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[Illustration: THOMAS W. LAWSON AFTER TWELVE MONTHS OF "FRENZIED
FINANCE"]
FRENZIED FINANCE
BY
THOMAS W. LAWSON
OF BOSTON
VOLUME I
THE CRIME OF AMALGAMATED
NEW YORK
THE RIDGWAY-THAYER COMPANY
1905
_Copyright, 1905, by_
THE RIDGWAY-THAYER COMPANY
_These articles are reprinted from "Everybody's Magazine"_
COPYRIGHT, 1904, BY THE RIDGWAY-THAYER COMPANY
COPYRIGHT, 1905, BY THE RIDGWAY-THAYER COMPANY
_All rights reserved_
TROW DIRECTORY
PRINTING AND BOOKBINDING COMPANY
NEW YORK
TO
PENITENCE AND PUNISHMENT
THIS BOOK IS DEDICATED
TO PENITENCE: that those whose deviltry is exposed within its pages may
see in a true light the wrongs they have wrought--and repent.
TO PUNISHMENT: that the unpenalized crimes of which it is the chronicle
may appear in such hideousness to the world as forever to disgrace their
perpetrators.
TO PENITENCE: that the transgressors, learning the error of their ways,
may reform.
TO PUNISHMENT: that the sins of the century crying to heaven for
vengeance may on earth be visited with condemnation stern enough to halt
greed at the kill.
TO PUNISHMENT: that public indignation may be so aroused against the
practices of high finance that it shall come to be as culpable to graft
and cozen within the law as it is lawless to-day to counterfeit and
steal.
TO PENITENCE: that in the minds of all who read this eventful history
there may grow up a knowledge and a conviction that the gaining of vast
wealth is not worth the sacrifice of manhood, and that poverty and
abstinence with honor are better worth having than millions and luxury
at the cost of candor and rectitude.
TO MY AUDIENCE
SAINTS, SINNERS, AND IN-BETWEENS
Before you enter the confines of "Frenzied Finance," here spread
out--for your inspection, at least; enlightenment, perhaps--halt one
brief moment. If the men and things to be encountered within are
real--did live or live now--you must deal with them one way. If these
embodiments are but figments of my mind and pen, you must regard them
from a different view-point. Therefore, before turning the page, it
behooves you to find for yourself an answer to the grave question:
Is it the truth that is dealt with here? In weighing the evidence
remember:
My profession is business. My writing is an incident. "Frenzied Finance"
was set down during the twenty-fifth and twenty-sixth hours of busy
days. I pass it up as the history of affairs of which I was a part. The
men who move within the book's pages are still on the turf. A period of
twelve years is covered. So far, eighteen instalments, in all some
400,000 words, have been published. The spigot is still running. I have
written from memory, necessarily. While it is true that fiction is
expressed in the same forms and phrases as truth, no man ever lived who
could shape 400,000 words into the kinds of pictures I have painted and
pass them off for aught but what they were. The character of my palette
made it mechanically impossible to shade or temper the pigments, for the
story was written in instalments, and circumstances were such that often
one month's issue was out to the public before the next instalment was
on paper. Considering all this, the consistency of the chronicle as it
stands is the best evidence of its truth. In submitting it to my readers
I desire to reiterate:
It _is_ truth--of the kind that carries its own bell and candle. Within
the narrative itself are the reagents required to test and prove its
genuineness. Were man endowed with the propensity of a Muenchhausen, the
cunning of a Machiavelli, the imagination of Scheherezade, the ability
of a Shakespeare, and the hellishness of his Satanic Majesty, he could
not play upon 400,000 words, or one-quarter that number, and make the
play peal truth for a single hour to the audience who will read this
book, or to one-thousandth part the audience that has already read it in
_Everybody's Magazine_.
Such as the story is, it is before you. If in its perusal you fathom my
intentions, my hopes, my desires, I shall have been repaid for the pain
its writing has brought me. At least you will find the history of a
colossal business affair involving millions of dollars and manned by the
financial leaders of the moment. It is a fair representation of
financial methods and commercial morals as they exist in America at the
beginning of the twentieth century. As a contemporary document the
narrative should have value; as history it is not, I believe, without
interest. As a message it has had its influence. Indeed, it is not an
exaggeration to say that no man in his own generation has seen such a
crop come forth from seed of his own sowing since the long bygone days
when the wandering king planted dragons' teeth on the Phoenician plain
and raised up an army of warriors.
Yours very truly
Thomas W. Lawson
FOREWORD
There will be set down in this book, in as simple and direct a fashion
as I can write it, the story of Amalgamated Copper and of the "System"
of which it is the most flagrant example. This "System" is a process or
a device for the incubation of wealth from the people's savings in the
banks, trust, and insurance companies, and the public funds. Through its
workings during the last twenty years there has grown up in this country
a set of colossal corporations in which unmeasured success and continued
immunity from punishment have bred an insolent disregard of law, of
common morality, and of public and private right, together with a grim
determination to hold on to, at all hazards, the great possessions they
have gulped or captured. It is the same "System" which has taken from
the millions of our people billions of dollars, and given them over to a
score or two of men with power to use and enjoy them as absolutely as
though these billions had been earned dollar by dollar by the labor of
their bodies and minds. Yet in telling the story of Amalgamated, the
most brazen and voracious maw of this "System," I desire it understood
that I take no issue with men; it is with a principle I am concerned.
With the men I have had close and intimate intercourse, and from my
knowledge of the means they have used, and the manner in which they have
used them, and the causes and effects of their performances, I have no
hesitation in stating that the good they have done, the evils they have
created, and the indelible imprints they have made on mankind are the
products of a condition and not of their individualities, and that if
not one of them had ever been born the same good and evil would to-day
exist. Others would have done what they did, and would have to answer
for what has been done, as they must. So I say the men are merely
individuals; the "System" is the thing at fault, and it is the "System"
that must be rectified. Better far for me not to tell the story I am
going to tell; better far for the victims of Amalgamated not to know who
plundered them and how, than to have them know it only to wreak
vengeance on individuals and overlook the "System," which, if allowed to
continue, surely will in time, a short time, destroy the nation by
precipitating fratricidal war.
The enormous losses, millions upon millions--to my personal knowledge
over a hundred millions of dollars--which were made because of
Amalgamated; the large number of suicides--to my personal knowledge over
thirty--which were directly caused by Amalgamated; the large number of
previously reputable citizens who were made prison convicts--to my
personal knowledge over twenty--directly because of Amalgamated, were
caused by acts of this "System" of which Henry H. Rogers and his
immediate associates were the direct administrators; and yet Mr. Rogers
and his immediate associates, while these great wrongs were occurring,
led social lives which, measured by the most rigid yardstick of mental
or moral rectitude, were as near perfect as it is possible for human
lives to be. As husbands, fathers, brothers, sons, friends, they were
ideal, cleanly of body and of mind, with heads filled with sentiment and
hearts filled with sympathies; their personal lives were like their
homes and their gardens--revealing only the brightest things of this
world, the singing, humming, sweet-smelling things which so strongly
speak to us of the other world we are yet to know. As workers in the
world's vineyards, they labored six days and rested upon the Sabbath,
and gave thanks to Him from whom all blessings flow that He allowed
them, His humble creatures, to have their earthly being. And yet these
men, to whose eyes I have seen come the tears for others' sufferings,
and whose voices I have heard grow husky in recounting the woes of their
less fortunate brothers--these men under the spell of the brutal code of
modern dollar-making are converted into beasts of prey, and put to shame
the denizens of the deep which devour their kind that they may live.
In the harness of the "System" these men knew no Sabbath, no Him; they
had no time to offer thanks, no care for earthly or celestial being;
from their eyes no human power could squeeze a tear, no suffering wring
a pang from their hearts. They were immune to every feeling known to God
or man. They knew only dollars. Their relatives of a moment since, their
friends of yesterday and long, long ago, they regarded only as lumps of
matter with which to feed the whirring, grinding, gnashing mill which
poured forth into their bins--dollars.
In telling the story of Amalgamated I hope to have profited by my long
and intimate study of this cruel, tigerishly cruel "System," so as to be
able to deaden myself to all those human sympathies which I have heard
its votaries so many times subordinate to "It's business." I shall try
only to keep before me how the Indians of the forest, as our forefathers
drove them farther and farther into the unknown West, got bitter
consolation out of the oft-chanted precept of their white brethren of
civilization, "An eye for an eye, a tooth for a tooth," reminding myself
that whatever of misery or unhappiness my story may bring to the few, it
will be as nothing to that which they have brought to the many.
In asking for the serious, earnest consideration of the public, I shall
be honest in giving to it my qualifications, my motives, and my desires
for writing this narrative. For thirty-four years I have been actively
connected with matters financial. As banker, broker, and corporation
man, I have, from the vantage-point of one who actually handled the
things he studied, studied the causes which created the conditions which
made possible the "System" which produced the Amalgamated affair. In my
thirty-four years of business experience I have seen the great fortunes,
which are the motive power of the "System" referred to, come out of the
far West as specks upon the financial horizon and grow and grow as they
travelled Eastward, until in their length, breadth, and thickness they
obscured the rising sun. At short range I have seen the giant money
machine put together; I have touched elbows with the men who made it, as
they fitted this wheel and adjusted that gear, while at the same time I
broke bread and slept with the every-day people who, with the industry
of the ant and the patience of the spider, toiled to pile in the
pennies, the nickels, and the dimes which have kept the "System's"
hopper full.
At my first meeting with the creators of Amalgamated it was clearly and
distinctly understood that under no circumstances would I enlist in that
"System's" interests other than for such special services as, after due
thought and investigation, I should decide to be such as I could in
fairness to myself and my clients work for; and when I give the details
of this first meeting in my narrative it will be evident to its readers
that in telling the story of Amalgamated I am violating no confidence,
nor in any way encroaching upon the niceties of that business code which
is, and should be, the foundation of all legitimate financial dealings,
nor in any way misusing knowledge which, if acquired under other
circumstances, might be sacred.
Amalgamated was one service the "System" asked of me. It was created
because of my work. It was largely because of my efforts that its
foundation was successfully laid. It was very largely because of what I
stood for and because of the public's confidence in the fulfilment of
the promises I made that the public invested its savings to an extent of
over $200,000,000; and it was almost wholly because of the broken
promises and trickery of the creators of the "System" that the public
lost the enormous sums it did.
My motives for writing the story of Amalgamated are manifold: I have
unwittingly been made the instrument by which thousands upon thousands
of investors in America and Europe have been plundered. I wish them to
know my position as to the past that they may acquit me of intentional
wrong-doing; as to the present that they may know that I am using all my
powers to right the wrongs that have been committed, and as to the
future that they may see how I propose to compel restitution.
My desire in writing the story of Amalgamated, while tinged perhaps with
hatred for and revenge against the "System" as a whole and some of its
votaries, is more truly pervaded with a strong conviction that the most
effective way to educate the public to realize the evils of which such
affairs as the Amalgamated are the direct result, is to expose before it
the brutal facts as to the conception, birth, and nursery-breeding of
this the foremost of all the unsavory offspring of the "System." Thus it
may learn that it is within its power to destroy the brood already in
existence and render impossible similar creations.
In the course of my task I shall describe such parts of the general
financial structure as will place my readers, especially those
unfamiliar with its more complicated conditions, in a mental state to
comprehend the methods by which the savings they think are safely
guarded in the banks, trust and insurance companies, are so manipulated
by the votaries of frenzied finance as to be in constant jeopardy. I
shall show them that while the press, the books, the stump, and our
halls of statesmanship are full to overflowing with the whys,
wherefores, and what-nots of "tariff," "currency," "silver," "gold," and
"labor"; while our market systems are perfected educational machines for
disseminating accurate statistics about the necessaries and luxuries of
life, the water and land carriers, real estate, and other material
things which the people have been taught to believe are the only things
that vitally affect their savings; that while they imagine they
understand the system by which speculation and investments are
controlled and worked, and that the causes and effects of this system
are at all times get-at-able by them through their bankers and their
brokers; there is a tangible, complicated, yet simple trick of financial
legerdemain, operated twenty-four hours in each day in the year, and
which the press, the books, the politicians, and the statesmen never
touch upon--a trick by means of which the savings of the people and the
public funds of the Government, whether in the national banks,
savings-banks, trust or insurance companies, are always at the absolute
service and mercy of the votaries of frenzied finance.
Therefore, in the course of my story of Amalgamated will come a few
kindergarten pictures of how the necessaries and luxuries of the people
are "incorporated"; of how the evidences of corporation ownership are
manufactured; of the individuals who "manufacture" them; of the
individuals who control and make or unmake their values; of the
meeting-place of these individuals, within and without the
stock-exchanges; of some of the corporations and of some of the signs
and tokens of corporation ownership; of some of their histories; of some
of their doings, and of some of their contemplated doings. These
kindergarten pictures I will endeavor to paint, not in that
"over-the-head" verbosity or "under-the-feet" profundity and intricacy
of the political economy pedant, which are as the canvases of the
Whistler school to the masses; but rather will I use the brush of the
artisan who in giving us our white fences, our gray cottages, and our
green blinds sets off those things which make up the pictures the people
really understand and dearly prize.
In the last few years the public has heard many stories of this
Juggernaut "System," which has grown to be the greatest private power in
our land--greater almost than the power which governs the nation,
because it is not only great within itself but by its peculiar workings
is really a part of the power which governs the people. Particularly has
it been told the story of Standard Oil by Mr. Henry D. Lloyd in his able
work, "Wealth Against Commonwealth," and by Miss Ida M. Tarbell in her
recent historical sketches; but however thorough these writers may have
been in gathering the facts, statistics, and evidences, however
relentless their pens and vivid their pictures, they dealt but with
things that are dead; things that to the present generation are but
skeletons whose dry and whitened bones cannot possibly bring to the
hearts, minds, and souls of the men and women of to-day that
all-consuming passion for revenge, that burning desire for justice,
without which no movement to benefit the people can be made successful.
In telling my story I shall, for I must, tell it fairly, and to make
sure of this I pledge myself to keep to the exact facts as they
occurred, not allowing myself to be overawed by their greatness into
contracting them, nor to be tempted by their littleness into expanding
them. In doing this I know, because of the peculiarity of the subject
and my intimate relation to it, no other way than to do it in the first
person. As I have already stated, I would prefer to deal with my subject
through the principles involved rather than with the men concerned; but
as I shall be compelled to call spades spades, I must, of necessity, use
the names of men and of institutions fearlessly and without favor.
In the beginning it will be necessary, for that clear understanding of
the whole subject which is one of my principal objects, to treat at
sufficient length the Bay State Gas intricacies and trickeries, in which
in a certain sense Amalgamated had its being. This will compel me to
devote a chapter to one of the most picturesquely notorious characters
of the age, John Edward O'Sullivan Addicks, of Delaware, Everywhere, and
Nowhere.
The main part of my narrative must of necessity deal with the two real
heads of Standard Oil and Amalgamated, Mr. Henry H. Rogers and Mr.
William Rockefeller; and with the biggest financial institution of
America, if not of the world, the National City Bank of New York, and
its head and dominating spirit, Mr. James Stillman.
An important chapter should be that devoted to the conception and
formation of the United Metals Selling Company, which was specially
organized to control the copper industry of the world without coming
within the restrictions of the laws for the prevention or regulation of
monopolies.
I shall also deal at length with a notorious character, who, like the
spot upon the sun, looms up in all American copper affairs whenever they
appear in the full vision of the public eye--Mr. F. Augustus Heinze, of
Montana.
There will be a chapter of more or less length devoted to one of the
most important episodes in Amalgamated affairs, wherein I shall describe
one of Wall Street's most picturesque, able, and intensely interesting
men, Mr. James R. Keene.
I shall touch on a bit of the nation's history in which within a few
days of the national election of 1896 a hurry-up call for additional
funds to the extent of $5,000,000 was so promptly met as to overturn the
people in five States and thereby preserve the destinies of the
Republican party, of which I am and have always been a member.
I shall draw a picture of two dress-suit cases of money being slipped
across the table at the foot of a judge's bench in the court-room, from
its custodian to its new owners, upon the rendering of a court decision;
and I shall show how the new owners frustrated a plot having for its
object their waylaying and the recovery of the bags of money.
I shall devote some space to pointing out the evils and dangers of the
latter-day methods of corrupting law-makers, and show how one entire
Massachusetts Legislature, with the exception of a few members, was
dealt with as openly as the fishmongers procure their stock-in-trade
upon the wharves; how upon the last day of the Legislature, because
their deferred cash payments were not promptly forthcoming, its members
turned, and made necessary the hurried departure for foreign shores of a
great lawyer and his secretary, with bags of quickly gathered gold, and
all evidences of the crimes committed and attempted; how after the ship
arrived at an island in foreign seas the great lawyer's dead body
received hurried burial, and his secretary's was later dropped, with
weights about its feet, to the ocean's depths; and how ever since the
natives whisper among themselves their gruesome suspicions.
I shall devote a chapter to the doings of certain financial reputation
sandbaggers and blackmailers; show how through their agencies they hold
up corporations and their managers for large sums, which upon being paid
start into motion a perfected system for the false moulding of public
opinion for the purpose of making more easy the plundering of the
people. I shall photograph the men and draw accurate diagrams of the
machinery through which their nefarious trade is carried on.
My story will carry me down Wall Street, into the Stock Exchange,
through its hundred and one or million and one open and hidden passages,
and into State Street, that ever-hung hammock of financial somnolence,
and into the courts of justice of New York, New Jersey, Pennsylvania,
Delaware, Massachusetts, and Montana, and into many other interesting
abodes of justice and injustice, of trickery, fraud, and simple, honest
trustfulness.
When my story is ended and the great American people, whose simple but
proud boast is that they cannot be fooled in the same place by the same
methods and the same instruments twice, know as much as I now know of
Amalgamated and its relation to the "System" which has for years as
boldly, as coarsely, and as cruelly robbed them as the coolie slaves are
robbed by their masters--it will be for them to decide whether my story
has been, because of the facts which entered into it, so well told that
they will not be satisfied with the restitution of the vast sums which
the Amalgamated took from them, which United States Steel took from
them, and which other financial enterprises took in lesser amounts but
by equally flagrant methods; but will demand the overthrow of the
"System" itself. It will be for them to decide; and if their decision
should be for a conclusive revolt, I shall be amply repaid for the pains
and the miseries which must necessarily follow in the wake of a task
such as the one I undertook when I decided to tell the story of
Amalgamated.
CONTENTS
PAGE
FOREWORD vii
PART I
CHAPTER
I. THE TORTUOUS COURSE OF AMALGAMATED 1
II. THE "SYSTEM'S" METHOD OF FINANCE AND MANAGEMENT 5
III. THE MEN IN POWER BEHIND THE "SYSTEM" 13
IV. MY OWN RESPONSIBILITY 23
V. THE POWER OF DOLLARS 33
VI. CONSTRUCTION OF "STANDARD OIL'S" "DOLLAR-MAKING" MILL 41
VII. JUGGLING WITH MILLIONS OF THE PEOPLE'S MONEY 52
VIII. "STANDARD OIL" INVESTS "MADE DOLLARS" IN GAS 56
IX. A VOTARY OF THE "SYSTEM" 60
X. ADDICKS COMES TO BOSTON 67
XI. HOW ADDICKS CAPTURED BOSTON GAS 71
XII. STOCK-BROKERS NOT ALL BAD 79
XIII. THE "SYSTEM" VERSUS WESTINGHOUSE 88
XIV. THE ALLIANCE WITH ADDICKS 93
XV. THE GREAT BAY STATE GAS FIGHT 103
XVI. PEACE NEGOTIATIONS WITH ROGERS 110
XVII. A MEMORABLE CONFERENCE 113
XVIII. THE DUPLICITY OF ADDICKS 125
XIX. ENTER H. M. WHITNEY 133
XX. AN AWKWARD ATTACK OF APPENDICITIS 142
XXI. BRIBING A LEGISLATURE 149
XXII. PLUNDERED OF THE PLUNDER 162
XXIII. TWO GENTLEMEN OF FRENZIED FINANCE 170
XXIV. BUYING A BUNCH OF STATES 176
XXV. ATHLETICS OF FINANCE 182
XXVI. THE CIRCLING OF THE VULTURES 187
XXVII. COURT CORRUPTION AND COIN 191
XXVIII. PEACE AT LAST 195
PART II
I. THE MAGIC WORLD OF FINANCE 197
II. THE "SYSTEM" AND THE LOUISIANA LOTTERY COMPARED 202
III. THE FUNDAMENTALS OF FINANCE 208
IV. THE MAGIC "JIMMY" 213
V. HOW THE "SYSTEM" DOES BUSINESS 217
VI. HOW WALL STREET'S MANIPULATIONS AFFECT THE COUNTRY 223
VII. ECONOMICS OF COPPER 226
VIII. MY PLAN FOR "COPPERS" 233
IX. BIRTH OF "COPPERS" 237
X. ROGERS GRASPS "COPPERS" 245
XI. THE COPPER CAMPAIGN OPENS 253
XII. THE BUNCOING OF THE STOCKHOLDERS OF UTAH 261
XIII. THE TRAP IN FINANCE 266
XIV. LAWYER UNTERMYER DISCOVERS THE "NIGGER" 274
XV. DEGREES IN CRIME 281
XVI. MR. ROGERS UNMASKS 283
XVII. "EXTRACT EVERY DOLLAR" 289
XVIII. THE BITERS BIT 301
XIX. THE DESPOILING OF LEONARD LEWISOHN 307
XX. THE CHRISTENING OF AMALGAMATED 311
XXI. FIXING THE RESPONSIBILITY 320
XXII. THE RESPONSIBILITY FASTENED 332
XXIII. THE FIRST CRIME OF AMALGAMATED 340
XXIV. THE SUBSCRIPTION OPENS 346
XXV. DOLLAR HYDROPHOBIA 351
XXVI. DEVILTRY AFOOT 359
XXVII. THE BLACK FLAG HOISTED 364
XXVIII. THE BOGUS SUBSCRIPTION 370
XXIX. THE AFTERMATH 376
XXX. THE MORNING AFTER 385
XXXI. I WALK THE PLANK 389
XXXII. PERFECTING THE DOUBLE CROSS 397
XXXIII. A RETROSPECT AND A MORAL 405
LAWSON AND HIS CRITICS
I. THE INSURANCE CONTROVERSY 413
II. THE ENEMIES I HAVE MADE 487
III. EXPLANATIONS 539
FRENZIED FINANCE
THE STORY OF AMALGAMATED
_PART I_
CHAPTER I
THE TORTUOUS COURSE OF AMALGAMATED
Amalgamated Copper was begotten in 1898, born in 1899, and in the first
five years of its existence plundered the public to the extent of over
one hundred millions of dollars.
It was a creature of that incubator of trust and corporation frauds, the
State of New Jersey, and was organized ostensibly to mine, manufacture,
buy, sell, and deal in copper, one of the staples, the necessities, of
civilization.
It is a corporation with $155,000,000 capital, 1,550,000 shares of the
par value of $100 each.
Its entire stock was sold to the public at an average of $115 per share
($100 to $130), and in 1903 the price had declined to $33 per share.
From its inception it was known as a "Standard Oil" creature, because
its birthplace was the National City Bank of New York (the "Standard
Oil" bank), and its parents the leading "Standard Oil" lights, Henry H.
Rogers, William Rockefeller, and James Stillman.
It has from its birth to present writing been responsible for more hell
than any other trust or financial thing since the world began. Because
of it the people have sustained incalculable losses and have suffered
untold miseries.
But for the existence of the National City Bank of New York, the
tremendous losses and necessarily corresponding profits could not have
been made.
I laid out the plans upon which Amalgamated was constructed, and, had
they been followed, there would have been reared a great financial
edifice, immensely profitable, permanently prosperous, one of the
world's big institutions.
The conditions of which Amalgamated was the consequence had their birth
in Bay State Gas. To explain them I must go back a few years.
In 1894 J. Edward Addicks, of Delaware, Everywhere, and Nowhere, the
Boston Gas King, invaded the gas preserves of the "Standard Oil" in
Brooklyn, N. Y., and the "Standard Oil," to compel him to withdraw,
moved on his pre-empted gas domains in Boston, Mass.
Late in 1894 a fierce battle was raging in Boston between Gas King
Addicks and Gas King Rogers; the very air was filled with denunciation
and defiance--bribery and municipal corruption; and King Addicks was
defeated all along the line and in full retreat, with his ammunition
down to the last few rounds.
Early in 1895 I took command of the Addicks forces against "Standard
Oil."
By the middle of 1895 the Addicks troopers had the "Standard Oil"
invaders "on the run."
In August, 1895, Henry H. Rogers and myself came together for the first
time, at his house in New York, and we practically settled the Boston
gas war.
Early in 1896 we actually settled the gas war, and "Standard Oil"
transferred all its Boston gas properties ($6,000,000) to the Addicks
crowd.
In October, 1896, the whole Bay State Gas outfit passed from the control
of Addicks and his cohorts into the hands of a receiver, and as a result
of this receivership, with its accumulated complications, "Standard
Oil," in November, 1896, regained all its old Boston companies, and in
addition all the Addicks companies, with the exception of the Bay State
Gas Company of Delaware.
In 1896 I perfected and formulated the plans for "Coppers," a broad and
comprehensive project, having for its basis the buying and consolidating
of all the best-producing copper properties in Europe and America, and
the educating of the world up to their great merits as safe and
profitable investments.
In 1897 I laid these plans before "Standard Oil."
In 1898 "Standard Oil" was so far educated up to my plans on "Coppers"
as to accept them.
In 1899 Amalgamated, intended to be the second or third section of
"Coppers," was suddenly shifted by "Standard Oil" into the first
section, and with a full head of steam ran out of the "City Bank"
station, carrying the largest and best train-load of passengers ever
sent to destruction on any financial trunk-line.
In 1899, after the allotment of the Amalgamated public subscription, the
public for the first time, in a dazed and benumbed way, realized it had
been "taken in" on this subscription, and a shiver went down America's
financial spinal column.
In 1900, after the price of Amalgamated had slumped to 75 instead of
advancing to 150, to 200, as had been promised, the "Standard
Oil"-Amalgamated-City Bank fraternity called Wall Street's king of
manipulators, James R. Keene, to the rescue, and under his adroit
handling of the stock in the market Amalgamated was sent soaring over
its flotation price of 100.
In 1901 Boston & Montana and Butte & Boston, after long delay, drew out
of the "Standard Oil" station as the second section of Amalgamated,
carrying an immense load of investors and speculators to what was at
that time confidently believed would be Dollar Utopia; and the price of
the enlarged Amalgamated fairly flew to 130. These were the stocks which
I had originally advertised would be part of the first section of the
consolidated "Coppers," and which, after Amalgamated had been run in
ahead of them, I advertised would follow in due course.
In the latter part of 1901 President McKinley was assassinated, and the
great panic which might have ensued was averted by the marvellous power
of J. Pierpont Morgan.
Then the Amalgamated dividend, without warning and in open defiance of
the absolute pledges of its creators, was cut, and the public, including
even James R. Keene, found itself on that wild toboggan whirl which
landed it battered and sore, at the foot of a financial precipice.
This, briefly, is the tortuous course of Amalgamated, and it is along
this twisting, winding, up-alley-and-down-lane way I must ask my readers
to travel if they would know the story as it is.
CHAPTER II
THE "SYSTEM'S" METHOD OF FINANCE AND MANAGEMENT
At the lower end of the greatest thoroughfare in the greatest city of
the New World is a huge structure of plain gray-stone. Solid as a
prison, towering as a steeple, its cold and forbidding facade seems to
rebuke the heedless levity of the passing crowd, and frown on the
frivolity of the stray sunbeams which in the late afternoon play around
its impassive cornices. Men point to its stern portals, glance quickly
up at the rows of unwinking windows, nudge each other, and hurry onward,
as the Spaniards used to do when going by the offices of the
Inquisition. The building is No. 26 Broadway.
26 Broadway, New York City, is the home of the Standard Oil. Its
countless miles of railroads may zigzag in and out of every State and
city in America, and its never-ending twistings of snaky pipe-lines
burrow into all parts of the North American continent which are
lubricated by nature; its mines may be in the West, its manufactories in
the East, its colleges in the South, and its churches in the North; its
head-quarters may be in the centre of the universe and its branches on
every shore washed by the ocean; its untold millions may levy tribute
wherever the voice of man is heard, but its home is the tall stone
building in old New York, which under the name "26 Broadway" has become
almost as well known wherever dollars are juggled as is "Standard Oil."
Wall Street and the financial world know that there are two "Standard
Oils," but to the public there is no clear distinction between Standard
Oil, the corporation which deals in oil and things which pertain to the
manufacture and transportation of oil, and "Standard Oil," the giant,
indefinite system which sometimes embraces all the "Standard Oil" group
of individuals and corporations, and sometimes only certain of the
individuals.
This giant creature, "Standard Oil," can best be described so that the
average man may understand it as a group of money-owners--some
individuals and some corporations--who have a right to use the name
"Standard Oil" in any business undertakings they engage in. The right to
use the name is of priceless value, for it carries with it "assured
success."
Standard Oil, the seller of oil to the people, transacts its business as
does any other corporation. It plays no part in my story and I shall not
hereafter touch upon its affairs, but confine my meaning, wherever I use
the name "Standard Oil," to the larger and many times more important
"System."
There are only three men who can lend the name "Standard Oil," even in
the most remote way to any project, for there is no more heinous crime
against the "Standard Oil" decalogue than using the name "Standard Oil"
unauthorizedly. The three men are Henry H. Rogers, William Rockefeller,
and John D. Rockefeller. Sometimes John D. Rockefeller uses the name
alone in projects in which Henry H. Rogers and William Rockefeller have
no interests. Henry H. Rogers or William Rockefeller seldom, if ever,
uses the name in projects with which neither of the other two is
associated. Sometimes, but not often, John D. and William Rockefeller
use the name in connection with projects of their own in which Henry H.
Rogers has no interest. Henry H. Rogers and John D. Rockefeller, I
believe, never are associated in projects in which William Rockefeller
has no interest. Henry H. Rogers and William Rockefeller frequently
bring to bear the influence of the magic-working syllables in connection
with joint affairs in which John D. Rockefeller has no interest--in
fact, during the past ten years the name "Standard Oil" has been used
more in their combined undertakings than in all others put together.
There are eight distinct groups of individuals and corporations which go
to make up the big "Standard Oil":
1st. The Standard Oil, seller of oil to the people, which is made up of
many sub-corporations either by actual ownership or by ownership of
their stock or bonds. Probably no person other than Henry H. Rogers,
William Rockefeller, and John D. Rockefeller knows exactly what the
assets of the Standard Oil corporation are, although John D.
Rockefeller, Jr., son of John D. Rockefeller, and William G.
Rockefeller, that able and excellent business man, son of William
Rockefeller and the probable future head of "Standard Oil," are being
rapidly educated in this great secret. In this first institution all
"Standard Oil" individuals and estates are direct owners.
2d. Henry H. Rogers, William Rockefeller, and John D. Rockefeller,
active heads, and included with them their sons.
3d. A large group of active captains and first lieutenants, men who
conduct the affairs of the different corporations or sections of
corporations in which some or all of the "Standard Oil" are interested.
Many of these are the sons or the second generation of men who held like
positions in Standard Oil's earlier days. Of these Daniel O'Day and
Charles Pratt are fair examples.
4th. A large group of captains retired from active service in the
Standard Oil army, who participate only in a general way in the
management of its affairs, and whose principal business is looking after
their own investments. These men are each worth from $5,000,000 or
$10,000,000 to $50,000,000 or $75,000,000. The Paynes and the Flaglers
are fair illustrations of this group.
5th. The estates of deceased members of this wonderful "Standard Oil"
family, which are still largely controlled by some or all of the
prominent "Standard Oil" men.
6th. "Standard Oil" banks and banking institutions, and the system of
national banks, trust companies, and insurance companies, of which
"Standard Oil" has, by ownership and otherwise, practically absolute
control. The head of this group is James Stillman, and it is when these
institutions are called into play in connection with "Standard Oil"
business that he is one of the "Standard Oil" leaders, second to neither
of the Rockefellers nor to Mr. Rogers.
7th. The "Standard Oil" army of followers, capitalists, and workers in
all parts of the world, men who require nothing more than the order, "Go
ahead," "Pull off," "Buy," "Sell," or "Stand Pat," to render as absolute
obedience and enthusiastic cooperation as though they knew, to the
smallest detail, the purposes which lay behind the giving of the order.
8th. The countless hordes of politicians, statesmen, law-makers and
enforcers, who, at home or as representatives of the nation abroad, go
to make up our political structure, and judges and lawyers.
To the world at large, which looks on and sees this giant institution
move through the ranks of business without noise or dissension and with
the ease and smoothness of a creature one-millionth its size, it would
seem that there must be some wonderful and complicated code of rules to
guide and control the thousands of lieutenants and privates who conduct
its affairs. This is partially true, partially false. "Standard Oil's"
governing rules are as rigid as the laws of the Medes and Persians, yet
so simple as to be easily understood by any one.
First, there is a fundamental law, from which no one--neither the great
nor the small--is exempt. In substance it is: "Every 'Standard Oil' man
must wear the 'Standard Oil' collar."
This collar is riveted on to each one as he is taken into "the band,"
and can only be removed with the head of the wearer.
Here is the code. The penalty for infringing the following rules is
instant "removal."
1. Keep your mouth closed, as silence is gold, and gold is
what we exist for.
2. Collect our debts to-day. Pay the other fellow's debts
to-morrow. To-day is always here, to-morrow may never come.
3. Conduct all our business so that the buyer and the seller
must come to us. Keep the seller waiting; the longer he
waits the less he'll take. Hurry the buyer, as his money
brings us interest.
4. Make all profitable bargains in the name of "Standard
Oil," chancy ones in the names of dummies. "Standard Oil"
never goes back on a bargain.
5. Never put "Standard Oil" trades in writing, as your
memory and the other fellow's forgetfulness will always be
re-enforced with our organization. Never forget our Legal
Department is paid by the year, and our land is full of
courts and judges.
6. As competition is the life of trade--our trade, and
monopoly the death of trade--our competitor's trade, employ
both judiciously.
7. Never enter into a "butting" contest with the Government.
Our Government is by the people and for the people, and we
are the people, and those people who are not us can be hired
by us.
8. Always do "right." Right makes might, might makes
dollars, dollars make right, and we have the dollars.
All business of the gigantic "Standard Oil" system is dealt with through
two great departments. Mr. Rogers is head of the executive, and William
Rockefeller the head of the financial department. All new schemes,
whether suggested by outsiders or initiated within the institution, go
to Mr. Rogers. Regardless of their nature or character, he first takes
them under advisement. If a scheme prove good enough to run the gantlet
of Mr. Rogers' tremendously high standard, the promoter, after he has
set forth his plans and estimates, hears with astonishment these words:
"Wait while I go upstairs. I'll say Yes or No upon my return."
And upon his return it is almost always "Yes." If the project, however,
does not come up to his exacting requirements, it is turned down without
further ado or consultation with any of his associates.
Those intimate with affairs at 26 Broadway have grown curiously familiar
with this expression, "I am going upstairs." "Upstairs" means two
distinct and separate things. When a matter in Mr. Rogers' department is
awaiting his return from "upstairs," it means he has gone to place the
scheme before William Rockefeller, on the thirteenth floor, and laying a
thing before William Rockefeller by Mr. Rogers consists of a brief,
vigorous statement of Mr. Rogers' own conclusions and a request for his
associate's judgment of it. William Rockefeller's strong quality is his
ability to estimate quickly the practical value of a given scheme. His
approval means he will finance it, and William Rockefeller's "say-so" is
as absolute in the financing of things as is Mr. Rogers' in passing
upon their feasibility. It does not matter whether it is an undertaking
calling for the employment of $50,000 capital or $50,000,000 or
$500,000,000, Mr. Rockefeller's "Yes" or "No" is all there is to it. He
having passed on it, Mr. Rogers supervises its execution.
The other "upstairs" is one that is heard every week-day of the year
except summer Saturdays. At 26 Broadway, just before eleven o'clock each
morning, there is a flutter in the offices of all the leading heads of
departments from Henry H. Rogers down, for going "upstairs" to the
eleven o'clock meeting is in the mind of each "Standard Oil" man the one
all-important event of every working day.
In the big room, on the fifteenth floor, at 26 Broadway, there gather
each day, between the hour of eleven and twelve o'clock, all the active
men whose efforts make "Standard Oil" what "Standard Oil" is; here also
come to meet and mingle with the active heads the retired captains when
"they are in town." Around a large table they sit. Reports are
presented, views exchanged, policies talked over, republics and empires
made and unmade. If the Recorders in the next world have kept complete
minutes of what has happened "upstairs" at 26 Broadway they must have
tremendously large fire-proof safes. It is at the meeting "upstairs"
that the "melons are cut," and if one of the retired captains were asked
why he was in such a rush to be on hand each day when in town, and if he
were in a talkative mood--which he would not be--he would answer: "They
may be cutting a new melon, and there's nothing like being on hand when
the juice runs out."
If a new melon has been cut--an Amalgamated Copper, for instance--it is
at one of these meetings that the different "Standard Oil" men are
informed for the first time that the scheme, about which they may have
read or heard much outside, is far enough along for them to participate
in it. Each is told what sized slice he may have if he cares for any. It
is a very exceptional thing for any one to ask for more than he has been
apportioned, and an unheard-of thing for any one to refuse to take his
slice, although there is absolutely no compulsion in the connection.
And here, perhaps, may not come amiss an incident which illustrates what
may happen in a few minutes "upstairs."
Before Amalgamated was launched, in bringing together the different
properties of which it was composed I negotiated for the acquisition of
the Parrott mine, the majority of whose stock was held by certain old and
wealthy brass manufacturers in Connecticut. They had never seen any of
the Rockefellers nor Henry H. Rogers, but we were several months getting
the deal into shape before it was finally arranged, and they became
familiar with the great "Standard Oil" institution. So much so that the
chief of the owners--to whom was delegated the duty of turning over the
securities to my principals--looked forward with much eagerness to the
time when he must necessarily meet the mysterious and important
personages who guided 26 Broadway's destinies. Finally the day came, and
at precisely a quarter of eleven I let him into one of the numerous
private offices which are a part of Mr. Rogers' suite. He had under his
arm a bundle of papers representing the stocks which he was to exchange
for the purchase money, amounting to $4,086,000, and I think he fully
expected that in their examination, in the receipting for so large an
amount of money, and in the general talkings over, which he thought must
of course be a necessary part of the delivery, the greater part of the
day would be taken up. It took me some six or seven minutes to get him
located, and it was close on to five minutes of eleven when Mr. Rogers
stepped into the room. I was well into the introduction, when out came
Mr. Rogers' watch, and with what must have appeared to the visitor as
astonished consternation.
"I do hope you will excuse me," he exclaimed in the middle of a
handshake, "but, my gracious, I am overdue upstairs," and he bolted.
His place was taken fifty seconds after by Mr. Rogers' secretary, who in
less than five minutes had exchanged a check of $4,086,000, made out to
herself and indorsed in blank, for the bundle of stocks, and in another
minute I was ushering the old gentleman into the elevator.
When he came to on the sidewalk he got his breath sufficiently to say:
"Phew! I thought my trade was a big one, but that friend of yours,
Rogers, must have had some other fellow upstairs who was going to turn
in $40,000,000 of stuff, because he did appear dreadfully excited!"
The success of "Standard Oil" is largely due to two things--to the
loyalty of its members to each other and to "Standard Oil," and to the
punishment of its enemies. Each member before initiation knows its
religion to be reward for friends and extermination for foes. Once
within the magic circle, a man realizes he is getting all that any one
else on earth can afford to pay him for like services, and still more
thrown in for full measure. Moreover, while a "Standard Oil" man's
reward is always ample and satisfactory, he is constantly reminded in a
thousand and one ways that punishment for disloyalty is sure and
terrible, and that in no corner of the earth can he escape it, nor can
any power on earth protect him from it.
"Standard Oil" is never loud in its rewards nor its punishments. It does
not care for the public's praise nor for its condemnation, but endeavors
to avoid both by keeping its "business" to itself. As an instance, in
connection with certain gas settlements I made with "Standard Oil," it
voluntarily paid one of its agents for a few days' work $250,000. He had
expected at the outside $25,000. When I published the fact, as I had a
right to, "Standard Oil" was mad as hornets--as upset, indeed, as though
it had been detected in cheating the man out of two-thirds of his just
due, instead of having paid him ten times what was coming to him.
CHAPTER III
THE MEN IN POWER BEHIND THE "SYSTEM"
In the great Thing known to the world as "Standard Oil," the most
perfect embodiment of a "system" which I will endeavor to get before my
readers in later chapters, there are three heads, Henry H. Rogers,
William Rockefeller, and John D. Rockefeller. All the other members are
distinctively lieutenants, or subordinate workers, unless possibly I
except James Stillman, who, from his peculiar connection with "Standard
Oil" and his individually independent position, should perhaps be placed
in the category of heads.
Some one has said: "If you would know who is the head of a family, slip
into the home." The world, the big, arbitrary, hit-or-miss,
too-much-in-a-hurry-to-correct-its-mistakes world, has decided that the
master of "Standard Oil" is John D. Rockefeller, and John D. Rockefeller
it is to all but those who have a pass-key to the "Standard Oil" home.
To those the head of "Standard Oil"--the "Standard Oil" the world knows
as it knows St. Paul, Shakespeare, or Jack the Giant-killer, or any of
the things it knows well but not at all--is Henry H. Rogers. John D.
Rockefeller may have more money, more actual dollars, than Henry H.
Rogers, or all other members of the "Standard Oil" family, and in the
early days of "Standard Oil" may have been looked up to as the big gun
by his partners, and allowed to take the hugest hunks of the profits,
and may have so handled and judiciously invested these as to be at the
beginning of the twentieth century the richest man on earth, but none of
these things alters the fact that the big brain, the big body, the head
of "Standard Oil," is Henry H. Rogers.
Take station at the entrance of 26 Broadway and watch the different
members of the "Standard Oil" family as they enter the building: you
will exclaim once and only once: "There goes the Master!" And the man
who calls forth the cry will be Henry H. Rogers.
The big, jovial detective who stands all day long with one foot resting
on the sidewalk and one on the first stone step of the home of "Standard
Oil" will make oath he shows no different sign to Henry H. Rogers than
to a Rockefeller, a Payne, a Flagler, a Pratt, or an O'Day; yet watch
him when Mr. Rogers passes up the steps--an unconscious deference marks
his salutation--the tribute of the soldier to the commanding general.
Follow through the door bearing the sign, "Henry H. Rogers, President of
the National Transit Co.," on the eleventh floor, and pass from the
outer office into the beautiful, spacious mahogany apartment beyond,
with its decorations of bronze bulls and bears and yacht-models, its
walls covered with neatly framed autograph letters from Lincoln, Grant,
"Tom" Reed, Mark Twain, and other real, big men, and it will come over
you like a flash that here, unmistakably, is the _sanctum sanctorum_ of
the mightiest business institution of modern times. If a single doubt
lingers, read what the men in the frames have said to Henry H. Rogers,
and you will have proof positive that these judges of human nature knew
this man, not only as the master of "Standard Oil," but also as a sturdy
and resolute friend whose jovial humanity they had recognized and
enjoyed.
Did my readers ever hear of the National Transit Company? Very few
have--yet the presidency of it is the modest title of Henry H. Rogers.
When the world is ladling out honors to the "Standard Oil" kings, and
spouting of their wondrous riches, how often is Henry H. Rogers
mentioned? Not often, for he is never where the public can get a glimpse
of him--he is too busy pulling the wires and playing the buttons in the
shadows just behind the throne. Had it not been that that divinity which
disposes of men's purposes compelled this man, as he neared the end of
his remarkable career, to come into the open on Amalgamated, he might
never have been known as the real master of "Standard Oil." But if he is
missing when the public is hurrahing, he is sufficiently in evidence
when clouds lower or when the danger-signal is run to the masthead at
26 Broadway. He who reads "Standard Oil" history will note that, from
its first deal until this day, whenever bricks, cabbages, or aged eggs
were being presented to "Standard Oil," always were Henry H. Rogers'
towering form and defiant eye to be seen in the foreground where the
missiles flew thickest.
During the past twenty years, whenever the great political parties have
lined-up for their regular once-in-four-years' tussle, there would be
found Henry H. Rogers, calm as a race-track gambler, "sizing-up" the
entries, their weights and handicaps. Every twist and turn in the
pedigrees and records of Republicans and Democrats are as familiar to
him as the "dope-sheets" are to the gambler, for is he not at the
receiving end of the greatest information bureau in the world?
A Standard Oil agent is in every hamlet in the country, and who better
than these trained and intelligent observers to interpret the varying
trends of feelings in their communities? Tabulated and analyzed, these
reports enable Rogers, the sagacious politician, to diagnose the drift
of the country far ahead of the most astute of campaign managers. He is
never in doubt about who will win the election. Before the contest is
under way he has picked his winner and is beside him with generous
offers of war expenses.
When labor would howl its anathemas at Standard Oil, and the
Rockefellers and other stout-hearted generals and captains of this band
of merry money-makers would fall to discussing conciliation and retreat,
it was always Henry H. Rogers who fired at his associates his now famous
panacea for all Standard Oil opposition: "We'll see Standard Oil in hell
before we will allow any body of men on earth to dictate how we shall
conduct our business!" And the fact that "Standard Oil" still does its
business in the Elysian fields of success, where is neither sulphur nor
the fumes of sulphur, is additional evidence of whose will it is that
sways its destinies.
An impression of the despotic character of the man and of his manner of
despatching the infinite details of the multitudinous business he must
deal with daily may be gained by a glimpse of Henry H. Rogers at one of
the meetings of the long list of giant corporations which number him
among their directors. Surrounded though he be by the elite of all
financialdom, the very flower of the business brains of America, you
will surely hear his sharp, incisive, steel-clicking: "Gentlemen, are we
ready for the vote, for I regret to say, I have another important and
unavoidable meeting at ----?" You look at your watch. The time he
mentions is twelve, or, at the most, fifteen minutes away. There is no
chance for further discussion. Cut-and-dried resolutions are promptly
put to the vote, and off goes the master to his other engagement which
will be disposed of in the same peremptory fashion.
At a meeting of the directors of "financed" Steel, during the brief
reign of its late "vacuumized" president, Charlie Schwab, an episode
occurred which exhibited the danger of interfering with Mr. Rogers'
iron-bound plans. The fact that the steel throne was many sizes too
large for Schwab had, about this time, become publicly notorious, but
Carnegie and Morgan on the surface, and "Standard Oil" beneath, were so
busy preparing their alibis against the crash which even then was
overdue that they had neither time nor desire to adjust themselves on
the seat.
In advance Mr. Rogers made his invariable plea for quick action on a
matter before the board when Schwab, with a tact generated by the
wabbling of a misfit Wall Street crown chafing a generous pair of ears,
blurted out: "Mr. Rogers will vote on this question after we have talked
on it."
In a voice that those who heard it say sounded like a rattlesnake's hiss
in a refrigerator, Rogers replied: "All meetings where I sit as director
vote first and talk after I am gone."
It is said, and from my knowledge of these and after-events I believe
with truth, that this occurrence was the spark that started the terrific
explosion in United States Steel, for not long afterward some unknown
and mysterious power began that formidable attack on Steel stock which
left Wall Street full of the unattached ears, eyes, noses, breastbones,
and scalps of hordes of financial potentates and their flambeau
carriers. Whether or not Mr. Rogers was the instigator of this movement
no man, of course, can positively state, but I can vouch for the fact
that about this time he displayed, when talking "Steel" affairs with
intimates, a most contemptuous bitterness against "King Charlie" and
certain of his associates.
At sixty-five Henry H. Rogers is probably one of the most
distinguished-looking men of the time; tall and straight, and as
well-proportioned and supple as one of the beautiful American elms which
line the streets of his native town. He was born in Fairhaven, a fishing
village just over the bridge from the great whaling port, New Bedford.
He comes of stalwart New England stock; his father was a sea-captain,
and his lot, like that of most of the sons of old New England seaport
towns, was cast along those hard, brain-and-body-developing lines which,
beginning in the red village school-house, the white meeting-house, and
the yellowish-grayish country store, end in unexpected places, often, as
in this instance, upon the golden throne of business royalty.
Mr. Rogers' part in the very early days of Standard Oil was that of
clerk and bookkeeper. He makes no secret that when he had risen to the
height of $8 a week wages he felt as proud and confident as ever in
after-life when for the same number of days' labor it was no uncommon
occurrence to find himself credited with a hundred thousand times that
amount.
All able men have some of God's indelible imprints of greatness. This
man's every feature bespeaks strength and distinction. When he walks,
the active swing of his figure expresses power--realized, confident
power. When at rest or in action his square jaw tells of fighting power,
bull-dog, hold-on, never-let-go fighting power, and his high, full
forehead of intellectual, mightily intellectual power; and they are
re-enforced with cheek-bones and nose which suggest that this fighting
power has in it something of the grim ruthlessness of the North American
Indian. The eyes, however, are the crowning characteristic of the man's
physical make-up.
One must see Mr. Rogers' eyes in action and in repose to half appreciate
their wonders. I can only say they are red, blue, and black, brown,
gray, and green; nor do I want my readers to think I put in colors that
are not there, for there must be many others than those I have
mentioned. I have seen them when they were so restfully blue that I
would think they never could be anything but a part of those skies that
come with the August and September afternoons when the bees' hum and the
locusts' drone blend with the smell of the new-mown hay to help spell
the word "Rest."
I have seen them so green that within their depths I was almost sure the
fish were lazily resting in the shadows of those sea-plants which grow
only on the ocean's bottom; and I have seen them as black as that
thunder-cloud which makes us wonder: "Is He angry?" And then again I
have watched them when they were of that fiery red and that glinting
yellow which one sees only when at night the doors of a great, roaring
furnace are opened.
There is such a kindly good-will in these eyes when they are at rest
that the man does not live who would not consider himself favored to be
allowed to turn over to Henry H. Rogers his pocket-book without
receiving a receipt. They are the eyes of the man you would name in your
will to care for your wife's and children's welfare. When their
animation is friendly one would rather watch their merry twinkle as they
keep time to their owner's inimitable stories and non-duplicatable
anecdotes, trying to interpret the rapid and incessant telegraphy of
their glances, than sit in a theatre or read an interesting book; but it
is when they are active in war that the one privileged to observe them
gets his real treat, always provided he can dodge the rain of blazing
sparks and the withering hail of wrath that pours out on the offender.
To watch them then requires real nerve, for it is only a nimble,
stout-hearted, mail-covered individual that can sustain the encounter.
I have seen many forms of human wrath, many men transformed to terrible
things by anger, but I have never seen any that were other than
jumping-jack imitations of a jungle tiger compared with Henry H. Rogers
when he "lets 'er go"--when the instant comes that he realizes some one
is balking the accomplishment of his will.
Above all things Henry H. Rogers is a great actor. Had his lot been
cast upon the stage, he might easily have eclipsed the fame of Booth or
Salvini. He knows the human animal from the soles of his feet to the
part in his hair and from his shoulder-blade to his breastbone, and like
all great actors is not above getting down to every part he plays. He is
likely also so to lose himself in a role that he gives it his own force
and identity, and then things happen quite at variance with the lines.
The original Booth would come upon the stage the cool, calculating,
polished actor, but when well into his part was so lost in it that it
was often with difficulty he could be brought back to himself when the
curtain fell. Once while playing Richard III. at the old Boston Museum,
Richmond, by whom he was to be slain, made, at the ordained moment, the
thrust which should have laid him low, but instead, Booth in high frenzy
parried it, and with the fiendishness of the original Richard, step by
step drove Richmond off the stage and through the wings, and it was not
until the police seized the great tragedian, two blocks away, that the
terrified duke, who had dropped his sword and was running for dear life,
was sure he would ever act again.
When in the midst of his important plays, it is doubtful whether Henry
H. Rogers realizes until the guardians of the peace appear where the
acting begins and the reality should end. His intimate associates can
recall many times when his determination to make a hit in his part has
caused other actors cast with him to throw aside their dummy swords and
run for their lives.
The entire history of "Standard Oil" is strewn with court-scenes, civil
and criminal, and in all the important ones Henry H. Rogers, the actor,
will be found doing marvellous "stunts." Standard Oil historians are
fond of dwelling on the extraordinary testifying abilities of John D.
Rockefeller and other members of the band, but the acrobatic feats of
ground and lofty tumbling in the way of truth which they have given when
before the blinking footlights of the temples of justice are as
Punch-and-Judy shows to a Barnum three-ring circus compared to Henry H.
Rogers' exhibitions.
His "I will tell the truth, the whole truth, and nothing but the truth,
so help me God," sounds absolutely sincere and honest, but as it rings
out in the tone of the third solemnest bell in the chime, this is how it
is taken down in the unerring short-hand notes of the recording angel
and sent by special wireless to the typewriter for His Majesty of the
Sulphur Trust: "What I tell _shall_ be the truth and the whole truth,
and there _shall be_ no truth but that I tell, and God help the man or
woman who tells truth different from my truth." The recording angel
never missed catching Henry H. Rogers' court-oaths in this way, and
never missed sending them along to the typewriter at Sulphurville, with
this postscript: "Keep your wire open, for there'll be things doing
now!"
At the recent but now famous sensational Boston "Gas Trial," Henry H.
Rogers in the role of defendant was the principal witness. I was in
court five hours and a half each sitting as day after day he testified.
I watched, as the brightest lawyers in the land laid their traps for him
in direct and cross-examination, to detect a single sign of fiction
replacing truth, or going joint-account with her, or where truth parted
company with fiction; and I was compelled, when he stepped from the
witness-stand, to admit I had not found what I had watched for. This,
too, when I was equipped with actual knowledge and black-and-white
proofs of the facts. Weeks before the trial began Attorney Sherman L.
Whipple, one of the great cross-examiners of the time, had made his
boast that he would break through the "Standard Oil" magnate's
heretofore impenetrable bulwarks, and when H. H. Rogers entered the
court-room for the first time and let his eagle eye sweep the lawyers,
the laymen, and the judge until it finally rested on Whipple, the glance
was as absolute a challenge and a defiance as ever knights of old
exchanged.
I followed Mr. Rogers on the witness-stand and was compelled to give
testimony directly opposite to that which he had given, and at one time,
as I glanced at the row of lawyers who were in "Standard Oil's" hire, I
felt a cold perspiration start at every pore at the thought of what
would happen if I even in a slight detail got mixed in my facts. Then I
fully realized the magnificence of Mr. Rogers' acting, for not once in
all the hours I had sat and watched him had I detected a single evidence
of cold, hot, or lukewarm perspiration coming from his pores.
Yet away from the intoxicating spell of dollar-making this remarkable
man is one of the most charming and lovable beings I have ever
encountered, a man whom any man or woman would be proud to have for a
brother; a man whom any mother or father would give thanks for as a son;
a man whom any woman would be happy to know as her husband, and a man
whom any boy or girl would rejoice to call father. Once he passes under
the baleful influence of "The Machine," however, he becomes a
relentless, ravenous creature, pitiless as a shark, knowing no law of
God or man in the execution of his purpose. Between him and coveted
dollars may come no kindly, humane influences--all are thrust aside,
their claims disregarded, in ministering to this strange, cannibalistic
money-hunger, which, in truth, grows by what it feeds on.
In describing one head of "Standard Oil," I have necessarily used many
words because nature cast him in a most uncommon and chameleon-like
mould. The other two require less of my space, for neither is unusual
nor remarkable.
John D. Rockefeller, however great his ability or worldly success, can
be fully described as a man made in the image of an ideal money-maker
and an ideal money-maker made in the image of a man. A foot-note should
call attention to the fact that an ideal money-maker is a machine the
details of which are diagrammed in the asbestos blue-prints which paper
the walls of Hell.
With William Rockefeller it is different. When I read in my Bible that
God made man in His own image and likeness, I find myself picturing a
certain type of individual--a solid, substantial, sturdy gentleman with
the broad shoulders and strong frame of an Englishman, and a cautious,
kindly expression of face. And that is the most fitting description I
can give of William Rockefeller. A man of few, very few words and most
excellent judgment--rather brotherly than friendly, clean of mind and
body; and if I have not given you the impression of a good, wholesome
man made in the image of his God, I have done William Rockefeller a
greater wrong than an honest man can afford to do another.
CHAPTER IV
MY OWN RESPONSIBILITY
As to my personal responsibility for the crime of Amalgamated, right
here, before proceeding further, I shall briefly explain the
transaction, state my share in the deal, and point out how completely I
was hoodwinked by the "System."
The great Anaconda mine and affiliated properties, previous to the
creation of the Amalgamated, were owned by J. B. Haggin, Lloyd Tevis,
and Marcus Daly. The control of the properties and their operations were
absolutely vested in Marcus Daly, and he alone knew where the lean veins
ended and the fat ones began. For many years he had kept a close guard
over the very fat ones, never letting his right eye know what the left
one saw when he was examining them. For deep down in his mind Marcus
Daly cherished a dream--a dream of immense riches, and it was to be
realized in a simple enough way. He would get together the millions to
buy out his partners on the basis of a valuation of the "ore in sight,"
then in supreme ownership himself reap untold profits out of the milling
of the plethoric veins he had been so careful to leave unworked. The
immense natural endowments of the Anaconda rendered this easy enough,
for even the lean veins "in sight" contained a vast store of copper and
gold and silver.
Just about the time the world awaited the first section of "Coppers"
which I had advertised should consist of the rich Boston & Montana, and
Butte & Boston properties, it "happened" that Mr. Rogers "met" Marcus
Daly. The result of the conjunction of the two personalities--the
whole-souled, trusting miner and the fascinating and persuasive master
of Standard Oil--was decisive; the miner confided his dreams and his
aspirations to the magnate, who at once magnificently undertook to
realize them. The trade was almost instantly made. Mr. Rogers would buy
the properties of Daly, Haggin, and Tevis, at "in-sight" prices, and
Daly would be his partner, but the partnership must remain secret until
the purchase was consummated.
The ownership of the Anaconda Company at the time consisted of 1,200,000
shares, and the purchase of a few shares over the majority at the
"in-sight" lean-vein valuation of $24,000,000 would carry the turnover
of the management and the control. It took but a very brief time to get
together the other properties which were finally included in the first
section of Amalgamated. They consisted of the Colorado, Washoe, and
Parrott Mining companies and timber, coal, and other lands, and
mercantile and like properties situated in the State of Montana, for
which Mr. Rogers paid in round figures $15,000,000, _a total of
$39,000,000 for what within a few days after purchase was capitalized at
$75,000,000 in the Amalgamated Company_.
No one but Henry H. Rogers, William Rockefeller, myself, and one lawyer
knew the actual figures of the cost, although a number of the members of
the different groups, including Marcus Daly, the silent partner, were
sure they were in the secret.
As soon as the properties were secured, they were capitalized for
$75,000,000 as the Amalgamated Copper Company and were immediately
offered for sale to the public. It will thus be seen that the profit on
this section alone was $36,000,000, probably the largest actual profit
ever made by one body of men in a single corporation deal, yet so nicely
does "Standard Oil" discriminate in dispensing its generosity that in
this case those who received the $36,000,000 profit refused to deduct
from it $77,000 of expenses connected with the formation of the company,
thereby compelling it to start $77,000 in debt. This was something
Marcus Daly never forgave and to the day of his death he repeatedly
referred to the act as the personification of corporation meanness.
In the organization of the Amalgamated Corporation certain individuals
and institutions, for various considerations, were entitled to some
share in the profits of the deal. First there was Marcus Daly who knew
what the major portion of the property had cost and was a silent partner
in the winnings as he knew them. The Amalgamated Company was organized
in and floated on the public from the National City Bank, and so James
Stillman, its president and head, who is also one of the inner circle of
"Standard Oil" chiefs, should participate. Something was due also to J.
Pierpont Morgan & Co., and to Frederick Olcott, president of the Central
Trust Company of New York, who were on the board of directors. On the
board of directors, too, was Governor Flower, of the banking and
brokerage house of Flower & Co., who had acted as fiscal agents for the
corporation at its formation. Nor must I forget the Lewisohn Brothers,
who had been compelled to turn in all their copper business at a
fraction of its worth--or at just the aggregate of its cost and raw
material--to be incorporated in the United Metals Selling Company, a
part of the Amalgamated scheme, but not included in the corporation.
Every one of these men had elaborate assurances that he was in on the
cellar floor.
This is what actually occurred. Before Mr. Rogers and William
Rockefeller let any one at all in, they built a superbly designed
water-, air-, and light-proof structure (particularly light-proof),
consisting of five floors, each one being the exact duplicate of the
$39,000,000 one upon which they, and they only, stood. Marcus Daly alone
was ushered in on the first floor, elevated just a few million dollars
above their own. James Stillman and Leonard Lewisohn, of Lewisohn
Brothers, were admitted to the next one, the $50,000,000 floor. In other
words, Mr. Stillman and Mr. Lewisohn were given an unnamed percentage,
the percentage to be arranged later by Mr. Rogers, in all profits above
actual cost, and such actual cost was called $50,000,000 and was arrived
at by adding the $11,000,000 of secret profits to the actual $39,000,000
cost. Then J. P. Morgan & Co., Frederick Olcott, Governor Flower, and
one or two of the dearest friends and closest associates, were let in on
the $60,000,000 floor--were given an unnamed percentage, the percentage
to be arranged by Mr. Rogers, in all profits above actual cost, and such
actual cost was called $60,000,000, and was arrived at by adding
$21,000,000 of secret profits to the actual $39,000,000 cost. Then
selected ones from the eight different groups of "Standard Oil" were
allowed to move in to the fifth, or underwriters' floor, which was
affirmed to be $70,000,000 cost; and then, as a solid phalanx, all the
different floor-dwellers marched upon the dear public to the tune of
$75,000,000, in the front ranks of which were those of the eight groups
of the Standard Oil army who had not already been admitted to any of the
secret floors.
Right here the crime of Amalgamated was born, not so much the legal
crime but the great moral crime. In the ethics of Wall Street the
heinousness of the transaction lies not in the fact that the public was
compelled to pay $36,000,000 profit to a few men who had invested but
$39,000,000--and, as I shall show when I approach this part of my story,
the $39,000,000 did not even belong to them--but in the fact that Mr.
Rogers and Mr. Rockefeller had given to their associates what, in the
vernacular of "the Street," is termed "the double cross."
The every-day people, the millions who do not know Wall Street, realm of
the royal American dollar; Wall Street, its sidewalks inlaid with gold
coin and paved from curb to curb with solid gold bricks; Wall Street,
lined with huge money-mills where hearts and souls are ground into
gold-dust, whose gutters run full to overflowing with strangled,
mangled, sand-bagged wrecks of human hopes, to be poured, in a
never-ending stream, into the brimming waters of the river at its foot,
for deposit at the poor-houses, insane asylums, States' prisons, and
suicides' graves, washed daily by that grim flood's ebb and flow--the
every-day people, I am sure, will not take in the blackness of this
transaction at this stage of my story, but before it is ended I will lay
this and many more of an equally hellish nature before them in such A B
C simplicity that all can read the portent as clearly as the Prophet
Daniel read the writing on the wall in the banquet-hall of Belshazzar.
When I consented to allow property which had cost only $39,000,000 to be
sold to the public for $75,000,000, it was under a pressure which it was
practically impossible for me to withstand. I do not think I use too
strong a word when I say "pressure." For three years I had been
advertising to the world the great merits of "Coppers," and for over a
year I had announced that when the public was given an opportunity to
participate in the consolidated "Coppers" it would be upon a basis most
carefully worked out: that the properties included in the first section
would surely be worth more than the price at which they would be offered
to the public, and that all the power, capital, and ability of "Standard
Oil" were behind the promises I made. I did this advertising openly and
in the frankest possible way, and in all of my announcements, whether
printed, oral, or otherwise, used the names of Henry H. Rogers, William
Rockefeller, James Stillman, the National City Bank of New York, and
"Standard Oil" as freely as I did my own, and in many ways led the
public to believe that the very rich Boston & Montana and Butte & Boston
companies were to be included in this section of "Coppers."
At that time my alliance with "Standard Oil" was close. A business
connection had developed into a strong personal relation between Mr.
Rogers and myself. We were engaged, together with William Rockefeller,
on a great financial deal which was based on certain conclusions I had
worked out in regard to the copper industry. These men were to me the
embodiment of success, success won in the fiercest commercial conflict
of the age. Their position at the helm of the greatest financial
institution in the world gave weight and importance to their judgment
and opinions. Nor had aught occurred between us to suggest they would
dare perpetrate the crimes they did. Besides all this, indeed an
integral part of it, my personal resources were completely involved in
the transaction, for the most part pledged with Mr. Rogers and William
Rockefeller in stocks of the Butte & Boston and Boston & Montana
corporations.
This was, then, the nature of our connection when Mr. Rogers, suddenly
and without previous intimation of his schemes, notified me of his
purchase of the Daly-Haggin-Tevis properties, and practically ordered me
to put them upon the tray which I was preparing and take them to the
eagerly waiting public, who by this time were fairly howling for the
good things we had been promising them.
In support of this extraordinary change of plan Mr. Rogers urged the
secret wealth of the Anaconda and the great value of the other
properties which I myself had helped purchase, but I bitterly opposed
the new proposition until there was nothing before me but these
alternatives--to accept the change Mr. Rogers insisted on or break with
"Standard Oil." The latter would mean that I must announce to the public
that it was in danger of being tricked, and it was by no means certain
that my warning would carry weight against the denials and assurances of
"Standard Oil." However much influence I had obtained through my long
years of dealings with the public, independent of "Standard Oil," I
realized that "Standard Oil's" influence and prestige were much greater,
for it must be remembered that at this time the public had not had the
evidence since acquired of the "System's" cold-blooded trickery. If I
took this course it would mean not only my own ruin financially, for Mr.
Rogers and William Rockefeller could call my loans and wipe me out
completely, but also the ruin of my friends and allies, who, under my
direction, had invested their own millions in the properties concerned.
On the other hand, I had the most earnest assurances from Mr. Rogers and
William Rockefeller that the new properties were worth much more than
the $75,000,000 at which it was proposed to capitalize them. They took
me to task for my distrust of them, and went far to demonstrate to me
the accuracy of their estimates. They not only gave me Marcus Daly's
minute estimates of the values and legitimate possibilities of Anaconda,
but consented to have these verified by outside experts in whom I had
implicit confidence, and whose personal examination more than bore out
Daly's appraisal. I have never yet had reason to doubt the correctness
of the figures then shown me, although since I began this story
"Standard Oil," in an endeavor to get me to abandon my efforts to
secure justice for the thousands I assisted in duping, have stated for
the first time that Marcus Daly deceived them and really, to use the
words of their chief counsel, sold them a "gold brick."
After this examination I felt convinced that the properties "Standard
Oil" insisted on substituting for those originally intended for the
first section of Amalgamated were such that the public, if honestly
dealt with, could not possibly meet with loss in purchasing. But even
then I only consented to go ahead with the flotation under a definite
agreement which seemed to me completely to guard against all
contingencies of jugglery or deception. This agreement stipulated that
all the profits from the transaction should be taken by those to whom
they were due in the stock of the Amalgamated Company, and no part of
them in cash--that the public should be sold, at the flotation, only
$5,000,000 of the $75,000,000, and that "Standard Oil" and all
associated with "Standard Oil" in the profits should retain the
remaining $70,000,000 until such time as it had been absolutely
demonstrated to the public that the property behind the $75,000,000 of
stock was worth more than the amount it had been capitalized for.
Furthermore, I was also promised that the $5,000,000 cash to be taken
from the public should be kept intact, and in my handling of the market
it should always be available for the repurchase from the investors of
what had been sold to them, at the price which they had paid for it.
This was the basis on which I went on with Amalgamated. I would not have
my readers understand me as asserting it would have been possible for me
to have stopped the flotation had I attempted it. But, on the other
hand, I would not have them think that I desire to be absolved from the
disastrous results of the great mistake I made at this time in not at
any cost doing that which after-happenings have shown would have been
the most honest course for me to have pursued. Nor would I have them
think I desire to be absolved from the consequences of many other
mistakes which this one led me into--mistakes in temporizing with the
situation and postponing action which I should have boldly and
fearlessly forced, regardless of all consequences to the public, my
friends, and myself.
The subsequent proceedings, the manner in which Amalgamated was actually
sold to the public, the flagrant disregard of the conditions of my
agreement with Mr. Rogers and William Rockefeller, will, when fully told
in their proper place in my story, show that the "System," by whose
methods the public is as ruthlessly plundered as though the fruits of
its labors were taken away from it by highwaymen, admits also of its own
votaries being tricked and despoiled by their associates. The men who
participated in the transaction I have just described are among the most
astute financiers in the country and presumably possessed of invincible
capacity to protect their own interests. But with all their knowledge of
the "System's" tricks they were, in this instance, as shrewdly duped as
the veriest tyro in the Wall Street game.
My own experience with the "System" in this deal was different in degree
but not in principle from that of these others, and it must be remembered
that I was better equipped to protect my interests than any of them. I knew
that the actual cost of the properties comprising the first Amalgamated was
$39,000,000, and that when sold to the public at $75,000,000 there must be
a profit of $36,000,000. I had every right to think I knew all the other
details connected with the transaction, for as organizer and executant of
the deal my share in the profits was to be equal to that of Henry H. Rogers
and William Rockefeller respectively. We were each to have twenty-five per
cent., the remaining twenty-five per cent. going to others. This was no
gentleman's "leave-it-to-me-and-I'll-see-you-get-what's-coming-to-you"
arrangement either, but a hard, cold, mutually satisfactory and
settled-in-advance agreement. But when it came to the final accounting, the
"System" had so regulated things that the participants on the various
floors, except, of course, Mr. Rogers and William Rockefeller, must each
accept without question the share finally handed over to him. Having no
means of knowing how large the other interests were, or what the
"extraordinary expenses" had been, they were in no position to question the
payments made them, which represented sums below what they would have had
if the business had been conducted as they thought it had been. When my
final account was presented to me I was startled. Notwithstanding the
"cleverness" of the "System," the deception was so obvious, so audacious,
that the instant Mr. Rogers submitted it to me I exploded and denounced the
transaction with such vehemence and conviction that within a few minutes
there was forthcoming a second statement, revising the account, by which I
was given just double the amount first tendered, and the figures in both
accounts ran into millions; yet the amount in the second account upon which
I settled was only one-half the share received by my equal partners, Henry
H. Rogers and William Rockefeller, as I afterward learned.[1]
This is a fair statement of my own share in the first Amalgamated
transaction. I have no desire to evade the issues suggested and raised
by these revelations. My frankness should be absolute proof of that. As
I promised, I shall hew to the exact line of fact, letting the chips of
responsibility, legal and moral, fall where they may, though many of
them stick to my own clothes. My own burden of error I am ready and
willing to shoulder, but I decline any longer to take and carry
responsibilities which belong absolutely to others. There should be a
time-limit on martyrdom, and mine anyhow is up.
FOOTNOTES:
[1] I know no better spot in my story than right here to set the public
right on two vital points concerning Amalgamated, upon which they are and
always have been greatly at sea:
John D. Rockefeller did not have before the Amalgamated Company was
organized and floated, nor at its organization and flotation, directly or
indirectly, a dollar's interest in its stock nor its affairs, and I have
what I consider excellent reasons for believing he has not had any interest
up to the time of this writing.
The disasters which have come to the Amalgamated stockholders did not
occur, as has been so industriously and ingeniously advertised throughout
the world, because of the inability of the "Standard Oil"-Amalgamated-City
Bank fraternity to prevent the collapse of the price of copper, the metal,
from the high price of seventeen cents to the low one of eleven cents per
pound. "Cornering" the metal market, forcing the price to an abnormally
high figure and maintaining it there had, notwithstanding the many emphatic
statements to the contrary, absolutely no part in any of our original
plans, and the success or failure of our project was in no way dependent
upon any price for copper, the metal, other than the fair and legitimate
price caused by legitimate supply and demand. In fact, as I shall
demonstrate before my story is ended, forcing the price to extremely high
points and the resulting collapse were all a part of the trickery by which
the public was plundered.
CHAPTER V
THE POWER OF DOLLARS
At no time in the history of the United States has the power of dollars
been as great as now. Freedom and equity are controlled by dollars. The
laws which should preserve and enforce all rights are made and enforced
by dollars. It is possible to-day, with dollars, to "steer" the
selection of the candidates of both the great parties for the highest
office in our republic, that of President of the United States. It is
possible to repeat the operation in the selection of candidates for the
executive and legislative conduct and control of every State and
municipality in the United States, and with a sufficient number of
dollars to "steer" the doings of the law-makers and law-enforcers of the
national, State, and municipal governments of the people, and to "steer"
a sufficient proportion of the court decisions to make absolute any
power created by such direction. It is all, broadly speaking, a matter
of dollars practically to accomplish these things. I must not be
misunderstood as even insinuating that there are not absolutely honest
law-makers and law-enforcers, nor that there are not as many of them in
proportion to the whole body as there were at the creation of our
republic. I believe there is at the present time as large a percentage
of honesty among Americans as ever there has been, but it is plainly
evident to any student of the times that at no other period in the
history of the United States has honesty been so completely "steered" by
dishonesty as at this, the beginning of the twentieth century.
_I shall go further and say that there to-day exists uncontrolled in the
hands of a set of men a power to make dollars from nothing._ That
function of dollar-making which the people believe is vested in their
Government alone and only exercised under the law for their benefit, is
actually being secretly exercised on an enormous scale by a few private
individuals for their own personal benefit. This, I am well aware, is a
startling statement, but not more so than the facts which support it.
Throughout the country we have all grown accustomed to the spectacle of
men who, poor yesterday, to-day display more dollars than the kings and
queens of olden times controlled. In flaunting this money these men
proudly boast: "We made all this yesternight, and are going to multiply
it five-or fifty-fold to-morrow night."
The fact that there must be in this country some secret method of
gaining vast fortunes gradually dawned on the minds of the people. This
method, they argued, must be outside the laws of the land which they
themselves had made, and they were confronted with the fact that the
possessors of these fabulous fortunes were creating a power not
recognized by their Government and which practically placed the
Government in the hands of the fortune-owners. They realized that in
some way the magic of this fortune-making was connected with, or seemed
to be compounded in, institutions called corporations and trusts, and
that among these the head and centre was a great affair called "Standard
Oil." Wherever this "Standard Oil" was, all knew that strange wonders
were worked. Within the sphere of its influence dirt changed to gold,
liquids to solids, and what was, was not, and what was not, was. Whoever
became a part of this mysterious "Standard Oil," at the same time was
rendered "powerful"; as though touched by a fairy's wand, he changed
from pauper to millionaire. But what was "Standard Oil"? The people knew
that at the beginning it was only an aggregation of men, private
individuals, who had accumulated much money by securing a monopoly of
selling oil, and that these men were "Rockefellers," and that Standard
Oil and "Rockefellers" had been cute and cunning in the conduct of their
oil-selling to a degree greater than had been rival sellers of oil or of
other necessities. And as time wore on much more was heard of the
cleverness of Standard Oil and "Rockefellers," as the victims of the
cuteness and the cunning "hollered" in public places, and the
newspapers and writers of books exclaimed against their practices and
exactions. But many other things were happening simultaneously, and to
the great bulk of the people it was interesting rather than portentous
that there existed in the country a giant oil-thing whose owners were
reputed the richest men in the world.
It was not until the beginning of the twentieth century that the monster
"Standard Oil" loomed up before the people as the giant of all corporate
things and that its ominous shadow seemed to dwarf all other
institutions, public or private. In multitudinous forms it was before
the people.
In awed whispers men talked of its mysterious doings and canvassed its
extraordinary powers as though "Standard Oil" were a living, breathing
entity rather than a mere business institution created by men and
existing only by virtue of the laws of the land.
About the time that the world had begun mistily to take in the
tremendous forces which radiated from "Standard Oil," there occurred a
financial crash, and the people saw their savings, invested in what they
supposed were the legal and absolute titles of ownership in the material
things of their country, suddenly decline in value and contract to
prices representing a loss to them of billions of dollars. Throughout
the misery and suffering this terrible collapse occasioned, "Standard
Oil" remained undisturbed as before and amid all the confusion kept
sternly on its dollar-"making" way. Indeed, it seemed to gain in bulk as
other institutions diminished or disappeared. Then it was that the
people first began to demand, what they are still to-day fiercely
demanding, "What is this 'Standard Oil'?" "What is its secret?" "Whence
came it?" and, "Can our republic endure if it, too, endures?"
To-day "Standard Oil," the "Private Thing," is the greatest power in the
land--more powerful than the people individually or as a whole, and its
secret is the knowledge of the trick of finance by which dollars are
"made" from nothing in unlimited quantities subject to no laws of man
nor nature. The dollars that "Standard Oil" _makes_ are of the same
value as the dollars of the people as made by the Government, which
dollars we know can be coined and put into circulation only in
accordance with law and for the benefit of all the people.
For the better understanding of those readers not versed in the
technical phrases of finance and economics I shall in my narrative make
use of certain terms of my own which will convey meanings readily
grasped when the sense in which they are used is once comprehended. In
speaking of "Standard Oil," for instance, I will speak of it as a
"Private Thing." By that term I desire to typify the active, private
identity of a corporation which comprehends, but exists independently
of, its legalized functions. Some corporations have a real personality
in addition to that which their name and the corporation laws prescribe
for them, an inherent power, or individuality, which exists above and
apart from their physical functions as sellers of oil, of coal, or of
ice. This may be an incarnation of the power developed in the
transaction of their legalized occupations, but the "Private Thing" is
uncontrolled by any of the restrictions by which the law defines and
curbs the corporation whose name it bears. Already I have distinguished
between "Standard Oil" which wields all the powers of its subsidiary
companies, and Standard Oil, the seller of oil. In the same way we have
"American Sugar Refineries" and "United States Steel," the "Private
Things" which are not one whit better than nor different from "Standard
Oil," the "Private Thing." Though this narrative will deal only with the
"Private Things," Bay State Gas and Amalgamated Copper, I have no
hesitancy in saying that the methods employed and the results, good or
bad, which accrued in the case of any of the other "Private Things" with
which the public have had to do, differ only in details from those with
which I shall deal in my story.
In speaking of dollars brought into existence by the trick of finance I
have referred to I shall call them henceforth "made dollars," to
distinguish them from dollars coined by the Government and legitimately
acquired by the individual or corporation. These "made dollars," it must
be remembered, are really "made" for all purposes of use as surely as
if they had the Government's stamp, yet they are not made in the sense
of the known volume of the people's money being added to. So, however
many of these "made dollars" are brought into existence by this trick of
finance, only the men who "made" them can know and profit by their
existence. The people are no wiser nor can they adjust themselves to the
change of conditions brought about by the creation of all this new
money; yet if "unmade" or lost, the entire volume of the nation's wealth
would be contracted.
I can set before my readers better by an illustration than by any
process of definition, the trick of finance by which "made dollars" are
brought into existence. Let us suppose that the United States Government
at Washington, the only power legally entitled to issue money for
circulation among the people, puts forth a particular $10,000. All the
conditions prescribed by law have been followed, and all the people in
the country are benefited by the issue and circulation of this
particular $10,000, each in the proportion the laws prescribe.
"B," a Western farmer, tills his soil and receives, by the sale of his
wheat, the particular $10,000, which he then deposits in _The Bank_.
_The Bank_, being a part of the Government machinery, only receives,
holds, and uses the $10,000 under safeguards provided for by the laws of
the land, so hereafter "B's" material life is conducted on the basis
that he is the full and actual possessor of $10,000. He knows, further,
that his $10,000 cannot be expanded nor contracted, nor its relation to
any of the other money of the people which is in circulation altered
without his knowledge, because he knows such changes cannot come about
except through the Government. I say he knows this--he has every right
to believe he knows it--but, in fact, it is not so, because of the
working of the secret financial device of the Private Thing. At this
stage enters "C," the Private Thing.
"C" purchases with $3,300 ("B's" money) which he borrows from _The
Bank_, a copper-mine, depositing the title which he receives from the
seller with _The Bank_ as collateral for the $3,300. After purchasing he
arbitrarily calls the copper-mine worth $10,000--arbitrarily because
his act is not controlled nor regulated by any of the laws of the
land--arbitrarily because the actual cost, $3,300, is his secret and his
alone. Then, arbitrarily, "C" organizes his $3,300 of copper property
into the Arbitrary Copper Company, and issues to himself a piece of
paper, which he arbitrarily stamps "10,000 stock dollars." This he takes
to _The Bank_, and by loan or other device exchanges it for the
remaining $6,700 belonging to "B," and thereafter "C" conducts his
affairs on the basis that he is the possessor of $6,700, his "made
dollars" in the transaction. At this stage there is actually in use
among the people $16,700 where "B," the legitimate factor, and his kind,
the people, suppose there is but $10,000--$10,000 which is recorded,
known and legal, being used by the legitimate factors, "B" and _The
Bank_, and $6,700 which is unrecorded and unknown to any but "C" and
_The Bank_, being used by the illegitimate Private Thing "C."
Right here is the secret device, the financial trick, by which the
greatest power in the land has been created, and by which the people can
be absolutely plundered of their savings for the benefit of the few.
At this stage the two-thirds of "B's" $10,000, of which he later is to
be plundered, has not been actually taken away, so he cannot possibly
have any evidence yet of the process of pillage which has been begun, or
that the volume of money which he supposes is all that exists has been
tremendously expanded. The next step is where "C" sells his $3,300,
stamped "10,000 stock dollars" (which, as already shown, he has
exchanged with _The Bank_ for the $10,000 deposited by "B"), to "B" for
$10,000, which $10,000 "B" withdraws from _The Bank_ by simply making
out a check in favor of "C." ("B's" inducement to exchange his dollars
for the stock dollars of "C" is the high rate of interest that they will
return in the form of dividends, which rate is much larger than _The
Bank_ can afford to pay.) "C" deposits "B's" check with _The Bank_ and
hereby liquidates his $10,000 indebtedness to _The Bank_.
At this stage "B" is still the possessor of $10,000, but it is "10,000
stock dollars." "C" is the possessor of $6,700, and "D," from whom the
copper-mine was purchased, is the possessor of $3,300; but the two
latter amounts make up the 10,000 real dollars, and _The Bank_ remains
where it was at the beginning of the transaction. The people, however,
are no wiser; but they know, because they have been most carefully
educated to such knowledge by "C's" agents, Wall Street, and the press,
that their country is tremendously prosperous--that its great prosperity
is evidenced by the $6,700 added wealth in the form of 6,700 new stock
dollars. At the next stage the financial trick accomplished by the
secret device is complete. "B," the farmer, who has contracted for new
machinery and other necessities and luxuries to be paid for "next
season," attempts next season to turn his 10,000 stock dollars into real
dollars, and "C," the Private Thing, knowing their real value to be but
$3,300, refuses to make the exchange, but instead, by proclaiming their
real value, compels "B," who must have real dollars to meet his debts,
to sell them for what "C," the Private Thing, is willing to pay. "C,"
the Private Thing, is willing to pay their worth, which he alone knows
is $3,300; he repurchases them at that price from "B," that he may
repeat the operation at the return of the next "wave of the country's
prosperity."
By this operation "B," the farmer, has lost, as absolutely as though
they had been taken away from him by a Government decree, $6,700 of his
own making, and "C," the Private Thing, has "made," as absolutely as
though the Government had allowed him to coin them for his own benefit,
6,700 real dollars, and _The Bank_, created, regulated, and controlled
by law, and existing because of the people's deposits of money, has been
the instrument by which "C," the Private Thing, has deprived "B," the
farmer, of his savings, because "C," the Private Thing, is at one and
the same time during the operation I have outlined, himself and _The
Bank_.
A careful study of this illustration, by even laymen unacquainted with
financial or corporation affairs, will clearly show that the foundation
of this transaction was _The Bank's_ putting in jeopardy $3,300 of "B's"
deposited $10,000, and that if the $3,300, after being put in jeopardy,
had been lost, "B" would have been the loser,[2] which, in turn, means
that the compensation for the jeopardy in which the $3,300 was placed
was the possibility of $6,700 profit; and that, therefore, the $6,700
profit when made should have gone to the owner of the $3,300, "B,"
instead of to "C," the user of it.
It is therefore in this sense that I shall use the term "made
dollars"--wherever they are "made" or "unmade" through one set of men
using the dollars of another set of men without that other set knowing
that their dollars are being so used; and wherever the result of such
use is that when dollars are "made," they are "made" by the ones who use
others' money, and where dollars are "unmade," they are lost by the ones
who own the dollars which they don't know are being used.
FOOTNOTES:
[2] I say "B" would have been the loser because all money lost by a bank
must eventually be lost by the depositors, the people, or the surplus or
capital of the bank which belongs to the people, through their ownership of
the stock in the bank. Of course the loss of individual amounts such as
$3,300 would not come directly on the people. But when the aggregate of the
money put in jeopardy by the four classes of institutions I name--national
banks, savings-banks, trusts, and insurance companies--runs into billions
and is lost, the loss _must_ fall on the people, because the only other
ones involved are the managers and controllers of these institutions, who
always see to it that when the losses which would wreck the bank are
actually made, they, the managers and controllers, have no deposits and
none of the stock.
CHAPTER VI
CONSTRUCTION OF "STANDARD OIL'S" "DOLLAR-MAKING" MILL
I believe "Standard Oil" was the first to utilize this secret device for
circumventing the safeguards which the law has erected to protect the
savings of the people. It was the first practically to apprehend that, a
large proportion of all the moneys in circulation, which belong to the
people or the Government, being in the custody of the national and
savings-banks and trust and insurance companies, it would only be
necessary for a set of men to obtain control of sufficient of the
principal national and savings-banks and trust and insurance companies
to control practically unlimited amounts of such funds. Once in control
of these funds dollars could be absolutely "made" at will by the three
following steps: 1st. Using the money in these institutions to acquire
properties. 2d. Consolidating such properties on an inflated basis, and
selling them to the people (who, in fact, already owned them; because
they owned the funds with which they had been purchased); and, 3d, by
stock-market trickery scaring their owners into re-selling them at an
enormous shrinkage from the price they had paid. To understand a
situation with "Standard Oil" is to act, and twenty years ago it began
to weave a net to secure control of the four classes of institutions I
have named.
Its first move was to establish a great corporation, the Standard Oil
Company, and make its stock, 1,000,000 shares, sell at from $650 to $800
per share, or $650,000,000 to $800,000,000. It kept its affairs
mysteriously secret, it paid enormous dividends, and from time to time
it caused to be published broadcast throughout the world the statement
that it was held in such value by its creators, the Rockefellers,
Rogers, etc, that they continued to own all but a few shares of the
entire capital. To prove that there could be no doubt of such continued
ownership, the public's attention was repeatedly called to the fact that
the Standard Oil Company was the only great corporation which did not
allow its shares to be traded in upon any of the stock-exchanges. As a
matter of fact, though they are not traded in on the regular
stock-exchanges, they are actively bought and sold daily on the New York
"Curb."
At the height of the recent financial storm word went round that the
crafts of three over-night-made multimillionaires, men foremost in the
seventh group of "Standard Oil" votaries, were in the trough of the
financial sea and headed for the breakers, which were already strewn
with the wrecks of the people's savings. Following closely on the heels
of these stories came the astounding one that each of these enormously
rich men had, in his endeavors to raise large amounts of cash, disclosed
among his assets blocks of "Standard Oil" stock ranging from 5,000 to
20,000 shares each. Hardly had the public heard this before all
financialdom knew that the storm-tossed crafts had received succor, and
that the crisis had passed. For one brief day the financial press of the
country printed the item: "Standard Oil came to the rescue by buying for
cash large blocks of Standard Oil stock which had long been held by this
or that interest for investment," and no more was thought of the
incident. Even the most alert financiers never suspected that the most
important stock secret of the age had been on the verge of becoming
public property.
Planted deep in the minds of the public that watches the comings and
goings of the Street is the conviction that Standard Oil is the holy of
holies among stocks. The world has been taught to believe that the
owners of Standard Oil regard the shares of the great oil corporation as
their most precious, most sacred possessions. Yet while "Standard Oil"
has been so scientifically spreading abroad the impression that the
public would never be permitted to own Standard Oil stock, secretly it
has been engaged in exchanging that stock for the securities of the
people in the form of banks and trust companies, railroads, and other
assets of definite value. So completely has "Standard Oil" pulled the
wool over the eyes of the votaries of finance that there cannot be found
in or out of Wall Street a single great financier who would not laugh to
scorn the suggestion that "Standard Oil" is engaged in a campaign for
the distribution of its Standard Oil stock to the public. Yet pin your
great financier down to the facts, and he'll admit that he himself has
quite a block of the stock, and that institutions of which he is a
director include among their assets in one form or another good-sized
parcels of the inestimable security. But so completely are these very
wise men held by the spells woven over them when for this or that
special reason they were allowed as a favor to acquire their holdings,
and so impressively have they been shown that their ownership in
Standard Oil stock must be kept secret, that no suspicion has ever
entered their minds that they were playing the part of lambs in its
purchase.
Nor was the episode I have described above allowed to disturb their
serenity. It soon became known to the innermost circle of Wall Street
that the stock the three men had resold to "Standard Oil" represented
the share of each in some of the gigantic deals to which he had been a
party during the last ten years, and that with its acquirement had gone
a pledge that it would always be kept in the purchaser's "tin box," and
whenever inspected by "Standard Oil" would be free from "pinholes." And
so, adroitly, dangerous deductions were prevented.
For the uninstructed I may say that a capitalist's "tin box" is the
receptacle for the stocks and bonds that largely represent his fortune,
and pinholes in a stock certificate are in Wall Street conclusive
evidence that such certificate has, at some period, temporarily passed
into other's hands as collateral for loans, for there has been pinned to
it a memorandum or note stating the details of the transaction in which
its owner parted with it. Pinholed securities are looked upon by the
upper crust of big financiers with much the same horror as that with
which members of the American social upper crust look upon their No. 10
boots and gloves--reminders of their peasant ancestry.
But to return to "Standard Oil's" financial weavings: Their next move
was to use Standard Oil stock as the basis for loans, that is, as
collateral for money borrowed from the banks, trust and insurance
companies, and treasuries of other great corporations and estates. The
money thus acquired was paid out to purchase the control of banks and
trust and insurance companies in all parts of the United States, the
Standard Oil ownership being represented by dummy directors and
officers.
The next move represents another of the dazzling devices of finance in
which "Standard Oil" is adept, and brings the process of artificial
expansion still further along. Control of a certain number of these
savings and national banks and trust and insurance companies having been
acquired, the funds of each were so manipulated by depositing those of
one institution with another, and the latter's in turn with the first,
as to swell the deposits of all and create in all of them an apparently
legitimate basis for increases of capitalization. At the same time there
was shown an apparently legitimate necessity for the establishment of
additional banking and trust companies, which were duly organized and
their assets juggled around by the same process. The result of all this
manipulation defies description. Throughout the series of correlated
institutions loans and deposits are multiplied in such an intricacy of
duplication that only a few able experts, employed by the "System"
because of their mathematical genius, are able to unravel the tangle to
the extent of approximating the proportion the legitimate funds bear to
those which have been created by the financial jugglery I have
indicated.
When "Standard Oil" had gathered into its net sufficient of the
important private institutions of finance there still remained the
federal Government, the largest handler of money in the country. It was
not hard for "Standard Oil" to introduce its expert votaries into the
United States Treasury and thus to steer the millions of the nation into
the banks subject to the "System's" control. This accomplished, the
structure was complete and the process of "making" dollars proceeded on
a magnificent scale.
That there may be no possible doubt in the minds of those of my readers
who are unacquainted with such matters that I am citing every-day, actual
happenings, I will tell just how the Daly-Haggin-Tevis-Anaconda-Amalgamated
transaction was worked out, showing that but for the existence of the
National City Bank of New York, or a like institution of the people, it
could not have been brought about.
When Mr. Rogers and William Rockefeller "traded" with Messrs. Daly,
Haggin, and Tevis for the Anaconda stock, and with others for like stock
or other properties which I have already named, the price agreed upon
was $24,000,000 to Daly, Haggin, and Tevis, and $15,000,000 to the
others, or $39,000,000 in all. This was to be paid by "Standard Oil" and
received by Daly, Haggin, and Tevis, and the others, but one of the
stipulations in the "trade" was that instead of the money's being paid
to Daly, Haggin, and Tevis, and others direct, it was to be credited to
them on the books of the National City Bank of New York and was to be,
by agreement, not withdrawn from the bank before a given time, the bank
agreeing that the new owners of this money should receive interest at a
low rate upon it while it so remained deposited. At the same time the
bank agreed to loan Mr. Rogers and William Rockefeller the $39,000,000
at the same rate of interest upon the collateral which the $39,000,000
was used in purchasing. Therefore the first part of the transaction was
as follows:
The bank, having $39,000,000 on hand belonging to the public in the form
of savings deposited, or having a fictitious $39,000,000 in the form of
book-keeping accounts made possible by the deposits of the public and
the manipulation of the funds in other banks and trust and insurance
companies belonging to the public or the Government, caused an entry to
be made in its books showing that this $39,000,000 had been loaned to
Mr. Rogers and William Rockefeller, and that they, having transferred it
to Daly, Haggin, Tevis, and others, were, upon the books of the bank,
the real owners.
The second part was the summoning into the City Bank of certain
"Standard Oil" lawyers, office-boys, and clerks, and the organization by
them of the Amalgamated Copper Company. The lawyers drew up the papers
and the office-boys and clerks signed them. First, the papers certified
that "whereas we (the office-boys and clerks) are desirous of taking
advantage of the corporation laws of the State of New Jersey, we (the
said office-boys and clerks) do so take advantage of the said laws and
form ourselves into the Amalgamated Copper Company, which will have a
capital of $75,000,000, and which will be allowed by said laws to own
copper-mines and other things, to mine copper and other things, to
manufacture, buy, sell, and trade in copper and other things, and to do
numerous and variegated other things; and that whereas we (the said
office-boys and clerks) have now become the Amalgamated Copper Company,
one of our number will purchase the entire capital stock of the said
Amalgamated Copper Company for $75,000,000 cash, which $75,000,000 cash
we herewith certify to have been paid in the form of a check for
$75,000,000, herewith delivered to the treasurer, one of our number, by
the clerk who drew it; and the treasurer, herewith certifying that he
has received the $75,000,000, herewith delivers unto said clerk the
$75,000,000 capital stock of the Amalgamated Copper Company, and we (the
said office-boys and clerks) herewith certify that there is within the
treasury of the Amalgamated Copper Company $75,000,000, and we (the said
office-boys and clerks) vote that it, the said $75,000,000, shall be
used in the purchase of certain stocks and properties, and said certain
stocks and properties shall be the same stocks and properties previously
purchased by Mr. Rogers and William Rockefeller, and now owned by them,
and we (the said office-boys and clerks) herewith certify that we have
paid from the treasury $75,000,000, that said $75,000,000 is in the form
of a check, and said check is the one previously received, or its
equivalent, by our treasurer, from one of our number, to wit, the clerk
referred to earlier in these papers, and said $75,000,000 has been paid
to Henry H. Rogers for his and William Rockefeller's use." Henry H.
Rogers, now having $75,000,000, where formerly he had stocks and
properties which had cost him $39,000,000, and being desirous of
investing it, purchased from the clerk the $75,000,000 of Amalgamated
stock which he, the clerk, had previously purchased from the treasury of
the Amalgamated Company, Mr. Rogers promptly paying for said purchase
with the $75,000,000 check or its equivalent, which has already done
such yeoman service.
The organization of the Amalgamated Copper Company of New Jersey now
being complete, and the company being in possession of all the property
which had formerly belonged to Mr. Rogers and William Rockefeller, and
which had cost them $39,000,000, and the clerk having again come into
possession of his $75,000,000 check, and Mr. Rogers and William
Rockefeller being the sole owners of the $75,000,000 of Amalgamated
stock, the second part of this transaction was completed. The third
began by the office-boys and clerks resigning from their positions as
directors and officers of the Amalgamated Copper Company of New Jersey
in favor of the more responsible and better known "Standard Oil"
votaries. Mr. Rogers and William Rockefeller then had the National City
Bank of New York offer for sale to the public the $75,000,000 of stock
in such a way that, although it was then the private property of Mr.
Rogers and William Rockefeller, the public were led to believe it was
the property of the Amalgamated Copper Company. Simultaneously, the
National City Bank of New York offered to loan the public its deposits
at the rate of ninety cents on the dollar, on any amount of the
Amalgamated stock it, the public, purchased; whereupon the public,
taking advantage of this offer, agreed to purchase from the National
City Bank of New York the $75,000,000 of stock for $75,000,000, thereby
enabling it to certify upon its books that the $39,000,000 it had loaned
to Messrs. Rogers and Rockefeller had been repaid, and enabling Mr.
Rogers and William Rockefeller, after paying said debts to the National
City Bank of New York, to become the absolute owners of $36,000,000 of
money, none of which they had owned before, and which they had "made" as
absolutely as though they had coined it by permit from the Government
of the people who had parted with it.[3]
The fourth part of the transaction began when months afterward the
public, who had borrowed their money from the National City Bank of New
York and other banks and trust and insurance companies to buy
Amalgamated stock at 100 cents on the dollar, were compelled to repay
it, and to do so were obliged to sell the Amalgamated stock which they
had purchased at $100 per share for the best price they could get, which
was $33 per share; and if we suppose for a moment that the "Standard
Oil," after repurchasing it at $33 per share, at a later day repeated
the operation of selling it for $100 per share, it will be seen that
"Standard Oil," the "Private Thing," would thereby "make" an additional
$50,000,000, as absolutely as though they had been allowed by the
Government to coin it.[4]
This explanation is not the creation of an extravagant fancy. It is not
romance, but reality. The thing described was a supreme manifestation of
the "System," of the perfect working of that tremendous financial
machine which reaps, grinds, and harvests for its own benefit, the
earned savings of the American people.
In showing how these thirty-six millions were made in the brief space of
this creature's (Amalgamated Copper's) life, I deal with reality and not
romance; but let my readers for a moment give their imaginations play
and picture to themselves one scene in this stupendous drama. A great
room in the greatest banking house in America, if not in the
world--silent, solemn--an atmosphere of impregnable rectitude--the solid
furniture, the heavy carpets, the chill high walls, the massive desks,
the impressive chairs, the great majestic table portentously suggestive
of power. Presto! the dim calm is broken; the air vibrates as when an
ancient church is invaded by a swarm of vampire-bats. Into the great
room enter a group of men and a flock of youths, who settle in the
impressive chairs round the majestic table. You wonder what is the
motive of the assemblage. These grave lawyers, whose names are weighty
in the nation's councils, and these gray-haired, dignified financiers
might well be gathered to arbitrate a dispute involving empires; but why
these office-boys and clerks, with their restless, surprised eyes and
uneasy gestures? The flourishing of papers, the murmuring of voices in a
confusion of "seventy-five million," "we buy," "we sell," "we are," "we
will"--words, nothing but words; then silence as one reads from a stiff
parchment certain resolutions which the suave gentleman with incisive
steel-clicking manners, at the head of the table, puts to a vote. Then
these youths, whose souls are afire with the hope of a director's $5
gold fee, timidly sign the record, trembling the while lest a blot call
down on them a scolding; a head clerk, whose fondest dream is a raise of
salary as the result of coming under the Master's eye in a
seventy-five-million-dollar deal, affixes a seal, and there is an
exchanging of thin slips of paper--checks--dollars--magically "made
dollars." Exit office-boys and lawyers.
The door closes--silence again. Then the air vibrates with the sound of
a hearty hand-slap and the genial, whole-souled greeting of the "Master"
to his partner. "William, I feel as though I had done an honest day's
labor! Thirty-six million dollars 'made' and no hitch, no delay!" Then
follows the partner's mild answer: "Yes, Harry, but don't forget James'
and the others' shares will shrink it up quite a bit."
Thirty-six million dollars for _one honest day's labor_! Thirty-six
million dollars--and Alaska cost us but seven millions and Spain
relinquished to us her claims on the Philippines for only twenty
millions. Thirty-six million dollars!--more than a hundred times as much
as George Washington, Thomas Jefferson, and "Abe" Lincoln together
secured for the patriotic labors of their lifetimes. And this vast sum
was taken from the people to enrich men whose coffers were already, as
the results of similar operations, so full of dollars that neither they
nor their children, nor their children's children could count them--as
the people count their savings, a dollar at a time--as thoughtlessly
taken as are the apples that the school-boy steals after he has eaten so
many that he can eat no more.
A thousand times have I tried to figure out in my mind what worlds of
misery such a sum of millions might allay if issued by a government and
intelligently distributed among a people--and do my readers know that
never in the world's recorded history has any nation felt itself rich
enough to devote thirty-six millions to the cause of charity--even in
the midst of the most awful calamities of fire, flood, war, or
pestilence? On the other hand, I have had to know about the horrors, the
misfortunes, the earthly hell, which were the awful consequences of the
appropriation of this vast amount. I have had to know about the
convicts, the suicides, the broken hearts, the starvation and
wretchedness, the ruined bodies and lost souls which strewed the fields
of the "System's" harvest.
Pondering all these things, I have ceased to wonder at the deep murmurs
of discontent that are rising, rising to my ears from all parts of the
continent.
Can it be that a just God suffers the sons and daughters of some of us
to eke out a bare existence as the best reward of earnest effort and
sterling worth, and at the same time rewards these other men with
$36,000,000 for one day's labor? Is this the freedom which our fathers
and our sons died on many a bloody, hard-fought field to preserve? I am
conscious of a haunting fear that these men and women may not always be
patient, may not always be put off with skilled evasion or slippery
subterfuge, and for one brief moment I see visions of a marching people,
bearing aloft grisly heads on gory poles, and hear above the low,
bestial murmur of the mob the cry for bread and for revenge.
And then I remember that this is _America_, not France; that our laws
are strong--if but the people are aroused to see them obeyed; that our
prisons are ample, even though they be for the present filled with petty
rascals who can do but little harm though turned loose to make room for
the real scoundrels who are undermining the foundations of our
Republic.
FOOTNOTES:
[3] It must be remembered that the Amalgamated Company never owned all the
capital stock of the Anaconda, but, on the contrary, only a few shares over
600,000, which represented the ownership of the Haggin-Tevis-Daly people,
and which they had turned in for a lump sum before the market price had
advanced. The control of the Parrott, owned by the Amalgamated Company, was
purchased for a lump amount from Franklin Farrell and his associates for
the sum of $4,000,000-odd, not $12,190,000. The Colorado Smelting and
Mining Company was also purchased in a lumped batch of Senator Wolcott, not
at $7,000,000, but for $2,000,000-odd, while the tremendous advance in the
price of Anaconda in the market from 30 to 70 was due to the operations of
Messrs. Rogers and Rockefeller for their private account, out of which they
made a large additional profit.
There can be no possibility of mistake or successful misrepresentation of
these figures: first, because the Anaconda figures are known not only to
Mr. Rogers, William Rockefeller, and myself, but to J. B. Haggin, and to
the estates of Tevis and Marcus Daly; the Colorado figures, to associates
of Senator Wolcott and to his estate; and the Parrott figures, to Mr.
Farrell who received the money, and to a large number of those to whom he
had to account; and, further, these figures will all be demonstrated in
open court in suits outside of any with which I have to do, which are now
being brought or are pending.
[4] As a matter of fact, the people lost even more than thirty-six millions
of dollars on this part of the Amalgamated transaction, because "Standard
Oil" did not sell all the 750,000 shares at $100 per share ($75,000,000) at
that time. They retained two-thirds of them, which at a later date they fed
out to the public at $115 per share, and at a still later date they took
them back at $33 per share.
CHAPTER VII
JUGGLING WITH MILLIONS OF THE PEOPLE'S MONEY
For the purposes of the transaction I have just described the machinery
of a great bank or trust company was essential. The vast profit gained
here was absolutely "made" through the instrumentality of the National
City Bank of New York, but some other tractable institution would have
been equally efficient. In order that my readers may focus such great
financial concerns as this National City Bank, I give right here brief
resumes of its career and resources and of those of two of its
affiliated institutions:
NATIONAL CITY BANK New York City
JAMES STILLMAN, _President_.
The "City Bank" was chartered by the New York Legislature in
1812, and reorganized as a National Bank July 17, 1865. The
capital paid in was $1,000,000. Moses Taylor held the office
of president for thirty-four years, and died in 1892, when
Percy R. Pyne, son-in-law of Moses Taylor, was elected
president and held office until the election of James
Stillman, of Woodward & Stillman, cotton merchants, when the
capital stock of the bank was increased to $10,000,000, and
again increased to $25,000,000. The sworn report of the
officers and directors filed with the Controller of the
Currency shows that the condition of the bank, January,
1904, was:
RESOURCES
Loans and discounts $114,507,919.20
Overdrafts secured and unsecured 162.90
United States bonds to secure circulation 3,220,000.00
United States bonds to secure United States deposits 12,937,000.00
United States bonds on hand 60,120.00
United States bond account 4,450,000.00
Premiums on United States bonds 1,354,013.00
Stocks, securities, etc. 16,709,241.62
Banking-house furniture and fixtures 200,000.00
Due from national banks (not reserve agents) 4,727,461.12
Due from State banks and bankers 644,288.80
Exchange for clearing-house 31,000,935.34
Checks and other cash items 798,843.22
Notes of other national banks 209,015.00
Fractional paper currency, nickels, and cents 684.63
Lawful money reserve in bank, viz.:
Specie $36,928,350.00
Legal tender notes 7,100,000.00 44,028,350.00
Redemption fund with U. S. Treasurer (5% of circulation) 161,000.00
Due from U. S. Treasurer other than 5% redemption fund 204,105.95
Total $235,213,140.78
LIABILITIES
Capital stock paid in $25,000,000.00
Surplus fund 8,900,000.00
Undivided profits, less expenses and taxes paid 8,503,038.26
_National bank notes outstanding_ 3,180,000.00
_Due to other national banks_ $36,469,683.95
_Due to State banks and bankers_ 5,903,473.87
_Due to trust companies and savings-banks_
29,210,461.00
Provident reserve fund 30,000.00
Dividends unpaid 519.00
_Individual deposits subject to check_ 82,576,884.06
Demand certificates of deposit 43,790.00
_Certified checks_ 10,752,671.01
_Cashier's checks outstanding_ 7,631,619.78
_United States deposits_ 12,937,000.00-- 185,556,102.67
United States bonds 4,155,000.00
Total $235,213,140.78
THE NEW YORK LIFE INSURANCE COMPANY
The company was incorporated by special act of the New York
Legislature in 1841. It is the third largest insurance
company in the United States. The assets of the company
January 1, 1892, were $125,947,290, and income $31,854,194.
In 1904 the assets were $352,652,048; income, $88,269,531.
THE NATIONAL SHAWMUT BANK, OF BOSTON
This institution was incorporated in 1898 with a paid-in
capital of $3,000,000. In 1904 its total resources, also
liabilities, were $63,471,639, of the same general character
as those of the National City Bank of New York.
A calm examination of these figures, illuminated by the explanation of
the "System's" methods I have previously given, will awaken the
American people to a comprehension of what use "high finance" makes of
the savings of the public intrusted to it for legitimate investment.
Nor must it be supposed for one minute that the insurance company and
the Boston bank which I have used for illustrations differ in any way
from scores and scores of their kind which are as absolutely "steered"
in their operations by the National City Bank of New York as the
National City Bank of New York is absolutely "steered" by its president,
James Stillman, or as James Stillman is absolutely "steered" by
"Standard Oil," the Private Thing, or as "Standard Oil," the Private
Thing, is absolutely "steered" by its supreme heads, Henry H. Rogers,
William Rockefeller, and John D. Rockefeller. And if any doubt remains
in the minds of my readers of the absolute power of "Standard Oil," the
Private Thing, to "make" dollars at will, or of the dead-sure working of
their "heads-I-win-and-tails-you-lose" gambling game, I ask them
carefully to analyze the above statements in connection with the facts
in the Amalgamated transaction which just precede them.
Fourteen years ago the National City Bank passed out of the legitimate
management of old-fashioned business men of the Moses Taylor stamp and
into the hands of the "System," the Private Thing. Then its capital was
$1,000,000; it is to-day $25,000,000, and after having paid out millions
in dividends and other profits it has, in addition, a surplus of
$16,000,000, and it has the absolute power to juggle with a total of
$235,000,000, $36,000,000 of which belong to other national banks,
$6,000,000 to State banks and bankers, $29,000,000 to trust companies
and savings-banks, $82,000,000 to individual depositors, $10,000,000 to
the holders of certified checks, $7,000,000 to the holders of cashiers'
checks, $13,000,000 to the Government directly, and $4,000,000 in
Government bonds, to say nothing of scores of hundreds of millions more
through its affiliated institutions. And all this juggling is done in
such a fearless manner that we find it in the Amalgamated deal loaning
in one transaction an amount so great that if it had been lost, the
bank's entire capital would have been more than completely wiped out.
That my readers may not base their conclusions upon this one
transaction of this mighty engine of the "System," vicious as it shows
on the surface and destructive as it really was to the thousands who
were parties to it, _I will later in this story show the National City
Bank in another section of the Amalgamated deal, doing things which in
intention and in result were so much bolder and grosser that this
transaction will by comparison appear pure and legitimate_.
During the past thirty years the American people have become so used to
enormous figures in connection with corporations and trusts that they
have not stopped to discriminate between different classes of fortunes
nor to figure out that fortunes of certain kinds are absolute
self-evidence that they were acquired by illegal methods, and that if
allowed to multiply the people will surely be enslaved and the republic
destroyed. For instance, there are in New York City alone dozens of
national and savings-banks and insurance and trust companies which
control money enough to make them practically omnipotent in whatever
direction their controllers exert their power. I will name but seven,
showing what enormous amounts their managers control; and let it be
borne in mind that all such institutions are linked together by the
"System" as firmly and surely as any human things can be linked. The
Equitable, Mutual, and New York Life Insurance companies have a combined
capital of $1,200,000,000 of assets, a yearly income of $230,000,000,
and $4,500,000,000 of insurance in force; the National City Bank, United
States Trust, Mercantile Trust, and Union Trust companies $30,000,000
capital, and $45,000,000 surplus, and they have the vast sum of
$450,000,000 of the people's money to juggle with.
CHAPTER VIII
"STANDARD OIL" INVESTS "MADE DOLLARS" IN GAS
And now I shall have to go back a bit in my story. After "Standard Oil"
had firmly established, through the agency of the curb,[5] the value of
the 1,000,000 shares of Standard Oil, the corporation seller of oil, at
between $600,000,000 and $800,000,000, and had used it as collateral in
securing control of the four classes of money institutions I have
named--the national and savings-banks and trust and insurance
companies--it proceeded to use the funds thus controlled to manipulate
the stocks of great public corporations for its own profit, forming them
into trusts with capitals far beyond their values, represented by new
stocks and bonds, which it sold to the public at prices aggregating a
hundred to five hundred per cent. over the old capitalization. It then
engaged in a wonderfully clever campaign to work off on the
people--directly, the very rich people, but indirectly, the people as a
whole--through institutions which exist because of the people's
savings--the $600,000,000 to $800,000,000 of Standard Oil stock which
had at this stage served the principal use for which it had been
created. It must be borne in mind that while "Standard Oil" is grinding
out "made dollars," its owners never for an instant lose sight of that
dim, distant day of reckoning when the people will awaken to their
losses. The "Rogerses" and the "Rockefellers" know well that the public
cannot always be kept in ignorance of the methods of the "System" by
which it has been plundered, and that once it is in possession of the
secret of how the savings of the many have become the property of the
few, there may be reprisals of such a nature as will compel the "System"
to yield up its gains. They know that when that day comes it will not be
best for them to have their enormous fortunes in such get-at-able
property as real estate, in which so many of the legitimately acquired
American fortunes are invested. In a quiet way, therefore, they have put
the bulk of their "made dollars" into unrecorded forms, such as
Government bonds; bonds and preferred stocks of what they consider
non-duplicatable franchise corporations such as railroads, which require
rights of way; into municipal public service enterprises, such as gas
companies, the existence of which depends upon rights of way for pipes;
and into the stocks of banks and trust and insurance companies, which
they believe the people will never dare attack because their savings are
largely deposited in them.
I would not have my readers think that the principal motive actuating
"Standard Oil" in parting with its Standard Oil stock is doubt of its
present intrinsic worth, for such is not the case. The masters of
"Standard Oil" are very able, far-seeing men, and they know that so
thoroughly have the American people been educated to the crimes which
created Standard Oil, the crimes by which it has existed and does exist,
that no passage of time or "pious-ing" of latter-day methods, will ever
blind them to its iniquities, and that when reprisal day comes, as come
it surely will, the first thing the people in their frenzy will look for
will be Standard Oil. This is the reason which, more than any other,
influences them in selling to others an enterprise which has up to the
present time not only enjoyed tremendous prosperity, but which has as
yet met with no obstacle or hindrance.
Of all forms of tangible investment "Standard Oil" has looked most
favorably upon gas stocks, and its secret devices have been worked
overtime in consolidating gas companies throughout the United States. In
a general way, as manufacturers of illuminating oil, "Standard Oil" had
early become familiar with the problems of supplying large
communities--cities--with gas light; and with the advent of water-gas,
as sellers of petroleum they controlled an important factor in the
production of that volatile commodity. All the talent of the "System,"
trained in "handling" municipal authorities, came into play in this big
new business of lighting cities--a business which perforce became a
monopoly as soon as the powerful tentacles grasping it were recognized
as "Standard Oil."
At the time my story opens (1894) "Standard Oil" had already captured
the gas-lighting corporations of certain of the great cities of the
United States, including the immensely rich ones of New York (directly),
Philadelphia and Chicago (indirectly); and for two years previously had
been besieging the several independent Brooklyn companies for the
purpose of consolidating them into a single gigantic corporation. This
project it has since accomplished. Its intention is to weld this
corporation with the great one that already holds the monopoly of
Manhattan.
The task of diagramming a territory for invasion is one after Henry H.
Rogers' own heart. His campaigns are planned with Napoleonic power and
foresight. When the capture of Brooklyn was decided on, the several
corporations to be subdued were "sized up" as to their revenues and
liabilities; the resources of their stockholders were studied out, and a
plan of action organized to separate each one from his shares at
"hard-pan" prices. In the "Standard Oil" armory there are many
instruments of "persuasion," and he is indeed a hardy fellow who can
resist the various "trying-out" processes to which mutineers are
subjected. This obstinate capitalist will be summarily knocked on the
head; that other inveigled into a dark corner by a strong-arm man;
another group owe money to one of the "System's" banks and a brief spell
on the financial rack will weaken their grip. Sooner or later all
succumb. While such details as these were being attended to, lines were
being strung here and there to bring about the passage by the city of
Brooklyn and the Legislature of New York State of ordinances and laws
which should allow this and compel that to be done, and so rivet the
various links of the great venture.
While in the midst of this campaign, to which Henry H. Rogers' genius,
matured in many a hard-fought business battle, foresaw an early and easy
triumphal termination, there came athwart his victorious path a
financial guerilla, "balloony," mysterious, yet as sticky as a
jelly-fish, who was destined to exert a most maleficent influence on his
after-life. Fate hangs no red lights at the cross-roads of a man's
career. No "pricking of his thumbs," no strange portents warned the
Master of "Standard Oil" that the impudent Philadelphia swashbuckler who
dared interfere with the execution of his plan to fetter the "System's"
yoke to the necks of the citizens of Brooklyn was the factor that
destiny had chosen to shape the ends that he had rough-hewn.
The financial guerilla was J. Edward O'Sullivan Addicks, votary of
rotten finance, perpetual candidate for the United States Senate,
wholesale debaucher of American citizenship and all-round corrupter of
men--J. Edward O'Sullivan Addicks, a corporation political trickster,
who has done more to hold up American laws, American elective
franchises, and American corporations to the scorn of the civilized
world than any other man of this or any previous age.
FOOTNOTES:
[5] The New York "curb" is the latest invention in finance, coming closely
upon the heels of the invention of trusts, and it holds the same relation
to the New York Stock Exchange that Private Things hold to corporations.
Before a stock can be bought and sold on the New York Stock Exchange, there
must be submitted to the governors a description of what the stock is,
which must be of such tangibility that any one who cares to investigate may
find there every detail and particular of the property represented, set
forth with the utmost exactitude. But on the "curb" stocks can be traded in
without responsible sponsors or descriptions that mean anything. In other
words, a stock may be bought and sold there, which is so vague and
indefinite as to be little more than a name, and it is through the "curb"
that the value of "Standard Oil" stock is established, for it is daily
bought and sold there at the steadily held prices of 650 to 800, and the
press of the world makes daily record of these prices.
CHAPTER IX
A VOTARY OF THE "SYSTEM"
The "System" has all sorts of votaries. About J. Edward O'Sullivan
Addicks there is nothing that remotely suggests coworkers of the types
of Mr. Rogers and William Rockefeller. A description that left him in
any part a duplicate of either would do him and them a grievous wrong.
Henry H. Rogers and William Rockefeller have two sides, their social
side and their business side. Socially, they are good men; in business
they work evil. J. Edward O'Sullivan Addicks is a bad man, socially, in
business, in every way. The term "bad man" is used advisedly. My idea of
a "bad man" is that like a bad dollar he is a counterfeit. A counterfeit
has all the appearances of reality, and is yet devoid of its properties
and virtues. So with Addicks. It is easy to find men who will declare by
all that is sacred that Henry H. Rogers is one of the best fellows in
the world, though as many more will as earnestly proclaim him the fiend
incarnate. About Addicks, among those who know the man, there is but one
opinion. I have yet to meet the man, woman, or child who would say aught
of Addicks, after a month's acquaintance, other than, "Don't mention
him! He is the limit." And it will be said with the calm of
dispassionate conviction, as one might speak of a stuffed tiger in a
dime-museum jungle.
Here we have a man without a heart, without a soul, and, I believe,
absolutely without conscience--the type of man who even his associates
feel is likely to bring in after their deaths queer bills against their
estates as an offset for what he owes them; the type of man whose
promise is just as good as his bond, and whose bond is so near his
promise as to make it absolutely immaterial to him which you take.
Exhibited in the side show of one of the great circuses some years ago
was a strange creature which, for lack of a better name, its owner and
the public dubbed, "A What Is It?" This freak had the semblance of
humanity, and yet was not human. All its functions and feelings reversed
the normal. Tickle it and it would cry bitterly; pinch or torture it and
it would grin rapturously; when starved it repelled food, and when
overfed it was ravenous for more. It had heart-beats but no heart. The
public gave it up. The public would long ago have given up J. Edward
O'Sullivan Addicks if he would have let them.
Illustration is better than explanation, and perhaps I can more
graphically set J. Edward O'Sullivan Addicks before my readers by a few
incidents which show his contradictory characteristics in action than by
verbal diagrams, however laborious.
Once upon a time Addicks, entering Delmonico's for dinner, stumbled on a
couple of newsboys at the entrance. One, broken-hearted, was being
consoled by the other. Addicks, observing the deep sobs, asked: "What's
the matter with you, bub?" The consoler explained that his chum had lost
$2, his day's earnings and capital, and "His mudder--his fadder's
dead--an' de baby'll git trun outter de tenement." Addicks, without more
ado, slipped the suffering young news-merchant a bill which his friends
supposed was $2 to replace the lost funds. As they were taking off their
coats in the hall, however, the little newsboy pushed his way in with:
"Say, boss, did yer mean ter guv me de twenty?" Addicks nodded a
good-natured assent, and his friends registered silently a white mark to
his score, and felt that, after all, somewhere beneath the surface he
was more of the right sort than they had given him credit for being.
After dinner, as they left, the newsboy again approached. "'Scuse me,
boss, but me chum 'd like ter t'ank yer too. I'm goin' ter give him a V
outter it." Addicks looked at the boy in his mildly cold way and said:
"Let me have that bill. I will change it for you." The boy gave it up,
and Addicks, after methodically placing it in his purse, handed him back
a $2 bill with: "That's what you lost, isn't it? And you" (to the
second little fellow, who by this time had mapped out visions of new
duds for the kids and a warm seat in the gallery of a Bowery theatre),
"you didn't lose anything, did you? Well, both of you run along now!"
His friends looked at each other, and from their slates wiped away the
white mark and replaced it with a deep, broad, black one. And yet
Addicks had made good the loss--done a good deed, but in an--Addicks
way. I should perhaps remark that J. Edward O'Sullivan Addicks has never
smoked, nor used a swear-word, nor taken liquor in any form.
During the Addicks gas campaign in Boston one of his lieutenants
demanded as his share of the deal a large amount of money, which he
claimed Addicks was withholding from him. Addicks refused to pay.
Friends and associates urged him to settle. While yet refusing, he
agreed to meet this man at one of the leading hotels in the presence of
counsel and lieutenants. The interview was a hot one. Addicks surprised
all by his absolute fearlessness in the face of a savage attack, which
culminated in the production of a document signed by certain
Massachusetts legislators, wherein they receipted for the bribe money
Addicks had paid for their votes. The man who claimed he was being
cheated threatened this would be laid before the Grand Jury the
following day. All the witnesses were dumfounded at the situation and in
concert begged Addicks to hush the matter up by paying what was claimed.
"Gentlemen," said this great financier, "my honor, my business and my
personal honor, has been assailed, and rather than submit to this
outrage I would die! I now ask you all to bear witness that under no
circumstances will I pay to this man a single dollar!" And he
indignantly left the meeting.
While his counsel and associates were appalled at what might be the
outcome, they admired Addicks' manly pluck, and asked themselves if they
had not, after all, been mistaken in their estimates of his courage and
principle. In the middle of the same night, the man with the document
was surprised by a telegram reading: "Meet me in Jersey City to-morrow
sure with paper; keep absolutely secret." Next day in Jersey they met,
and Addicks simply said: "There is the full amount. Give me the paper.
You don't suppose I would compound a felony in the State in which it was
committed, and before witnesses, do you?"
In the national election of 1896 J. Edward O'Sullivan Addicks was a
candidate for the United States Senate in Delaware, and for a variety of
reasons was anxious to secure a Republican victory. Within the State,
however, the real contest was not over national issues, but to obtain
control of the Legislature which in the following January had to elect a
United States Senator. There were three factions, the Democrats and two
wings of the Republicans, the Addicks and anti-Addicks parties, the
latter calling themselves "regulars." On Election Day Addicks used an
even $100,000 buying votes, and that evening Delaware was safe for
McKinley--both the "regulars" and the men whom Addicks' money bought
having voted for a Republican President. But it was early bruited around
that if the vote of Sussex County (there are three counties in
Delaware--Newcastle, Kent, and Sussex) were allowed to stand as
received, all Addicks' efforts to control the Legislature would have
been fruitless and his "made dollars" expended for nothing. The ex-flour
dealer of Philadelphia was not satisfied to accept the people's sacred
verdict. He quickly called his lieutenants together, mapped out a
campaign of almost reckless audacity and daring, and assigned his best
men to its execution.
The ballot-boxes with their contents were in the sheriff's charge and
stored under lock and key in the court-house. The sheriff was an Addicks
tool. At midnight he turned over his charge to one of the would-be
statesman's trustiest lieutenants, who, with the aid of a lantern and a
slip of paper containing the directions, sorted over the legal ballots,
threw some out, and put in new ones. When another sun arose the
dastardly outrage upon the American elective franchise had been
completed, and Addicks was busily scheming to carry out the remainder of
the plot. On the declaration which he or one of his associates would
make, that there had been fraud in Sussex County, the Government at
Washington must send on an investigating committee to whom it would be
asserted that the voting lists had been doctored by the Democrats. To
prove it the boxes would be opened, the ballots counted, and lo! the
villany of the Democrats would be, beyond contradiction, demonstrated.
But the scheme was an Addicks scheme. Had it been the plot of any other
man with the brains, the nerve, and the lack of principle to concoct it
and set it in motion, inevitably it would have been carried through to
the designed conclusion. As it was, this is what happened: The
lieutenant who had charge of the actual commission of the crime
thoughtlessly chuckled over the details of it with another, and this
other "in the presence of witnesses" laughingly congratulated Addicks on
his plan's success. What was the astonishment of the group to hear the
candidate for the Senate say: "Gentlemen, I could not countenance such a
transaction. This is the first I have heard of it, and it is so
outrageously criminal that I refuse to allow it to proceed further.
There will be no investigation, and if it is a fact that those ballots
have been changed in the box, the ones who changed them shall receive no
benefit from their nefarious work. I have spoken."
Mind you, every member of the group was a party to the scheme and had
been carefully rehearsed in the part assigned him by Addicks himself,
but alone, that is, without witnesses; nevertheless so earnest and
apparently honest was the man in his protest that for an instant they
doubted their senses--until they remembered it was Addicks.
The investigation was never held, and to this day Addicks' lieutenants,
especially he who did the midnight work and who still lives in the
peaceful State of Delaware, turn with disgust when Addicks' daring is
mentioned.
It should be explained here that, whenever Addicks plans an illegal
transaction--one for which he might be made civilly or criminally
liable--he invariably coaches each of his accomplices alone, "without
witnesses." And when it becomes necessary in developing the plot to have
a confab, at which the several parties to the proceeding must meet,
Addicks is most careful to preserve a legal semblance of ignorance of
incriminating details. At intervals, when a danger-place in the
discussion is approaching, he will get up from his seat and, moving to
the door, will say: "Gentlemen, halt right there, until I step out of
the room; tap at the door when you are over that bad spot, and I will
return."
Addicks' "Wait until I step out of the room" is as familiar among his
coworkers as the "I am going upstairs" is among the "Standard Oil"
family.
Try to conjure before your mind's eye a picture of the anomalous character
these instances suggest. I'll warrant your mental image as little
resembles the original Addicks as Mr. Hyde did Dr. Jekyll in the story. He
does not look the part assigned him here, nor any other part for that
matter. I saw him coming toward me on State Street one summer day some
years ago, a tall, wiry man, in a white-flannel suit, perfect in fit and
spotless as snow, wearing a fine Panama hat. This was in the period before
Panamas were commonly worn. He was to the life the elegant and luxurious
Southern planter of ante-bellum days. Six months afterward in about the
same place I saw approaching me a splendid person in rich sable outer
garments who looked for all the world like an exiled Russian grand duke.
It was Addicks in winter. You will not surprise his secret from that
pleasant, rather ambiguous, but square-jawed face, nor from the mouth
hidden under a long, drooping, gray, military mustache. His is a
good-sized, well-shaped head, you might say, and the gray, shallow eyes
that look out at you are almost merry in their glances. But they are
inscrutable eyes which seem to have a challenge in their gaze, a sort of
"look-me-over-as-long-as-you-like-and-you'll-never-guess-what's-under-the-surface"
expression that is baffling and provocative. Yet this sybarite, this
daring coward, this stingy prodigal, this sincere hypocrite, this
extraordinary blending of contradictory qualities, is the man who from
1887 to 1892 made Boston look like the proverbial country gawk at
circus-time.
Power the man certainly has, and of a distinct quality, yet his
intimates cannot explain the reason of their obedience to him. After a
brief acquaintance he is revealed as the very soul of insincerity--he
"works" his friends, he pays toll to his enemies, he frankly shows
himself without the sense of moral obligation. I believe his talent
resides in his capacity to select the proper type of man to "make rich"
in the illicit schemes his abnormal mind conceives. These coworkers of
his are of different grades; some have a super-abundance of cash; others
a desire to get it--in common are their lack of principle and dearth of
brains. Addicks cannot do business long with men of real ability, nor
does he understand them, whereas he can read the minds of his ordained
victims as if they were an open book. The big men who have encountered
or been associated with Addicks are prone to characterize him as a
mountebank, a joker, or a chump.
CHAPTER X
ADDICKS COMES TO BOSTON
J. Edward O'Sullivan Addicks was born in Philadelphia in 1841, and was
in the eighties plodding along the ordinary, uneventful path of a seller
of flour to the people of that city which since the death of William
Penn holds the record for the highest and densest percentage of sleep
per capita of any English-speaking community.
In the eighties two things happened that changed the whole course of J.
Edward O'Sullivan Addicks' life. Some one invented water-gas and "let
in" Addicks on the invention; and the Philadelphia branch of the
"Standard Oil," represented by Widener, Elkins, and Dolan, "trustified"
the gas companies of the city of Chicago, which enabled Addicks to "hold
up" the "trustification" until Dolan and Dolan's associates paid him the
sum of $300,000 for the instrument with which he had done the holding
up, $10,000 worth of the stock of one of the necessary Chicago
companies.
The law of compensation, which gets in its deadly work on all the
prettiest plans of man, but decreed that what goes up must come down
when it ceases going up. It has a shrewd trick of grafting sorrows on
our joys, and of handicapping success with discomfiting conditions. The
favorite of fortune whose feet have fallen in pleasant places sooner or
later stubs his toe.
Addicks' first "made dollars" certainly came easy--so easy, indeed, that
those who watched his early career marvelled at his success; but nowhere
on God's footstool is there to-day a more terrible illustration of the
inevitable workings of the law of compensation than the present
standing of J. Edward O'Sullivan Addicks affords.
The thief whose first excursion into a wayfarer's pocket is rewarded
with the equivalent of days and nights of honest labor will surely be
convinced thereafter of the superiority of theft over toil as a means of
money-getting. Invariably the manufacturer of "made dollars," after his
first coup, forsakes forever after the cold arithmetic of commerce for
the rule of guess, dream, hope, and "I will," which constitutes the
mathematics of high finance. Addicks' first "made dollars" came with
such magical ease that there awoke in his slumbering substitute for a
soul a disgust for those prosaic pursuits at which one could never, try
how one might, make more than four by the addition of two and two. He
probably argued to himself: "Why should I work in the flour business
when I know a way of getting overnight more than I can make out of flour
in a lifetime? If people are so simple in guarding their savings that I
can by a trick take away from them enormous wealth without the slightest
danger to my own safety or my profit, even if detected, why should I not
devote my life to such healthful and profitable occupation?" The logic
of the proposition was convincing. Accepting its conclusions, J. Edward
O'Sullivan Addicks, of Philadelphia, embarked on his career. Soon
afterward he discovered gas in Boston.
This was in 1887. Equipped with his "made dollars" for capital, his
impressive name, sublime effrontery, and a pedigree free from anything
suggestive of his new purpose in life, the ex-flour merchant "lit" into
our everything-figured-out-ahead-and-every-promise-made-taken-at-par
town of Boston. To appreciate the lights and shadows of this event, one
should know Boston and, at the same time, Addicks. Every country boy
will remember Tom Hood's poem beginning:
I remember, I remember the house where I was born,
With the little lattice window where the sun came peeping in at morn,
and can recall milking-time in July or August when, sitting on the
rail-fence surrounding the barn-yard, he watched the pigeons snipping
up grain, the old hen scratching up worms for the chicks, the ducks and
the drakes and the geese and the ganders proudly waddling back and
forth, among and around the fluffy ducklings and goslings, and the
bull-pup sound asleep by the side of the tortoise-shell cat. Probably he
will think of some particular milking-time when the calm, contented
serenity of the barn-yard was suddenly disturbed by the unexpected
descent in its midst of a neighboring peacock, who, apparently
unconscious of the consternation produced by his entry, proceeded
proudly to spread his dazzling plumage to convince every one, from Uncle
Cy, on the milking-stool, and mild-eyed Bess, down to the white
fan-tailed dove, that he was--It.
Conjure up the picture--the peacock at milking-time in the farm-yard;
thus Addicks came to Boston--though it is far from my intention to
identify the bucolic background I have drawn with the Hub of the
Universe.
Boston, up to this time, had been singularly free from the mushroom
variety of millionaire which had sprung up overnight in such numbers in
New York and Philadelphia. Proudly defiant of a product so alien to all
her traditions, her citizens would have sworn that no votary of modern
high finance could exist over one curfew-toll within her gates. For
Boston had her own financial eminence, of a character in keeping with
the chill conditions of conservatism and rectitude appropriate to the
metropolis of the New England conscience. She had her Stock Exchange,
her numerous great corporations, her scores of single and
multimillionaires, and it was her boast that her capital had played the
greatest legitimate part in the country's growth. She had furnished a
large percentage of the money which had created our vast Western railway
system; she had found and made the superb copper-mines of Michigan and
Montana, and in all parts of the land branches of her sturdy
institutions were vitally assisting the miracle of America's
development. Notwithstanding what these wide-flung enterprises imply of
commercial push and audacity, Boston, at the time Addicks discovered gas
there, was one of the most trusting wealth-investing communities in the
world. She had her simple rules of business conduct which years of
usage had consecrated into all-powerful precedent, but her brokers and
capitalists, however fearful of all things quick or tricky, had never
previously figured as candidates for what in Western parlance are
described as "come-ons."
CHAPTER XI
HOW ADDICKS CAPTURED BOSTON GAS
At the time Addicks "lit" in Boston that city numbered among her
proudest possessions several extremely rich gas companies, and they were
owned by her "best people." To do business with Boston's "best people"
is no easy task, and up to the advent of Addicks, to do business with
her "best people" without doing it through others of her "best people"
who could absolutely vouch for you was an unheard-of thing. The manner
in which the ex-flour merchant of Philadelphia managed to slip by the
barriers and into the heart of our blue-blooded citadel affords the most
unparalleled example of audacity of which I know.
In many ways Boston is unlike other great American cities. Some of her
institutions through antiquity or association have acquired a positive
sanctity. Pedigree is important. The average inhabitant spends much of
his time watching the grandson of his neighbor's father, to see the old
man's characteristics crop out in him. The boy's failures will be
remembered against his own offspring fifty years hence. It is a city of
long memories and of traditions. In 1887 Boston, as now, consisted
largely of her traditions, her blue-glass window-panes and her Somerset
Club.
Now the distinction, sanctity, and antiquity of the Somerset Club are
quite beyond peradventure. Since Boston has been Boston she has had her
Somerset Club, a club distinctively of grandfathers, fathers, and sons.
The right to membership in the Somerset Club is as much the inheritance
of a Somerset man's son as his name or as the proud title which always
will be found affixed to his signature when he reaches man's estate, "of
Boston." For a man to get into the Somerset without long years of
waiting and intense scrutiny, not only of his own record but of his
parents' before him, is a rare event. Yet the name of J. Edward
O'Sullivan Addicks was up for full membership, with Boston's picked best
for his sponsors, a few days after he "lit." How Addicks got upon the
Somerset list Boston will never tell, and the mention of the fact
nowadays within the club-house will empty its sideboard instanter.
The campaign of arrangement for the advent of Addicks in Boston was more
elaborate, more astute and expensive than was ever organized for
exploitation of prima donna or great pianist. For months an advance
agent had been preparing the way for his chief's arrival in a blaze of
glory. There was talk in the papers and among the financiers about the
wonderful water-gas process which enormously enhanced the profits of
gas-making, and such rumor was always linked with the name of the
brilliant Philadelphia Gas King, for so the press had already dubbed
him. A wonder and magic immensely provocative of curiosity were woven
about the identity of this J. Edward O'Sullivan Addicks, who it was said
might be persuaded to visit Boston to work marvels with the stocks that
had been "in the family" long before the present generation could
remember. When it was sure that the great man was really coming the
agent sought the advice of Boston's best in selecting quarters for him.
In the Tudor, a beautiful family hotel adjoining the Somerset Club on
Beacon Hill, a magnificent suite of apartments was taken, and though the
great man could remain in Boston but a brief space, the furniture, the
hangings, and even the carpets were all changed for him.
Eminent financial tricksters have various ways of handling their
victims. Some believe that the most skilful mode of attack is the slow,
confident, dignified approach which allays the subject's fears by its
solemn display of deliberation. Others (and Addicks is of this creed)
are persuaded of the superior efficacy of the "rush-in-and-drag-out"
method. The subject, they say, "gives up" more and quicker when the
hurry call is sounded. It was a winter's day when Addicks "lit" in
Boston, and circumstances had arisen, the suave advance agent told
various Boston's best, with whom he was in consultation, that would make
his chief's stay much briefer than either had anticipated. So when the
great man arrived at the club just before dinner, quite an array of
important people were congregated there.
Addicks ran the gantlet of the critical glances of as critical a group
as you'll find on earth, and the word went round--no one could remember
afterward who started it--"Typical Southern gentleman! Breeding sticking
out everywhere!" So well had the astute advance agent done his work that
a little dinner was arranged on the spot, and Addicks made such rapid
progress with these reserved and conservative Bostonians that, by the
time coffee was served, conversation had reached the stage where it was
natural for him to send the waiter to the coat-room for his bunch of gas
papers. The emissary returned bringing the fur overcoat with which
Addicks always envelops himself in chilly weather. Addicks searched the
pockets, and, apparently to his surprise, discovered that they did not
contain the required documents, but where they should have been he found
a small bale of 1,000-dollar government bonds, containing, one of the
party said afterward, at least one hundred certificates. "How careless
of my secretary!" said Addicks, nonchalantly replacing the packet in the
pocket and motioning the waiter to take the overcoat away again.
It was, of course, due to the admirable work of his advance agent that
these Monte Cristo effects impressed the cultured little set who would
have laughed to scorn such a display on the part of one of their own
kind. In Addicks it was the dazzling eccentricity of the wonder-worker,
and so excusable; and the free, flash, careless exhibit of wealth made
the man's conversation and subsequent demands seem natural. Next
morning, in discussing the work of the previous evening with his
lieutenant, Addicks delivered himself of the wise remark: "Finance, my
boy, like theatricals, is dependent for success on the staging, more
even than on the actor. My experience has shown me that men the world
over are alike--if you properly surround them, they will hiss at hissing
time and clap at applauding time; yes, upon the way you stage your
finance plays depends their success." The fact is that by no other
method could this scenic artist of finance have set his plans moving so
rapidly. The man had calculated to a nicety on the romantic cupidity he
aroused.
After dinner, Addicks at once "got down to business": "Gentlemen, my
project is as simple as it is feasible and conservative, for I will
touch nothing but conservative enterprises. Gentlemen, you have three
great gas companies supplying this great city with light, the Boston,
Roxbury, and South Boston. They are worth at the present time about five
million dollars. I am going to buy them and spend three or four millions
more on a new company; then I shall consolidate the four and turn them
from coal into water-gas companies, which will sell gas to your people
at less than they now pay, and at the same time make a lot of money for
you and for myself. What do you say?"
This was certainly quick action. Boston's best was breathless for a
minute. Then some one suggested that in so weighty a matter it would be
necessary for solicitors to investigate, for the families owning the
stock to be consulted and agree before a proper basis could be arrived
at on which to dispose of their holdings.
Addicks' genius was equal to the occasion. "I regret, gentlemen, any
seeming haste, but this is the situation: I am going to invest fifteen
or twenty millions, or perhaps thirty or forty, in city gas properties,
and as the project will require quite a bit of financiering, I have got
to round it up at once, in time to slip over to London to lay it before
my associates, ----, ----, and ----" (naming some of the great English
lords of finance), "with whom you, gentlemen, are probably well
acquainted. I think you will, after you have given the matter a little
thought, agree with me that it would be a mistake to postpone the
conversion of these magnificent Boston plants to the water-gas system
until after other cities I have in mind are reconstructed. You see we
can turn over but one city at a time, the system being new and competent
engineers and builders few."
The painful thought took shape in the minds of the distinguished little
gathering that if they were not careful, Monte Cristo might actually
slip out of their town without working any of the promised golden
marvels.
"Just what is your idea, Mr. Addicks, of how this gigantic piece of
business could be done?" one asked.
"Simple, simple"--the great Colonel Sellers of eye-water fame never
looked more cool and unconcerned when calling attention to the facts,
"100,000,000 of people, two eyes each, a bottle of my patent eye-wash
for each at a dollar a bottle, and eye-wash made at a net cost of a dime
a barrel"--"simple, simple; you name your price, I pay it, and the thing
is done."
Some one pointed out that the gas properties were valued very high. That
in the Boston, for instance, the par value of each share was $500--and
that it was improbable Mr. Addicks could buy it for less than--than
eight hundred.
"Of course, of course; I am not buying gas companies that are not well
thought of by their present owners," returned Addicks. "I think you
underestimate the value of the Boston Company's stock when you say $800.
Naturally, as a conservative business man I wish to buy as reasonably as
possible, but as I know what the future of your company will be under
the water-gas change, I consider $1,000 a share cheap; and if you say
so, will take it now--majority, minority and all--at that price."
This was strong talk. In spite of their proverbial frigidness under all
conditions, Boston's best began to get fidgety.
"Indeed," went on the Monte Cristo from Philadelphia, "I'll do better
than that. On second thought I will give you $1,200 a share. Think it
over and we'll have another sit-down to-morrow."
It took Addicks but a few days to trade, for at each sitting the staging
was more enticing and the call from his associates in London more
insistent. Minor difficulties were magnificently waved away. A number of
scions of Boston's best families had good paying positions in the
different companies; what would Mr. Addicks do with them?
"Simple, simple," he replied; "double the time of contract and the
salary; no favor to them or you; good men are very hard to get, you
know."
One episode that occurred about this time was allowed to get into print
when the stocks and bonds were being floated, by way of showing what a
tremendous fellow Addicks was. In a hired hack he had driven up to the
club from State Street. A snow-storm was raging. After Addicks had been
in the club a few moments word was brought in to him that the driver had
found his sable overcoat inside the carriage. Addicks stepped into the
vestibule to speak to the driver, and next day it was all over the
club-house and through the "Street" that the prodigal Philadelphian,
overcome at the thought of the unfortunate driver in his scanty clothing
exposed to the cruel storm, had said: "My good man, take that coat as a
present from me."
For the truth of the story I do not vouch, nor for that other which
explains that the door-boy who spread this tale of generosity said
afterward, when discharged, that Addicks himself had told him what he
had done, and at the same time had given him a five-dollar bill. He
would have sworn the moment before that he heard Addicks tell the driver
to take the coat to his apartments.
Addicks got what he came to Boston for--the Boston, Roxbury, and South
Boston Gas companies. He did what he said he would, built a new one, the
Bay State of Massachusetts, and turned them all into the Bay State of
Delaware, and the Bay State of Delaware turned them out on the public in
exchange for their savings to the extent of $19,000,000 in the form of
bonds and stock. Addicks, to use his own language, "cleaned up around
$7,000,000," and turned to new fields, fields suited to his peculiar
genius.
As he looked over the United States he found but one great city which
had not already been captured by "Standard Oil" or some of its
disciples--Brooklyn, N. Y. To the present day Rogers swears Addicks'
only reason for coming to Brooklyn was to hold up the "Standard Oil"
"trustification." Addicks retorts with: "I saw it first." Whatever the
facts, in 1892 Rogers in the midst of tagging the different companies
was surprised and angered to find that Addicks had slipped in ahead and
had secured one of those necessary to the success of his plan. He
quickly served notice on the man from Delaware to "git," and Addicks,
flushed with an unbroken chain of victories, as promptly returned the
notice with, scrawled across its face, a variation of Rogers' pet
phrase--for it must be remembered Addicks never "cusses"--"I'll see you
in heaven first."
If there is any one time when Henry H. Rogers is quicker of action than
any other, it is when his notice to "git" in a stock deal has been
returned with "sass."
The ink was hardly dry on Addicks' answer before the Master of "Standard
Oil" and his hosts were upon him, but not where the Philadelphian looked
for them. While he awaited their attack in Brooklyn, N. Y., he received
a series of hurry-up calls from his lieutenants in Boston. Rogers had
bought the insignificant Brookline Gas Company, which supplied gas to
one of the suburbs of Boston. It was only a $300,000 affair, but it
possessed charter rights to come into any and all of the streets of
Boston. This was a characteristic "Standard Oil" attack. It came out of
a clear sky, and before the public had even a warning of it they were
witnessing a war which looked as though it had been years in maturing.
Rogers let it become public knowledge that the entire "Standard Oil"
forces were to be brought to bear to crush Addicks and that untold
millions would, if necessary, be spent in the effort. In reality he had
most carefully mapped out a cyclonic campaign which he believed would
not call for an expenditure of over $500,000, and which he was sure
would in a few months drive Addicks out of Brooklyn, N. Y., and bring
him to his knees in Boston. His fight began in earnest in 1894. Gas in
Boston was $1.25 per thousand cubic feet, and the rate yielded a good
profit to the Addicks companies. Rogers served notice that he would
parallel with the Brookline Company every pipe of the different Boston
companies and would reduce the price of gas to $1. Simultaneously he
attacked the Addicks stocks and bonds in the market, his charters in the
Legislature, and took away from him the contracts to supply the
municipality of Boston with gas. For a time Addicks struck back
savagely. Then, as the fight became hotter, he gave it up in Brooklyn,
and concentrated all his resources on repelling the savage inroads
Rogers was making in Boston. By this time the contest had grown to such
proportions and so much bad blood had been engendered that Rogers
declined to be mollified by Addicks' surrender in Brooklyn and refused
to retire from Boston unless Addicks repaid "Standard Oil's" entire
outlay and got down on his knees in public--a demand that called forth
one of Addicks' sardonic smiles.
Addicks had at this time additional difficulties to face. He had spread
out his financial commitments, and now he found his stocks and bonds all
declining. It was obvious to State and Wall streets that Rogers was in a
fair way to drive the buccaneer from Philadelphia to the wall.
It is at this stage that I come into the story.
CHAPTER XII
STOCK-BROKERS NOT ALL BAD
Right here, before plunging deeper into the current of events which led
to the organization of Amalgamated--for what has gone before is only
that which I deem necessary setting for the story, necessary in order
that my readers may clearly take in its meaning--it is only fair to them
and to myself for me to say that my life has been spent in the
stock-market for the purpose of gain. I have never in my stock
operations set myself up for a philanthropist nor in any way posed as a
reformer, nor pretended to be a bit better than the business I had
chosen for a livelihood. From the first day until now I have endeavored
to keep strictly to the principle that I would never knowingly deceive
any man, woman, or child who, out of confidence in me, risked their
money in speculation or investment. At the same time it should be
remembered that the stock-brokerage business often makes queer
bedfellows. Moreover, the true stock-operator is sometimes tempted to
buckle on his armor and get into an exciting fight solely for the
combat's sake, and then he may not be over-concerned about the rights
and wrongs of the contention, if upon both sides are lined up
professional captains of finance. The minister, the college professor,
the dry-goods merchant, may exclaim against this, but they have never
known the delicious tingle which, since the abolition of the tournaments
of old, can be felt only on the great financial battlefields. If the
critics of the stock-gambler could be put through a single minute of a
thousand I have known they would be less brash in their denunciations.
And let it be remembered that in these terrific dollar-wars there is as
much opportunity for heroism, for generosity, for kindly deeds, as ever
physical fighting affords. I read here in the papers of the noble act
of a captain in the navy who has taken his life in his hands; in another
place of a rich man who has given a million to create a charity. On the
same page that these men are eulogized I will find references to "Jim
Keene, the stock-gambler," etc., "heartless, soulless stock-sharp," etc.
"Jim Keene, Stock-gambler," keeps no press agent to flaunt his kindly
acts, but from the noble things I know he has done, and the things
others with whom I am personally acquainted know he has done--men,
women, and children saved from misery, pain, and death, at the risk of
ruin to himself--I'll warrant the celestial scroll shows to his record
as many deeds of mercy and noble daring as are credited to any soldier
or philanthropist who has achieved worldly fame in recent years.
The desire for sudden wealth is strong in all parts of our American
community. Men want money, and women too, for a score of reasons--some
good, some bad--and the stock-market is the magical place where miracles
occur and dollars multiply themselves overnight. The agent for all the
cupidity of the world is the stock-broker, and he sees life from a
strange angle.
Hundreds of letters come to me daily from all kinds of people, who have
no other call upon me than their belief that, having at some previous
time profitably followed my advice or advice credited to me, they have a
right, when "the papers say" I am doing or going to do this, that, or
the other thing in stocks, to come to me with their troubles. In 1899
there reached me from a woman a picture of her husband, herself, her
three children, and the aged father and mother of her husband. I wish I
might print it, but I dare not through fear that they would be
recognized. The letter accompanying it was one of the most touchingly
pathetic I have ever read. I investigated the case. The statements made
were absolutely true. The woman's husband was the cashier of one of the
small national banks in one of the old towns in a New England State. His
father's brother had been cashier before him. The family's past was
thickly strewn with all those simple honors and good things which are so
often the heritage of families of the old, self-respecting,
God-fearing, middle-class communities of New England and like
long-settled sections of the country. On his death-bed the uncle
confessed that for years he had carried upon the books of the bank a
shortage which had arisen from mistakes. Her husband, to keep the
family's name from stain, had continued to keep this buried, which was
an easy thing to do, as when he was moved up from teller to cashier at
his uncle's death the two positions were combined into one. The wife
explained that her husband had let her into the fearful secret, and
together they had carried it until it had eaten its way into their
hearts. At last the man could no longer stand the strain. He had
followed my printed sayings about the market, and now had made the fatal
plunge. He had bought upon margin 2,000 shares of Sugar stock to see if
it were not possible to make up quickly a shortage of over $20,000,
because I had said Sugar was going right up; and then horror of worse
than death had seized the wife and she had given me the awful secret,
and a description, a word picture of what would happen if I had made a
mistake.
She could go no further. She did not need to. I read the letter. I saw
the picture, and even I, who believed myself from long years of
experience with such affairs immune--I, too, became horror-stricken. It
was no affair of mine. I had not said Sugar was going up; as is often
the case, some newspaper had printed what another operator had said and
credited it to me. I was not even operating in Sugar, nor at the time
particularly interested in it. I could not return the letter nor have
any communication with these persons without in a way becoming their
accomplice. The woman had said that with the purchase her husband had
given orders to sell the stocks at twelve points' rise.
Try as I might to look at the matter in a cold-blooded business way the
picture haunted me--the old gentleman proud of his family's long record
of sturdy honesty, the old mother's faith in her boy, the wife seeing on
each of her children the brand of a felon father, and the husband
watching each day's market prices to see whether they had brought him a
verdict which meant State's prison or permanent relief from the
haunting fear which had become his never-absent shadow; and I read and
reread the closing lines of the faithful wife: "Mr. Lawson, you will put
Sugar up?--you surely will, just this once--and we will teach the
children to pray for you and yours, and God answers this kind of
prayers, you know He does."
The picture haunted me; I saw it in the market prices; I heard the story
in each tick of the ticker and each rustle of the tape; and every time
my eye caught "SUG," the stock-exchange abbreviation for Sugar, I
winced, as one does at the dentist's probe--well, I could not stand it.
I determined to put up Sugar--that is, I determined to try. Little the
woman knew what she asked when she wrote: "You will put up Sugar?" She
had read that a stock operator works magic, but it had never entered her
head that his wand was a stick of dynamite a thousand times
concentrated--a stick of dynamite that the law of stock-market averages
shows goes off in his hand nine out of every ten times it is handled,
and that when it goes off there is nothing more for the handler but the
minister, the flowers, and the head-stone; indeed, often the explosion
leaves nothing with which to buy even a head-stone! Little she thought
that it might strain the wealth of the Bank of England to move Sugar up
twelve points. I moved it up, and it went so easy--oh, so easy!
that--well, I will let the first description I pick from my scrap-book
from among a hundred from the daily press tell the story:
[From the _Boston Journal_, March 17, 1899]
LAWSON'S LUMP
HIS COFFEE SWEETENED WITH QUARTER OF A MILLION--MADE IT IN
SUGAR THURSDAY IN TWO HOURS' TRADING
A quarter of a million in a day!
That was Thomas W. Lawson's record for March 16, 1899.
The celebrated "Unthroned King of State Street" was on top
of the Sugar market; that is the reason of it all.
Sugar was the big card of stock speculation yesterday.
Indeed, the stock had one of the wildest days in its
history, and its high price--$170--reached amid great
excitement--is the highest on record. The speculation was
something tremendous, and it has been through the
speculation that the people who have been under the
impression that the markets were drifting into a dull and
uninteresting condition have had a sudden awakening.
From the opening it quickly advanced to 149, receded a point
or more, and shortly after noon started sharply upward. The
demand for it came so rapidly that the tape could not keep
up with it, and the excitement grew as the demand increased.
The scenes on the floors of both the New York and local
boards were most exciting. Blocks of 500 and 1,000 shares
changed hands frequently, and at one time the quotation in
the Boston market was fully four points behind that of the
New York list. The small army of shorts scrambled to get
covered up, and everybody was in a fever of wild excitement
over the marvellous movement. Before it had culminated the
price reached 170, or a gain of twenty-nine points over the
opening--the most remarkable display of strength in so short
a period of time that this remarkable stock has ever shown.
Broker Lawson did the buying, and while the excitement was
running high he bought freely. He had taken 20,000 shares
all told before the advance had fairly gotten under way at
from 143-1/2 to 144. At 170 he gave an order to sell 20,000
shares at a limit of 155, and obtained an average of over
160, thereby netting an estimated snug profit of $250,000 or
more within two hours. Asked as to whether the strength in
Sugar meant a settlement of the Sugar war, Mr. Lawson smiled
and said: "There has never been any Sugar war."
The conservative people on the Street are disposed to regard
the whole movement as a piece of clever manipulation.
* * * * *
[From the _Boston Herald_, March 16, 1899]
Mr. Thomas W. Lawson was the mover in the deal, and his
orders for 20,000 shares early in the day excited other
buying, which encompassed the astonishing rise. What point
Mr. Lawson had to trade upon is his own asset, if he had any
point, and it would not matter so far as the event was
concerned whether he had a point. The market was in a
position to respond to orders of these dimensions, and it
did respond.
* * * * *
[From the _New York Journal_, March 17, 1899]
The frenzied brokers fought like madmen around the Sugar
post. The wildest sort of excitement prevailed throughout
the day. The rest of the floor was practically abandoned,
and brokers crowded, pushed, elbowed, and yelled frantically
in their efforts to fill orders. There was no warning. The
sudden jump of the stock almost threw the brokers into a
panic. Men became ferocious in their efforts to fill orders.
Those on the outside made wild rushes to get into the
whirlpool. Men who are generally calm fell over each other
in their excitement. Scores of arms whipped the air, and men
yelled themselves hoarse. So great was the din and so
compact the yelling crowd that those on one side of the post
did not know the bidding on the other. At one point Sugar
was going at 159, and five feet away it was bringing 164.
While almost at arm's-length farther away it was going at
160, and farther around the post at 162.
The excitement became general among the offices of
stock-brokers as the news flew on the ticker. Members of
firms who were not on the floor gathered about the tickers
in excited groups and watched the pyrotechnic fluctuations
of Sugar to the exclusion of all other stocks. The
quotations came out at two and three points apart. One
minute the stock was away up, and the next it seemed to fall
hopelessly. Then it would as suddenly soar upward again. It
reached 170, and in five minutes it was down to 152.
* * * * *
[From the _Boston Post_, March 22, 1899]
Late in the afternoon Mr. Lawson was induced to give the
following explanation of his movements in Sugar: "You know
it is not conducive to the health of an active operator to
talk on what he is doing, for if he expects to retain his
hirsute adornment he must either keep jumping so lively that
none of the expert scalpers who haunt the jungles of Wall
Street can find him long enough in one spot to cut the floor
from under him, or he must envelop himself in mystery so
dense that all seeking for him will grow color-blind; but on
this particular commodity--Sugar--I can depart from the
standard formula.
"I have been twenty-nine years dodging the scalping-knives
of Wall Street Comanches, and, although I am still here, I
have many places on my head where the hair refuses to grow,
and, strange to tell, almost all the bare spots are labelled
'Sugar.' I suppose that I have, during the past ten years,
contributed money enough to Sugar to endow a fair-sized
asylum for tailless bears. It has never seemed to matter
whether I bought or sold, went long or short, the dollars
which I secured by the employment of pick and shovel, brawn,
muscle or gray matter, all seemed to follow one another into
the relentless maw of that modern Saccharine Titanotherium.
"Way back in 1890 I invested the profits of my Lamson
deal--$700,000--in 10,000 Sugar at 84, and in a few days,
amid brilliant fireworks, I bade it adieu, when it
gracefully dropped below 50. Again, four years ago, I
decided I could make no better long-time investment of
$700,000 or $800,000 Electric profits than to short Sugar
from 61 to 70. In eleven days it took $1,500 more than my
profits to even up my accounts.
"Thinking these things over of late, I determined to make a
final demand on astute and relentless Wall Street for my
accumulated deposits--a kind of
please-give-me-back-my-losses demand. I carefully loaded up
two weeks ago to the extent of 20,000 Sugar in the thirties,
and feeling the atmosphere was redolent of opportunities,
last Friday I bought 20,000 more, the last 5,000 of which in
a rather open and frank way that seemed but fair to my
scalping New York friends. Well, you know the rest. It took
fire. I cleaned up something over $700,000, and put out a
short line of 30,000 shares, the last of which I have
covered to-day at something over $350,000 profit. Strange as
it may seem, I was quit. I have struck a balance with Sugar,
and it gets no more of my money.
"I am one of the few Bostonians who are contented to live in
the knowledge that Wall Street is too big and bright and
cute a metropolitan centre for country boys to monkey with,
and you can say I am so tickled to get back my bait that I
will never again, never, wander away from home. There is one
moral that may be drawn by Wall and State streets from the
last few days in Sugar. It is this: It is not necessary
to-day, any more than it was in old days, to work deals with
false stories or fakes. In doing what I did in Sugar I
depended on no fakes nor stories. I simply followed Charley
Osborne's old admonition: 'If you want to bull stocks, buy
'em. If you want to bear 'em, sell 'em.' I bought 'em and I
sold 'em. These are Sugar facts as far as my movements have
affected them!"
For years after, even up to to-day, this yarn turned up in the press in
different parts of the world, and every time I read it I chuckled to
myself, for I see a big manly fellow, president of a bank now and asking
no odds of any, for he can buy 2,000 shares of Sugar at any time and
draw his check to pay for it against a bank account honestly earned
since the day his wife wrote that letter.
And I see a grateful mother teaching three youths to say a certain
prayer, and then I forget the critics' scathing sermons against stock
gamblers. It does not pain me when my own children ask, "Why do they say
such awful things about the stock operator?" I answer: "Oh, they mean no
harm; they don't know the stock gambler they write about."
ONE OF THE SYSTEM'S SHADOWS
That my readers may not drop this chapter with a false idea of the
results of the stock-broker's efforts to "live and let live," I will
give them an illustration of one of the counterbalances of the law of
compensations.
In the same year with the Sugar transaction, in an evil moment my mail
brought me the following letter:
_Dear Sir_: I have read with interest your proclamations
about "Coppers." I am not a rich man, but I have about
$20,000 lying idle which I should like to add to, and will
put it into anything you advise.
The writer received the following answer from my secretary:
Mr. Lawson instructs me to say he received your letter of
---- and he knows no better investment than the stock of the
Amalgamated Copper Company, which will be offered for public
subscription next week. In the advertising which will
accompany the offer you will note that it is to pay 8 per
cent., is now earning 16, and should sell at $150 or $200
per share. It will be offered at par. Not only does Mr.
Lawson personally believe in every word in the
advertisements, but they are vouched for by such men and
institutions as the National City Bank of New York, Henry H.
Rogers, William Rockefeller and others, whose names are
synonymous with success in business affairs. Mr. Lawson does
not hesitate to advise you to invest your $20,000 in this
stock, provided you are not looking for an investment that
is absolutely safe, that is, one that should not, in these
times, pay you over 3-3/4 or 4 per cent.; but if you are
looking for a semi-speculative investment, that is, one that
will pay you over 6 per cent., and where the chances are
good for large profits, he recommends this stock.
Later I received the following:
Upon your advice I purchased 200 shares of the Amalgamated
stock at $100 per share. When the stock dropped to 80,
remembering your strong advice I purchased 300 shares more,
and after it had advanced to 120, thinking it was surely
going to the 150 or 200 you mentioned, I bought 1,000,
putting up my 500 shares as margin. It has now dropped back
to 100, and the many stories I read in the papers are
causing me much anxiety. Do you still believe as you first
wrote me?
To which he received the following answer:
Mr. Lawson instructs me to say he received yours of ----.
His faith in the Amalgamated property, the men who control
and manage it, and the stock is the same as it always has
been. He, like yourself, added to his holdings at 120, and
as high as 129, and knowing what he does about the property,
and what the men who control and manage it, and with whom he
is intimately associated, say to him, he cannot believe the
yarns which are appearing in the press are other than the
vaporings of those stock-market critics who must write their
opinions of prominent stocks even though they have no means
of actually knowing anything about them.
While Mr. Lawson regrets that you have spread yourself out,
as you say in your letter, he can only answer your question
by the above, to wit, his faith in Amalgamated is the same
as from the beginning.
Later I received the following from one of the penal institutions of the
country:
You will observe by the postmark on this letter my present
place of residence. You probably knew that before, as the
press has had much to say about me of late.
I trust you and your associates are satisfied with
yourselves when you observe the hell you have caused others.
When I first wrote you about the Amalgamated stock I was an
honest, prosperous man. I had never committed a crime nor
done any great wrong to my fellow-beings. Relying upon what
you said publicly and the well-known record of the
Rockefellers and their partners, I committed acts which I
now know to my everlasting sorrow I should not have
committed. I had no intention of doing wrong, but when I saw
ruin staring me in the face I used, as I supposed only
temporarily, funds intrusted to me to protect my stocks from
being slaughtered at declining prices by the sharks of
brokers whom I dealt with. The rest is the old story. My
wife and children are disgraced and oppressed with poverty,
and I am serving a five years' sentence in this institution,
buoyed up only with the hope that I may live to face you and
your kind, that you may have the pleasure of seeing the
wreck you have wrought--in the hope that I may satisfy a
desire which night and day gnaws at my very soul, a desire
to say to you, face to face: "Look upon a man who, although
a branded criminal, is as much better than you and your
associates as it is possible for one to be," and to ask you
how your wife and your children enjoy the luxuries they have
when they know at what price they were secured, for I shall
surely, if I live, insist upon your wife and children
hearing from my lips what agonies a wife and children, who
are as dear to me as yours are to you, have suffered because
of your baseness.
CHAPTER XIII
THE "SYSTEM" VERSUS WESTINGHOUSE
In 1894 I had just wound up one of the most strenuous and successful
financial campaigns I ever engaged in. This was the Westinghouse deal,
of which the papers were full at the time. George Westinghouse, to whom
the world owes the air-brake and countless improvements in electrical
machinery, having surmounted the difficulties that clog the early steps
of the inventor who would be his own master, had taken rank, some years
before, among the prominent public figures of the day. The various
corporations in America bearing his name had prospered amazingly; his
ingenious appliances had displaced home products in the European market;
and titles and decorations had been conferred on the inventor, though
these last, like the sturdy American he is, Westinghouse had put aside.
This great success was wholly the fruit of George Westinghouse's
personal endeavor. It owed nothing to extraneous influences. It had been
accomplished along those manly, independent, Yankee lines which have
made that name synonymous with hustle and success in every part of the
civilized world. Above all, the man had organized and developed his
companies without the aid of the "System" or without truckling to its
votaries. In consequence he had incurred the deadly hatred of some of
its lords paramount.
In the business world Westinghouse's great rival was the General Electric
Company. To mention "Westinghouse" and "General Electric" in the same
breath was to speak of a thing and its antithesis. Everything George
Westinghouse was or had been the General Electric was not and had never
been. The General Electric had been and was by leave of the "System"; in
fact, was one of the very foremost examples of its methods. Its
high-priest was J. Pierpont Morgan; its home, Wall Street; its owners, the
principal votaries of the "System." It had grown because of their favor
and by means of the rankest exhibitions of knock-down-and-drag-out methods
of consolidation of all competitors but--Westinghouse.
Just previous to 1894 Westinghouse had rejected a dazzling scheme of
uniting the two institutions on an immense capitalization which would
have absorbed millions and millions of the people's savings and earned
millions in commissions for its projectors. Wall Street's indignation at
his hardihood knew no bounds, and at the time of which I write the
yegg-men of the "System" were laying for him with dark-lantern and
sand-bag.
To appreciate the story of what the "System" tried to do to George
Westinghouse and what he withstood, one must know the man. He embodies
in many ways the conception of what the ideal American should be. His
remarkable six feet and odd of physique and his fertile, powerful brain
are the admiration of all true men with whom he comes in contact. In
spite of his unparalleled success and the accumulation of a great
fortune, he retains the same simplicity of manner and conduct that
characterized him when working at the bench for weekly wages, and with
all his shrewdness and force of character he has preserved a simple,
honest, childlike belief in humanity. Single-handed he conducted all his
great enterprises on a plain, patriarchal basis, using their revenues
for extensions, and depending on his faithful and well-satisfied
stockholders for such further accessions of capital as the business
might in his judgment need. About the time General Electric was most
anxious to bolster up its jerry-built structure with the solid
Westinghouse concern, the latter institution had begun the erection of
some big new plants which required immediately several millions
additional capital. Westinghouse prepared to apply to his stockholders
for the required funds, and the announcement was to be made at the
annual election soon due. Suddenly the financial sky became overcast.
The stock-market grew panicky and money as scare in Wall Street as rain
in Arizona in May. It was just such a situation as the "System" might
have brought about to accomplish its fell designs had it possessed the
power to work miracles.
And the "System" took care of its advantage. At a tense moment in that
soul and nerve trying period, with Wall and State streets full of talk
about General Electric's probable absorption of Westinghouse, General
Electric being then at its highest price, $119 per share, the Westinghouse
companies held their annual meetings and the big inventor, confidently
facing his stockholders, quite regardless of conditions which he thought
could have no possible bearing on his concern's splendid prospects, came
forward with his demand for the millions required to complete the projects
already under way. This was the signal. From all the stock-market
sub-cellars and rat-holes of State, Broad, and Wall streets crept those
wriggling, slimy snakes of bastard rumors which, seemingly fatherless and
motherless, have in reality multi-parents who beget them with a deviltry
of intention: "George Westinghouse had mismanaged his companies"; "George
Westinghouse, because of gross extravagance, had spread himself and his
companies until they were involved beyond extrication unless by
consolidation with General Electric"; these and many more seeped through
the financial haunts of Boston, Philadelphia, and New York, and kept hot
the wires into every financial centre in America and Europe, where aid
must be sought to relieve the crisis. There came a crash in Westinghouse
stocks, and their price melted. From amidst the thunder and lowering
clouds emerged the "System." "Notwithstanding the black eye the name of
everything Westinghouse had received, it would stand by and consolidate
and save the day!" But the "System" and its everything-gauged-by-machinery
votaries had reckoned without their host. George Westinghouse was too
strong a man to be thus easily shaken down. He threw back his mighty
shoulders, shook his big head, and flung his great private fortune into
the market to stay the falling prices of his securities. The movement was
too strong against him at the moment, and his millions were but a
temporary help. He got on the firing-line himself and did a thousand and
one things that only a brave, honest, and democratic Yankee would or could
do--everything but accept the cunning aid offered him by the "System" or
its votaries. He knew too well that the friendly mask concealed a foe and
that the kid-gloved hand extended him had a dagger up its sleeve.
These were the conditions when I, as an expert in stock-market affairs,
was called in for assistance. Here was this sound, sturdy institution
standing for everything that was best and self-supporting in American
finance adrift on the Wall Street shoals, and it seemed almost a
hopeless task to attempt its rescue. But it was a task eminently worth
while, and I undertook it with all the energy I could command.
The problem was to restore the Westinghouse stocks to their former high
price, and, confidence being re-established, to sell the new treasury
stock at such a figure as would pay for the plants and other projects
the company had under way. The completion of these meant greatly
increased earnings and such an advance in facilities and economy of
manufacture as would surely seal the fate of General Electric if it
competed with Westinghouse under the new conditions. Small wonder
"Standard Oil's" whole strength was bent to force the alliance.
My fight had hardly begun when I saw it was to be opposed by all the
forces of General Electric and the "System," and I concluded defeat was
sure unless by a counter movement on their stock I could keep them so
busy that they would have no time to interfere with Westinghouse.
Thereupon I laid out that attack on everything connected with General
Electric which created so much consternation at the time. To this day,
if my enemies are asked to name the act which most conclusively
justifies their hatred of me, they will point to my terrible General
Electric raid. They will tell you I broke the stock from 118 to 56 in a
day, and thereby caused one of our most disastrous panics; that I
continued to hammer it to 20, that I compelled reorganization, and then
did not let up. They will show you that the misery and ruin I wrought
were beyond calculation. I will only say that, of any of the things I am
proud of having done, I am proudest of what I did in General Electric,
and, willingly, I would give over five years of my life to go through
the experience again.
It was a most arduous campaign, and our fate trembled many times in the
balance. By dint of hard, overtime work, and what my enemies were
pleased to call rank manipulation, we drove Westinghouse stock back to
its former price, after which a strong syndicate was formed to take the
new stock, and the righted institution at once magnificently swept on
its international career which to-day is at its height.
Though I had taken up the Westinghouse cause as a business venture and
its successful termination was most profitable to me, I had entered into
the campaign with the ardor of a lawyer defending a client unjustly
accused of a heinous crime. But there was this difference--if in spite
of his efforts the lawyer fails to convince the jury of his client's
innocence it means no detriment to his fortune or his reputation,
whereas all I had and was were involved in this stock-exchange struggle.
The great rewards that are the guerdon of success in financial fights
are balanced by the terrific consequences of defeat. The broker general
engaged in surrounding his enemy requires every dollar he and his
principals can pledge or beg, and where great forces are in conflict
millions are burnt up to seize any vantage, as Kuroki sacrifices a
regiment to gain a hill. I had won for myself as well as for
Westinghouse, but if the fortunes of the war had been on the other side,
I must certainly have been wiped out.
CHAPTER XIV
THE ALLIANCE WITH ADDICKS
It was part of my method of conducting my stock-brokerage business to
expose through the medium of the press or through market letters the
stocks of corporations I thought rotten. It was also my way to work up
bull campaigns in stocks that seemed to be selling for less than they
were worth. With Addicks or the "Standard Oil" I had no connection. I
had watched the Philadelphian's operations and had my eye marketwise on
his bonds and stock, particularly on his stock, which was 100,000 shares
of the Bay State Gas Company of Delaware, of a par value of fifty
dollars each, and which became very active in the market shortly after
it was created, at just under par. I thought I saw in the scheme the
ordinary, cold-blooded, stock-jobbing, unloading-on-the-public affair. I
had heard recounted the man's wonderful doings, particularly his
recklessness in the purchase of the Boston companies; I "sized up" his
mighty effort to be the tremendously rich good fellow as inspired by the
idea and the purpose of giving his "stuff" in the stock-market a good
send-off; and from the start I had put his property on my "to-be-watched
memoranda" as one I might at the proper time let daylight into.
I was tearing large strips from its values when Addicks' bankers, who
happened to be business friends of mine, sought to enlist me on their
side of the gas war. I remember expressing frankly my opinion about the
contestants and their contest at the time, stating that so far as
morality, fairness, or justice went I could see little to choose between
Addicks and "Standard Oil." I continued to "bear" the stock until one
day my banker friends brought me an earnest request from the Delaware
financier that I go to New York and talk things over with him.
On reaching New York--the two bankers and myself--we went directly to
Addicks' apartments at the Imperial Hotel. Although the fortunes of war
were rapidly crumbling this worthy's brilliant financial structure,
there were as yet no outward signs of disintegration. His beautiful
estate at Claymont, Del., his stock farm in the same State, his
town-house in Philadelphia, his $30,000 apartments in the Knickerbocker
on Fifth Avenue in New York, and the superbly furnished suite in the
Imperial, close by, all seemed to testify to the man's boundless
prosperity.
Memorable though this meeting was destined to be to both of us, my chief
sensation in approaching it was a certain curiosity as to the
personality of Addicks, whom I had seen, but had never spoken to. I knew
him to a "T" in my mind, but here was my opportunity to compare my
mental "sizing-up" with the real man. The apartment into which we were
ushered was of the low-burning-red-light, Turkish pattern. Addicks rose
from a great divan disturbing a pose which his white cricket-cloth suit
and the scarlet shadows made so stagy that I guessed it was for my
benefit. I looked him over, and he returned the inspection. After the
introduction he at once unlimbered his business gun.
"Let's get right down to business, Lawson," he began. "I wanted to meet
you to see if we could get together on any satisfactory basis."
I told him that that was my understanding of our meeting. Then he wanted
assurances that I had no connections with "Standard Oil" and that I was
free, sentimentally and commercially, to enlist in his fight. I replied
that I was a stock-broker and operator, and was looking for
opportunities; no one had strings on me, and provided he made
satisfactory terms I was free to join him; further, that when it came to
enlisting in a fight between two such financiers as Addicks and Rogers,
sentiment seemed to me out of place.
"That's right," he said. "That's what I like to hear. Now, Lawson, will
you take this fight of mine against 'Standard Oil'?"
"If you meet my terms, yes."
Addicks looked at me. "What do you want?" he asked. "Perhaps, though,
you'd first like to have me tell you how my affairs stand."
"I know sufficiently where you stand," I replied, "to name my terms
right now. If they are acceptable, I'll hear you tell where you stand
afterward. I'll take your fight for a cash commission of $250,000 and a
cash capital of $1,000,000, to be used in the market on joint account,
we to divide the profits of all operations."
Addicks smiled. "You are too high," he said. "I'll pay you $50,000
commission and give you $250,000 capital, and after I show you in what
good shape my fight now is and how near I am to victory, you'll agree
that the terms I offer are good pay and fair."
"Mr. Addicks," said I, "I have just time to get dinner, look in at the
theatre, and catch the midnight back to Boston. It is my business to
keep posted on such scrimmages as you are engaged in. If you and your
affairs are where I believe they are, the terms I offer are
exceptionally low. If your affairs are as you would have me believe, you
need no one to captain your fight."
Addicks asked where I thought his affairs stood, and I answered: "I
don't think--I know, or, at least, I feel quite sure I do. You are at
the end of your rope and are practically bankrupt."
At once Addicks grew indignant. "You are absolutely wrong," he asserted.
"I'll admit I have had a hard fight, and that it has cost me, so far,
considerable money; but I give you my word I'm worth between six and
seven millions clear and clean right now."
I bade him good-night and left. Our interview had consumed not over
twenty to twenty-five minutes. I said to his bankers:
"Addicks is the Addicks I have sized him up to be, only worse."
We got back to Boston next morning, and at the opening of the Stock
Exchange I sailed into the Bay State stock in earnest, for I felt surer
than before that Addicks was nearing his finish. A few minutes after
the Exchange opened, Addicks' banker rushed into my office and said the
Delaware financier begged that I would return to New York at once, and
whispered to me that in a conversation just held on the telephone
Addicks had stated that he would accept my terms. I informed the banker
I was not anxious for the job, but as he urged his own interest, I
jumped on the noon train and in the evening was again in New York.
It was a warm day and I was pleased to get a wire on the train from
Addicks asking me to meet him at the pier, as we should hold our
conference on his yacht, the _Now-Then_, at that time one of the fastest
steam-yachts afloat.
It was a night of memorable beauty. In the golden light of a dazzling
sunset we flew up the majestic Hudson. From under the awning I watched
the serried edges of the Palisades as we slipped swiftly by them to the
broad reaches of tinted waters above Yonkers. Every natural influence
conspired to make acute to me the warning whisper of my soul, which
flashed the caution as I crossed the gang-plank, "Watch out!" But, as I
said before, Fate hangs no red lights at the cross-roads of a man's
career, and I plunged recklessly into the toils my Mephistophelian
companion so artfully wove around me.
The _Now-Then_ was hardly in mid-stream before Addicks had got down to
business. His demeanor had changed since the previous evening. All his
bravado had disappeared; he was simple, frank, direct, and, in the
manner of one who has made a mistake and regrets it, he commenced
without any delay:
"I didn't think last night I'd pay your price, Lawson. It staggered me a
bit, but I gave it considerable thought after you left, and when this
morning's prices showed me you were again on the war-path, I saw my
error."
"Mr. Addicks," said I, "let's have no fooling about this matter. If we
do business together, it will only be after there is some
plain--brutally plain talk between us. It will do no good to trick,
because some one will get slaughtered when the trickery is discovered,
as it surely would be, after we hitched up together."
Then, straight from the shoulder, free from all attempt to gloss over
the raw truth, I detailed to him the things I knew he had done to his
former associates, and it was a tale of unbroken duplicity and
double-dealing on his part, loss and misery for his lieutenants, and
profits and curses for him. I ended by saying: "If we get together,
Addicks, it will be upon my terms, and I'll see to it that you never put
me in the position in which you have put all the others you've been
connected with. I don't trust you and I'll watch you all the time."
When I had finished Addicks looked at me sadly with a wounded,
"how-this-man-has misjudged-me" expression in his eyes.
"Lawson," he said, "you were never more mistaken in your life, but it's
a matter I don't want to argue about. You'll tell me you were all wrong
after you know me better. I'll do business with you--yes, and I'll allow
you to make your own terms. I'll agree to them whatever they are, and
I'll live up to the very letter of them, however hard."
I may mention that it is a peculiar characteristic of Addicks that one
may talk to him as though he were a pick-pocket, and he will not resent
it, if it is "business." Where H. H. Rogers would flash into a Vesuvius
of wrath, the Delaware statesman only smiles.
Addicks by no means convinced me of his sincerity. I decided I would
test him pretty thoroughly before I went further. So I said: "This seems
the proper time for a clean statement from you as to just where you and
your companies stand."
I did not believe this man could make an absolutely truthful statement
on any subject of importance, but I knew enough of his real position to
protect me from being fooled. What was my surprise, therefore, when in
the most open way possible he calmly spread before me a condition of
affairs far worse than the worst I knew. He was, indeed, bankrupt and
his corporation was in little better shape.
As soon as I could catch my breath I said:
"No wonder you refused my proposition last night. If your bankers had
dreamed of this state of affairs, they would have had a receiver
to-day. You cannot meet my terms. You cannot even carry out the ones you
yourself offered."
Addicks leaned back on the cushions of his chair in the easiest, most
_insouciant_ way imaginable. He grinned. "That's true," he replied, "but
I never give up a ship till I feel her bump the bottom, and I am sure
that, bad as things are, you and I can pull them out and whip Rogers to
a standstill."
It was a remarkable situation. Here was one of the most ruthless
financial schemers of the age cornered for slaughter, and he had put
himself absolutely at the mercy of the man who had bitterly fought him
and whom he knew hated his kind. Yet he was as cool and collected as a
bunch of orange blossoms at a winter's wedding.
The man's supreme nerve astounded me, yet I could not help admiring him.
I saw through his game, yet his assurance fascinated me. I thought a
minute. I said to him: "Addicks, I'm really sorry for you, and I'll
promise you here now to keep what you've told me sacred. What's more,
I'll stop fighting you. I'll cover my shares and without doing any one
any harm I'll help make prices a bit better for your securities."
He smiled, said "Thank you!" and continued looking at me as though he
awaited something further, a quizzical, expectant smile on his face.
There was an interval of silence. Finally I said to him--and there were
neither red lights nor warning intuitions to signal my peril: "Just what
do you expect me to do, Mr. Addicks?"
"Whatever you think best," he replied in a mild tone. Then, rousing
himself a bit, he went on: "They say in the market that you like a fight
and the harder it is the better. Well, I certainly have an uphill fight.
Do as you would have the other fellow do to you."
After that I had no further doubts of Addicks' slickness. I said to him:
"You are certainly the shrewd man they describe you as. Now continue to
be frank long enough to answer this one question: Did you figure this
out as the last card to throw at me, knowing that the very desperation
of the case might warm me up and tempt me to tackle it for the sake of
the fight there's in it?"
Instantly Addicks knew his game was won. He straightened up and was the
able, shrewd, and cunning financier who had tricked conservative Boston.
His facts chased his figures in marvellously rapid succession, and he
showed a knowledge of conditions, relations, and corporation tricks that
dazzled me. For an hour he rushed on, and when at last he came to a stop
I said to him:
"It's unnecessary to say any more. I see the situation as you would have
me see it, and it comes to this: If I refuse to link up with you it
means another 'Standard Oil' victory and another wreck for Boston.
Rogers' success means that New England speculators and investors will
again, for the three hundred and thirty-third time, be robbed of their
savings. If I get in, we may either avert all this or I may be ground up
at the same time you are. However, it's too good a fight to miss, and so
here goes. I'll link up."
At some particularly hazardous halting-place in after-years Addicks and
myself have often laughed as we have talked over that August evening on
the _Now-Then_. I was easy, he asserts, and I must admit that he is
right--I was easy. Yet no one knew Addicks better than I did then.
Looking back along his extraordinary career, one is obliged to allow a
certain magic as a factor in his men-and-dollar tussles. We had
absolutely nothing in common, Addicks and I. We thought and felt
differently about every relationship of life. A dozen other ventures,
sure, easy, and promising infinitely greater profits, were ready at my
hand--but he appealed to my sense of adventure, he promised me abundant
and glorious fighting, and I forgot everything else and went with him.
When the _Now-Then_ touched her pier and I stepped ashore, it was as
captain of Addicks' corporation and stock-market forces, with absolute
power to wage war, make peace, and use in whatever way I thought best
such resources of his as I could lay hands on. I lost no time. Within
forty-eight hours of my return to Boston I had mapped out my campaign,
reconstructed Addicks' broken lines, and gayly set forth on about as
forlorn a hope as ever operator or fighter tackled.
Nothing more desperate could be imagined than the condition of the
Delaware financier's affairs when I assumed control. All the resources
of his companies were pledged for loans, and the constantly falling
prices of his securities, coupled with the discrediting stories Rogers'
agents kept in circulation, made it difficult to keep these going. To
pay would mean ruin, for Addicks had no further thing of value to
pledge. At the same time, Rogers' company, which had now paralleled many
of the Bay State Company's pipes, had secured a large slice of that
corporation's business, and had a corps of up-to-date solicitors working
overtime to secure the balance. Boston, in the meantime, having decided
that Addicts' star was of the shooting variety, and on its return trip,
was throwing up its hat in the wake of the "Standard Oil" band-wagon.
The city government and the Massachusetts Legislature had awakened to
the enormity of Addicksism and were boiling over with that brand of
virtue which the "System" and "Standard Oil" know so well how to rouse
in American breasts by way of American pockets. By this time Rogers'
investment in Boston had grown from the half-million he had in the
beginning estimated as sufficient to annihilate Addicks to three and a
half millions, a million and a half of which represented real property,
and the balance, all kinds of expenditures made in the fight to crush
the Delaware financier, a large part of it being invested in the votes
and favor of State and municipal authorities.
Chief among the enemies of Addicks at this period was the young and
brilliant boss of Boston, its reform mayor, the Hon. Nathan Matthews,
and thereby hangs a swinging tale. When the Addicks-Rogers gas-fight
broke out in Boston this Nathan Matthews was at the zenith of his
political career, and was rather a greater man than even reform mayors
generally fancy themselves. He was at that state of development in the
lives of aspiring persons which compels the average spectator to debate
whether the swelling of the cranium should be met by a larger hat-band
or by a sweeping haircut. _En passant_, Addicks' Panama had had its
fifth enlargement to accommodate the successive bulges of his brow.
Now, the city of Boston's contract with the Bay State Company for gas at
a dollar and twenty-five cents, which had run a long term of years, was
just expiring. One bright June morning the mayor's secretary telephoned
the secretary of the Mogul from Delaware that His Honor of Boston,
desired converse with the Gas King. If those who overheard the dialogue
can be credited, the parley was of this character:
"This is the mayor of Boston, the Hon. Nathan Matthews."
"This is J. Edward O'Sullivan Addicks, Gas King and United States
Senator-to-be. What would you with me?"
"I would hold converse with you in regard to a contract of much moment
which will expire in a few days."
"Well and good. My office is in West Street. Give your card to my first,
second, or third secretary and I will not keep you waiting long."
"The office of the mayor of Boston is at the City Hall and my first or
under-secretary will make things agreeable while you wait. When will you
call?"
"I would have you understand, Mr. Mayor, that any one to talk gas with
J. Edward O'Sullivan Addicks, Gas King and United State Senator-to-be,
comes to his office."
"Good-day to you, Mr. Gas King and United States Senator-to-be."
"Good-day to you, Mr. Mayor."
I do not, of course, guarantee that the conversation took exactly the
form here given it, but no injustice has been done its substance, nor
would it be possible to estimate in miles the breach it created. From
that telephonic encounter date the earnest efforts of Matthews and
Addicks to do up each other, in which both were successful to a degree
that filled their hearts with Indian pleasure.
A few days later public announcement was made that the Brookline Gas
Company, Rogers' corporation, had been awarded the contract for lighting
Boston, and that henceforth the legal price of gas to the consumer was
to be $1 per thousand feet. This was due notice to all concerned that
"Standard Oil" had captured City Hall, and Addicks realized his error.
He sought the mayor's office, but the mayor had no time to see him. His
companies met the new rate. There was nothing else for them to do.
CHAPTER XV
THE GREAT BAY STATE GAS FIGHT
It was to this condition that I had to adapt my campaigning plans. I
determined first to raise the market price of Addicks' securities; to
turn the tide against the "Standard Oil" by that most potent of
stock-market weapons, publicity; and then to attack Rogers from the rear
through the City Hall. For Addicks to attempt to match pocket-books with
Rogers and "Standard Oil" in corrupting city or State officials I knew
would be useless; and besides a fundamental stipulation in the agreement
with the Delaware financier on the _Now-Then_ had been that under no
circumstances should bribery or corruption be allowed to enter into any
of our plans while I was connected with the enterprise. I had always
held, do now, and always shall hold, that the meanest crime in the
calendar of vice is bribery of the servants of the people. I felt pretty
sure, moreover, that I could play a card that would more than offset the
dollars of "Standard Oil." Nathan Matthews was on the high-road to the
governor's chair, but I happened to know that, however ambitious he
might be for political preferment, his temperament rendered him more
avid for distinction in business. Addicks had within his gift the
richest plum in all the Boston commercial world. As controller of the
affairs of the Bay State Company of Delaware, which controlled the
nomination and consequent election of the officers of the old Boston gas
companies, he could award to any one he pleased the presidency of these
corporations, together with the large salary that went with the
office.[6]
My plans in shape, I rushed to the firing-line. I began with a statement
to the investors of New England and the gas consumers of Boston brimming
over with facts and figures. Then I fired a volley of candid details as
to the manner in which city and State officials had recently betrayed
the public's interests. Lastly, I discharged at "Standard Oil" a
broadside which my attorneys and friends assured me meant jail on a
libel charge. I put my banking-house and my personal guarantee behind
the old and new loans, and proceeded to roll up my sleeves in the
stock-market. I got results at once. A change became apparent in public
sentiment--the rottenness of Addicksism was overcome by the stench of
"Standard Oil." The prices of Bay State stocks and bonds shot up; loan
funds were offered freely and at lower rates of interest.
There were, however, reprisals. Rogers met my onslaught by a manoeuvre
new in "Standard Oil" tactics. He came into the open, issuing a
proclamation over his own signature which gave me the lie, at the same
time tearing off a yard or two of my skin and throwing on a bucket of
brine to remind me I had lost it. This attack was just off the press
when I was out with a rejoinder which he, in after-years, referred to as
quite the hottest thing of its kind he had ever read. In it I calmly,
but in that "chunk English" which those who really wish to convey the
truth naked can always find handy, told him plainly who he was,
explicitly what "Standard Oil" was, and exactly who and what I was. I
opine that about either assault there was nothing dignified, generous,
or refined, but in stock-exchange battles one has not time to scent
shrapnel. The immediate result of this interchange of deckle-edged[7]
insults was to daze the public. "Standard Oil" attacked and actually
replying; Rogers assaulting Lawson and Lawson sending back worse than he
got--almost anything might happen next. It was right here I got to
Rogers' _solar plexus_. I came out with another plain public talk, and
gave him the choice of haling me into court--in which event I pledged
him my word I would send him and his associates to jail for bribery and
other crimes--or of acknowledging to the world he was licked and on the
run. He was silent and I loudly claimed victory. The price of Addicks
stocks quickly emphasized our success by a further advance.
Thus far the campaign appeared to be working smoothly, and I turned my
attention next to my rear attack. I began negotiations with Mayor
Matthews for the withdrawal of his support from Rogers. It was a
difficult task, but after much manoeuvring I landed my big fish. I
promised him the presidency of the Boston, South Boston, Roxbury, and
Bay State gas companies for the term of three years, at a salary of
$25,000 per annum, with the explicit understanding that he was to allow
me, as his vice-president, to see that the bargain between us was lived
up to. When the trade was made it was understood that the fact of
Matthews' change of base should be kept secret, and that he should not
assume the office until the end of his term as mayor of Boston. With
that agreement the deal was clinched, signed, sealed, and delivered.
In order that my readers may comprehend the events that follow, it is
necessary that they understand something of the complications in which
Addicks' manipulations had involved that corporation.
When Addicks purchased the several Boston gas properties he organized a
company, the Bay State of Delaware, in which this ownership was vested.
In order to facilitate the financing of the new corporation and for
other manipulative purposes of his own, Addicks created an inner
corporation, the Bay State of New Jersey, owned by the treasury of the
Bay State of Delaware, to which he turned over the stocks of the Boston
gas companies. These the Bay State of New Jersey transferred to the
Mercantile Trust Company of New York as collateral for the twelve
million Boston Gas bonds which had been sold to the investing public.
While to all intents and purposes the Bay State of Delaware was owner of
the subsidiary properties, the contract with the Mercantile Trust
Company was made with the Bay State of New Jersey, and it was to the
president of the latter corporation (Addicks) that the Trust Company was
bound to deliver the proxies for the gas stocks in its possession, three
days before an annual election. Knowledge of this subcutaneous
corporation was confined to Addicks and his immediate associates, and
the Delaware financier alone quite grasped its potentialities.
Hitherto Addicks had used the proxies to elect himself president of each
of the subordinate corporations, drawing the several salaries which went
with the offices. To prevail on him to give up these places and their
emoluments to a man he hated as bitterly as he did Matthews was a
difficult task, but his situation was desperate. Finally, he agreed. I
did not know till long afterward that this reluctant compliance was
yielded only after Addicks had had a secret session with his Bay State
directors, at which they voted him, by way of salve for his resignation,
a sum equal to three years' salary, $75,000.
The mayor, who was a lawyer, prided himself on his shrewdness, and was
fully alive to the serpent strategy of Addicks. He determined that the
prize he had secured should not slip through his fingers for lack of
precaution. We had many legal pow-wows in which the most astute lawyers
at the Boston bar were called in, and finally the directors of the Bay
State made an iron-clad contract with Nathan Matthews, agreeing to
deliver over to him whatever proxies it, the Bay State Gas of Delaware,
received from the Mercantile Trust Company of New York, on a given day
before the annual election, with which he, of course, could elect
himself president. This contract was signed by Addicks and his directors
and by all the officers of the Bay State of Delaware corporation, and
was passed on and approved by the eminent law sharps both sides had
retained.
A few days after the document that made Nathan Matthews supreme boss of
Boston Gas was conveyed to him, there came an explosion. Like the
premature bursting of a bombshell at a Fourth of July celebration, the
transaction "leaked," and the press announced in sable head-lines that
Mayor Matthews had sold out, that Addicks was on top, and that Rogers
and "Standard Oil" would surely be found beneath the _debris_. Matthews
has always claimed that this "leakage" was a piece of Addicks' double
dealing; Addicks declares it was a part of Matthews' and Rogers'
deep-laid plan to give him the double cross. Anyway, as a hurrier-up of
coming events the news was most successful, although its effect was
somewhat of the nature of that produced by the throwing in of an
overdose of soda at a candy pull--the pot boiled over, and the air for a
time was permeated with the odor of burned sweets. In spite of all
public and private criticism Matthews budged not a jot, and confirmed
the reports. I made the most of our triumph over "Standard Oil," and for
a few days the public took to it, too. Then came one of those return
waves of sentiment which may always be counted on in any contest in
which "Standard Oil" is engaged. From mysterious places and in
untraceable ways the report became current that victory was really with
Rogers instead of with our side; that the deal was a smooth piece of
Machiavelian work; that Matthews when he took the helm was to steer our
ship alongside one of Rogers' forts and perhaps drop anchor under a row
of his concealed guns.
This rumor alarmed me. I lost no time in running it to earth, and
discovered to my consternation that Matthews had spent the night before
he made the agreement to come over to us in New York, at the home of H.
H. Rogers. Exactly what had occurred there, or what their programme was,
I don't know. Long after this episode had slipped into gas history, at
the time when Rogers and myself were doing business together, I asked
him to enlighten me on this one point, and he did to the extent of
saying, "Matthews only did what I approved of." This certainly redeemed
Matthews in my eyes from the reproach of having sold out his friends.
There is nothing more despicable than a man who, after having consented
to be "put" will not "stay put"--even though the first "put" be of a
questionable character.
This new complication demanded immediate action. I called on Matthews to
make public announcement that I was to be his vice-president, and thus
set at rest the reports that were fast destroying the beneficial effects
of our coup. I argued that such an announcement would convince the
public that victory was with us and not with Rogers. My surprise may be
grasped when the Mayor placed this icicle in my hot palm:
"Mr. Lawson, it has long been my ambition to show the public of Boston
and gas consumers what I could do with this situation, and now that I am
absolutely assured of gas supremacy, I would have you and all others
distinctly understand I will run it as I deem best, regardless of the
wishes of any one."
Nathan Matthews was destined later to learn that in an Addicks edifice
there are secret trap-doors and concealed passageways available for
quick escape in emergency, and that the term "absolutely assured" is of
relative value when used in high finance, with Addicks to interpret the
relativeness. A few days after the mayor had shown his colors the annual
election was "pulled off" in an unexpected manner. The Mercantile Trust
Company delivered its proxies to the president of the Bay State _of New
Jersey_, who promptly re-elected himself and his friends to their old
offices.
Next morning the public, the press, and the ex-mayor were alike
surprised to learn that J. Edward O'Sullivan Addicks was still president
of all the Boston gas companies; that General Sam Thomas, of New York,
and Thomas W. Lawson, of Boston, were vice-presidents; and that the
expected and widely heralded Matthews turnover to Matthews had been
indefinitely postponed. There was a tremendous "towse" for a few days
during which time I tried my hand at public-opinion moulding, and so
successfully that all interested saw that the tide had really turned,
and was running swiftly against the heretofore invincible "Standard
Oil." Rogers tried to stem it by causing it to be known that Matthews
was to carry the new complication to the courts, but we quickly disposed
of this possibility by reaching a settlement with our man. This was
brought about by the payment to Matthews of a number of thousands of
dollars, which Addicks afterward informed me he had entered in the
gas-books as "balm salary." From this event until August, 1895, it was
one continuous running fire with Rogers and his crowd, with a constant
gain to our side in public opinion, though final victory was still far
off because of the unlimited money resources of "Standard Oil." In fact,
it gradually became evident that, though we might hold out, it was
impossible to whip "Standard Oil" to an open acknowledgment of defeat.
The phase of the problem that gave me keenest cause for uneasiness was
the possibility I recognized of treachery in my own camp. I had become
painfully aware that Addicks was getting impatient and was ready at any
favorable moment to make one of his quick Judas turns, which would land
him safe with Rogers as the price of the slaughter of the rest of us.
True, I had taken all possible precautions to safeguard my own and my
friends' interests against his craft by securing from him and from the
subsidiary companies iron-clad power to act for them without
consultation. To get this I had had to use great pressure, for he had
balked long and hard against giving it. This was the condition of
affairs when I decided to stake everything on one move.
* Certain of my critics have seized upon the transaction
with Mayor Matthews, narrated in this chapter, to say: "He
bribed the Mayor and is no better than other bribers."
The fact is, that the only thing the Mayor of Boston could
do in the gas war--take sides with Rogers, grant a permit to
the Brookline company to open the streets and come in
competition with our companies, thus compelling, in the
interests of the people, a reduction in the selling price of
gas from $1.25 to $1.00--the Mayor had already done. There
was nothing more in his power, and the only object we had in
securing his services was to put him between our companies
and Rogers, in the belief that Rogers, owing to his former
relations, would not dare fire through him.
I never, directly or indirectly, bribed Mayor Matthews; but,
on the contrary, only induced him to do what he had a moral
right to do and I a moral right to ask him to do.
FOOTNOTES:
[6] See page 109.
[7] Mr. Lawson's proclamations and market communications are invariably
printed on the finest grade of deckle-edged paper.--THE PUBLISHER.
CHAPTER XVI
PEACE NEGOTIATIONS WITH ROGERS
Having made up my mind that the time had come for a final engagement, I
decided myself to try legitimately to settle with Mr. Rogers, and
prepared two letters which, if he were willing for us to get together,
would pave the way for a meeting. These letters I sent by my secretary,
Mr. Vinal, to Mr. Rogers at Fairhaven. My readers, in weighing this odd
correspondence, must bear in mind what the relations between Mr. Rogers
and myself had been. We had vilified each other in every imaginable way,
and I knew, or at least I thought I did, that the "Standard Oil" magnate
would not hesitate to use any written communication of mine that he
could lay hold of to bring about a split between Addicks and myself. I
had good evidence that he believed that in such a rupture lay his only
chance of bringing home the quieting blow he had been trying to inflict
on us. Letter I. read as follows:
HENRY H. ROGERS, Fairhaven, Mass.
_Dear Sir_: My secretary, Mr. Vinal, will hand you this
letter. If after reading it you are desirous of further
communication with me, he has instructions, after you have
returned this one to him, sealed in the enclosed envelope,
to hand you another, which if after reading you return to
him in another enclosed envelope, he will bring to me with
whatever verbal answer you may care to send.
My secretary knows nothing more of his errand or the
contents of either letter. He can, therefore, give you no
further information. If you do not call for the second
letter, I will consider you do not care to pursue the
subject further, which will lead me to notify you that the
Boston gas war will end in a most sensational way next
Wednesday.
Believe me, sir,
Yours respectfully,
(Signed) THOMAS W. LAWSON.
Upon his return from Fairhaven Mr. Vinal informed me that Mr. Rogers,
after reading this letter twice, folded and placed it in the envelope I
had sent and handed it without comment to him, whereupon my secretary
delivered to him letter II., which was a type-written communication on a
plain bit of paper, addressed to no one, signed by no one, and bearing
no marks to identify the sender:
There is a gas war now existing. Upon one side is the
"Standard Oil." Upon the other the Addicks Bay State
companies.
After a fight has been begun there are but four things
possible:
"Standard Oil" can sell out to the Bay State.
The Bay State can sell out to the "Standard Oil."
They can come together by consolidation; or
They can continue fighting until one or the other has been
annihilated.
Nothing else is possible. Therefore, one of these four
things is to be the outcome of the present war.
If you can be shown now that if one of the first three is
not settled upon before next Wednesday the fourth will be
impossible beyond that date, and that it is absolutely in
the power of one man, without consultation with any one, to
bring about the accomplishment of any one of the first
three, you will meet that man before next Wednesday and make
your selection.
I can absolutely prove to you that this war will not
continue after next Wednesday, and that it is absolutely in
my power, without consulting any one, to do any one of the
three things you signify you desire done.
Mr. Vinal reported that Mr. Rogers also read this letter a second time,
but slowly and carefully, as though he were weighing each word, and
then, sealing it in the envelope, passed it back to him with: "Say to
your employer I return to New York to-morrow, Sunday night, and shall be
at my office, 26 Broadway, from 9.30 on Monday morning till five in the
afternoon; that I shall dine at my house, 26 East 57th Street; that I
shall be through dinner at eight o'clock, and that I go to bed at 10.30.
Tell him that any man who has an important communication to make to me
affecting a matter in which I have large interests will be welcome to
call on me between the hours I have named, provided he notifies me a
little while in advance."
When my secretary, whose practice it was to give me the minutest
details of such affairs as this errand, had reported all that had
happened, I at once sent a message to 26 Broadway stating that I would
be at Rogers' house at eight o'clock on Monday night, and on the stroke
I pushed his electric latchstring. His man had hardly taken my hat when
Mr. Rogers himself came down the hall with outstretched hand.
CHAPTER XVII
A MEMORABLE CONFERENCE
If the years of my life are protracted beyond the Psalmist's threescore
and ten, even though the events that chance in the comparatively long
future seethe and struggle as strenuously as those that befell in the
eager, vivid procession of yesterdays which makes up my past, my
memory's picture of this meeting will always hang where the lights cast
their kindest reflections.
I had left Boston on the noon train, and got down to my hotel, the
Brunswick, on Fifth Avenue, by six o'clock. In those kind days of good
memory when New Yorkers really lived instead of looping-the-loop through
life, the Brunswick was head-quarters for Southerners and Bostonians of
the old school. To-day its bricks and mortar and the picturesque iron
balconies, from which two generations of America's celebrities reviewed
the marching armies of peace and war, are heaps of refuse; for the old
Brunswick has had to give place to yet one more of the twenty-storied,
emblazoned hostelries, whose alabaster halls, frescoed walls, mosaic
floors, and onyx and silver bathtubs are designed to minister to the
comfort of our great and free people when they needs must wander from
the luxury of their homes. When I had dressed I crossed over to the old
Delmonico's opposite, and, in a secluded corner beside an open window
which gave full view of the passing show on Gotham's great boulevard, I
sat and listened to old "Philip," who, time out of mind, had been
high-priest of the famous Frenchman's temple of appetite, as he posted
me on the latest doings of the town where no one remembers further back
than yesterday, and to-morrow doesn't count. Ordinarily I should have
lingered for hours with "Philip" and his tidbits, but that night my
mind was a mad steeplechase of memories and hopes, all starting and
finishing at 26 East 57th Street, and I fear he must have thought he had
failed in the plump little duck which I left unpicked, and in the bottle
of Chianti which I hardly sipped.
At 7.30 I lit my cigar and started for what I felt was to be the tomb or
the forcing-house of all the air-castles I had cherished from boyhood.
At last I was to meet the real champion; I was to tussle hand-to-hand
with the head of the financial clan, the man of all men best fitted to
test to the utmost the skill and quickness which I had picked up in the
rough and tumble of a hundred fights on State and Wall streets--Rogers,
wary, intrepid, implacable, the survivor of bloody battles in comparison
with which mine were but pink skirmishes.
I had carefully put aside that half-hour between dinner and the moment
for my appointment to run up and down my mental keyboard under what to
me are the most favorable conditions possible--an evening walk through
the streets of a great city. Some men can invite their souls only in
sylvan solitudes, but the flare of light, the clash of traffic, the
kaleidoscopic procession of humanity, with its challenging contrasts
shifting and seething on great metropolitan highways, breed in my mind a
sense of calm, cool remoteness in which all the glitter and excitement
of the spectacle suggests only its appalling transiency.
From the gay carnival of Broadway I cut across through the brownstone
gloom of 27th Street into Sixth Avenue, where the tired men and women of
the toiling millions sat in their doorways or at their windows over the
shops resting after the heat and travail of the day. Some watched the
sidewalk antics of their children--perhaps speculating on the
possibility that this or the other among that merry throng of urchins
might rise to be an alderman or even a city boss--perhaps President of
the greatest republic on earth--or--transcendent bliss--a Rogers or a
Rockefeller.
From 42d Street I turned up Fifth Avenue, lifting my hat and exchanging
a word with Mr. and Mrs. Russell Sage, and for an instant, as I left
them, my wandering thoughts took a new twist, for Mrs. Sage had informed
me that "Father and I are on the way to prayer-meeting"--early evening
prayer-meeting in New York! For an instant I was in one of those tiny
New Hampshire villages, a forgotten haven of rest and simplicity,
innocent as yet of steam, machinery, or trolleys, for the sweet lady and
the angular man with the pained gait which spoke in loud tones of the
unbroken store-shoe could belong in no other than a rural place. But the
image of the New Hampshire village only flitted across my mind's film,
for my truant senses seized on a message over memory's telephone:
"Russell Sage has $100,000,000." One hundred millions, and I was back on
earth again, but as I walked the thought was buzzing in my brain: "Is it
possible that that countryman has MADE _one hundred million dollars_,
when the expert carpenter who started at the birth of Christ to trudge
the world until from his honest labors he had accumulated $1,000,000 by
laying aside each day all the wage he was entitled to, one dollar, had
at the end of 1,900 years only a little more than half that sum?"
At last I turned the corner of 57th Street, and when I looked down Mr.
Rogers' home-like hall and grasped his outstretched hand and heard his
"Lawson, I'm glad to see you!" I would have sworn it was hours and hours
since I left the little table in the corner of Delmonico's.
* * * * *
The chief impression I recall of my experience that night is gratitude
for Henry H. Rogers' unexpected kindness, and admiration for his
manliness, ability, and firmness. When this memory rises in my mind I
regret "Frenzied Finance" and all the consequences with which it is
fraught for him and his connections. When the American people are
aroused, as they surely will be, to demand restitution and are in the
act of brushing, with a mighty sweep of indignation, back into the laps
of the plundered the billions of which they have been robbed, and
"Standard Oil" and the "System" break and fall like trees before the
gale, I doubt, even if Henry H. Rogers be brought face to face with
ruin, that he will feel half the pain I shall, for I know that the
picture of that memorable night will surely come back to me with all
the vividness of reality.
But as my mind harks back, there clashes with this another, a hellish
picture, which the same Henry H. Rogers painted with the brush of
Amalgamated, and a procession of convicts and suicides trail slowly
toward me out of the canvas. Then I realize that my pen is but the
instrument of a righteous retribution and that no personal feelings,
however tender, must be allowed to interfere.
"Come this way," said my host, striding ahead of me along the hall. "In
here we can have our talk and our smoke undisturbed." He led me into the
big, empty dining-room and closed the door.
"Mr. Rogers," I began, "it is kind of you to be so friendly after the
mean things we have said of each other. Am I to understand you don't lay
any of all that has passed up against me?"
"Lay it up against you, my boy? Drop that all out of your mind. You
probably know I talk to the point and mean what I say. If you had hit
below the belt as that--Addicks has, I _would_ lay it up against you and
a hundred years would not make me forget it. I know what you've done and
why you've done it, and it was as much your right to do it as mine to do
what I have done. I have nothing against you, and if events place me in
a position where I can do anything to make your job easier without
hurting my own interests--mind that, without hurting my own interests--I
will do it. You have my word for it."
We sat within a few feet of each other, and I looked squarely into his
eyes as he said, "You have my word for it," and they were honest
eyes--honest as the ten-year-old boy's who with legs apart and hands in
pockets throws his head back and says: "Wait until I am a man, and I
will do it if I die for it!" I looked into them and I knew "My word for
it" was all gold and a hundred cents to the dollar. For a minute we
gazed steadily into--through each other, and I knew he was reading away
into the back of my head. Inwardly I said: "If I do business with this
man for a day or for a lifetime, I will never face him and give him my
word for one thing and mean another," and in the years after when we did
millions upon millions of business, with only each other's word for a
bond of fair treatment, not once did I depart from the letter of my
resolution. Up to the recent famous "Gas Trial," where our roads
suddenly shot off at right angles, owing to a foul act of perjury, Henry
H. Rogers never tired of meeting all his associates' attacks upon me
with: "Lawson's word is gospel truth for me."
When we dropped our eyes, both evidently satisfied, he said: "Now, what
have you to say to me?"
I spoke my piece rapidly and without interruption: "There are four
things possible, as I wrote you--only four. I will take up the fourth
first. I have absolute power to speak for all our local companies. If
we, you and I, come to no settlement by to-morrow night, I will, without
warning to any one, confess a default to the notes of our different
companies and have a receiver appointed. As our stocks and bonds are
held by our best investors all over New England, and as no such move is
suspected, there will be a terrific rumpus. In the crash I shall go down
with Addicks and the rest, for we have all put our personal resources
behind the enterprise. I will see that the howl following the crash
shall be such as all must hear, and I will call attention to the illegal
acts of every one--your companies, Addicks' companies, and the city and
State officials that have made such conditions possible. I don't think
you will be able to stand against the cyclone this crash will raise; but
even if you do, the receiver, having no interest to pay on bonds, will
be in a position to smash the price of gas to seventy or seventy-five
cents, and make it impossible for you to get possession of our companies
for so long a time that the consumers will never allow you to get the
price back to a profitable one. Have I made it clear that you cannot, as
you were counting on doing, continue this fight till you have us tired
out and crushed?"
His answer came as clear, quick, and sharp as the click of a revolver:
"Perfectly, provided you can do the thing you say."
"I will prove to you I can."
"It is not necessary," he clicked back. "Do you give me your word that
you can?"
"Absolutely."
"I am satisfied. Go on."
"That leaves only three possibilities," I continued. "You buy us; we buy
you; or, we consolidate. I will take the third first. Under any
circumstances or conditions will you join forces and do business with
us?"
"Under no circumstances nor conditions will I do any business with
Addicks. He has played me false, broken his word, and lied to me when
there was no necessity for doing so, and no man who has done this once
can ever do business with me a second time."
I once stood by a mechanism through which passed a strip of metal.
Click! 'Twas cut. Whir! 'Twas a cylinder. Click! Whir! Click! A corner,
an edge, an end, and b-r-r-rr! It was dropped, a metallic cartridge, to
do its part in peace or war. Even more fascinating was it to see this
human machine eject the product of its whirring brain.
"Then we have but two possibilities. Will you buy us out at the price we
must have?"
"What is the price?"
"Sufficient to make good the promises that I have made to Addicks, my
friends, and the public since I have been in command," I replied.
"Pass that by as an impossibility."
"Then, Mr. Rogers, we are down to this: You must sell and we must buy
you out."
"Right. Now, how do you propose to buy?"
For months the ablest financiers and business men of Wall Street and
Boston had striven to start up negotiations with Mr. Rogers with a view
to settlement, and all had dropped them without even getting in an
opening wedge, and here was I at the end of fifteen minutes of my first
meeting, with my task half accomplished. I went on:
"There is something more you must do, Mr. Rogers. You must assist us in
buying, which means you must sell at the terms you and I agree are the
only ones we can meet. Therefore I will run over our situation. You have
certain property, consisting of the Brookline Company and miscellaneous
investments in connection with it. What cost does it stand you?"
Frankly, he went over what his Boston gas-war equipment consisted of and
what it had cost, which, boiled down, amounted to $3,500,000. He then
said:
"Let us figure what it will be worth to you when, it being known you
have won out, you will have additional prestige and no competition."
We agreed upon $2,000,000 as representing the probable appreciation in
what we were to acquire from him over and above any increase to our own
securities.
"I'll take cost, $3,500,000, if it is cash or the equivalent, or I will
take $4,500,000 if it is to be credit of a nature that assures me my
money eventually, and I will divide my profit of a million equally with
you. This sum will of course be in addition to anything you may be paid
by Addicks."
Instantly, as if we had agreed upon it in advance, our eyes met--his
cold, clear, and steely business--mine, I hoped, the same. For a second
neither of us said a word. Then I said: "Thank you for the offer of the
$500,000 profit, but we will cut all such offers out. My pay comes from
my side. I never yet have known the man who could take pay from both
sides and do his work properly." I slowly drew out the word
"_properly_," and he in the same tone of voice said:
"'Properly' is better than 'honestly.' You know, Lawson, there is much
cant in these times of which 'honesty' is the refrain."
"You and I will make no headway discussing moral ethics, Mr. Rogers,
although we may in discussing business practices," I said, and I chalked
up on my mental black-board: "Test One." Then I went on:
"I agree that $4,500,000, in anything we can pay in, is as fair a price
as $3,500,000 cash, provided we find a credit guarantee satisfactory to
you; unless indeed you are willing to allow us the $500,000 you just
offered me."
"What I offered you was part of my profit. I will not allow any of it.
My price is the same whether I pay you anything or not."
"Very well, Mr. Rogers, then the situation is this: In any trade that is
made it will first be necessary for you to turn your property over to us
to manage in conjunction with our own. When the public see it in our
hands, our securities will advance and we can, by issuing additional Bay
State stock, sell it and secure whatever sum it will be necessary for us
to have beyond what we can borrow on your securities. Do you agree with
me?"
He saw it as I did.
"I imagine you will never consent to turn your property over to us on
our say-so that we will later pay you for it?"
"You are right there. I would not take J. Edward Addicks' guarantee in
any form he could possibly put it. Once he got his hands on my company,
for even thirty days, he would so far misuse it that he would
deliberately default for the purpose of returning it to me in a damaged
condition, and, in addition, would play some of those tricks which are
second nature to him."
"It will be necessary for us then," I went on, "to give you some forfeit
bond so large that, even if we misuse your property while it is in our
hands, you will be repaid for the damage done, and it must be at the
same time something of such value to us that even Addicks will be
compelled to play fair."
"Well, what can you put up?" Mr. Rogers asked.
"Addicks has a right, through the Bay State Company of Delaware, to
issue, through the Bay State Company of New Jersey, a million and a half
new bonds for the purpose of acquiring new property. He and I have
discussed the scheme as a last resort should any settlement seem
possible."
"Do you mean to tell me there is anything Addicks can get his hands on
which he has not yet used for his companies nor stolen for himself?"
replied Mr. Rogers incredulously.
"Yes, he has time and again assured me of this, and he would not dare to
lie to me under existing conditions."
He arose from his chair and stood directly in front of me and
straightened up for what I could see was to be an unusual effort. Then
with the force and the fire which in all his supreme moments make Henry
H. Rogers wellnigh irresistible he said:
"Lawson, I have listened to you. Now listen to me. I have taken you at
your word, and have talked frankly and shown you my hand as I have
seldom shown it to a stranger. To do the business I want to do, I see I
must talk even more frankly than I already have, and I want you to weigh
carefully what I shall say to you, for it may have a great bearing on
your after-life. How old are you?"
"Thirty-seven," I replied.
"I thought you were about thirty-seven," he said. "Well, I am fifty-six
and in experience am old enough to be your grandfather, so you can
afford to give weight to what I am about to say, especially as I give
you my word that I speak for your benefit first and my own afterward. I
watched you before you hitched up with Addicks, and always thought that
if the opportunity arose, we might do business together. We, or as you
and others like to call us, 'Standard Oil,' have money enough to carry
through whatever business we embark on and we know where there is all
the business to be had that we care to engage in. We have everything, in
fact, but men. We are always short of men to carry out our
projects--young men, who are honest, therefore loyal; men to whom work
is a pleasure; above all, men who have no price but our price. To such
men we can afford to give the only things they have not got, or, if they
have already got them, to give them in greater quantities--I mean power
and money. You made a great mistake when you joined forces with Addicks,
because no man can afford to be associated with the kind of a rascal
Addicks is, the lowest I have yet come across. He is the type of man who
cuts his best friend's throat with as much ease and satisfaction as he
does his worst enemy's, if not with more. I fully expected that by this
time he would have sold you out. If he had, where would you have been?
Now, here you are from sheer desperation driven to me to avoid utter
failure. Suppose you can do all you hope to--get the bonds, put them up
and secure my property--do you not suppose that by that time Addicks
will have some mine dug under you which will blow you to destruction?
But grant even that he plays fair, and you bring the Boston situation
up to a paying place, what good will it do you? You surely have more
sense than to believe a man of Addicks' make-up can be permanently
successful?"
Mr. Rogers halted. I had risen, and we stood facing each other. I felt
that I was right here playing for that greatest of all stakes, my
self-respect, the loss of which to any man, I had long before
discovered, means ebon failure.
"What do you want me to do?" I asked.
"Say you'll come with us, and we'll fix up the Boston situation in some
way that will forever eliminate Addicks from our affairs--your and my
affairs. I would not insult you by asking you to sell Addicks out. It is
unnecessary. He has no real rights in Boston. You and I can figure out a
scheme that will take care of every other interest, and we'll give
Addicks a lot more money than he can secure in any other way and show
him the door. As for you and me, we'll make a lot of money and make it
fairly and above board. But I am not thinking so much of the immediate
situation as I am of the possibility of you joining us and working on
some of the deals we have on hand. I shall put you in a position to make
more money and secure more real power than you could possibly obtain in
a like time under any other conditions. You know corporations and the
stock-market, and you can readily see what the combination of our money
and prestige and your knowledge of the market and investors will mean."
Heaven knows I could see what it all meant. I had even at that time in a
chrysalis state those plans for destroying the "System" which now in a
rounded out and matured form I intend to be the superstructure of my
story of "Frenzied Finance." I had, a year before in Paris, outlined
those plans to some of the brightest financial minds of Europe, and
while they had marvelled at their radicalness, they had pronounced them
sound, and had offered to furnish the hundred million of dollars
required for their execution. Then I realized that to take this money
from bankers would hamper me in the execution of my plans, and I
postponed putting the project in force until I could furnish the
necessary money through my own connections. Again, I had big ideas as
to the copper situation--ideas that only awaited unlimited capital to be
brought before the people, and which, if carried out, would do for them
what had as yet never been done--give them tremendous profits upon their
savings. And here were the unlimited capital and unlimited business
prestige right at hand, but----
"Mr. Rogers," I said, "don't! Please don't! I appreciate your
proposition, and I thank you, but I can't accept. I agree with you about
Addicks, the position I am in, and the mistake or foolish recklessness I
was guilty of when I linked up with this Boston mess, but that doesn't
alter the case an iota. I am enlisted with this man. I knew what he was
when I consented to take charge of his affairs, and I should hate myself
if I sold him out, even though I knew he would without hesitation sell
me out. I must be true to myself."
Mr. Rogers remained silent. I went on:
"This, if I accepted your proposal, I could no longer be, even were
Addicks and Boston Gas out of it. The man who is 'Standard Oil' wears a
collar, and if I did what you ask I should expect to wear a collar
and--and--I can't do it." I stopped; I was not excited; it was
impossible to be so with that calm figure, apparently cut from crystal
ice, so near me, but I was very much in earnest. I wondered what would
come next. Mr. Rogers raised his hand and held it out to me, mine
grasped it, and without a word thus we stood long enough to put that
seal on our friendship which none of the many financial hells we jointly
passed through in the after-nine years was hot enough to melt.
But that friendship is ended now. Henry H. Rogers' evidence in the
Boston "Gas Trial" was the spark that kindled the dead leaves of the
past into the conflagration which, now spread beyond the control of man,
has brought to light the hidden skeletons of forgotten misdeeds and
exposed them for all the world to see.
He at last broke the spell. "Lawson, you're a queer chap; but we are all
queer, for that matter, and we must work along those lines we each think
best. I once stood, just as you do now, in front of a man whom I looked
up to as all that was wisest and best. He made an earnest effort to
induce me to choose the ministry for my life-work, but I chose dollars
instead, and I sometimes wonder if I chose wisely; but, as I said, we
all must select our pack and, as we are the ones who must carry it, I
suppose no one else should complain."
After a moment's pause I shot ahead into business again as though we had
never left it. It took me but a short time to arrange the details of our
trade. The Bay State of Delaware was to buy all of Mr. Rogers' Boston
investments and to pay for the same $4,500,000--$1,500,000 in six
months, $1,000,000 in a year, the balance in a year and a half, with
interest at five per cent.; the Bay State was to put up, as a pledge of
good faith, $1,500,000 new Boston bonds; and as soon as such deposit was
made, Mr. Rogers was to transfer his securities and corporation to us. I
was to go to Philadelphia that night and arrange all details with
Addicks and report the following day.
It was 10.30 o'clock when I left 26 East 57th Street. I hurried down to
the Brunswick, where I had time only to shift my clothes and catch the
"midnight" for Philadelphia. After breakfast next morning I tackled
Addicks. It goes without saying that I was a cyclone of enthusiasm as I
minutely ran through what I had done, beginning with my letter to Rogers
and finishing up with my visit of the night before. I omitted not the
slightest detail, and when I wound up with my request that Addicks get
the lawyers together and prepare the necessary documents for the
turnover of the bonds and acceptance of Rogers' properties, I felt that
my share in the Boston gas war was almost ended.
CHAPTER XVIII
THE DUPLICITY OF ADDICKS
Addicks looked at me in a cool, aggravating way, as though my enthusiasm
was a joke.
"Lawson, you have done a big thing, a big thing, but you put up too many
bonds, altogether too many. It looks to me as though that old trickster
had got the best of us at last."
By this time I had learned all the moods of this man and knew that when
he assumed that air of cold, saturnine jocularity it was safe to look
for the uncovering of some vaporized trickery. My enthusiasm oozed. I
hastened to ask:
"What do you mean by 'too many bonds,' Addicks? I gave him all we had.
Sorry it was not more. We are to pay him four and a half million
dollars, and the sooner we do it the better. Now out with what you've
got in your mind; I won't stand any trifling."
Addicks continued to look at me with the same insolent, critical air. He
said slowly:
"The reason I say you've given too many bonds is that we haven't a
million and a half to put up. Where in the world did you get the idea we
had?"
In an instant I realized that this sharper had tricked me into
apparently tricking Rogers. I was boiling with rage.
"You have told me over and over again that you retained the right to
issue a million and a half bonds, that you had never parted with it, and
relying on your assurances, I have done business with Rogers. Let's have
the truth now at once."
Addicks is a master in the management of just such tangles as had
developed here. I had expected him to give way before my indignation.
He looked me square in the eye and turned the tables on me. He got mad
first.
"You have taken too much on yourself," he began vehemently. "You had no
right to go ahead without consulting me. Because I've given you full
swing you think you are the whole thing, but you're not. And as for your
rushing in on me without warning and expecting me to let you turn all
the assets of this corporation over to your new 'Standard Oil' friend, I
won't stand for it. You can't do this corporation's business that way."
He poured on for five minutes without giving me a chance to interpose a
word. He seemed to be consumed with anger and paced up and down the
office. Then suddenly he stopped:
"We cannot afford to have any trouble, you and I, Lawson. I'm sure you
did only what you thought best, but the fact is, I pledged some of those
bonds for our war supplies a few months ago, and though I'm not going to
dispute it with you, I'd swear I told you at the time."
As Addicks talked I had been mentally reviewing the situation in which I
found myself. I saw myself dropped out of Rogers' consideration as the
same kind of a financial trickster that Addicks was. For the moment, I
had no fight left; I was knocked out.
"Don't feel bad, Lawson. You got as far with Rogers as it is possible to
get, and you are dead right when you say that once we get hold of his
corporation so that every one knows we've licked him, we can easily sell
stock enough to pay him in a few weeks." As he talked he was again the
master financial trickster, full of device and strategy. Finally I
answered:
"Don't say any more, Addicks. Words won't help us. I've got to face
Rogers as soon as a train can take me back to New York, and after
that--then I'll have something to say to you." I started to go.
"What are you going to say to him?" he asked.
"Say to him? What can I say to him? At my solicitation he gave me a
hearing--at his own home--treated me best in the world. I told him
certain things, and pledged my word they were truths, and I've got to go
back and tell----"
"Tell what?"
"That I'm either as big a liar as he says you are or a fool--a doddering
fool."
"You are going to do nothing of the kind," Addicks declared
peremptorily. "You're going to tell him that you were not posted up to
date, and that I, being pressed for money, had pledged some of the
million and a half I had told you we had. That's all. He'll see it all
right, and he'll trade for--for--what we have left."
I suddenly remembered that he had not told me how many bonds he had on
hand. Just a ray of hope in the fog.
"How many free bonds have we to offer, Addicks, suppose he is willing to
overlook this ugly piece of trickery?" I asked anxiously.
"I'm not quite sure," he answered, "but I can find out from the books."
He rang for Miller, his right-hand man, the dummy treasurer of the Bay
State Company, and said to him: "Harry, Mr. Lawson has got mixed up
about the bonds. He thought we had a million and a half. You remember
we've pledged some in the loans. Just how many have we now on hand?"
"Harry" looked it up and said: "Just $904,000 worth."
"There you are, Lawson," cried Addicks. "There's plenty to assure Rogers
we'll do what we agree to."
Fool that I was, I did not see his game. No one ever does see Addicks'
game till it is too late, for no one but a moral idiot would play the
game Addicks plays, and, thank heaven, moral idiots are so rare in life
that it is not worth while figuring out the formula from which they
work.
By one o'clock I was at Mr. Rogers' office at 26 Broadway.
He greeted me warmly. "Well, Lawson, did you get things finished up all
right?"
"Mr. Rogers, I have a most humiliating admission to----"
"Hold up right there. Cut out all explanations and excuses. Have you
brought those bonds as you agreed to, or not?" His eyes were snapping
and shifting from one color to another.
"No, I have not got them."
"Why not?"
Had I been a woman I should have clapped my hands to my ears and
screamed, so sudden and bomb-like came those two words.
"He had used some of them and has only $904,000 on hand."
"Only $904,000!"
It is impossible to convey the concentrated scorn and sarcasm Mr. Rogers
infused into these words, and he continued to glare at me for fully a
minute, his eyes as searching as _x_-rays. When that glare shifted I had
a presentiment it would leave me forever a stranger to him, and I made
up my mind to turn on my heel and leave his office without a word. I
felt that he was in the right, and that if I were in his place I'd
glare, too.
Suddenly the expression changed. He said peremptorily: "Lawson, get on
the first train for Philadelphia and bring back those agreements
executed and the $904,000 instead of the $1,500,000."
"Mr. Rogers," I began, but he stopped me with an imperative gesture.
"Don't say a word, but do as I tell you. I warned you you were dealing
with a dog, but you wouldn't have it. Now I'm going to put this trade
through even if I make a fool of myself thereby. You've done your work
and that whelp shall not keep you out of its results. I'm in this now,
and we will see if Addicks can outplay me as well as you. Not another
word. I understand the whole thing."
I returned to Philadelphia deciding once and for all certain things in
regard to Mr. Rogers and others affecting the future of J. Edward
O'Sullivan Addicks; and that night Addicks and I "had it out." I shall
not attempt to reproduce our talk. Suffice it to state that when I
called for the bonds Addicks began to hem and haw, and then I realized
that he had a second time lied to me. We were in his Philadelphia
office, and it was night and we were alone. I demanded the truth, and
finally he told me he had no $904,000 of bonds. As a fact he had not a
single bond. He had used them to the last one and had deceived me for
months. In regard to this interview Addicks has always maintained that I
laid hands upon him, and that he was on the verge of doing some awful
thing, but this is false. What I did was to turn the key in the door and
then, without undue regard to his sensibilities, draw a word-picture of
the position he had placed me in. Also I said what I thought of him.
That is all.
The vast profits which the stock operator makes apparently overnight are
often subjects for the world's wonder and envy. But if the gains are
great, the road is muddy. If those who covet the golden rewards will
participate in a deal or two, wallow in the filthy double-dealing which
is an inevitable part of the cost price of success, they will quickly
realize the dark side of the glittering game, and that the sacrifices
are in proportion to the winnings. If I had been asked that night what
price would recompense me for the hell Addicks' shabby deceit had
stirred up in me, I should have said--that night--that no number of
millions would pay for the bitterness of the experience.
It was after midnight when I left Addicks' office, and as I walked to my
hotel I was steeped in gloom and bitterness. Before me was the most
humiliating ordeal with which Fate had ever saddled me. I had to confess
failure a second time, and under such circumstances that Rogers would be
justified in believing me either a swindler or a dupe unworthy of
respect or consideration.
I was at 26 Broadway by ten o'clock the same morning. Mr. Rogers was in
his main private office. His secretary was with him. He was full of
business, and, I thought, preoccupied. As I entered, and before a word
of greeting passed, he gave me one of his keen, appraising glances.
"Well?" was all he said.
"Your estimate of Addicks was correct. He has no bonds," I said, giving
him the worst of it at once. I was desperate and certainly in no mood
for apology. Rogers looked at me. I thought he gasped. He
rushed--whether he pushed or pulled me, or we both slid, or how we got
there I don't know--but in an instant after I had said "He has no
bonds" we were in one of the number of 8 x 12 glass-sided pens he calls
waiting-rooms, but which the clerks have dubbed "visitors' sweatboxes."
He put both hands on my shoulders and he yelled--fairly _yelled_: "Say
that again! I did not get it."
In after-years I became on rather playful terms with the extraordinary
bursts of wrath to which Henry H. Rogers occasionally gives way, and
which sweep through the "System's" shrine like a tornado; but this was
my first experience, and it was a shock and a revelation. Just what was
going to happen next I could not imagine. I remembered afterward that
the most definite of the impressions that chased each other through my
mind was that Henry H. Rogers would surely have a stroke of apoplexy.
Then that he would "bust." However, I pulled myself together and began:
"Mr. Rogers, what's the use of getting excited?"
I got no further. He jumped backward. The next second I was in the
storm-centre. The room was small. Suddenly it became full of arms and
legs and hands waving and gesticulating, and fists banging and
brandishing; gnashing teeth and a convulsed face in which the eyes
actually burned and rained fire; and the language--such a torrent of
vilification and denunciation I have never heard, mingled with oaths so
intense, so picturesque, so varied that the assortment would have driven
an old-time East Indiaman skipper green with jealousy. I was horrified
for an instant, then surprised, and after that, if it had not been for
my position as the cause of it all, I should have been interested in the
exhibition as a performance.
I could hear a stirring and a movement outside. The clerks were
evidently aware of the scene. Forms passed rapidly across the
ground-glass walls. After a time Rogers controlled himself. Then he said
to me in a voice still vibrant with passion:
"Lawson, tell me--put it in short, plain language--do you mean to say
that after coming to me of your own accord and agreeing to do certain
things, and then returning here to this very office, admitting that you
had tricked me; after my overlooking that breach of faith and agreeing
to take half the collateral simply because it was all you could raise,
and because I desired to assist _you_--do you mean to say you have the
audacity to tell me to my face that the whole thing is a lie and you
have imposed on me?"
"I mean, Mr. Rogers, to tell you that Mr. Addicks has just proved to me
that he has no bonds; that he is a liar and worse."
"Oh, he is, is he? But does that justify you in coming?--oh!----"
Again he was off. When he stopped for breath I raised my voice and made
it loud and emphatic enough to convince even a man temporarily insane
that my part as audience and victim had ended. I said:
"Mr. Rogers, I can't say more than that I apologize for the part I've
been made to play in this transaction, and I'll leave your office
prepared to take any kind of medicine, however harsh it may be, that you
will deal out on account of all this. Not only will I take it, but I'll
think you are right in administering it."
Rogers once more got himself under control. I stepped toward the door.
"One minute, Lawson--one minute. What are you going to do? Go back to
your associate, that gentlemanly, square-dealing fellow in
Philadelphia?"
"Mr. Rogers," I replied, "I ask no mercy at your hands, but there's a
limit to the things a man will stand under the mess I'm laboring with.
I'm going to do the best I can. What it will be I don't know. There's a
deal of money at stake--my friends', the public's, my own--I'm
responsible for it. I've made a terrible blunder. I am paying for it,
but nothing that has happened has altered my idea of the duty I owe
myself and others."
He was about to say something sarcastic. Then he choked back the words.
His manlier nature rose to the surface.
"Lawson," he said, "I'm sorry for you. Upon my soul I am."
"You needn't be, Mr. Rogers. It's all right; it's part of the game, but
I'm awfully sorry I came near you." I opened the door.
"One second more, Lawson," he said, stopping me and putting out his
hand. "I'm not only sorry, but I give you my word I have not a
doubt--no, not a suspicion of your good faith throughout this
business--and if at any time you see your way to open up negotiations,
you're welcome. Do you understand? You're welcome to come in here or to
my house at any time you think you see your way out."
I said "good-by" and bolted before my feelings overcame me.
CHAPTER XIX
ENTER H. M. WHITNEY
It is not surprising that there should now have ensued an interval of
silence and peace in the Boston gas war. Disheartened, disgusted,
disappointed, I had to take stock of our position. However enraged I
might be at the new revelation of Addicks' extraordinary veniality, the
other elements in the situation remained as before. I could see nothing
for me to do but to resume the tactics I had employed previous to the
meeting with Rogers. My friends' interests had to be protected, and to
do that war must be waged until a vulnerable spot in Rogers' armor had
been found. But it was some days before I could screw my enthusiasm back
to fighting-pitch. In the mean time Rogers did nothing. He, too, was
waiting for new developments.
To this extent the situation had altered, however: I knew just where I
stood with Rogers, and he realized the consequences of pressing us into
a corner. I knew he would sell his company and retire from the field if
I could find a way to pay him for so doing. He knew that if he turned
the screws too hard I would as a last resort turn the tables by throwing
Bay State Gas into bankruptcy. I tried many times and in many ways to
find means to bring about a termination of the struggle, but to no
purpose. Our extremity was such that it was impossible to do more than
protect our companies from a receivership. To raise new capital to
deposit as collateral with Rogers was out of the question, for the
public, looking on at what was evidently most disastrous warfare, was in
no temper to buy new stock.
The lull in our hostilities was only a pause between battles. It
suddenly came to an end January, 1896, when a new enemy appeared in the
field. Henry M. Whitney, who had built up Boston's electric
street-railway system, and who, from his frequent dealings with the
Massachusetts Legislature in obtaining franchises, had the reputation of
carrying that body in his waistcoat-pocket, came before this Legislature
with a proposition for a charter for a new and independent gas company.
Up to this time Whitney had had no relation with the gas public. He
based his new departure on the claim that he had come into possession of
a patented device through which it became possible to turn the low-grade
sulphuric coal of Nova Scotia into coke without sacrificing either the
valuable by-products, such as ammonia, tar, etc., or illuminating gas.
This was a very remarkable pretension, for we had long ago eliminated
these low-grade coals from consideration as material for gas-making; but
if Whitney's device actually was what he claimed, undoubtedly he would
be a dangerous competitor. Whitney's petition set forth further, that
because of the exceedingly low price of this Province coal and its
richness in by-products he could afford to sell gas to consumers at 50
cents per thousand feet (the legal charge was then $1 per thousand
feet), a price which would enable the great manufacturing institutions
and all the steam and heating plants to use gas economically for fuel
purposes.
The thing was sprung one day and was all over town before night. There
were interviews and pamphlets floridly setting forth Mr. Whitney's good
intentions toward gas consumers.
Mr. Whitney was, and is, one of Boston's most important citizens, at the
present time president of the Chamber of Commerce, and a brother of the
"System's" most Machiavelian votary, the late William C. Whitney. The
application, backed by his prestige, and the roseate dreams of cheap gas
it conveyed, created a sensation in Boston. Evidently he intended to
have it seem that the people were in favor of the new charter, for
simultaneously there appeared notices in the press calling for three
distinct citizens' meetings. There seemed to be general rejoicing that
at last the odious Standard-Oil Addicks-Bay State Gas outfit with all
its corruption and unwholesome wrangling was to be deposited outside
the city walls.
The experience of any man who has had to do with political and financial
affairs invariably shows him that nothing ever happens of itself.
Thunderbolts do descend from clear skies, but an enemy and not nature
has hurled them. A clever tactician will always look for his
antagonist's hand behind any isolated or detached fluctuation of public
feeling which bears in the slightest degree upon his problem. In going
over the circumstances, looking for the correct interpretation of the
appearance in our field of this second Richmond, I took into
consideration the fact that H. M. Whitney was deep in a speculative
venture, Dominion Coal, which owned vast tracts of these low-grade coal
lands in Nova Scotia, and it was known he had been trying vainly to
utilize their products in the locomotives of the Boston & Maine Railroad
and several other ventures in which he was a controlling factor. In one
way it seemed reasonable that if Whitney really had found a way to get
something out of his coal, he was justified in making the best possible
use of it. On the other hand, I could not but see how the new project
brought about the very situation at which Rogers had so long been
aiming. Selling gas at 75 or 50 cents, the new company would absolutely
command the business; the old companies must go bankrupt, pass into a
receiver's hands, and in due course would be absorbed by the Whitney
corporation. That would leave but one gas company in complete control of
the Boston field, and it would not be bound to continue the low prices
when competition had disappeared, but would be legally free to go back
to the old rates of $1 and $1.25. In a combination which so completely
went Rogers' way, surely his fine slim Italian hand might be perceived
at the throttle.
Once I had made up my mind by what we were confronted, I lost no time.
Inquiries revealed that Whitney's alleged control of the Legislature was
not exaggerated. In fact, it seemed eager to do his bidding in any
direction. There was no space for negotiation or deliberation, so I
returned his bomb with another, which, exploding in his breastworks,
created as much of a sensation as his own had done. I did not believe
Whitney could do with Nova Scotia coal the things he claimed, but,
whether or not, if he got his charter, Rogers' object would be
accomplished. If he were absolutely bound, however, under heavy bonds to
do exactly as he had promised, his proposition would be so loaded that
it might go off in his own hands and blow him to pieces. The next day I
went personally before the Legislature and agreed to pay the State of
Massachusetts $1,000,000 for the charter Whitney had applied for, and
offered to give bonds to do all the things Whitney would give bonds to
do on receipt of it.
This proceeding caused a halt. It startled the public and set the
Whitney forces agape. My proposition was decidedly novel, and on its
face absurd--the State could not under the law accept a million dollars
or any other sum for its charter--but, on the other hand, it was the
quickest-acting horse-sense producer that could possibly have been
brought to bear. It was discussed everywhere. Men said: "Why not? If the
State has a valuable thing to give away, why should it not go to the one
who will pay the people the most money for it?" I had outflanked the
enemy, and if he gave battle it would have to be on my conditions.
Whitney was furious, and his privately owned Legislature cursed me for
interfering with its plans; but he and they recognized my advantage, and
that night I had a call from Mr. Whitney and his attorney, George Towle.
"What are you trying to do, Lawson?" Whitney asked.
"Only trying to protect from destruction the Boston gas companies of
which I am vice-president and general manager," I replied.
"But my proposition is a perfectly legitimate one," Whitney objected. "I
have got hold of this invention, which enables me to utilize my Dominion
coal in such a way that we can make coke out of it, and at the same time
get all the gas. This coal is cheap to produce and costs little per ton
to bring in. So I can sell gas cheaper than you can make it."
"And we have a plant for the manufacture and distribution of gas which
has cost us seventy years and millions of dollars to get together, and
we have also the customers to whom you must sell your cheap gas," I
returned. "If you can really do what you claim, why not go ahead, make
your gas, and sell it to us? We will distribute it to the people and we
will divide the profit, and you will make as much as though you did it
all, for you will not have a fight on hand nor be obliged to build up a
duplicate plant. That's all you can do now; you cannot get a charter to
duplicate our plant, because whatever price you offer the Legislature
for it we will go you a few hundred thousand better."
We argued for hours. I showed him that if he finally prevailed and got
what he was after, his charter would bind him to the absolute fulfilment
of his promise under bonds that would make it unprofitable and
dangerous. He finally made up his mind that such a victory was not worth
winning, and he said to me:
"What kind of a hitch-up can I make with you and your companies?"
"Any fair one," I replied. "This is the situation as I see it, and I'm
going to be frank: You say you have a good scheme, but you certainly
have a Legislature, and you have evidently entered into a compact with
Rogers whereby he is to utilize what you have, to knock us on the head.
Now we have fairly checkmated you, and Rogers is out. Seems to me you
owe it to us and yourself to give us the same chance you offered him.
Let us utilize your plans to save ourselves and to knock Rogers on the
head. But first, are you free to go on with us without explaining things
to 'Standard Oil'?"
Whitney assured me that his arrangement with Rogers was tentative,
depending on whether he could get the charter and could carry out his
other plans.
After some further manoeuvring we agreed that we should withdraw our
offer from the Legislature, that Whitney should secure the new charter,
and that it should be so worded as expressly to allow his company to lay
pipes, manufacture, buy or sell gas, and to consolidate any or all of
the existing or new gas companies in the State of Massachusetts; and
that when the charter was granted it should belong equally to the
Addicks Boston gas companies and to Whitney. Upon their part the Boston
gas companies would buy of the new company all the gas it produced at
something less than it was costing them to manufacture it under the old
process. That bound us to nothing dangerous, and we were not forced to
take Whitney's gas unless he actually got the results he promised.
At this time I knew nothing whatever of the workings or the
wire-pullings of State legislatures. My business life had been engaged
at the stock end of corporate transactions, and I had not troubled
myself about franchises, or how they were obtained, being content to
play my part with the manufactured product with which we dealt on the
market. In a general way I knew political corruption existed. That
Rogers had obtained favors for his Brookline Company through bribing
officials I had good grounds to believe; I had read of strange doings in
connection with H. M. Whitney's West End Railway franchise obtained from
the Massachusetts Legislature amid an accompaniment of much public
scandal; but being quite without personal experience I had no clear
conception of how things were done and, innocently enough, I asked
Whitney before we parted:
"How is it possible for you to get this valuable charter from the
Legislature, particularly with such a strong and honest man as Roger
Wolcott in the governor's chair, when Addicks has been trying
continuously for four or five years, regardless of expense, to secure an
ordinary one under which he can combine our gas companies?"
George Towle answered for Whitney:
"Lawson, that part of the transaction is no affair of yours. Mr. Whitney
will absolutely guarantee to deliver all those goods, and should it
prove necessary to override the governor in getting them, he will
guarantee to do that too. You can call all that done the minute we sign
papers."
There was no doubt the new combination was a winner for both of us. If
Whitney got the charter, he would be in a position to make a lot of
money out of his Dominion Coal stock, which would surely go up with a
bound in company with Bay State Gas stock when it became known that our
companies were in the new deal. Besides, all the talk he would make over
the value of the charter would help create a market for new stock which
we would issue for the purpose of obtaining funds to buy Rogers out.
Later, if Whitney's invention was what he imagined, his own profit would
run into millions and our properties, having the sole right to
distribution, would be stronger than ever. That meant resuscitation of
Bay State Gas, and that all the stocks and bonds held by my friends and
the public would return splendid profits.
I tested the scheme in all its aspects and found only one weak spot in
it. We, the Boston companies, were to "go snags" with Whitney in the
results of a legislative game in which he was to bear the expense of
getting a charter, and as Whitney and Towle said it was to cost them
$250,000 to $300,000 to get it, it looked as if there would be some
nasty business done at the State House.
I do not set up for a saint, nor to possessing exclusive virtues which
distinguish me from the ordinary American citizen who does business for
gain. In reiterating that the bribery end of our "hitch-up" with Whitney
did not appeal to me, I am neither pluming nor crowning myself; I am
merely stating a fact. This was an emergency, however, I could not
regard as a mere personal concern. It was my duty to care for the
interests of a great property which must not be endangered by my
scruples, and I was willing to be advised by my business friends in the
matter. I went round among my most conservative banking, business, and
newspaper connections and put hypothetical questions to them bearing on
my difficulty. In nearly all instances the replies were the same, and
the subject seemed to be regarded as a joke--what were legislatures for,
anyway, but to be "fixed"? All who did business with legislatures
"fixed" them, and Whitney was certainly the star "fixer." I frankly
stated that I considered bribing a legislator as a low-down crime and
that I did not believe it was done in our strait-laced old Commonwealth
as freely as they all seemed to imagine. Thereupon I was sarcastically
referred to my Bell Telephone, New Haven, and Boston & Maine Railroad
friends, to the organizers of trust companies, and to many other
representative pillars of social and business society who had had
occasion to deal with the State. I started at once a round of
investigation among men who would talk frankly to me, and discovered
that a most iniquitous condition existed. Massachusetts senators and
representatives were not only bought and sold as sausages or fish are in
the markets, but there existed a regular quotation schedule for their
votes. Many of the prominent lawyers of the State were traffickers in
legislation, and earned large fees engineering the repeal of old laws
and the passage of new ones. Agents of corporations nominated candidates
for office, and paid the expenses of their election in return for votes
for a favorite measure and promises to "do business." The Legislature
was organized on the same basis; its executive officers were chosen
because of their subservience to certain corporation leaders; committees
were rigged to do given things and prevent other things from being done.
Above all, I learned that the chance of a citizen of Massachusetts
obtaining a charter from the Legislature of his State, unless he had
money to put up for it, was about as good as a hobo's of securing a
diamond and ruby studded crown at Tiffany's by explaining that he wanted
it. In fact, the citizen's request would be regarded by senators and
representatives very much as Tiffany's would regard the hobo's--as a
joke first, then as an impertinence.
Right here I desire to say to my readers and especially to all those
hypocritical and ignorant people who, imagining any strong statement
must express a strong prejudice and not a fact, will cry, "He
overstates! He exaggerates!" that in years after when I had full
opportunity to study at close range the Massachusetts Legislature, its
workings and those who worked it, all the impressions I had received at
this time were absolutely confirmed. I do not hesitate to state, then,
that:
_The Massachusetts Legislature is bought and sold as are sausages and
fish at the markets and wharves. That the largest, wealthiest, and most
prominent corporations in New England, whose affairs are conducted by
our most representative citizens, habitually corrupt the Massachusetts
Legislature, and the man of wealth connected with such corporations who
would enter protest against the iniquity would be looked on as a "class
anarchist." I will go further and state that if in New England a man of
the type of Folk, of Missouri, can be found who, after giving over six
months to turning up the legislative and Boston municipal sod of the
past ten years, does not expose to the world a condition of rottenness
more rotten than was ever before exhibited in any community in the
civilized world, it will be because he has been suffocated by the stench
of what he exhumes._
To return to my story, after my investigations I again saw Whitney and
Towle, and they, not relishing my remarks on the subject of bribery,
told me frankly to attend to my own part of the affair and leave their
part to them. At this stage I called in Addicks, our corporation
counsel, and some of the largest holders of Bay State bonds and stock,
and put before them the bargain I had arranged with Whitney. They all
agreed it was an excellent combination, and ratified the terms I had
proposed to Whitney. It was further agreed that Whitney should make over
to us one-half ownership in the new company, which we were to transfer
to the Bay State Company after the charter had been granted.
There was every reason at this stage in the deal to regard victory as
assured, for it did look as though the flapping sails on our
much-buffeted and battered craft were at last to be filled with a lusty
breeze strong enough to carry us to the harbor we had so long been
trying to make. Besides what we ourselves could do and had already done,
we now had Whitney for an ally in the deal, and certainly he was a
stock-selling power throughout New England. He had agreed to go before
the Legislature and the public, and pledge his word that his scheme
would do all the wonderful things he had promised for it.[8] And when
amid acclamation the charter was awarded and it became known that we
were its beneficiaries, I could see our stock soaring.
FOOTNOTES:
[8] As a matter of fact, he did, later, in the peroration of an eloquent
address before a public legislative hearing, electrify the law-makers with:
"I here and now pledge my word, my fortune, and my sacred honor to the
fulfilment of these promises."
CHAPTER XX
AN AWKWARD ATTACK OF APPENDICITIS
In no walk of life is that head-light axiom, "Man proposes, God
disposes," so often flashed plump in the eyes of enthusiastic travellers
for their bewilderment or befuddlement as in finance. At this very
moment of success I was, without knowing it, on the brink of ruin, owing
to causes and conditions which were beyond human power to calculate or
foresee. Here is what happened:
All the details of our bargain having at last been agreed upon verbally,
it was proper the principals should get together and formally execute
the documents which should bind the trade. We arranged to meet on a
given Saturday at the beautiful stock-farm of Parker C. Chandler, Esq.,
the Bay State's general counsel, and as secrecy was important, a special
train was to take the party the twenty-five miles out of Boston. By an
unavoidable accident I missed the train, and in driving over the road in
a bleak rain-storm, caught a violent cold. I was about three hours late,
but when I arrived we went to work with a will and by seven o'clock,
shortly before dinner, our contracts had been dictated to the
stenographers and would be typed, ready to sign, by the time we came to
our coffee.
That dinner was a thing to be remembered. No one in New England
understands more admirably the art of dining than does Parker Chandler,
and he gave us a feast worthy to celebrate the brilliant new combination
which was to end all our troubles and lead us out of darkness into the
light. As the cheese was being served I was seized suddenly with a
terrible pain, which was followed by convulsions. They carried me to a
bedroom; lawyers and capitalists went scurrying after doctors, and in
the confusion the documents which were all ready awaiting execution were
put aside. It was obvious that at that moment I could not O.K. them. At
last specialists from Boston arrived and it was diagnosed that I was
suffering from an aggravated attack of appendicitis. At two o'clock in
the morning, after a prolonged consultation, the consensus of opinion
was that my next field of operations would be in another world.
It must have been some time a little later that I, awaking to a brief
interval of consciousness, witnessed a tableau, the memory of which
invariably rises to my mind's eye whenever I try to mitigate or subdue
my feelings of hatred and disgust for Addicks. The room was dimly lit;
the two doctors were at the foot of the bed; Addicks, standing beside
them, was looking fixedly at me. I caught his eye; doped as I was with
opiates I saw the cold, calculating expression of his face, which told
me as plainly as words that he felt it was all up with me, that my
usefulness to him was at an end, and that without a thought for my
interests or a scintilla of regret, he was calculating how to turn my
death to his advantage. An amused conviction of the man's heartlessness
crept over me, and then I passed out into the land of dreams.
From that night until one bright morning ten days later, I was visiting
other worlds than those of finance and gas; but on the tenth day they
told me I had eluded the grim ferryman and, barring accident, might get
out into the world again in five weeks. A suspicion which owed its
origin to that glimpse of Addicks on the first night of my illness
awakened in my mind, and the following day I sent for my principal
attorney and demanded an exact statement of what had happened in the
interval of my illness. He had kept close track of all that had
occurred, and the facts he revealed, calloused as I was to the thought
of Addicks' baseness, horrified me by their cold-blooded villany. My
associates had gone ahead with a vengeance, without waiting a minute to
see whether I should live or die. My offer to the Legislature had been
withdrawn; Addicks had substituted his name for mine in all the
documents, and then he had traded with Rogers. It had been arranged
between them that Whitney should go on and get the charter, which was to
allow the company to sell gas at any price, for it was not to be under
the supervision of the gas commissioners, who had pledged the public
that the price of gas in Boston should not ever be more than $1 per one
thousand feet. This obtained, a new corporation was to be organized,
into which Rogers would merge his companies, and Addicks our Boston
properties, in such a way as to leave Bay State stock and bondholders
high and dry, while Addicks, Whitney, and Rogers reaped tremendous
profits. These amiable plans were being hammered into shape at top
speed, and unless I could get into harness at once, my friends and I
would most certainly be ground up. Head-quarters had been opened at the
Algonquin Club, and there Addicks, Whitney, Towle, and the lawyers and
lobbyists were holding day and night sessions.
There was but one thing for me to do, and I lost not a moment. I sent
for my doctors and said: "I will devote to-day, to-morrow, and next day
to getting well; but on the fourth day I will be moved in a special car
to Boston and then to the Algonquin Club." I explained the situation and
showed them that regardless of all consequences this must be done.
I shall never forget the expression on the faces of these loyal
associates of mine--Addicks, Whitney, and the others--when I dropped in
upon their deliberations Saturday morning, four days later. My doctor, a
nurse, and my lawyer accompanied me, and I was swathed in flannels and
shawls. I got to a chair, dismissed my attendants, and launched in. What
little I had to say would be brief, I told them, but "edgy." It was all
that. I insisted that we should go right back to our old bargain exactly
at the place we had left it the night I was taken ill. If they did not
comply, I would make application for a receiver for the Bay State
companies and give to the afternoon papers the inside facts of the
affair from beginning to end. No one doubted either my ability or my
determination to carry out my threat. We sent for the documents that had
been prepared at Parker Chandler's, and inside of three hours these had
been substituted and the several agreements entered into with Rogers
formally renounced. I retired to bed that night with a chuckle of
self-satisfaction, and a convincing appreciation of the truth of the
axiom I have referred to.
The low-down treachery and double-dealing characterizing this
transaction, the utter callousness to sacred obligations it exhibits in
men of presumed high standing and personal honor, may surprise my
readers. I assure them that several such episodes will be told in the
forthcoming pages of this history. Indeed, among a certain school of
eminent financiers, loyalty is no more than devotion to the opportunity
of making the highest profit. If circumstances shift this from the side
of their enlistment to that of an adversary, their arms and hearts go
where their pockets lead. It must be remembered that the Hessian who
"down-town" is steeped in perfidy, trickery, and fraud, may appear
before the "up-town" world as a Christian citizen and an example of
domestic virtue. The type is not uncommon nowadays of the pleasant and
proper gentleman, prompt to knock down any one daring to asperse his
veracity after five any evening and all day Sunday, but who considers
himself free to engage in any dirty juggle or misrepresentation from 9
A.M. to 4.45 P.M. In office hours you run no risk in calling him a liar,
for then he'll laugh at the joke and tell you business is business.
However, the foregoing episode was an experience that left an indelible
impression on my mind, and the hatred and disgust it engendered
precipitated events out of which in the course of years came the
offences and injuries that are responsible for the story of "Frenzied
Finance."
The immediate results of my reappearance were not startling. Rogers
raved at Addicks and especially at Whitney, but he was too old a student
of men, and the monkeys Dame Fortune makes of them, to sulk over the
facts he could not remedy. He soon resumed his former attitude of
waiting for something to turn up, which indeed he had maintained ever
since my unsuccessful effort to make terms with him.
Fate had not yet tired, however, of playing shuttlecock with our hopes.
The world learned one morning of a new gas called acetylene, clear,
brilliant, cheap, and simply made from calcium carbide. It would surely
revolutionize gas-making the world over, and the company which could
secure the right to it would have those who could not at its mercy.
Addicks moved like a flash to gather in the advantage, and the
announcement that the new gas had been proved a success was coupled in
the press with the news that the Bay State Gas had captured the
invention for New England, and was to pay millions for it. This did give
a boost to our securities, and for a time it looked as though we had
clinched our success with another rivet. What Addicks had done was this:
He had bought the right, subject to the test of a big public
demonstration. For this demonstration a fine flare-up was arranged.
Eminent mayors, counsellors, and gas magnates were to attend in
multitude, and if the invention met its engagements, there would be such
a blaze of publicity and congratulations that we felt sure our new stock
would go off like hot cakes. The demonstration proved in a most
sensational way that acetylene was a failure--a tremendous explosion
occurred; three men were killed, many others injured, and next day back
went our stock to its old figures.
All this time I had sought most diligently for the real solution of our
troubles--a method of purchasing Rogers' companies. A substantial
guarantee there must be, not only for the performance of our financial
engagements but to insure to Rogers the integrity of his properties
while under the domination of Addicks. The difficulty was, in the
weakened condition of the company, to put together any satisfactory
guarantee. Others in our group had wrestled with the problem as
strenuously as I had. Suddenly, a few days before May, 1896, the light
came to me. All the time the solution had been in our hands, and, beset
as we were, it had never occurred to any of us. We absolutely controlled
the old Boston gas companies. They were intrinsically among the richest
corporations in Massachusetts, and although their stocks were pledged
for the $12,000,000 of bonds held by the public, they did not owe a
dollar. Though the terms of the agreement between the Bay State Company
and the Mercantile Trust, which held their shares, precluded them from
contracting any debts, they were empowered, through us, their officials,
to buy or sell gas, and all their great wealth was behind such
contracts. If, then, we agreed on their behalf to buy gas of the
Brookline Company for a term of years at such a price and in sufficient
quantities to give the latter concern a profit equal to ten per cent.
dividends on its stock, surely we had complied with the very letter of
Rogers' exaction. Testing the idea in one way and another, I found it
sound as a bell. The problem after that was to get into shape for the
substantial issue of new stock we must make to pay for our purchase. The
banks and trust companies were loaded up with our securities pledged for
loans, and before there could be any conviction behind our prosperity it
behooved us to get all our valuables out of pawn. I went to Mr. Rogers
and frankly told him I had solved our problem and his by a financial
invention of my own. I entered into the details of our plan, explaining
it would not even be necessary for us to buy any gas of him, because we
would turn over a sufficient number of our own customers to the
Brookline Company to secure to it the required profit. He saw in an
instant the scheme with all its far-reaching possibilities, and
assented. Then I broached the rest of my plan--we would pay him four and
a half millions in six months. To do this we must sell stocks and bonds.
Before we could do that it was necessary that he help us still
further--he must buy of us all the bonds now in pledge and the stock of
the Dorchester Gas Company, another Bay State asset up for security, all
for the sum of a million and a half dollars. For this amount these
securities would at once be released and turned over to him. Then he
should resell them to us together with the Brookline Gas Company for six
millions of dollars. There would be a formal turning over of the
management of his properties so the public should be convinced that we
really were the victors in the strife. Mr. Rogers saw my point, quickly
ran over the details in his comprehensive way, and closed the trade
without further bargaining. That time, thank Heaven, it was not within
Addicks' power to thwart me.
On May 1st we made our settlement in compliance with the terms I had
arranged. The six millions of dollars were to be paid November 1st. As
the necessary options and sales could not legally run to our company,
they were made to Henry M. Whitney, and he simultaneously transferred
them to us, and we elected him a director of our different corporations.
Rogers publicly resigned and turned over to us the control of the
Brookline Company, and we elected our own management. To all intents and
purposes we had won.
The settlement was the sensation of the day in financial circles, and I
was the recipient of many generous congratulations. I had neither time
nor inclination to take care of bouquets at that moment, however. I was
too keenly aware of the difficulty of raising six millions of dollars in
the limited period at our disposal. Times have changed since 1896. Then
six millions was quite a large sum, larger than sixty millions now. That
was before the halcyon period of "Frenzied Finance."
CHAPTER XXI
BRIBING A LEGISLATURE
That six months between May 1st and November 1st was the most crowded
period in all my experience up to that time. Events of consequence
tumbled over one another in startling succession. We actually lived on
sensations. In exercising the historian's right to choose the order of
setting down incidents I am puzzled as to which to give precedence.
Shall I begin with the sensational bribery of the Massachusetts
Legislature which occurred within this period, or with the episode that
was the exciting climax of that interval of trial? About this time, too,
occurred the laying of the foundation of "Coppers" and Amalgamated, but
that certainly requires a chapter to itself. However, as all are starry
examples of what made "Frenzied Finance" possible, and as any one fits
into my story as well ahead as behind the other two, I'll take them in
the succession above set down.
The Whitney machine for the manufacture and moulding of legislation was
complex but efficient. It achieved its wonders in broad daylight.
Considering all it did and how that all was accomplished, the
astonishing fact is that no outcry to speak of was ever raised at its
performances. It was vastly bolder than Tammany and made fewer excuses
for its grabbings. It must be remembered, however, that its chief
engineer was a leading citizen, and his assistants all gentlemen of
great respectability and admirable antecedents, and, in Boston, social
and civic distinctions are shields behind which much may be concealed.
Corrupting a Legislature is not something a man may do with a fillip of
his finger and thumb. However bold the operations, the convenances must
be observed. When really large designs are entertained, the manipulator
sets to before the preceding election and has his "lawyers" at work
throughout the country interviewing candidates and ascertaining their
feelings. Thus a certain percentage of votes are signed and sealed in
advance, ready for delivery at the proper time. But there is always a
crowd of new men who must be taken care of on the spot, and these must
be approached with tact. Some amateurs have fanatical notions of honor
which interfere with both their own and the interests of
franchise-grabbers. To deal with all contingencies, to take care of
captured votes and to shape legislative proceedings along safe lines,
requires the services of almost an army of men.
At the head of Whitney's forces was his lawyer, George H. Towle, big of
brain, ponderous of frame, and with the strength of an ox. A man of
terrific temper, he knew not the meaning of the word fear. Nothing
aroused him to such frenzy as to have to do with a legislator who
unnecessarily haggled over the price of his vote or influence. On
occasions when a lieutenant reported that Senator This or Representative
That would not come into camp, Towle, with an oath, would say: "Take me
to him, and I'll have his vote in ten minutes or there'll be occasion
for a new election in his district to-morrow!"
Second in command was Mr. Patch, Towle's secretary and factotum, his
exact opposite in every way. Where Towle was brutally straight to the
point, Mr. Patch was as smooth an intriguer as ever connected himself
with secrets by way of keyholes and transoms. It is a Beacon Hill
tradition that for years Towle on final-payment day would have the
members of the Massachusetts Legislature march through his private
offices one at a time, and, handing each of them their loot, would
proclaim: "Well, you're settled with in full, aren't you? That
represents your vote on ---- and on ----." Then he would loudly identify
the bill and the particulars of the service, while behind a partition
with a stenographer would be Mr. Patch, who after the notes had been
written out would witness the accuracy of the stenographer's report.
When the Legislature assembled again, old members, the same story goes,
would be requested to call on Towle to renew acquaintanceship. Then he
would allow them to look over his memoranda "just to keep them from
being too honest," as he gently phrased it.
Subordinate to Towle and Patch was a long line of eminently respectable
lawyers known over the Commonwealth as "Whitney's attorneys." These men
assisted at nominations, orated at elections, and took care of the finer
preliminary details. The first line of attack was composed of practical
politicians of various grades--ex-senators or representatives, and local
bosses, who were known as "Whitney's right-hand men." Below these were
the ordinary lobbyists, the detectives, and runners, who kept "tabs" on
every move and deed, day and night, of the members of the Legislature.
This was the Whitney machine, and it worked together with that fine
solidity and evenness which can be attained only by constant practice
and much success. In comparison with this competent organization, an
average "Tammany Gang," a "Chicago Combine," or a "St. Louis Syndicate"
would look like a hay-covered snow-plough in August.
It is seldom the public is given an opportunity of seeing a picture,
drawn to life, of the Legislature of one of the greatest States in the
Union in the act of being bribed to grant the votaries of "Frenzied
Finance," for nothing, those things which should and do belong to the
people, and for which the "System's" votaries would willingly pay
millions of dollars if they were compelled to. I shall dwell on the
performance that ensued at this juncture of my story long enough to
present an outline of such a proceeding.
Head-quarters for Whitney's Massachusetts Pipe Line were opened at
Young's Hotel--Parlors 9, 10, and 11, Rooms 6, 7, 8, second story front.
Parlors 9 and 10 were the general reception-room, while 11 was reserved
for the commander himself and for important and "touchy" interviews. The
rooms 4, 5, 6, 7, 8 were used for educational purposes. In the morning
the place was deserted, but at noon the parlors began to fill up with
the different officers of the "Machine" and their friends, trustworthy
members of the Legislature. A little later an elaborate luncheon would
be served, the supernumeraries eating in one room, Towle and his chiefs
and the legislators in the other. At table the gossip of the morning
session at the State House was exchanged and the work laid out for the
afternoon legislative and committee sessions. Another interval of
silence and peace until at 5.30 the real business of the day began. Mr.
Patch was generally on the ground first, carrying the books in which the
bribery records were kept, for be it remembered that the efficiency of
the Whitney machine was largely due to the thoroughly systematic manner
in which its operations were conducted. Nothing was left to chance or to
any one's memory. In turn, the subordinates presented careful reports of
the day's transactions. At 6.30 Mr. Towle would go over these documents,
"sizing up" the actual results for submission later to the chief
himself. Between 7.30 and 8.30 the "Machine" dined; the remains of the
feast having been removed, the doors were locked and the books brought
out.
If an outsider could possibly have obtained the entry to the
head-quarters of the Whitney Massachusetts Pipe Line, say at nine
o'clock any evening during the session, he might easily have imagined
himself at the Madison Square Garden or at Tattersall's on the evening
of the first day of an international horse-sale. This is what he would
have seen: In Parlor 10, seated at a long table a dozen of Mr. Towle's
chiefs, all in their shirt-sleeves, smoking voluminously; before each a
sheet of paper on which is printed a list of the members of the
Legislature; against every name a blank space for memoranda; at the head
of the table Towle himself, frowning severely over a similar sheet
having broader memoranda-spaces. One after another the chiefs call off
the names of the legislators, reporting as they go along. The outsider
would have heard droned monotonously: "..... from ..... not my man;
..... from ..... my man and .....'s man; seen to-day, stood same as
yesterday; ..... from ....., raised price $20, making it $150; agreed;
$10 paid on account, total of $90 due; raised because ..... told him
that he had got $20 more from ....."
As each man reports the other chiefs and Towle discuss the details, and
when a decision on disputed points is arrived at, Towle makes a
memorandum on his blank, and the chief concerned records the order in
the little note-book which each carries. All reports at last in, Towle
retires to Room 11 and speedily returns with the "stuff," consisting of
cash, stocks, puts, calls, or transportation tickets, which he deals out
to the chiefs to make good their promises for the day. It would have
been obvious to the outsider, as soon as he had learned what was being
dealt in, that a large proportion of the members of the Great and
General Court of Massachusetts had bargained with the different members
of "the machine" to sell their votes not only in committee but in full
session of the Legislature, and that the price was to be paid when the
votes were cast, though something was invariably exacted on account, to
tie the bargain. Payment was made in cash, calls on Bay State Gas or
Dominion Coal, or transportation on any of the railroads in the United
States or Canada. The latter appears to be a class of remuneration Towle
favored, probably because it cost nothing.
The conference seldom closed for the day without Towle admonishing his
subordinates: "The old man's getting dead sore at the way his leg is
being pulled, and if you fellows don't get those countrymen to play a
more liberal game, they'll just drive the boss out of the business, and
then there'll be a slump in prices that'll make them prefer to stay home
and farm."
You may ask here, Could such things happen without attracting public
attention? Or are the citizens of Boston so habituated to the corruption
of their Legislature that they could witness unmoved this wholesale
bribing campaign conducted in full daylight from Young's Hotel? Thank
Heaven, this is not so. There are in every American community honest,
sturdy souls who can be depended on to come forward in emergencies and
cry out aloud against a threatened political crime. Above the brute
hubbub of a city's roar their voices are heard like the voice of
conscience, and the hurrying throng pauses a second in its mad rush
after dollars to listen to their tale of the Commonwealth's wrong. But
what's in the air is not on earth. The practical politicians, whose
affair it is to heed and counteract these honorable protests, laugh
contemptuously at the vanity of any contest between theories and the
"stuff." They know the overpowering logic of gold.
There were public meetings in Boston; good-government clubs throughout
the State met and "resoluted"; citizens' organizations howled robbery
and malfeasance. For a few weeks all Massachusetts seemed wrought up.
From the space the papers gave the protestants one might have imagined
that there was a chance for virtue, but the results of the clamor were
more apparent than real. Day by day, night by night, the "machine"
ground away at Young's, and as its product fell into the hopper Whitney
and Towle only smiled at the clamor and awaited the moment when, as
Towle coarsely put it, "the reformers would have yawped themselves to a
standstill."
That day came at last. One by one, all in a perfectly orderly and
methodical manner, the giving-bonds-to-compel-promises clauses,
restrictive amendments and other people's safeguards had been voted down
and the "Are you ready for the main question?" having been put in both
houses, the Massachusetts Pipe Line Charter was duly passed and sent on
to the governor. It required his signature to make the bill a
hard-and-fast law, and that once appended, all Towle's "promises to pay"
became due.
As the campaign neared a finish Whitney had, a number of times, informed
his chiefs, and they the members of the Legislature, that the governor
had given personal assurance that if the bill passed both houses, he
would sign it. On this score all interested had been relieved of doubt,
and immediately upon the Senate's favorable action Bay State and
Dominion Coal shares advanced in price. During the period the governor
had the bill under consideration there was an active and rising market
and a great volume of transactions on the Stock Exchange. Apparently the
day of our peace and prosperity had dawned at last. But we were not yet
out of a gnarled Fate's clutches.
In the midst of a strenuous forenoon of trading, suddenly, without the
slightest warning, both stocks began to sink in price like pigs of lead
from a capsized boat. At once I was on the defensive. To prevent a wild
market panic during the few minutes consumed in getting telephone
connection with the State House, I had to purchase thousands of shares.
I knew that something disastrous had happened, but was not prepared for
the startling information that came over the wire: "The governor has
vetoed the Whitney bill with a savage message." My informant told me
that Towle and his men were making for head-quarters on a run. As I hung
up the receiver, the bell rang again. In a second my telephone with
Whitney's office was in the middle of a spasm.
"Have you got the news, Lawson?"
"Have I got it? The tape is screaming it.[9] Bay State and your stock
are racing for the bottom," I replied.
"What shall we do? This is a thunderbolt."
"Do?" I replied. "It's for you to say what to do. That's your end, not
mine, but from now until three o'clock one thing you must do, or
there'll be no further thinking on the subject--protect Dominion
Coal--have your brokers on the floor every second and tell them to buy
all that's offered. Beat a slow retreat if you must, but prevent a wild
break. Things at the Exchange are bad now. I'll take care of Bay State.
Look out for Dominion at once, and when you are through I must see
you--where?"
"At Young's in ten minutes."
"I'll be there."
Ten minutes later I was in Whitney's head-quarters. There pandemonium
reigned; all the cocksureness and bluster of the "machine" had vanished,
and it was a horde of clamorous and excited men I found struggling round
Towle and Whitney, who vainly sought to stay the panic. It was not
disappointment at the governor's message that had so stirred these
hardened practitioners of politics, but the terror of impending loss.
The majority of the Whitney band, lawyers, lieutenants, and
water-carriers had bought one stock or both on margin, and had assured
their friends it was safe to plunge to the limit.
On earth there is no more pitiable sight than the panic of a herd of
novice stock-speculators suddenly awakened to a realization of their
ruin. The ticker clicks a sort of death-watch as the merciless tape,
without hitch or let up, reels off destruction. To such desperate beings
the stock operator--the market-maker--is the straw to save them from
drowning, and to him they turn as the one possible source of aid and
hope. I only knew these men at sight's end, but they knew me and were
sure in their abject plight that I could help them--by what wizardry
they never stopped to think. They were terribly certain that unless the
market turned, their brokers must have additional margin or their stock
would be thrown overboard, sinking prices still lower and bringing down
their friends' stock, and so on, like a row of falling bricks.
From their comfortable viewpoint of out-of-temptation virtue, my readers
may regard these lawyers, lieutenants, and water-carriers of Whitney as
bad men, deserving of no sympathy, meeting here a righteous punishment;
but, my word for it--and I know the world and the human ants and spiders
who inhabit it--while they bore no marks of immorality, they were the
average men one meets in one's journey over the bridge between the two
unknowns.
My talk with Whitney and Towle was brief and pointed. It was no time for
pow-wow. It was the moment for action. Men who do things in
stock-markets never waste time over milk that is in the gutter. How to
get new milk to replace that spilt is their care.
"What are you going to do, Mr. Whitney?" I asked.
George Towle started to explain. I stopped him.
"The market is bad," I said, talking quickly. "If time is dribbled, it
will be worse, and--and Boston will be a warm place for you, Towle. It
would not surprise me if it got warm even for Mr. Whitney, when the
desperate men who are filling the brokerage shops and the corridors
outside demand a reason why they were egged on to buy stocks on Mr.
Whitney's word that the governor would sign. No excuses now; I want to
know from Mr. Whitney just what he proposes to do. You both told me the
legislative end was none of my business, and, thank Heaven, it was not.
You said it was your business. Now, how about it?"
Henry M. Whitney is a great general. He also can light his cigar, when
the battle's on, with the friction of a passing cannon-ball.
"I'm going to pass it over the governor's veto," he instantly answered.
"Can you do it?" I asked.
"I can, for I must." He meant it. It needed but one look into his and
Towle's eyes to see they both had read the message on the back of
To-morrow's visiting-card.
"All right," I said. "Let your people have the word, and it must have no
doubtful ring; tell your brokers to buy Dominion Coal, and don't let
them stand on the order of their buying. Dominion Coal must be put back,
regardless of how much it costs or how little you want what you must
buy. I will turn Bay State before three if it is necessary to trade in
the whole capital stock to do it."
As I came out of Parlor 11 to rush back to my office I said to the
despairing men who crowded the corridor outside the head-quarters, and
who had in their desperation thrown all caution or thought of
concealment to the winds: "Coal and Gas look to me like good buys." The
sudden revulsion of feeling was pathetic. In a minute the news had
spread by way of them to their brokers and their suffering friends:
"It's all right; Whitney and Lawson are buying stock." It got to the
Exchange almost as soon as I did.
We turned the market.
That night Whitney and Towle's plans were mapped out to the army and
their orders despatched with a vicious snap that plainly said: "Whoever
attempts to put the Whitney machine in a hole will be shown no mercy."
The morning papers announced that Whitney had picked up the gantlet
Governor Wolcott had thrown at his feet, and--all roads led up Beacon
Hill.
It was a quick, sharp set-to. Every man was lined up with a jerk, and
when the line was tallied up and tallied down and Towle had consented to
the last raise in price of votes and given away to the final squeeze,
the word went up and down the ranks that the Whitney bill would, on the
approaching last day of the session, go flying through both Houses over
the governor's veto with a vote or two to spare. Again the prices of the
two stocks shot upward.
Then, sharp and quick as a bolt of lightning, Fate, who apparently had
been camped on the trail of Bay State Gas and Addicks from the first,
let fly another of her quiver's contents. On the morning of the closing
day of the session (the one selected for the Whitney coup), there
slipped in and out amongst the Whitney legislative ranks a man with a
story. As each legislator listened, his brow knitted and he nodded
assent. The story was a simple one: In one of Whitney's former
campaigns, desperate like this one, on payment-day Towle had gone back
on his promises and forced the acceptance of a fifty-cents-on-the-dollar
settlement; and, so the story now went, he, Towle, had put the saved
fifty cents, a matter altogether of some $75,000, in his own pocket.
Probably he was now going to repeat the operation on an even larger
scale. In an hour there came to Young's Hotel a trusty messenger who
delivered to Towle himself the ultimatum of the Great and General Court
of the dear old Commonwealth: "Money in advance or no bill!"
Consternation reigned. The army was quickly recalled to head-quarters,
and despatched back to the State House to put through every manoeuvre
known to the two veterans--but to no purpose. The Great and General
Court stood its ground, openly defied the army and hurled back into
Towle's teeth all his frantic threats. It was the last day, and the
Great and General Court was intrenched inside the protecting walls of
the State House, and it knew that before it could be compelled to come
forth to face Towle he must come to a decision. A terrible dilemma,
surely, for the amounts promised had run up to such an enormous
aggregate that it was impossible to pay all in so short a time, even if
such had been Whitney and Towle's intention. Yet to pay one or a few of
the dangerous malcontents meant to pay every one; the gang had firmly
banded themselves together.
This was the real moment of panic. Even Whitney and Towle were at their
wits' end. Finally, in desperation, and as a last resort, Whitney rushed
to the governor, threw up his hands, and asked for mercy. "What would
the governor sign?"
Massachusetts' able and fearless Governor Wolcott, who seemed to have
been expecting some such outcome of the battle, gave his answer clear as
an anvil-blow:
"You have told the people your company would give them cheap gas. Bind
yourself to do it by amending the charter so that the highest price your
gas can be sold at will be sixty cents. Then I will sign."
There was nothing else to do.[10] At the last minute the amendment was
inserted. The governor's representative gave the word that it was
satisfactory, and it passed.
I was in my office taking care of the market. Of the stampede I knew
nothing. Suddenly came the word: "The Whitney bill has passed on the
governor's recommendation." Both stocks started to jump; then a halt,
then--I didn't try to stop the decline, for I saw something terrible had
happened. In a few minutes the news was on the Street: "The charter was
not worth the parchment upon which it was engrossed."
The biter had been fatally bitten.
The market closed with the tape and ticker fiercely, exultingly shouting
"Ruin!" with each tick and slip: and that night Whitney's head-quarters
was little better than a mob. Frantic men demanded money, money due to
them for votes, money they had promised for margins to the brokers
before the Stock Exchange opened the next day, and swearing desperate
consequences to Whitney and Towle regardless of the effect upon
themselves.
Early next morning there came to my office two wild-eyed, desperate
creatures, Towle and Mr. Patch.
I had spent the night going over my accounts and those of which I had
charge, and in addition to a quick, real loss of over a million dollars,
I realized that the immediate future was so hung with dark clouds that I
dared not anticipate what the coming day might mean to me and mine; but
when I looked upon the big, powerful man, who had always seemed in any
light in which I had heretofore beheld him to fear neither man nor
God--when I looked and saw his plight I pitied him deeply, sincerely. He
carried a large travelling-bag, and Mr. Patch two others.
"Lawson, for God's sake, don't do what they are all doing--don't upbraid
me! I've got to get out into the world and be dead to all I
know--family, friends, every one. If I stay, it's State's prison or
worse, and Whitney says I must go. I've got all the papers together and
Whitney has given me what cash he had on hand, and this check of
$10,000. Do me one last favor, get me gold for it. I know I have no
right to ask any favors of you, but think if you were in my place. I
have a wife and children, and--" and the great, strong man wept like a
child.[11]
I called my secretary, and in a short time George Towle with the $10,000
in gold and the bags of "evidence" faded out of my life and into the
gray mist of eternity.
A few days after, a vessel dropped anchor off the island of Jamaica;
George Towle's body was carried ashore and buried, and Mr. Patch was
escorted back to the ship. A few days later, with weights of lead to
carry it to its last resting-place at the ocean's bottom, the latter's
dead body was dropped over the vessel's side. And somewhere floating the
high seas are a venturesome sailor-captain and a crew, who when in their
cups tell, 'tis said, strange tales of bags of gold and mysterious
documents.
As for the members of the Great and Good Court of the old Commonwealth
of Massachusetts for the year of our Lord One thousand eight hundred and
ninety-six, they received, none of them could tell from where, their
promised vote-money in the form of a yarn that the "stuff" belonging to
them had been delivered to George Towle, but that Towle had decamped
with it to foreign shores, where he was living in luxury with Mr. Patch.
'Tis writ that some crimes are so black and foul that they will not
down, and when I read over what is written here, I wonder if there will
not some day be another chapter of "Frenzied Finance" written by another
pen than mine.
I sent two police officials to the island of Jamaica, and had the
contents of the coffin marked "George H. Towle" photographed. I could
not photograph the contents of the ocean's depths.
FOOTNOTES:
[9] A stock operator's one reliable source of information is his ticker and
tape. For the benefit of those of my readers who are unacquainted with the
paraphernalia by which stock-markets and financial operations are
conducted, I would say that the ticker is a small printing machine through
which passes an endless paper tape. The machine is run by telegraph wires,
and it prints upon the tape letters and figures which are abbreviations of
the names and prices of all the stocks and commodities dealt in on the
stock-exchanges and boards of trade throughout the world. The instant
anything of moment happens anywhere, it is reflected by a rise or fall in
the price of securities or commodities such as wheat, corn, pork, cotton,
etc., that are dealt in in the different stock-exchanges or boards of
trade. As soon as a share of stock or bushel of wheat is sold by one
operator to another on the floors of the different exchanges, its price is
within a second printed on the tapes in the different offices. Therefore
what the ticker "ticks" out onto the tape is instantly read by operators
throughout the world, and as "the tape never lies," operators turn to it
for their real information. When the ticker begins to increase its clatter
and the tape to travel fast, an operator will tell you its activity means
something unusual is happening. The ticker begins to talk at ten o'clock
each week-day morning and finishes at 3 P.M., with the exception of
Saturday, when the hour is 12 noon. These are the hours that the
stock-exchanges are in session.
[10] The charter as originally passed had gone through by a fair majority,
but to pass it over the governor's veto was another matter. That required a
two-thirds majority of both houses, and in the brief time at the disposal
of the conspirators the securing of the additional votes was wellnigh
impossible. From the necessities of the case such votes must cost much more
than those of the original supporters of the bill, for it may be taken for
granted that most of the members of the minority had already withstood such
temptations as the Whitney faction had cared to offer. It was therefore a
case of bringing into camp the most honorable and the most expensive
members of the legislature, and without opportunity for strategy or
manipulation. The sole recourse was rank, flat bribery, and that in full
view of a mutinous following ready at the suggestion of the slightest
favoritism to the new men to become actively hostile. The task was
altogether too fraught with peril, to be undertaken. When they realized how
threatening the situation really was, Whitney and Towle decided to make
terms with the governor. The charter once obtained, they calculated that
the obnoxious clause might be amended out of it at a subsequent session (as
a matter of fact this charter, with its 60-cent clause, was afterward made
the nucleus of the present Massachusetts Gas companies which has just been
floated on a basis of $53,000,000 capital). Besides, the state of feeling
of the legislators and conditions in the stock-market had both to be taken
into consideration. It was not the fault of the legislators who had voted
for the charter that the governor had vetoed it, for they had been given to
understand by Mr. Whitney that he would not oppose it. They had delivered
their goods, and now, if the governor's sanction could be had under any
sort of a compromise, they would certainly hold Towle and Whitney
responsible for failure to make whatever arrangements were necessary.
[11] Towle told me, as he waited impatiently in my office for the gold,
that in addition to the great losses the drop in price of the two stocks
had inflicted on himself and his associates, there were losses on stocks
held by legislators, who had plunged on assurances that the charter would
go through, and that the amounts he would be called on to pay, if he
remained, were far greater than could possibly be met.
CHAPTER XXII
PLUNDERED OF THE PLUNDER
So extraordinary a happening as the disappearance of George H. Towle and
Mr. Patch, you think, should have furnished a national sensation. And
this is the first you have ever heard of it. Bear in mind that here for
the first time the facts of this case are set forth in their proper
relation to one another, and without the fear or favor that has hitherto
prevented them from being understood.
In Boston after the adjournment of the Legislature, however bitter the
feeling of the men who had sold themselves, and those others who had
lost their all in the crash of stock values that had followed Whitney's
defeat, their own complicity enforced silence and prevented outcry. It
was given out that George H. Towle and Mr. Patch, tired by their labors,
had gone to the country for a brief sojourn. On their return there would
be a settlement. And with these assurances, both legislators and
lieutenants had, perforce, to be satisfied. Gradually, betrayers and
betrayed drifted back to their own homes and their erstwhile avocations,
and when the strange story of the disappearance and death of the chief
actors in the Whitney drama came from over the seas, it fell on the
heedless ears of men who had written off a loss and desired to forget
the experience. A conspiracy of silence is easily organized among
accomplices.
I myself was the greatest sufferer by the disaster. Banking on Whitney's
assurance of success I had loaded up heavily with Bay State on my own
account; and my customers pinning their faith to my predictions of a
rise, had also bought heavily both of the gas stock and Dominion Coal.
In my attempt to support the market when the first decline occurred, I
had further increased my holdings, and, at the final break, thousands
of shares purchased for my clients were left on my hands. So my loss was
very large, many times larger than Whitney's. Like the others, I said
nothing, crediting the expense to education, while Whitney silently
tucked his emasculated charter into a crypt already furnished with other
corporation derelicts, to await some fair opportunity of legislative or
other resuscitation; for the instrument, shorn though it had been of its
immediate availability, was by no means without real value. Probably in
view of prospective contingencies, perhaps with a sense of what his
error had cost me, he said to me: "Lawson, the Pipe Line charter is
worthless now, but if at any time in the future it becomes valuable, you
or your company shall have half of it."
If Henry M. Whitney had kept that promise, what a world of disaster and
bitterness might have been averted. Generated in corruption, perhaps it
is not strange that this charter has since been so fertile a breeder of
dissension and ruin among all who have attempted to handle it. It may be
accepted as an axiom of finance that double-dealing is as dangerous to
the dealer as to his victim. The fierce conflicts that at intervals
burst out in the financial world and like a cyclone spread dishonor and
destruction broadcast, invariably are caused by some one man's
treachery.
To return to my story. To all appearances, the gas war was over. We bore
the palm of victory, but looming up before us was the task of getting
together the six millions which Rogers must have by November 1st. That
paid, the companies became permanently ours. It was a period of
unremitting effort, but the prospects of success were excellent. Addicks
had got ready a new lot of Bay State stock, and I had prepared the
public to take it. With the proceeds of this stock and the securities
which Rogers would turn over to us, we should have money enough to meet
our engagement, always provided no slip-up occurred. Since the May 1st
settlement our relations with Rogers had been satisfactory--I should
say, _my_ relations--for he persistently kept Addicks and his crowd at a
distance, refusing to have anything to do with them. But it's hard to
keep a big pot boiling in the open without some intruder smelling the
savor of your soup and sneaking up for a mouthful. Though secrecy had
been solicitously preserved regarding the details of our bargain with
the "Standard Oil" magnates, certain of the camp-followers of "Frenzied
Finance" had nosed out the facts, and at the very moment when our
position and prospects seemed most secure a plot was being laid, which,
as after-events will show, came close to bringing about the destruction
we had thus far managed to escape.
As the time of settlement drew near, it became necessary for me to have
frequent conferences with Addicks and his directors, and we opened
head-quarters at the Hoffman House in New York. It was my habit to come
over for a short time every week, when we got together, reported
progress, and discussed future moves. It was at one of these gatherings,
on Friday, October 16th, that we had intimation of our peril. I had come
down on the midnight train from Boston and was brimming over with
pleasant news and agreeable anticipations. The day and all other things
seemed good to me. The air was crisp and the morning sun gleamed
brightly on the red and yellow autumn tints of the trees in Madison
Square. For a moment I stood on the corner beside the naval monument
watching the down-townward procession of cabs and coupes in which the
spider aristocracy of finance makes its way to its webs in Wall Street
and lower Broadway. In the parlor of Addicks' suite at the Hoffman the
directors were gathered when I entered, and with them was Parker
Chandler, the Bay State's general counsel. We got down to business at
once. I told them how well our affairs were moving in Boston and
listened to their tidings of progress elsewhere. We were all in the
merry mood of success. The past was nothing but a bad dream; our
thoughts were on the rich moments beyond November 1st when we should
handle and know the real currency of our victory.
The telephone bell rang. Some one wanted Addicks quick.
Addicks stepped to the instrument. We all heard him say: "Hello."
Then--"Is that you, Fred?" (Fred Keller was his personal secretary.)
Then--"Yes, I hear you plainly. Repeat it." Then--a minute's wait while
we listened. Then--"When will they get up there?" Then--"Send every one
home, lock up and go over to the house, and call me on my wire." All
this in his ordinary, well-attuned, even voice, without the emphasis of
a word to show that the subject was a hair more important than any of
the hundred and one ordinary messages which went to make up a large part
of his daily life. The talk was so commonplace that we were none of us
interested enough to even stop our chatter.
Addicks stepped from the telephone and in a "bring-me-a-finger-bowl"
tone of voice said: "Tom, come into the other room for a minute; I want
a word with you."
He passed ahead of me through a small parlor into his bedroom. I
followed. He went straight to the bureau, took something from a drawer,
slipped it into his pocket, turned and dropped upon a lounge. But a
minute had elapsed since he had gone to the telephone. Could this gray
ghost be the same man who a short time ago had been smiling so
contentedly at Parker Chandler's last story? His face was the color of a
mouldy lead pipe and seared with strange lines and seams. The eyes that
met mine were dim and glazed, lustreless and dead as the eyes of a fish
dragged from watery depths.
Courage is not character; it is temperamental. There is an impression
that the man truly brave is he who can face sudden, unexpected
misfortune or calamity without a tremor or a flicker to suggest his
hurt. That is but a single phase and indicative of physical rather than
moral qualities; or, perhaps, merely the callousness born of long
exposure to danger. One of the bravest men I've ever known stood
watching the ticker one day during a downward run. Suddenly I heard "My
God, I'm ruined!" and he fell in a faint on the floor. And a certain
bank officer, whom I knew to be an arrant coward when arrested for
stealing a million, smiled at the policeman who had tapped his shoulder
and asked him for a light for his cigarette. Addicks had not turned a
hair as he hung up the telephone receiver, and here he was cowering in a
mortal funk, abjectly hopeless.
"Lawson, the game's up," he said in a trembling voice. "That was Fred.
He says Dwight Braman has had himself appointed receiver of Bay State;
that he raided the Wilmington office immediately after he was appointed,
broke open desks, and took all the papers he could find, and that in an
hour or so he will be in Philadelphia and in possession of all my books
and papers. He has a court order for the bank accounts and the right to
take charge of our funds."
"This is a startler," I said; "what are we going to do?"
"The trap is perfect, and I'm in it. They've caught me with every bar
down. Before, when they attempted to get a receivership, things were
ready for them--books and papers packed for Europe and cash in charge of
an unserved officer prepared at the first word to start for Canada. But
now, a few days before election, when if I don't throw a lot of money
into Delaware for my followers, they'll turn on me like wolves--they've
caught me napping. It's a plot, sure--a receiver in possession,
particularly Braman, and appointed in a way that shows deliberate
calculation, proves it was done by some one who knows our situation to a
'T.' It means ruin for me and the company. You know I won't have a
friend left on earth, and enemies now will rise up like snakes before a
prairie fire."
It was indeed a stiff, tough turn, yet I was watching the man rather out
of curiosity to note how he could take a reverse than out of sympathy. I
don't believe there was another man on earth who, similarly placed,
would not have aroused my pity; but Addicks--no man or woman has pity
for Addicks.
"Well," I repeated, "what are we going to do?"
He did not reply for a moment. I continued to look at him. The eyes
haunted me. I noted that the lines round the lids had deepened into
furrows. He half raised himself from the lounge.
"I've said they would never get me, and they won't." Instinctively his
hand sought the pocket into which he had dropped what he had taken from
the dresser's drawer. Then I knew. The yellow streak showed plain at
last. I had guessed from the start it was there.
The stock manipulator in common with the successful general must have
the capacity to deal with the unexpected. The faculty to see a situation
whole must be his, to focus instantly the lay of the land, the enemy's
plans and strength, his own resources, the strategic possibilities of
his position; and instantly, if necessity demands it, he must be ready
with a new plan of campaign fitted to the first emergency. The more
rapidly his mind works the safer are the interests he is guarding. But
if he has not this capacity, he can never be a market manipulator.
For a moment I could not but pause to admire the devilish ingenuity of
the trap that had been sprung on us. The state of affairs that Addicks
revealed was about the worst imaginable. I had been on this particular
war-path so long that my mind instantly grasped the possibilities of
destruction that lay in this new attack. I saw November 1st--no money to
pay Rogers; everything forfeited; Addicks in a nauseating scandal; and
all those friends of mine who had put their funds into Bay State because
of their confidence in my ability to win out slaughtered. No, it should
not be if I could prevent it. Other storms we had met and weathered, why
not this? Even if it were a tornado, we would "ride her out." Perhaps we
should not be afloat when the rollers subsided, but at least we should
be at rest--on the bottom. I turned to Addicks, who, heaped up on his
lounge, was staring into vacancy.
"Brace up, Addicks," I said. "We are not knocked out yet. At least let
us find out what has struck us."
I was some moments in arousing him from his condition of despair, but
finally he pulled himself together, and piece by piece we went over
the situation. I had to agree with him that he was in an
end-to-end-center-pull trap. The cunning machinery he had set up to
meet just such an emergency, now that it was in hostile hands, was
rather a source of danger than of safety. There was but one way out of
the complication--we must undo this receivership and release our
properties and funds before November 1st. Addicks, when he got his
thinking loom running, declared the receivership was all a "Standard
Oil" plot to ruin him. I felt sure it was an independent operation,
but there was no time for controversy.
The telephone bell rang again. It was Fred Keller, talking from Addicks'
house. We soon had all the details of the raid. This is what had
happened. Dwight Braman, a former Boston broker, now a New York
capitalist and promoter, had suddenly appeared in Wilmington, Del.,
accompanied by Roger Foster, a New York attorney representing Wm.
Buchanan, one of the original holders of Bay State Gas income bonds. He
held $100,000. They had gone before Judge Wales, and pleading that the
interest on the bonds was in default and that Addicks was dissipating
the assets of the company, had succeeded in inducing the judge to
appoint Braman receiver. The whole performance was put through with such
marvellous rapidity that not one of Addicks' innumerable henchmen had
had a hint of it, and so no warning could be given in any direction.
Braman, an adept in corporation try-outs, lost not a moment, for the
instant his receivership appointment was signed he pounced down on the
Delaware offices of the Bay State and seized everything they contained.
He was waiting there for the first train to Philadelphia for the purpose
of capturing the head offices of our corporation, which were located
there, adjoining Addicks' private offices.
It was the moment for rapid action. We had an hour before Braman and
Foster could reach Philadelphia, and in finance in that time continents'
have been submerged and oceans pumped dry. Addicks instructed Fred
Keller to rush the books of the company into a trunk, together with all
the private papers in Addicks' safe, and to come at once to New York,
where he would be beyond the jurisdiction of the Delaware court. We
returned to the large parlor and hastily explained to the waiting
directors what had occurred. Addicks instructed the Bay State secretary,
who was present, to connect with the trunk upon its arrival and
disappear. In the meantime the company's counsel advised that Addicks
and the other directors barricade themselves in their rooms at the
Hoffman to frustrate any attempt to get legal service on them, for we
well knew that Braman and Foster, as soon as they realized they were
balked in Philadelphia, would go to the New York courts for additional
powers--which afterward they did.
This line of defence having been fully organized I hurried down town to
26 Broadway. I felt certain that Mr. Rogers had nothing to do with the
Braman-Foster affair, but to satisfy Addicks and make assurance doubly
sure I determined to see him. After being with him for five minutes I
knew I had not been deceived. Rogers agreed with me that the situation
looked as though it had been made for his interest, for it threatened to
leave us absolutely at his mercy with nothing to prevent his checkmating
Addicks at his own game. As I pointed out to him, however, there were
disadvantages in the position which he must take into consideration. His
acceptance of the opportunity would work such losses to the public and
to my friends that though the responsibility might be laid to Braman and
Foster, I would fight so viciously that no one would be spared. Besides,
between the Addicks scandal and that other which we agreed must
unquestionably lurk in the hasty appointment of the receiver, the whole
affair must eventually be ventilated in court. It is always hard for Mr.
Rogers to forego an advantage, but by this time he was tired of the
wrangle and wanted peace, and, moreover, he did not relish the thought
of court proceedings, so he admitted that my reasoning was good, and
promised to do anything in his power to assist us.
CHAPTER XXIII
TWO GENTLEMEN OF FRENZIED FINANCE
The enemy did not leave us long in suspense. Next day Braman and Foster
arrived in New York, bursting with a noble wrath at the failure of their
coup in Philadelphia. An outrage had been worked upon them, upon the
public, upon the majesty of the law. To hear their ravings one might
have supposed them the evangelists of Justice righteously denouncing a
desecration of the sacred altar; or, that we had deprived them of an
inalienable right they had possessed to our property. It would have been
humorous if the conditions had been less tragic.
No defender of property right is so vociferous as the financier who,
having appropriated his neighbor's goods, argues that possession
constitutes legal ownership. On a country road I once almost rode over
two hoboes, who were so busy wrangling with one another that they had
not heard my approach. I gathered that one of them, having filched a
collection of laundry from a farmer's backyard, had placed it in charge
of his mate while he went off for a second helping, and had returned
just in time to stop the latter from decamping with the swag. The talk
the original purloiner was giving his ungrateful assistant was one of
the best expositions of virtue and honesty I've ever listened to.
We met the following Monday and in reply to my request that we talk
things over, Foster delivered himself of an exalted exposition of the
rights of deluded stockholders, the majesty of the law, and the stern
duties of Mr. Braman, who, for the time being, had departed his private
self and, until further notice, existed only as a rigid arm of the
court. Just as I had arrived at the conclusion that I had got into the
wrong shop, Braman took up the lecture by informing me of things I
already had made myself familiar with, to wit, how he had at different
times occupied similar roles in other corporations' affairs and how
relentlessly he had exposed mismanagement and peculation. I suggested to
him that in most such cases the receiverships seemed to have been
dismissed in favor of the former managers. He waved his hands and
replied that in this particular case there was absolutely no chance of
control being returned to Addicks, who had outrageously abused his
trust; "although, of course (this as a sort of second thought) you know,
Mr. Lawson, if Mr. Foster on behalf of his client should receive the
amount of his claim and the proper fee, from whatever source, I should
be powerless to prevent the dismissal of the receiver."
Braman and Foster were a delightful combination. As the talented Chimmie
Fadden would say: "Dey knew dere biz from de bar to de till an' from de
till by de way of de cash register to de wine-cellar, so's dey could do
de circuit wid dere lamps blinked and dere hands tied." With their
corporation mix-up records I was familiar, and after a few minutes' talk
realized that it would be impossible to do anything with them until they
had kicked up against one or two of the bricks Addicks was now with
renewed energy preparing to cast into their pathway. I left with an
agreement to see them the following day, and a parting reminder that all
natural history showed that unpicked ripe plums were in great danger of
being blown from the tree with every passing breeze.
I hurried back to Addicks. "It's the old game," said I; "they are on the
box and have the lines, and know just how badly we need our coach, and
it's only a case of how much 'inducement' we can stand."
I left him and went down to 26 Broadway. I had not wasted time, but they
had been there ahead of me.
"Lawson," said Mr. Rogers, "this time Addicks is up against a real
condition, and phenomenal work will have to be done or his race is run.
Braman and Foster have been here and made a strong bid for a partnership
with me, but I did as agreed and sent them away with a cold 'I'm in no
way interested.'"
Foster and Braman secured an order from the New York courts to take
possession of all property, money, papers, and books claimed by the
company, and formally laid siege to Addicks' quarters in the Hoffman.
There was considerable excitement for the guests and the newspapers.
Doors were battered down, but the astute and slippery Addicks led them a
merry chase until they finally caught him hiding in a freight elevator
which he was using for a private staircase, only to find he had no
books, papers, or money.
The week that ensued was full of trouble and incident for all concerned.
Addicks led an expedition to Wilmington in an effort to get the court to
call off the receivership, but had his labor and the expense of his
lawyers for his pains. Braman and Foster dragged us through a weary
round of special hearings and demands of various kinds in the different
courts, but by Tuesday night of the second week their ardor had cooled
considerably and they were as puzzled how to let go of the bull they had
captured as we were to find a way to make them do so.
Bright and early Wednesday morning Braman called on me, and when he
threw his coat and hat into a chair he must have dropped his
receivership cloak too, for after he had carefully closed the door and
made sure we were without witness he said:
"If there's any business to be done in this matter it must be done
quick."
I admitted no one could possibly appreciate this more than I--but what
could be done? After bluffing for an hour and exchanging honest views
for fifteen minutes we agreed that the situation stood thus:
If nothing were done before the coming Sunday, the 1st, the receivership
would be permanent; the stock, which had fallen to $3 per share, would
remain at that figure or go lower; my friends, the public, and myself
would be tremendous losers; all the past of Bay State, the doings of
Addicks and Rogers, and the appointment of the receiver would come in
for thorough investigation; an awful scandal would be aired in public;
every one would be covered more or less with mud; and no one could
possibly be the gainer but "Standard Oil," for Braman agreed with me
that the deal we had made with Rogers would probably stand in the
courts.
On the other hand, if an arrangement could be arrived at by which we
could have the receivership discharged, the company returned to its
officers, or our equities preserved, all would be gainers by the move,
for it would be proof positive that whatever the obstacles, we could
overcome them, and the stock would go flying upward again.
After we had set out all the advantages, disadvantages, and
possibilities of the situation, I bluntly plumped Braman with that
inevitable question of all such "sit-downs": "What's the price?" And
Braman as plumply and bluntly answered: "Buchanan, Foster's client, must
have the face of his bonds and interest, $150,000, and we must have at
least $150,000 for our trouble and expense."
My long experience in corporation affairs, and my intimate knowledge of
the practices which the "System" with its votaries has made habitual was
such that I was proof against shock from anything that could possibly
turn up in even extraordinary financial deals, but I was just a bit
staggered by the business-like way Braman demanded for himself and
Foster $150,000 and the coolness with which he further explained that
they must divide their share with certain influential persons without
whose hearty cooperation the tangling-up which had been so cleverly
accomplished would have been impossible. He made no bones of showing me
that once "we gave up" it would only be a matter of the number of
minutes required to get details fixed before everything would be as it
was before he had interfered. I dwelt upon the possibilities of the
judge not following orders to the letter and the minute, but he only
smiled and answered: "Leave all that to us; if we don't make good as
agreed, we get no pay." He was fully alive to the dangers of the game,
and he impressed upon me he would take nobody's word for anything. With
him and Foster nothing but money talked, and it must not be of the
marked-bill kind either, meaning he would not take anything which could
be tied up by injunctions and lawsuits after the receiver had been
dismissed. However, he would play fair. He would not ask us to pay on
anything but the actual delivery of the goods. He also frankly told me
that he had named the very low figure, $150,000, because he expected to
invest what he received in Bay State Gas stock at $3 and, upon its
jumping to $10 or $20, to make half a million.
But this is outrageous, you say. You call the performance I have
described by hard names! Surely our courts are not also the creatures of
"frenzied finance"? you ask. I warn my readers that this narrative is no
more than a record of events occurring within my own knowledge, and that
dark and vicious as the pictures seem they are photographs of actual
happenings. Nor should the public conclude that the dishonor and
dishonesty revealed in connection with Bay State Gas are exceptional. On
the contrary, such doings are the rule in the affairs of great financial
corporations. Into the rigging and launching of almost every big
financial operation in the United States during the last twenty years,
double-dealing, sharp practice, and jobbery have entered; and, what is
more, the men interested have participated in and profited thereby. To
correct a popular fallacy I want to say that I am not referring here
simply to moral derelictions but to actual legal crimes. If the details
of the great reorganization and trustification deals put through since
1885 could be laid bare, eight out of ten of our most successful
stock-jobbing financiers would be in a fair way to get into State or
federal prisons. They do such things better in England. During the past
ten years three "frenzied financiers" have practised their legerdemain
in London--Ernest Hooley, Barney Barnato, and Whitaker Wright. The first
is bankrupt and discredited; Barney Barnato jumped into the ocean at the
height of his career, and Whitaker Wright, after numerous attempts to
escape, was hauled up before an English judge and jury, promptly
convicted and sentenced, and committed suicide by poison before leaving
the court-room. I will agree at any time to set down from memory the
names of a score of eminent American financiers, at this writing in full
enjoyment of the envy and respect of their countrymen and the luxury
purchased by their many millions, whose crimes, moral and legal,
committed in the accumulation of these millions, would, if fully
exposed, make the performances of Wright and Barnato seem like petty
larceny in comparison.[12] But freedom and equality, as guaranteed us by
the Declaration of Independence, have recently been capitalized, and
"freedom" now means immunity from legal interference for financiers,
while the latest acceptance of "equality" is that all victims of special
privilege are treated alike by those who control and exercise such
privilege. If the judges and the public prosecutors of these United
States were equal to the sworn duties of their sacred offices, this
"freedom" would have been confined long ago, and throughout this broad
land there would be jails full of "frenzied financiers" who had imagined
themselves licensed to rob the public.
But to return to Bay State Gas: "Braman," I said, "we see the situation
through the same glasses, but before deciding as to prices let us see
where the coin required is to come from. Until the receivership is
dismissed not a cent can come from the Bay State treasury, so that
eliminates Addicks. I, personally, am in such shape because of this same
receivership that I can do nothing. So, as usual, it comes down to the
man with unlimited money--Rogers. The question is, how to get Rogers to
advance so large a sum in such a ticklish business? He does not want to
get mixed up in a matter in which any one man's treachery might mean
State's prison."
"Somebody's word ought to be good," he commented.
"Only two men's words would be of any avail," I interrupted--"yours and
Addicks', and you have just made it clear that in this case neither
would be worth the breath expended in pledging it."
FOOTNOTES:
[12] Since the above was published the American people have become aroused,
and as this book is going to press, scores of the greatest financiers in
America are having under oath confessions squeezed from them in a
life-insurance investigation conducted by the State of New
York--confessions which reveal such a condition of perjury, bribery, and
habitual sequestration of funds, as to make my statement seem mild.
CHAPTER XXIV
BUYING A BUNCH OF STATES
I left Braman and went down to Mr. Rogers. After a careful canvas of the
situation it was settled that the only way out was for Rogers to furnish
the money to release the receivership, in consideration of which
accommodation Addicks should forfeit the old Boston companies to him
through Bay State's failure to comply with the terms of the May contract
which matured the following Monday. Rogers would administer these
companies in trust, applying their earnings to the liquidation of the
bonds, and after these latter had been paid off, would turn them back to
the Bay State Company for the benefit of its stock; or he would release
the companies to us whenever we could raise the money to redeem them.
Thus Rogers would make sure of the amount of his original investment,
the million dollars profit the May 1st deal permitted him, while I
should have secured for my friends and the public the amount of their
investment in the property and a good profit for the stockholders to
boot. To secure Addicks' consent to this arrangement would be the
difficulty; but there was one consideration that would probably induce
him to give way--his terrible plight in case the receivership became
permanent.
Having reached this point, the next problem was how to get the money.
Rogers refused absolutely to be a party to any payment that could be
traced back to him. He pointed out the sources of hazard; first, through
treachery on the part of Foster, Braman, or Addicks, he might be accused
of bribing a court officer, the receiver; Addicks might blackmail him by
charging him with conspiracy, or a conspiracy charge might be brought by
Bay State stockholders, and he be held for tremendous damages. He
refused to put himself into any such trap. I put forward a dozen ways to
meet the emergency, but he would have none of them. Finally he suggested
a method which was certainly perfect of its kind. He began by letting me
into the secret that the chances of a McKinley victory in the election
the following week looked pretty bad, and that the latest canvass of the
State showed that unless something radical were done, Bryan would surely
win. Hanna had called into consultation half a dozen of the biggest
financiers in Wall Street, and it was decided to turn at least five of
the doubtful States. For this purpose a fund of $5,000,000 had been
raised under Rogers' direction,[13] to be turned over to Mark Hanna and
McKinley's cousin, Osborne, through John Moore, the Wall Street broker,
who was acting as Rogers' representative in collecting the money. It
would be legitimate for the National Committee to pay out money to carry
Delaware, and he, Rogers, would arrange it that the coin to satisfy
Braman and Foster should come through this channel. Thus he would be
completely protected.
"Lawson," said Mr. Rogers, looking at me with intense and deadly
seriousness, his voice charged with conviction, "if Bryan's elected,
there will be such a panic in this country as the world has never seen,
and with his money ideas and the crazy-headed radicals he will call to
Washington to administer the nation's affairs, business will surely be
destroyed and the working people will suffer untold misery. You know we
all hate to do what Uncle Mark says is necessary, but it's a case of
some of us sacrificing something for the country's good. Bryan's
election would set our country back a century, and I believe it's the
sacred duty of every honest American to do what he can to save his land
from such a calamity."[14]
The "System's" conscience has its own quaint logic--the logic of
self-interest--and this is how it reasoned: "The election of Bryan would
disturb our control of American institutions, therefore American
institutions would be destroyed by Bryan's election. On us, the
'System,' devolves the sacred if expensive duty of saving the nation,
and, however abhorrent to our fine moral sense, patriotism compels us to
spend millions in bribing and corrupting the electorate so that virtue,
'Standard Oil,' and J. P. Morgan may continue the good work of caring
for the public's interests as their own."
As I listened to Rogers' exordium on the duties of a citizen in an
emergency, I remembered the "Standard Oil" code--"Everything for God
(our God); God (our God) in everything." It was so essentially "Standard
Oil," this willingness to commit even that greatest wrong, subverting
the will of the people in the exercise of their highest function--the
election of a President--but only that good (their good) might come of
it. It was no more than selfish greed tricked out in the noble trappings
of morality, an infamous crime disguised as patriotism. Doubtless, the
excellent, God-fearing, law-abiding citizens of the doubtful States who
read this and learn how the "System" defeated their will at the polls
will cry, "Monstrous! Can such things be in America?" and then will
resume their interrupted occupation of "letting well enough alone."
However, this is aside from my story.
Having clearly set forth the political situation through which we should
be saved, Mr. Rogers proceeded to map out my own programme. First, I
must perfect an alibi for him by going to Foster and Braman, and
impressing upon them the fact that he was absolutely out of the affair,
and must under no circumstances be brought into it; next, I must
convince Addicks to the same effect, and in addition tell him that Mr.
Rogers had angrily refused to get into the mix-up; I should then hold
myself in readiness to meet John Moore and Hanna or Osborne as soon as
an appointment could be arranged. That afternoon I got the word and went
to 26 Broadway, and from there Mr. Rogers and I went over to John
Moore's office, slipping in the private door from the rear street.
"John," said Mr. Rogers, "I am going to turn this matter over to you and
Lawson, and I am to have nothing further to do with it. What you two
agree to will be satisfactory to me, and remember, both of you, every
dollar that is paid is paid by the National Committee, but after it's
all settled, and if there is no slip-up, I will look to Lawson for
whatever is expended. Is it understood?"
We agreed that it was, and Mr. Rogers left us.
John Moore deserves more than a mere passing mention here, for he was at
this time a distinguished Wall Street character and one of the ablest
practitioners of finance in the country. During the last fifteen years
of his life, John Moore was party to more confidential financial jobs
and deals than all other contemporaneous financiers, and he handled them
with great skill and high art. Big, jolly, generous, a royal eater and
drinker, an associate of the rich, the friend of the poor, a many-times
millionaire, who a few years before had been logging it on the rivers of
Maine, his native State, John Moore well deserved his "Street" name,
"Prince John." His firm, Moore & Schley, transacted an immense brokerage
business, and numbered among its clients great capitalists and bankers
all over the country. Especially were Moore & Schley famed for their
discretion, and the highest proof of confidence reposed in the firm was
the fact that it did the bulk of the stock speculating for what is known
as "the Washington contingent." This is, perhaps, the most peculiar and
delicate business that comes to "the Street." A big Wall Street house
opens a Washington office and organizes an elaborate system of special
wires, wires from which there can be no possibility of leakage. It is
then ready for the patronage of members of Congress, United States
Senators and national officials, whose honorable positions make them the
custodians of national secrets of great commercial value. If, for
instance, a new law is to be passed which must favorably affect a given
stock, legislators who are on "the inside" often buy thousands of shares
in order to reap the profit of the rise in value incidental to its
passage. Or perhaps there is in prospect a law which will interfere with
the special privilege of some other stock and reduce its price. Those in
possession of advance information "go short" of that stock (sell for
future delivery) to profit by the drop. There are many other
opportunities the Washington "insider" of speculative turn may use to
advantage. For instance, if a high official of the Government were about
to issue a proclamation against a foreign nation, and should desire
secretly to make a million or so out of the panic he knew must follow
the announcement, he would cast about him for a broker who would
preserve this sacred confidence. It would invariably be through the
Moore firm that his secretary or confidential man would do the short
selling. There are also the operations of lobbyists who, to affect
important legislation for this great interest or the other, buy or sell
stock for the benefit of legislators whose votes they desire to
influence. Extreme caution is demanded in the execution of such orders,
or all hands might by some slip-up find themselves wearing striped
suits.[15]
Such a catastrophe seemed imminent some years ago when the Sugar Trust
was before the United States Senate for some legislation necessary to
bolster up its monopoly. Its agents had either been less cautious than
usual in disguising the raw bribery they were perpetrating, or this
particular Senate was too brazen to take the usual precautions to hide
its greed from the world. In any case, so great an outcry was made in
the press of the country that some sacrifice to the people's wrath was
called for--one of those familiar sacrifices which, at intervals of ten
or fifteen years in this republic, our rulers make to the great god
Integrity. An investigation was organized, and a Senatorial inquisition
had before it eminent sugar capitalists and many other distinguished
gentlemen who could by no possibility shed light on the transactions,
and then, realizing that a show of earnestness, at least, was demanded,
it was agreed that some member of Moore & Schley's firm must go on the
witness-stand, and, on refusing to tell which Senators had speculated in
sugar, must be sent to jail. This grandstand play, it was calculated,
and rightly, would so hold the attention of the American people that
when the committee concluded its investigation with the usual loud
acclaim of duty well done, its Draconian punishment of the unsubmissive
broker would act as another ten years' stay against outcry.
When this stratagem was decided on, John Moore announced that he as head
of the firm should be the sacrifice. But the representatives of the
"System" and the Senate firmly refused to assign him that role, and
instead, to his grief and anger, nominated for jail the associate member
who had charge of Moore & Schley's Washington business, whom they
declared the logical victim. During the thirty days that his friend and
partner spent behind the bars John Moore's hair whitened more than in
all the years before, and from that time until his death he refused
firmly to take part in his old line of work, or was ever again his old
jovial self.
FOOTNOTES:
[13] Over a year after the publication of this statement startled the
country, John A. McCall, President of the New York Life Insurance Company,
and George W. Perkins, Vice-President of the same company and partner of J.
Pierpont Morgan, were compelled to confess that they had contributed from
their policy-holders' deposits, large amounts of money to a fund to defeat
Bryan in 1896 and to the Republican campaign funds of the two following
presidential elections, and that they gloried in it. At the same time Jacob
Schiff, director of the Equitable Life and a partner in the great
international banking-house of Kuhn, Loeb & Co., admitted that funds
belonging to the policy-holders of the "Big Three," the New York, the
Mutual, and the Equitable, were used in a joint fund to influence the
Legislature of every State in the Union.
[14] President McCall used almost the same language in September, 1905, in
justifying his payment.
[15] The President was notified some few months ago that the cotton report
was being juggled by employees of the United States Department of
Agriculture in the interest of certain Wall Street speculators who were
gambling in cotton. Investigation proved that it was the practice to
falsify the report; and certain Government officials and brokers are now
under indictment.
CHAPTER XXV
ATHLETICS OF FINANCE
Entirely apart from his relationship with Mr. Rogers it was a great help
in this Bay State emergency to have the aid of a man of John Moore's
wealth of vim and wide knowledge of men and affairs. Freely and frankly
I explained our situation to him with its innumerable complications
until he had mastered its intricacies. A tough job he pronounced our
proposition, and he was the authority on the subject. After our talk was
ended he called in Osborne, who had evidently already been talked to. He
said to Osborne:
"I've been over Addicks' affairs with Lawson, and there is no question
in my mind and that of other friends of the party that he should have
what is necessary to carry Delaware. You had better have the committee
ready to put in between $350,000 and $400,000 if we call for it. I will
see that it is kept down as low as possible."
Osborne then spoke his piece and replied that the committee would do
whatever was decided best, and asked me to send Addicks around next day
to explain just how he was pushing things in Delaware. All this was
play-acting for the benefit of Rogers' alibi.
The next thing on my programme was to persuade Addicks to relinquish his
hold on the old Boston gas companies, and this was likely to prove my
most difficult task. I left John Moore, who agreed to hold himself in
readiness at any hour to consult on and approve such settlement as I
could arrange, and energetically started in on the Delaware financier.
It was a trying ordeal. As soon as Addicks saw I had something to work
on he began to demur and object. If he could not have things his way, he
would do nothing. He knew that I had joined a conspiracy to ruin him;
that I was in league with Rogers, who was in league with Braman and
Foster, and that all were banded together to take all he had away from
him. In the course of that two hours' wrestle I was tempted several
times to throw up the whole affair, and there were some bitter and
savage word-passages that left both of us heated. I could do nothing
with him; he must hear from Rogers personally. Finally I got the
"Standard Oil" wire, and Rogers talked so plainly and coldly as
partially to sober him, but ended by agreeing to have his counsel talk
things over with Addicks, which was a distinct concession. A little
later Mr. Rogers' representative was at the Hoffman and he and Addicks
had it hot and heavy. After about fifteen minutes of conference they had
wellnigh come to blows. However, the hot exchanges had begun to tell.
Addicks grew saner, but he insisted on seeing Foster and Braman. I
warned him that he was fast getting our affairs into such shape that no
one could patch them up, but to no avail. He must meet his enemies face
to face if only to ram into their teeth that they were scoundrels.
Finally, I got Braman on the telephone and explained that I was doing my
best to quiet a crazy man, who would consent to nothing until after he
had seen him and Foster and told them what thieves they were. I heard
Braman chuckle. He said: "Bring him along to Foster's house at 10.30,"
and added: "It wouldn't be a bad idea to have an ambulance along, too."
This suggested further complications, for Braman has the reputation on
"the Street" of being more eager to face a wild man on a rampage than a
sick one in a plaster cast, while Foster, although a little bit of a
fellow, was never known to side-step or duck trouble. I slipped word
down to Moore at the Waldorf to follow along to Foster's place in a cab.
There are several "spite houses" in New York. Foster's house was one of
them. It is a narrow strip of a brownstone dwelling at 79 West 54th
Street, built to express the enmity of one property owner for his
neighbor who refused to pay an extortionate price for the land. It is
about the width of a front door, and inside there is just about room to
move around. It afforded a queer background for the scene enacted there
that night.
Promptly at 10.30 Addicks and I were at the door, and by 10.32 the
tunnel-like walls of the "spite house" resounded with as illuminating a
verbal interchange of billingsgate biographies as I have ever listened
to. At 10.35 I covered Addicks in a hasty but quite successful retreat
which he beat to our cab. Thence to the Hoffman House, where I summoned
Parker Chandler to aid in the calming of our raving associate. The next
two hours were of the pulse-jumping, vein-tearing kind incidental to
"frenzied finance," but they were not without avail, for Addicks finally
agreed that he might consent to "something" provided the Bay State
equities in the Boston companies were so preserved that he could
eventually get them back into his hands by repayment to Rogers or by the
redemption of bonds.
Having got thus far, I again went after Braman and Foster, who were at
the Hotel Cambridge. We repaired for further conference to the
University Club, which was then in the old A. T. Stewart marble palace
on the corner of Thirty-fourth Street and Fifth Avenue. I shall never
forget that session. It was past midnight, but the three of us battled
with our smoky problem, now good-naturedly, now bitterly. At times it
looked hopeless because of this obstinate demand or that steadfast
refusal. It must have been three o'clock in the morning when I left them
and stepped into the Waldorf for a moment to relieve Moore's vigil. Then
back again to the Hoffman, where Addicks, Chandler, and some Bay State
directors were nodding. By this time I was in no mood to say more than
that I would be over in the morning, and that Addicks should go early to
the National Committee's head-quarters and explain the desperation of
conditions in Delaware to Hanna, Osborne, and their associates. At last
I was free to return to the Brunswick for a few hours' rest.
In the country, cock-crow is the signal to be up and doing. In the city,
the signal to be up and to do is a hoarse, metallic roar that would
drown a million country cock-crows if each particular cock were as big
as the mythical rooster of antiquity and could crow in proportion to his
size. My readers who dwell on the hills and in dales and wheat-fields,
and who are unfamiliar with the wild, weird early morning din of the
city, may not know that the metropolitan cock-crow is made up of the
jingle and jangle of a million tin milk cans jolted over a million
blocks of stone to the tune of thousands of steel-shod feet, the shrill
cries of an army of butcher and baker boys and the groans and the moans
of countless troubled and tortured human souls. Cock-crow in the country
means "Awake to another day of life." Cock-crow in the city is a signal
for the slaves of Mammon to arise to another interval of flight and
pursuit.
The great city cock was just getting ready to send forth his hoarse cry
as I went to bed, and he was still on his roost a few hours later, when
I awoke. I looked from my window of the Brunswick across the Square, now
flooded with the pure sunlight of early morning, and all the kinks and
quirks and hobgoblins which the rush and irritation of yesterday had
generated seemed to have vanished, and I could not suppress a smile at
the thought of the night before, when this battle--this puny,
insignificant battle for a few dirty dollars--had almost raised feelings
I now knew too well should only be aroused by real battles, battles in
which noble principles were involved, and I felt better able to fight
what I had thought, the night before, was going to be a hard battle.
"Pshaw!" said I, as I looked away and beyond the park to the grand
battlefields of my better imagination, "what will it matter a hundred
years hence what name appears against victor or vanquished in the
archives of fame or the records of infamy when the student reads, 'A.D.
1896, Bay State Gas-"Standard Oil" war,'" for I saw that among the
countless real deeds there would be no room for any record to mark the
existence of any Gas or Dollar war.
With these thoughts still in mind I sat down to breakfast with Parker
Chandler, and as I listened to his cheerful gossip of yesterday, I
inwardly resolved that whatever the result of the day's effort, I would
take it with a smile.
Thursday was another period of strenuous struggle and unceasing effort.
I began early, and every moment was taken up with arguments, wrangles,
pleadings! Chandler had agreed to see that Addicks kept his appointment
with the National Committee and that a quorum of Bay State directors
should be on hand in the Hoffman so that we could get quick action on
any proposition that came up. This arranged I hurried over to see John
Moore, then down for a last word with Mr. Rogers. Addicks came next for
a spell; from him to Braman and Foster; back to John Moore; more
interviews with lawyers and round the circle again. It seemed as though
it were impossible to arrive at any agreement that some one of the
principals interested would not kick over. At four o'clock Friday
morning John Moore and myself ceased our labors for the day, both of us
wellnigh exhausted. With all our efforts many of the vital points to our
agreement were still in the air. A few hours' sleep and we were back at
our task, and by six o'clock on Friday night the last obstacle had been
overcome and the deal was completed.
There remained now the tremendous business of putting all the
arrangements concluded into execution. A multitude of legal documents
had to be drawn up and executed, first by Rogers and then by the Bay
State board of directors and officers. It was a pile of work, but not a
second was lost, and by 11.20 that night we were ready for the third
act, which was to be performed simultaneously by different sets of
actors in Boston and Wilmington. For this our officers were split. With
the directors of the Boston corporations, Chandler, and Mr. Rogers'
attorney to supervise the legal end of next day's transaction, I left on
a special car attached to the midnight train for Boston; while Addicks
and the Bay State directors set forth on another midnight train for
Wilmington, Del., to be followed in the early morning by my New York
partner, John Moore's partner, Braman, Foster, and more counsel
representing Mr. Rogers. This contingent was to carry the money.
CHAPTER XXVI
THE CIRCLING OF THE VULTURES
I don't believe there ever was before or since a financial operation in
which so many things, each of vital importance, had to be done at one
and the same time.
Before I took the train for Boston, just after the last deed had been
signed, Braman, Foster, and I had come to a complete understanding in
regard to the manner in which the court proceedings the following
morning should be conducted. It was understood that no one should take
another's word for anything, and consequently that no money should pass
until specific performance of all the required conditions. Immediately
on the release of the receivership, Foster and Braman were to be paid
their "fee," and they asked that the $175,000 cash coming to them should
be arranged in separate piles of bills. The two packages containing
Foster's and part of Buchanan's, and Braman's $50,000 were to be in the
joint custody of John Moore's representative and my partner, who, with
Rogers' counsel and Addicks, had been assigned to represent Bay State in
the court.
What would happen after the transfer of these several amounts was
outside my jurisdiction. Addicks did not confide to me his own scheme of
revenge, but of Braman and Foster's purposes I had a clear idea. As
Braman had explained, the great winning of his adventure should be made
in the stock plunge he and Foster contemplated in Bay State Gas stock,
then selling at 3-1/2 to 4; but lest there be some slip-up in court,
"buy" orders to their brokers were contingent on the word "go!" from
Wilmington. To get this off at the right moment a clerk was taken along,
whose only part in the play was to telephone this word "go!" They
expected in this way to make at least half a million.[16]
Addicks' intentions, as I afterward learned, were less exalted but much
more direct. He had conceived a plan whereby without danger to himself
he could punish Braman and Foster for the wrong they had done Bay State,
and at the same time meet his election expenses at no cost to his own
pocket. In the course of his electioneering campaign in Delaware,
conducted as all the world knows how, Addicks had gathered to his cause
as tough and rascally a set of "heelers" as ever waylaid aged woman or
lame man on the highway. A lieutenant who had been despatched to
Delaware early Friday afternoon, when it had become evident that we
should get things settled up, gathered the sturdiest members of this
precious troop together and solemnly told them that a serious hitch had
occurred in Addicks' game and that it looked as though, owing to the
receivership, there would be no "stuff" to put in circulation this year.
The men responsible for this outrage were to be in Wilmington on the
following day and from the appearance of things would get the money
Addicks had destined for his followers. He understood they were to
receive it in cash, too--$175,000--cash that really belonged to Addicks,
who had intended it for his good friends in Delaware. The thugs,
properly indignant at the wrong that had been done "the Boss," dispersed
rapidly to discuss the information among themselves. That night a group
of leaders got together and figured out a little plan of campaign to
frustrate the robbery of their beloved master. Court proceedings to
release the receivership could not take long, and they calculated that
the train schedule would detain Braman and Foster at least two hours in
Wilmington after the adjournment. What more easy than the organizing of
a little scuffle on the station platform or on the street and in the
rush--well, many things happen in a rush. This simple procedure
commended itself to all concerned, and that night there was much
rejoicing among the Addicks camp-followers at the pleasant things that
should be pulled "off" at the flim-flamming bee next day.
All these things were in the air when court opened in Wilmington on
Saturday morning. A special telephone line had been run and
arrangements made for a clear wire right into the directors' office in
the head-quarters of the Gas Light Company in Boston. At the telephone
in Wilmington sat my partner ready to communicate to me the exact course
of the proceedings, so that I might simultaneously make the agreed
transfers of our companies to Rogers. I knew my partner's voice; he knew
mine. We, too, were taking no chances.
* NEW YORK, February 21, 1905.
_Dear Mr. Lawson_: In your article in _Everybody's Magazine_
for January, among other misstatements upon which I shall
not now comment--since you have committed yourself too far
to make it likely that you will withdraw them--you accuse me
of having speculated in Bay State Gas stock with Mr.
Buchanan's money; and of having subsequently been sued by
him. I hold Mr. Buchanan's receipt for the money collected
for him, which I paid him the night that I returned from
Delaware. He has never sued me. Please inform me whether you
are willing and agree to strike out these statements from
your article when published in book form, and also whether
you will agree to withdraw the same in your magazine. I
tried to call on you and discuss the case when in Boston,
January 21st; and I also tried to meet you on the day after
last Thanksgiving; but apparently you were unwilling to see
me. I remain,
Very truly yours,
ROGER FOSTER.
THOMAS W. LAWSON, ESQ.,
Boston, Mass.
FEBRUARY 23, 1905.
_My Dear Mr. Foster_: I received your letter of the 21st
inst., and in reply will say, if I have done you any wrong
in my story, "Frenzied Finance," or otherwise, it has been
unintentional, and I regret it, and I seek this, the first
opportunity, to give my regrets the same wide circulation as
my original statements.
As I wrote you previous to the publication of the magazine
containing the parts you refer to, I try to exercise the
greatest care in allowing nothing to appear in my story but
facts--facts I know to be facts, and in addition only such
facts as are absolutely necessary to my work, which is the
portrayal of those events of the past essential to a proper
understanding by the people of the evils that have been done
them, and how they have been done, that they may do what is
necessary to undo them and to prevent their repetition in
the future, and, in addition, such facts as it is fair for
me to use. I repeat what I said to you then: I have
absolutely no feeling in regard to you other than an intense
desire to do you exact justice.
I dealt with you in the entire Bay State receivership affair
in connection with Mr. Braman and I thought that I had every
reason to believe that his Bay State Gas purchases were for
your joint account; but now that you assure me they were
not, I hasten to have such assurances chase my original
story with the hope that they may speedily overtake it.
My information that you had been sued by Mr. Buchanan came
to me in a way that left no doubt in my mind of its
correctness--no doubt until I received your letter. Papers
were sent to me some time ago by reputable attorneys in a
suit of Buchanan against Braman and, I understood, yourself,
along the lines outlined in my story, with the request that
I allow my deposition to be taken, so that Buchanan could
get at the facts in his attempt to recover the moneys
claimed.
Your assurances to the contrary in regard to this matter I
also hasten to start on the road you point out, and I will
see that both statements are expunged from my book.
You are in error in thinking that I did not wish to see you
when you were in Boston. I did not know in either case of
your desires until it was too late to see you. I certainly
would have had a "sit-down" with you if it had been
possible.
Again assuring you not only that it is a pleasure to set
forth the facts you have called to my attention, but that I
am your debtor inasmuch as you have given me an opportunity
to perform that duty which I owe to every individual my
story treats of--to state facts and only facts with which
they have been connected--believe me,
Yours truly,
THOMAS W. LAWSON.
FOOTNOTES:
[16] See foot-note on pages 189 and 190.
CHAPTER XXVII
COURT CORRUPTION AND COIN
The closing scene of this most significant drama was enacted on Saturday
morning in the Wilmington Circuit Court-room. There was nothing in the
cold formality of the proceedings to indicate that here was the
_denouement_ of a serio-comedy in which greed and ambition had clashed
in a battle for millions; nor in the amiable indifference of the men who
got within the enclosed space below the judge's desk to suggest the
murderous passions and fierce hatreds raging beneath the surface of the
prevailing calm.
The _dramatis personae_ were gathered in little groups representing the
separate interests--Addicks and some of his lieutenants; my partner at
the telephone; John Moore's partner and Rogers' counsel with their heads
together; Braman and Foster nearer the judge, their eyes wandering
toward two dress-suit cases piled before John Moore's partner, which, it
was understood, contained the money. At a glance it was impossible to
tell the one containing Buchanan's share from the other laden with the
receivership loot, but each was tagged, and it was evident that
possibilities of a mix-up had been carefully guarded against. Behind
Braman was his clerk, and in the rear of the court-room sat as many of
Addicks' thugs as could squeeze into the narrow space reserved for
spectators. They, too, eyed the dress-suit cases avidly, for the
information had been passed around that these innocent receptacles
contained the "stuff," of which the "Boss" was about to be robbed.
Court came to order. Foster rose, announced that the claims of his
client had been satisfied, and made a formal motion to dismiss the
receivership. The Court formally consented, and as the clerk was
entering the dismissal in his minute-book my partner telephoned the
facts to me. I sent back the word that my directors were resigning--had
resigned--that Rogers' directors were being elected--had been
elected--that the Boston gas companies were now transferred to Rogers.
My partner whispered my words to John Moore's partner and Rogers'
counsel. At once the two dress-suit cases, each loaded with currency,
were slipped to Braman and Foster. At the same time the messenger who
was to telephone to their broker rose and quickly left the court-room. A
brief period was consumed in signing receipts, certificates, and other
legal papers, and then the performance was over. Addicks rose and went
out among his henchmen in the rear, who eagerly surrounded him. In the
bustle Braman and Foster, each with his own booty, fled.
Let us see what was happening at the Boston end of the wire while all
this dumb show was being enacted in the Wilmington court-house. My
directors and officials were lined up against the walls of the
directors' room in the Boston Gas Light Company's office like so many
members of young John D. Rockefeller's Sunday-school class, inasmuch as
they were prepared to listen, sing, or shout "Amen!" at any time they
received the nod of the class-leader. In an adjoining room Rogers'
counsel had a similar line-up, with the difference that my men were
about to shed the crowns which the others were waiting to receive, and
which would transform them from humble business men into royal gas
kings. Through the open wire I was in such close touch with the scene in
the Wilmington court-room that I was almost sure I heard the subdued
weeping of the blindfolded Lady of the Scales on the bills which
occupied such a prominent part in the disreputable proceedings. Nothing
now could impede the course of events, so I concluded to take Time by
the headgear and secure what Bay State stock was in the market before
Braman and Foster got in their work. Over another wire which was at my
elbow I gave the word "go!" to my own brokers in Boston and New York,
and when a few minutes later they told me they were securing thousands
of shares, and that the stock was climbing toward 10, I could not
repress an inward chuckle at the thought that the money we had so
reluctantly parted with would spread over only one-half or one-third the
surface it was originally intended to cover.
It was all over in a few minutes, and when my partner said, "It's done,"
and "By Jove, there go Dwight Braman and Roger Foster on the dead run
with a dress-suit case apiece!" I held my sides as Parker Chandler in
his inimitable way bawled: "Tom, let's leave our straw hats on the pegs,
for we'll probably be back next spring figuring out how to pump air
enough through the gas-measuring meters to pay for that money we've just
loaned Braman and Foster for a day or two."
Braman and Foster, as I have observed before, knew their business. The
danger to which $175,000 in currency would be exposed, in a territory
controlled by Addicks, had appealed to their cautious instincts, and
once outside the court-room they literally took to their heels and ran
for a corner of the railway yard, where awaiting them was a special car
and engine. They jumped aboard, yelling to the engineer: "Let her go."
In the meantime eager-eyed ruffians searched the streets and hung round
the hotels, looking for two men with dress-suit cases. A hundred of them
were on the station platform, awaiting the departure of the regular
train. Ten minutes before leaving-time one of the henchmen appeared
among the gang, and passed round the word that the gents and the "stuff"
had got off by a special, and it was no use waiting any longer. Later
that afternoon, Addicks, to use his own words, in one of his rendezvous,
"dealt out his own good money in place of that he had hoped would take
care of the people's rights."
It was a fierce session of the Stock Exchange that Saturday morning.
Shortly before closing time a new set of brokers were frantically
grabbing for Bay State stock round 10, and Monday morning, when all the
world knew that the receivership had been lifted and our company was
itself again, the same crowd continued to buy fiercely. To these eager
purchasers I resold all that I had previously gathered, and enough
short besides, to compensate me for some of the losses I had previously
suffered, for this latter I was enabled to repurchase at half price,
when news came that another suit had begun against Bay State. This
latter drop in price so shattered the nerves of Braman and Foster that
they retired, having made up their minds that they did not know quite as
much about one end of "frenzied finance" as they did about the other. As
a matter of fact, nothing came of the suit in question, for it was
evident when the transfer of the Boston gas companies to Rogers' control
became known, that Bay State Gas receiverships had played their last
successful engagement.
My readers will not object if I again call their attention to the
inevitable workings of the law of compensation. The losses occasioned by
the market action of Bay State stock in these four days so mixed up
Braman and Foster in their financial accounts that later they were sued
by their client, Buchanan, who in court stated that he in turn was so
confused as to what was done in connection with this business that he
really knew less after it was over than before the suits were brought.
But one thing was indelibly impressed upon his mind--that his bonds had
disappeared in the whirl and he had not received anything for them. I
think this suit is still pending.
CHAPTER XXVIII
PEACE AT LAST
When the curtain fell on the closing scene of the performance in the
Delaware court there ensued a brief interval of quiet in the affairs of
Bay State Gas. Rejoicing in the temporary diversion of public attention,
the chief actors proceeded to assume their former roles, and soon
affairs began to move at their old gait. Rogers took possession of all
the Boston gas companies and patiently awaited the coming down the pike
of some traveller with more money than brains. Having successfully
corrupted the State of Delaware, Addicks was being measured for the
senatorial toga, when accidentally the blind lady dropped her scales on
his unprotected head, which catastrophe laid him out long enough to
enable another to sneak the prize he had so long striven for. We are not
at present concerned with the affairs of Delaware, and it suffices to
say in passing, that after a heated contest one Richard Kenney was
chosen to the senatorial seat Addicks had so long coveted, and that this
man, a typical Delaware vote-rancher, after being sworn in as United
States Senator, was brought back to Wilmington and tried for robbing a
Delaware bank, his accomplices being some other heelers of Addicks. The
disclosures made in the trial showed that the case in all
characteristics conformed to the Addicks standard of indecency, for the
bank officials, not satisfied with "blowing in" every dollar of deposits
and capital the institution owned or controlled, had actually "lifted"
in addition the building in which the bank was situated. One of the
court functionaries who had heard the evidence tersely remarked: "Talk
about stealing a red-hot stove: this is a case where they took the
funnel with it to keep the draught going until they set it up in a new
location!"
But Delaware, as my readers have doubtless gathered long ere this, is
its own kind of a country, and rewards and punishments are so perversely
adjusted that it seems a sort of Topsyturvydom. In this instance certain
of Addicks' heelers went to State's prison and death; Kenney returned to
the Senate to help make laws for the great free people of America, while
the chief conspirator, with a threat to sue the blindfolded lady for
damage done, began to set out the pieces on the Bay State Gas chessboard
with a view to trying certain new moves that had occurred to his
perpetual-motion mind.
The situation of Bay State Gas stock was fully understood by the public.
While Rogers had possession of the Boston companies, he simply held them
in trust, and must give them up whenever the parent corporation had coin
enough to redeem them. The securities were still in the hands of the
public and my friends, and my own duty to get Bay State Gas on its feet
was plain. It was again a case of raising money, and to do this we had
the issue of securities which we were preparing to float just before
Foster and Braman swooped down on us. Addicks agreed that if I would
undertake the marketing of this stock, he would issue only enough of it
to redeem the properties from Rogers. His directors met and formally
"resoluted" on this point, and I felt satisfied before going ahead that
there was no danger of this money being put in jeopardy without actually
stealing it. The company, for the nonce, had no other business but to
pay office rent and clerk hire, and in spite of Addicks' financial
immorality, all who knew him were aware he took no chances of ever
getting himself sent to jail. So I began to sell the stock in the open
market.
_PART II_
CHAPTER I
THE MAGIC WORLD OF FINANCE
Though this is the twentieth century and enlightenment is supposed to
prevail throughout this broad land of ours, the majority of people still
regard the world of finance as the world of magic. Within the fairy
realm of finance the laws of nature apparently are suspended, and,
overnight, wonders are worked. The ordinary mortal, wise in all other
walks of life, sees the man who yesterday stood beside him at the plough
or at the bench emerging from the mysterious portals bearing the fruits
of the endeavors of a hundred or a thousand lives, although a moment ago
he passed through them with nothing. Who can deny the magic that thus
demonstrates its power, or fail to accord veneration to the magicians
that work such marvels? No wonder the ordinary mortal feels that he has
no license to enter the world of finance save on his knees, hat in hand,
bearing tribute to the divinities enthroned within this enchanted
territory.
It is my purpose to do away with this extraordinary deception and to
show it up as one of the artifices with which tricksters, since the
beginning of the world, have imposed upon the people. There should be
nothing in finance that any man or woman of ordinary intelligence and
experience cannot understand, and I purpose to explain here the
machinery of the "System" so that every one will exactly understand it
from headlight to rear-end lantern. Many intelligent people have no
clear idea of what a certificate of stock or a bond really is, and the
words "money," "stock-exchange," and "finance" are mere terms which they
glibly use without knowledge of their meaning.
It is not difficult to understand the grocery or the dry-goods business.
Standard articles of well-known form are sold by weight or measure over
the counters for fair prices. The patrons of such businesses insist on
knowing what they are buying--what they are to get in exchange for the
money which is the fruit of their labor, and then, after they have been
told, and they trade, they require that the goods be as described or
they will know why not. The average American would consider it a huge
joke should his grocer undertake to induce him to buy one hundred times
more sugar than he could use, on the ground that he might find in the
sugar bags when he reached home gold and diamonds. But would he not
wrathfully seek the police if, after opening his sugar bag, for which he
had paid $1, he found it contained only 50 cents' worth of sugar? He
would tell you if you met him at this stage: "You can bet that chap on
the corner cannot get away with any such trick as that--not in America.
He might in Zanzibar or in the kingdom of the Sultan of Sulu, but I will
show him he cannot rob Americans in these enlightened times." The grocer
would be hustled to jail without a "by your leave," and thenceforward
his name would be a by-word among all honest tradesmen.
And so it goes in every business but finance--finance, the most
important of all, the business into which is merged all other
businesses, the business of taking and preserving the results of all
other businesses, of all other human endeavor. Over our land to-day are
big, able Americans, long-headed and experienced, adept at a jack-knife
swap or a horse trade--industrious farmers, hard-handed miners, shrewd
manufacturers, each in his own line a good business man, yet these
sturdy traders, whom the "gold-brick" artist or the "green-goods"
practitioner would never dream of tackling, come weekly into Wall
Street, or into such branch shops as exist in every community on the
continent, and are done out of their savings like the veriest
"come-ons." Humbly they take, in return for the gold earned with the
sweat of their brows, a piece of paper of a given value which they
return later and exchange for half the amount the paper cost them
originally. In the space between purchase and sale fifty per cent. of
their investment has disappeared--has been filched away, but yet they
have no resentment. They evince none of the feelings of the man whose
pocket has been picked or whose till has been robbed. On the contrary,
their sentiment is of admiration for the banker, the broker, the
financier through whose agency their money has been lost.
Take, for instance, the prosperous tanner who goes to his banker with
$100,000, the fruit of ten years' success, and exchanges this sum for
1,000 shares of Steel Preferred. Now, if he were to examine this
security with half the thought or investigation he gives to a $500
car-load of bark, he would learn that there was not 20 cents on the
dollar of real value behind it. In six months the eminent tanner is
again at the banker's offering for sale his thousand shares of steel. In
the meantime it has declined in value and he has to part with it for
$50,000. But he does not complain; indeed, he bows his way out of the
palatial office of the great man and is full of sincere thanks when the
banker promises to let him know the next good thing on the market.
Suppose our tanner had purchased ten cars of tan bark and found that
each car-load was short ten per cent. Would he not at once go to his
attorney and exclaim emphatically that he would spend thousands rather
than let the scoundrel who had tricked him get away with his swag?
Suppose our grocer waxing rich invests his funds in the Sugar trust. He
thinks he knows all there is to be known about sugar. The business of
the trust is to make the sweet commodity and sell it to the people. No
mystery or magic, surely, about this simple pursuit. Yet when our grocer
invests his savings, the sugar stock is many dollars more valuable than
when, scared into selling by fluctuations which he cannot see any reason
for, he tries to get back his investment. So many times have investors
been milked of their savings by this one trust during the past twenty
years that in the coffers of its creators and jugglers are hundreds of
millions of money that once belonged to the people for which they have
received absolutely nothing in return.
Both the tanner and the grocer must know, when they look up and down
Wall Street at the great office buildings which tower into the sky on
either side of the street, that these are huge hives of expensive bees
who, from New Year's to New Year's, do not produce a dollar. They should
realize that the hundreds of millions spent each year for the expense of
running the "System's" game, and the millions which the game-makers
flaunt in their faces, must have been derived from such as they--the men
who produce.
It is the phenomenon of the age that millions of people throughout this
great country of ours come of their own free will to the shearing pens
of the "System" each year, voluntarily chloroform themselves, so that
the "System" may go through their pockets, and then depart peacefully
home to dig and delve for more money that they may have the debasing
operation repeated on them twelve months later.
You may ask if I desire to convey the idea that the great financial
institutions and trusts of this country, which have their head centre in
Wall Street, are all concerned in a conspiracy to rob the people of
their savings. You think, doubtless, that so sweeping a statement goes
beyond the truth. I desire to go on record right here in declaring that
all financial institutions which in any way are engaged in taking from
the people the money that is their surplus earnings or their capital,
for the ostensible purpose of safeguarding it, or putting it in use for
them, or exchanging it for stocks, bonds, policies, or other paper
evidences of worth, are a part of the machinery for the plundering of
the people.
This is a terrible charge, I am well aware, but it is based upon a
thorough knowledge of the subject and made with a full appreciation of
its gravity. I do not mean to say that all the men who handle and
control the different institutions I mentioned have guilty knowledge of
the bearing of their actions. Many of them are of the purest minds and
most honest intentions, and are quite incapable of participating
voluntarily in a conspiracy to wrong any one. They do not know, however,
that the relation between their own minor institution and the general
financial structure constitutes the former an agency for the "System,"
which controls and has organized the general financial structure into an
instrument for converting the money of the public to its own purposes.
In fact, the "System" has cunningly possessed itself of the financial
mechanism of the country and is running it, not for the object for which
the machine was devised, but for the benefit and personal profit of its
votaries, and so the vast correlated organization of banks, trust
companies, and insurance corporations which were brought into being for
the safe handling of the people's savings has become an agency for
transferring these savings to the control of unscrupulous manipulators,
who take liberal toll of every dollar that passes through their hands.
The duty of the American people is to unloosen the thraldom of the
"System" on our financial mechanism; to pluck out of their high places
the dishonest usurpers who have degraded the purposes of our financial
institutions, and to restore those institutions to their legitimate
functions. When the people are fully awakened to the condition I
describe, surely they will arise in their wrath and sweep the
money-changers from the temple.