BIRTH OF "COPPERS"
Active upon the Boston market during my Bay State Gas operations were
two copper-mining companies--the Butte & Boston and the Boston &
Montana. Their properties were in Montana and both were large producers
of the metal, that is, they were old and equipped mines. These two
organizations form to-day the most valuable part of the Amalgamated
Copper Company--in fact, more than three-quarters of all the real worth
owned by that corporation.
Butte & Boston and Boston & Montana were essentially Boston
institutions, and were both officered and directed by the same set of
men. It had come to my knowledge, in the course of my stock business,
that there had been bought for the Butte & Boston, with its money, some
very valuable mines; instead of transferring these to that corporation,
however, its directors at the last minute had turned the titles over to
the Boston & Montana. It is only fair to these men to say that up to the
present this alleged fact has not been proven, although set forth in
cases still pending in the courts. This curious proceeding was part of a
plot the subsequent steps in which would be to run Butte & Boston
through the bankruptcy mill, and, by placing it in the hands of a
receiver, to drop the stock to a nominal figure, at which it might all
be gathered in from the public. I verified my information sufficiently
to decide to act, and swung the red danger-signal in a public statement
telling the stockholders and people in general of the coming move. At
once there arose a chorus of denials and recriminations from the
management, and the cry, "He's short of the stock and is working a fake
to scare us into throwing over our holdings that he may buy them," from
the Stock Exchange, stockholders, and the hireling moulders of opinions,
the "News Bureaus."
The role of Cassandra is not more popular to-day than it was in ancient
Troy. The swinger of the red danger-signal is seldom heeded, and is
invariably suspected of interested motives by the human moths circling
round the flickering flames of frenzied finance. When I gave my warning,
Butte & Boston was selling between 25 and 30. In accordance with their
plan the insiders began to sell, and soon the price began to slide
downward, for the great majority of the stock was held by the people.
There was a halt when the denials of the management were heard, but only
for a moment. The decline continued, growing swifter as it got lower
until the stock struck $2 per share. At this stage, while the stock was
on the way to $2, just as I had predicted, the property was cleverly
slid into a receiver's hands by the very men who had so indignantly
denied my statement that such would be their action. An assessment of
$10 per share was next levied, and those who held on, hoping against
hope, began to throw over their holdings for what they would
bring--which was around a dollar.
So far the scheme had slipped smoothly along the single-rail track
constructed for it by those in the deal, and just as my information had
led me to expect. At this juncture, however, the train struck an open
switch, and with a painful jolt for the conductor and the engineers it
slid out on a siding--it was my siding. From the time the stock struck
$2 a mysterious purchaser took in all that was offered, and when it
struck bottom he was still buying. Suddenly the schemers "tumbled" that
the plums they were shaking off the tree were dropping into some other
bag than their own, and they started into competition for the coveted
fruit.
Next day, and for several days afterward, there were strenuous doings in
Butte & Boston on the Boston Stock Exchange. The trading was heavy and
the price pushed up from the bottom to 6-1/2. Soon, however, it was
slammed to 2-3/4, then back to 6 again, down to 3-1/4, back to 5-3/4,
and so on, until the middle of the fourth day, when the rival News
Bureau to the "System's" favorite opinion-moulder sprang the following
notice set forth on a double-leaded sheet:
"We have just solved the Butte & Boston conundrum. The
enormous blocks of stock purchased during the past few days
have come in for transfer, and the management now know who
owns the bag into which all the stock they have for months
been planning to acquire dropped. We have unmistakable
evidence that the bag belonged to Lawson, and that he now is
in control of the Butte & Boston Company. A hasty
investigation amongst the leading floor brokers which we
have just made brings out a consensus of opinion that there
will now be music in Coppers."
The announcement was calculated to interest a good many persons, and I
was the target of a thousand inquiries. In answer to the innumerable
calls for a denial or confirmation of the statement, I issued the
following:
'Tis true. 'Tis my bag, and there are 46,000 shares in it.
It was not until the following morning that I realized what a rarely
presumptuous thing I had done. I had invaded a valuable preserve. I had
coarsely "butted into" a private copper domain without a by-your-leave
to the natives who thought it belonged to them. I was an interloper, an
intruder, an upstart. The prevailing opinion seemed to be that it now
devolved on me to present what I had purchased to those who had been a
bit late in getting to the bargain-counter, or that I should, at least,
turn it over to the conscience fund of the Stock Exchange. The copper
market reflected the indignation of the baffled schemers. It entered for
once into an open competition with Donnybrook Fair, and to judge by the
action and feeling developed in both individual and corporation classes,
the Hub had Donnybrook jigged to a wind-up. In my various contests with
the "System" I had accumulated a certain hardihood which now stood me in
good stead. I had learned before this that breaking into a secluded
treasure-trove is about as pleasant as taking the lining out of a steel
furnace with the metal sizzling and the blower on.
I stood to my guns for the time being and then charged into the ranks
of the enemy. I issued the following statement:
TO MY FELLOW-BROKERS AND THE PUBLIC
I have stumbled on the fact that the stock--capital 200,000
shares--of the Butte & Boston Copper Mining Company is a
nugget. I bought about 46,000 shares of it at an average of
something over 2-1/4, or, with the assessment paid, 12-1/4
per share. I am going to hold it until I get over 50 for it.
Barring accidents, I shall get it.
I advise--strongly and unqualifiedly advise--all my friends
and the public to load up with it at anything under that
price. My friends and the public know whether or not I mean
a thing when I say it. I pledge them that I not only mean
this but that I shall fight it out, and shall not sell until
there is an active and legitimate market for not only my
stock, but for what they buy, at over $50 per share. All
intending purchasers must bear in mind this is not a sure
thing, for the men who are opposing, and will oppose me, are
not conducting their operations from a graveyard, but are as
lively and aggressive as Bengal tigers at raw-meat time; but
they may rest easy in the knowledge that barring tripping
over stumps or into bogs, I'll give whoever buy a run for
their investments.
Buy and watch Butte all the time, and, above all, pay no
attention to what the fake "News Bureau" says.
This was the formal declaration of war. State and Wall streets, familiar
with my style of fighting, at once lined up and took sides. The papers
entered the controversy. According to what one read, Butte & Boston was
either the greatest mine in the world or a hole in the ground. Feeling
intensified; Geneva and Queensberry conventions were forgotten; it
became a go-as-you-please scramble; mud batteries filled the air with
liquid dirt, and both sides used Gatling guns to fire off their libels.
It was altogether a lusty and vociferous contest, which meant
destruction and death for the lame, the halt, and the slow-footed who
got between the fighting lines. I was naturally the chief mark for the
enemy, and was deluged with vilification. In the Bay State campaign I
had learned the personal cost of antagonizing the "System"; the copper
magnates showed me that they had terrors at command which might make
even "Standard Oil" jealous. In those days I don't believe my bank
account varied thirty-five cents without the news being passed around
before the ink on the bank-book was dry, and my family, down to my
ten-year-old, received daily or weekly through the mails pictorial
representations of their parent being hustled along to the realms where
sulphur is the standard of all values. Here is a sample of my usual
breakfast-table reading:
C. W. Barron, the proprietor of the "Boston News Bureau,"
feels it his duty to inform his readers, the banks and
bankers and brokers and representative investors of New
England, that that faking ass of State Street, that knave of
knaves, Tom Lawson, is braying again, and such
braying!--"Butte is to sell at 50, and going to be worth
50." It would be such a joke that this conservative paper
would be only too happy to circulate this scoundrel's
vaporings, if it were not for the sad part of such schemer's
work--if it were not that the poor and ignorant unfortunates
who are unacquainted with this knave, may buy Butte because
of his advertised lies at $14 or $15 a share and thereby be
robbed of what they can ill afford to lose. There is no more
chance of Butte & Boston stock selling at $50, or even $25,
than there is of Tom Lawson telling the truth; and this
paper does not hesitate to say that if Butte stock ever does
sell at 50, we will upon that day close up our office and
forever leave Boston and our lucrative business of guarding
investors against such knaves as this lying thief; for any
man who would do what he is doing to fleece investors is a
thief and should wear stripes, and it is surprising to us he
has so long escaped.
It was not so long after the above appeared that Butte & Boston stock
was selling at $130 per share, and that the same Mr. Barron was using
his own and his "News Bureau's" best efforts to induce the people whose
Butte showed them over $115 a share profit to exchange it for
Amalgamated. At this latter time he was acting for "Standard Oil."
It may be added that this same Butte & Boston stock, which I was such a
knave to advise the people to buy at twelve and fifteen, sells to-day in
the form of a share of Amalgamated, for which it was exchanged at
seventy-five to eighty-dollars, not cents.
My chief weapon in this Butte & Boston fight was publicity. Every
morning while the battle waxed hottest I had huge, striking
advertisements in the papers urging the public to buy and to hold on to
what they had bought. My opponents responded in kind, and being
intrenched in the management, told such alarming stories of the mine
that it was often as much as I could do to prevent my followers from
being scared into throwing over their holdings. The tremendous expense
of this mode of warfare, together with the immense sums my market
operations required, kept me hustling, and there were times when things
looked distinctly blue. However, the value of victory is measured by the
fierceness of the tussle, and far be it from me to complain of my
opponents' energy. There was good fighting over Butte & Boston.
The more deeply I became interested in this struggle and the more
familiar I grew with "Coppers," the more advantageous and profitable
seemed the prospects of such a consolidation of copper properties as I
had in mind. The large holdings of Butte & Boston I had accumulated in
the battle gave me a practical basis for my structure, for I could now
afford to do all my own part of the work of organization for what I
would eventually make when the consolidation was brought about, and I
could get for my shares what I knew they were worth. It was at this
stage I broached the subject of "Coppers" to Mr. Rogers, and discovered
to my surprise that he knew nothing about it or its possibilities,
notwithstanding that "Standard Oil" has a department for the sole
purpose of keeping the "System" posted about what the world is doing in
various directions. Indeed, both he and Mr. Rockefeller laughed when I
informed them that we had been trading in copper stocks in Boston long
before the Standard Oil Company received its birth certificate.
Before I could get down to business on the subject I had to take
advantage of five gas-talks, offering at each a few interesting and
striking facts about the metal. One day Mr. Rogers said to me, laughing
pleasantly: "Lawson, we're beginning to look for all your talks to taper
off with, 'I wish I could get you to listen to Coppers!'"
"Why don't you then?" I said. "It's the biggest opportunity in the world
to-day."
"I'll tell you what I'll do," replied Mr. Rogers. "If you will put
through for us right away thus and so" (naming quite a difficult little
bit of work in connection with the Brooklyn Gas Company), "and do it in
good shape, I'll ask John Moore to run up to Boston next week and
listen to your story. If he says it looks anything like good, I'll go
over it with you to a finish."
The Brooklyn job was done on time, and I began on John Moore in my
office at my hotel in Boston just after breakfast one bleak, rainy
morning the week following. I talked for five straight-away hours, and
he listened. He was a good listener. On all stock things he was
admirably posted, and it was not necessary to waste words. I wasted
none. I knew my subject from the letter-head to "Yours truly," and I was
playing for a stake that looked as big to me as the sun does to a
solitary-confinement life prisoner. At the end of the five uninterrupted
hours I agreed with Moore that I had nothing more to produce, and I
looked for my verdict. Before starting I had felt sure of winning him;
when I was half through I knew nothing could stand against my arguments,
and when I had said the last word I felt satisfied that, being human and
intelligent, he must be convinced. It took him only ten minutes to show
me that I had been talking against ten-inch armor-plate, and that he
meant it absolutely when he said, "Lawson, I want to see it your way,
but I can't."
It was John Moore's turn then, and he showed me the good thing in an
industrial scheme he was floating at that time, and as he wound up he
said pleasantly:
"Lawson, we must do something to show for our long talk, so I'll put you
down for $50,000 underwriting." And he did.
If John Moore had seen "Coppers" as I tried to show them to him that wet
morning he could not have made for himself less than three to five
millions, for in the operation which hung on his decision I had expected
to buy stocks that soon after doubled and trebled in value. Calumet &
Hecla then sold at 256, and later as high as 900, while Boston &
Montana, then 50, mounted to 520. On the other hand, the stock of which
he had sold me $50,000 worth returned at the end of the year but a mere
fraction of that amount, and was one of the worst failures of the
industrial boom period. It cost John Moore not only an enormous amount
of money, but also prestige, and its miscarriage was one of the few bad
disappointments of his brilliant career. Afterward, when "Coppers" were
the rage and all Wall Street was green with envy at our success and his
enterprise was trying to hide itself behind the garbage barrels, John
Moore said to me:
"Lawson, we all think we are the masters of our own fortunes, but we are
not. We are only working on a schedule laid out by some One who does not
take our desires into consideration."
And it is so. The ablest Wall Street man is only like the burglar who,
after working for weeks to loot a second story, is astounded to find,
while lugging his swag by the police station, that the bag he thought
full of dead sealskins contains a live parrot with a lusty vocabulary,
"Police! Robbers!"