LAWYER UNTERMYER DISCOVERS THE "NIGGER"
I have dwelt on this Utah episode because it shows phases of the
"System's" methods never heretofore made public, just as episodes which
are to follow in the narrative will develop other startling and
ingenious deviltries. But, before going on, the sequel to the Utah
affair deserves a place in the story. A sequel there was, and my readers
will agree, I think, that it has a mordant humor quite its own. To-day,
after the years that have gone by, I cannot think of this tremendous
bunco game, in spite of its cruel and tragic phases, without a laugh at
the manner in which the smart gentlemen who composed the Utah
Consolidated crowd were "outwitted." Bear in mind that Clark, Ward & Co.
were among the "flyest" operators in Wall Street's juggle factories.
They asked no odds of any one in shuffling and dealing their cards, and
with them was the eminent Samuel Untermyer, surely the head of his class
of corporation counsellors, and himself a master in the fine arts of
copper financiering. On the conclusion of the deal, these gentlemen and
their partners in Utah assumed all the airs and graces they conceived
proper for associates of "Standard Oil," and at once enlarged their
hatbands and let out their waistcoats. Some of them, I believe, went so
far as to be measured for copper crowns. The stories they set afloat
about the richness of Utah, as proved by "Standard Oil's" determination
to have its 150,000 shares, would have made the constructor of Aladdin's
palace look to his laurels as a treasure-house creator, and the
stockholders of the corporation felt so good over their prospects that
in London and New York two large banquets were simultaneously given at
which the prospective millionaires tossed cable congratulations at one
another across the Atlantic and toasted in vintage champagnes the
brilliant promoters who had worked such wonders. At these entertainments
there was no question but that Utah was destined to be the foundation
company in the coming great copper consolidation.
With this roseate view Mr. Rogers did not entirely coincide. His
diagnosis of the situation had all that whichever-way-the-cat-jumps
frankness I had learned to look upon as characteristic of the man. He
said to me:
"Lawson, this is the situation: We are in absolute control of the Utah
property. If it were good we could do great things with it, but it's
bad, very bad; there is nothing out there but a bunch of ore which is
rich enough, but which cannot possibly last longer than six years, and
then--then there is nothing but a hole in the ground. Of course there is
a possibility of our finding other bunches, but with all the machinery
in our hands it looks to me as though we could play a very safe game. If
we find things that will make the stock valuable, we can keep the good
news buried until we shake the price down and get whatever we want. If
it is all bad, we can sell the stock and buy it in at big profits. I
think, on the whole, it is safe to call this deal completed and mark it
a success."
With this understanding we left it, and for some little time I paid no
attention whatever to Utah. One day I was surprised to notice on the
tape that the price of the stock was declining. I was puzzling over what
could have happened, when I received a sudden call from the Machiavelli
of the New York Bar, Samuel Untermyer. The set glare of his eyes, the
fervor of his hand-shake, told me that I had a volcano to deal with.
"Lawson," said he, "something came up the other day that led me to
investigate, and do you know, I have got to a point already where I can
put my fingers on people, outside of any one connected with 'Standard
Oil,' who own over 200,000 shares of Utah. If this is so, how can Rogers
and his crowd own the 150,000 shares they took away from us at millions
below the market? It seems impossible, but it looks as though we had
been buncoed--buncoed as no one outside a crazy-house was ever buncoed
before."
That steely imperturbability which is alternately the pride and pleasure
of Mr. Untermyer's friends, the glittering surface of which it is said
no cloud has ever shadowed or no gale disturbed, was fast losing its
distinction under the influence of the excitement that welled up in the
heaving bosom of the eminent cross-examiner; and excitement and he were
so remote, so studiously antagonistic, that I looked on and listened in
wonder for the outcome. An interesting situation was evidently fast
developing, and to grasp its possibilities one should know the attitude
of Mr. Rogers toward Mr. Untermyer. For this astute lawyer the "Standard
Oil" magnate has something akin to terrified admiration. Mr. Rogers has
said many times to me and to others among his associates that there is
but one lawyer in the United States whose cross-examination on the
witness-stand could afford him anything but amusement and recreation;
and this extraordinary exception is Samuel Untermyer. The bare thought
of being subjected under oath to the remorseless questioning of this
astute dissector and analyst of motives and actions brings him to the
verge of rippling chills. And here was this legal Nemesis on the
war-path and headed directly for 26 Broadway.
"What does it mean, Lawson?" His voice was in a court-and-jury key.
The opportunity was too good to miss. I could not help it. I said,
"Untermyer, you have another guess coming."
"Do you refuse to tell me anything about it?" he snapped.
"Tell you about it?" said I. "What could I possibly tell you about your
own scheme? You flatter me; you are getting excited. Let me ask you a
question, What do you say it means?"
"I say it means," he fairly yelled, "that we have been
buncoed--swindled!"
"If that is a fact," I said, "you are the best man on earth to tackle
such a proposition. Introducing swindlers to justice is your specialty."
"Lawson," said he, "let's talk it out. I don't see wherein you are in
any way to blame, but I tell you if I find true what I now suspect,
there will be music in the copper world that will set copper investors
by the ears."
I saw there was no use trying to dodge the issue, and we entered into
executive session. He had gathered most of the facts, he told me, and to
ascertain the balance, proposed at once to call a meeting of Utah
Consolidated stockholders. Also he had men out examining the transfer
agencies to find who got the shares of Utah delivered to Rogers.
I said to him, "What do you think has happened, Untermyer?"
"I think you people have sold the bulk of that stock," he said.
"Suppose we have," I said; "there is no crime in that, is there?"
"No crime," said he, "but it is a piece of dirty double-dealing."
"All right, suppose I admit it," said I, "what of it?"
"Well, did you do it? Did you sell that stock after we delivered it to
you?"
"Not a share," said I.
"Do you give me your word for it?"
"I give you my word, we didn't sell a share of that stock after you
delivered it to us."
"When did you sell it?" said he.
"Every share before we secured it of you."
At this the distinguished impassivity faded finally away and Samuel
Untermyer was actually and absolutely flabbergasted. The sight of him
dumfounded, confused, was too much for me. I laughed. It is seldom one
gets the laugh on Mr. Untermyer.
"Do you mean to tell me you were short the whole bunch?"
"Short every share of it, and 10,000 besides," said I.
"And where do you stand now?" he pursued.
"Still short of it, and before you can get fairly to work kicking up a
rumpus I should not be surprised if we were short the whole capital
stock. Rogers, as you know, does play a great game, that is, when he has
all the cards, owns the table, the room it's in, and has control of the
doorkeeper."
There was an interval of tense silence. Untermyer was making a noble
effort to swallow his fury. I began to figure the degree of my
responsibility if he should burst a blood-vessel or have an apoplectic
stroke. Finally he said:
"Lawson, if I don't blow this thing to pieces and shake 26 Broadway to
its foundations, I'm not Sam Untermyer."
The time had come to reason with the heated legal gentleman, and in
plain language I proceeded to show him where he stood, the position of
the property, the public's relation to it, and his own duty to the
clients whose money he had invested in it. Under the logic of my
argument he cooled. He saw the net, and that he and his friends were
absolutely enmeshed. He even admitted that he and his friends had
unknowingly aided in what had occurred and were mostly to blame for
their present position; but while he acknowledged all this, he
reiterated over and over again that in all his experience--and in Samuel
Untermyer's professional position he has either prosecuted, defended, or
had an inquisitorial finger in every sword-swallowing, dissolving-view,
frenzied finance game that has been born or naturalized in Wall Street
within the decade--he had never met the equal in high-handed bunco of
this deal in Utah.
Finally he said: "There's one thing I can do, if I cannot get even with
Rogers; and that is, I can 'fire' the present management of this
company, and I'm going to do it now, this very minute, and incidentally
I'm going to state what I think of them and the whole dirty business."
I called up "Standard Oil" on the telephone and told what had happened.
Mr. Rogers said: "Cool him down at any cost, but particularly try to
show him I had little to do with the deal; that it was largely the
outgrowth of what the Clark-Ward people thrust upon us, and that I left
the details to you and the lawyers."
Again I had visions of what would be the cost of making "Coppers" a
success.
Within an hour Untermyer was back visibly relieved and glowing after his
encounter. He had the resignations in his pocket, and he began joyously
to detail the specific opprobriums he had cast upon the management. "I
shall put in an entirely new management," he proclaimed triumphantly.
"You have positively made up your mind to that?" said I.
"You bet I have," he answered.
"Excuse me for a few minutes, then," I said; "I want to give my brokers
orders to rip out 50,000 or 60,000 shares of Utah. Rogers and
Rockefeller would take me to task if I wasted a minute."
"Hold on there, Lawson," he said.
"Not a minute," said I; "you know the game well enough, Untermyer, to
realize that there are a few millions hanging very low on the boughs at
just this second. I want to get my hat under them before you and your
friends have an opportunity to roll in your own hogsheads."
It was no time for diplomacy, and I set forth in plain, dog-eat-dog
terms to Mr. Untermyer exactly where he was "at," and that no one but
himself and his associates would be the sufferers by a public explosion.
Reluctantly he agreed with me that under no conditions must the
"Standard Oil" management be changed, but he was bound to have one
victim to show.
"You have the resignations of the present board--why not put in new men,
the strongest 'Standard Oil' men you know?" I suggested.
"I'll do it," he said, "but I'll throw out the present president, blame
him for all that's happened, but--whom shall I put in to replace him?
How about Rogers himself?"
Knowing Mr. Rogers' cross-purposes I was sure he would never become
officially responsible for the company; so I told Untermyer this was
impossible, but I continued: "The next best man and the closest I know
to Rogers is Broughton, his son-in-law. There's your president."
Whereupon Broughton was elected president of the Utah company. The stock
has since dropped from 52 to 22, gone from 22 to 37-1/2, dropped to
18-1/2, with frequent repetitions, and is now 43: and all the drops have
been preceded by tremendous short selling, followed by stories of the
absolute worthlessness of the property; and all the rises, by
tremendous buying and stories of the mine's fabulous richness. Some one
has made millions.
"Standard Oil" is ever ready to forgive and forget those it has injured,
but it has power and place for those who have made it tremble. Its
associates to-day are often yesterday's enemies. As one looks back upon the
Utah episode from over the divide, it helps accentuate its humor to
contrast the present attitudes of the parties engaged with those they then
held to one another. We now see the virtuously indignant Samuel Untermyer
shoulder to shoulder with his wicked betrayer, Henry H. Rogers, whose
counsel he is against the original ally of the same Henry H. Rogers, Thomas
W. Lawson, historian of "Frenzied Finance." And the talented expert, most
trusted of "Standard Oil" mining emissaries--Broughton, whose unfavorable
report on Utah Consolidated was the instrument of the plundering of the
Clark-Ward-Untermyer contingent--elected president by Samuel Untermyer, has
remained ever since at the head of the property he had pronounced
worthless.