MR. ROGERS UNMASKS
There was in Montana a great copper property known as the
Daly-Haggin-Tevis group, the centre of which was the huge Anaconda mine
with its 1,200,000 shares. This is the mine that Marcus Daly induced the
late George Hearst to buy and develop for the marvellously successful
syndicate of California mining operators, composed of J. B. Haggin,
noted now the world over for his horses; Lloyd Tevis, an extraordinarily
shrewd San Francisco financier; and Senator George Hearst, himself
perhaps the greatest mining expert America has ever known. After Senator
Hearst's death his estate sold its holdings to European investors, who
with the other three owned the company at the time of which I am
writing. I had never in my copper-consolidation plans contemplated
including this property, for the reason that the public I was operating
among was not familiar with it. I did not care to put in jeopardy the
success of our venture by admitting any but mines of such well-known and
unquestionable value that there could arise no possible doubt as to the
security of the investment. I was well along in my task of gathering in,
through public-market manipulation and private negotiation, the shares
of the several good Boston companies whose merits I myself knew about
and had so carefully gone over with Mr. Rogers and Mr. Rockefeller, when
one day Mr. Rogers called me up on the telephone and requested that I
come to New York to see him. "I have," he said, "a very important matter
to go over with you." I took the train and early next morning was at 26
Broadway. As soon as we started in I was struck by a certain strangeness
in his manner--an unusual impressiveness that indicated to me at once
that something was in the wind.
This proved to be the case. I was soon in possession of the information
that he and Mr. Rockefeller had been putting in a lot of work on the
copper business; that they had evolved some further schemes, and that
now the plans were so far along that I could not upset them, therefore
they proposed to let me in--all this in the pleasantest manner.
In answer to my quick inquiry as to what plans I had ever upset he waved
a chilling hand toward me. "Don't start in looking for trouble," he
said. "There are certain things which cannot be done by a man who works
as you do. From the very beginning you have insisted upon taking the
public into your confidence, with the result that they get large profits
which otherwise would come to us. If you did your business as we do
ours--acted first and talked after, or, better still, did not talk at
all--there would be no difference of opinion between us. Still, we
recognize that each man must do business in his own way, and we have let
you go ahead where it was possible." After a short pause he continued:
"While you were getting the Boston companies in shape I unearthed
another situation which almost seemed as though it were made to order
for us. What do you know of the Anaconda Company?"
The way he asked this question in one of his cross-bred,
cat-purring-and-fox-bark tones which I had seen him work on others, and
which I had observed always denoted a perfect knowledge of your answer
to his question before you had it, did not help my guessing any.
I told him I knew nothing more than that there was such a company with
stock dealt in on the English and our markets.
"Nothing more than that?" And he looked at me quizzically. "Have you
been watching the stock's actions in the market?"
In a second it flashed over me that Anaconda had been quite active of
late, that is, had been largely traded in without attracting much
attention, although the price had been steadily advancing.
"I thought you boasted you could read the tape, Lawson?" he went on,
"and that nothing could be happening in a field you were interested in
without your smelling it out? When I tell you Mr. Rockefeller and myself
have bought control of the biggest copper property in the world,
measured either by the number of shares and their selling price or by
production, without your even suspecting it, much less the public's
jumping in and running up the price on us, you can see there is
something in our quiet way of doing things compared with your public
way."
"All right, Mr. Rogers; I have never contended that there were as many
dollars in my way of doing things as in yours--as many dollars for
_us_."
"Lawson," said he, "the public are about ready to invest in the first
section of our new consolidated company, are they not?"
"Sitting up nights to see that they get a place in line the minute we
scatter our first handbills," I answered.
"Well, are we ready to put our things together? Have we got the
necessary companies to meet the ideas you have been educating the public
into?"
"We have things in such shape that we can whip a $75,000,000 or a
$100,000,000 company up for public subscription in a very few days, if
you give the word."
Mr. Rogers leaned toward me and said in his most decisive and imperious
tones:
"Very well; I have plans all shaped up which will allow us to offer the
first section, but not made up as we first arranged. Mr. Rockefeller and
myself have decided to put entirely new companies in the first section,
and to reserve the Butte and the Montana and other companies you have
been working on for the second section."
The blow had fallen. My head swam. Visions of Clark, Ward, Untermyer,
Utah, and others I had seen on the rack writhed fearfully across the
stage of memory. Here I was loaded with Butte, Montana, and other stocks
which I had felt as certain were to go into the first section as one can
feel in regard to a thing which seems in one's own control. On my public
and private assurances as the accredited agent of Mr. Rogers and William
Rockefeller and "Standard Oil," my friends and following had large
amounts of money in the same securities. The market was booming on what
I had proclaimed was to happen, and here an absolutely new condition was
being imposed, a condition which gave all my assertions the lie, which
discredited me, and would, I felt sure, precipitate a terrible disaster.
Inevitably the copper public would be dazed, would be shaken; a reaction
would follow which would bring on a panic and a destruction of values
impossible to measure. In it all, I should be left alone to bear the
brunt of the storm of ruin, wrath, and denunciation as the result of
what must seem base trickery to those who had accepted my
representations. I tried to pull myself together, for I felt Mr. Rogers'
keen eyes burning into the back of my head, appraising the effect of his
words and measuring the degree of my numb terror. He saw, in spite of
all my efforts to appear calm, that I knew I had been given a knock-out
blow.
As in a dream I inquired what companies it had been decided should go
into the first section.
"Anaconda, Washoe, Colorado, and all the big timber lands, coal-mines,
banks, stores, and other Montana properties that go to make up the
Daly-Haggin-Tevis properties," he replied crisply.
I found my numb inertia melting in a fierce anger. I jumped up. I raised
my voice:
"Mr. Rogers, do you mean to tell me that Mr. Rockefeller and yourself
have deliberately decided to take advantage of the situation I have
made--the situation I have not only made but put myself into--to try to
sell to the investors of this country other property than that I have
promised them they were to have? You cannot mean that--you surely
cannot, for you and all your 'Standard Oil,' even though you were many
times bigger than you are, would never have dared to tell it to me face
to face."
I was boiling over--becoming literally frenzied at the picture unrolling
before me.
Now it was Mr. Rogers' turn to be aroused. His voice quivered with
intensity and his fist came down on his desk with a force that shook the
inkstand. It flashed into my brain that this anger was assumed to cow
me, and I tried to look through his eyes on to his mind tablets back of
them, and read what was there recorded. The gaze that met mine was
polished steel ice coated, off which my glances slipped and slid. I
dropped into my chair.
"In the name of all that's sensible, Lawson, hear me out and quit acting
like a child." He stopped a second and then went on impressively. "In
looking over the copper field I discovered a number of things you failed
to see. First, that Haggin and Tevis, who own Anaconda with Marcus Daly,
have grown so wealthy that they have left the management of their
Montana copper and silver properties entirely to Daly, and he has been
coddling the mines along, saying nothing about their real worth and
quietly passing by the richest parts, awaiting the day when he could buy
his partners out. Shortly after you let it be known that we were to go
into 'Coppers,' Daly came to me to talk things over, and it took me only
a short time to get under his waistcoat and find just what he had out
there, and it took me still less time to decide that he offered
something a little better than anything we had yet turned up. These
properties, which we can secure for $24,000,000, which will carry with
them the majority of the 1,200,000 shares of Anaconda, alone are worth
$75,000,000, and with the addition of the Colorado, Washoe, and Parrott,
which he recommends that we buy and which he is in a way to secure for
us at a bargain, will cost not over $15,000,000. So it came right down
to this: We could trade with Daly immediately, while if we waited until
the first section was out to the public the inevitable appreciation of
Anaconda stock in the market would alone make it impossible; for even if
Daly was willing to go in with us, Haggin and Tevis would not let him at
anything like the prices he now names. It seemed best to take action at
once, so we closed with him; and we have also just closed with the
Washoe and Colorado, and we want you to secure the Parrott. Under these
circumstances, could we do otherwise than we have done?"
His argument seemed conclusive. It looked so fair and unanswerable that
I could not disguise from him that my fears had fled. I was immensely
relieved. My fight oozed; I became as pliable as any of the brittle
clay which he daily kneaded for each shaping with his applications of
oil.
"What are your plans, Mr. Rogers?" I asked quietly.
"This is what we thought would be the thing to do if you agreed, Lawson,
for, of course, you are, after all, the one who must decide. First, you
shall go over everything we have done, and if you feel sure we have
property worth at least, at the hardest kind of hard-pan prices,
$75,000,000, we want to whoop up the country to the very top notch of
expectation, and while doing so begin to hint that there are to be three
or four sections, and that the first one will embrace Anaconda,
Colorado, Washoe, Parrott, and lots of other unnamed things. Then our
idea was to offer the $75,000,000 by public subscription, and by using
every dollar we receive for it to support it in the market, to make it
sell afterward under all conditions at a big premium over cost, so that
every one would make big profits, and so, consequently, by the time the
second section came along, the demand for subscriptions would be
unprecedented. We could continue this until all the good 'Coppers' were
in our company, and then our consolidation would be a prodigious
success, just as you outlined at the start. There cannot possibly be any
loss to any one; in fact, success is so assured that William
Rockefeller, Daly, Stillman, and all the others who will be associated
with us, do not propose to sell a share of their stock, but, on the
contrary, will go along with us to the finish. So good does it look to
us that I feel it will really beat out Standard Oil itself as a
money-maker, and you must remember that whatever else they may say about
Standard Oil, no one who has ever owned a share has lost money; on the
contrary, every one has made large profits."