THE BITERS BIT
To see and judge actions aright one must have them in perspective. As
the Celt remarked, "You can get the best view of your life after you're
dead." Looking back on the performances of this period, I myself am
amazed at their monstrous audacity. Remote from common experience, their
extravagance suggests unreality. Here were the master of the greatest
business the world has ever known, and I, a mere captain of his forces,
without even a by-your-leave, calmly carving up a big commercial
enterprise, the property of other men who had spent the days of their
lives in creating it; and these men whose institution was thus being
ravished were not children, idiots, or aged dolts, but able merchants
renowned the world over for their shrewdness and success. The one phase
of the contemplated operation which occurred to neither of us as worth
discussing was the possibility of not securing the property. This
transaction demonstrates the despotism of the "System," the extent of
its rapacity, and its arrogant disregard of all laws and rights, human
or divine, in the enforcement of its exactions. And it was but one of a
hundred similar transactions.
Before Mr. Rogers and myself parted, I had definite instructions: First,
to begin to teach the public to look for new things in the first
section; second, to overcome the objections of the holders of Butte &
Boston and Boston & Montana, and other Boston stocks to being in the
second section of the consolidation; third, to purchase the majority of
the Parrott Company's stock; fourth, to see that the public kept away
from Anaconda in the market for the time being.
While the minor details of these plans were being mapped out, I had let
my mind run over the market situation of Anaconda stock, and had arrived
at certain conclusions which I determined to test forthwith. So I said:
"Some one, Mr. Rogers, must have bought lots of Anaconda while you have
been working this plan out--I mean lots outside of that which is going
into the new company--and I should like to know if I'm in on any part of
what may have been gathered in?"
His eyes focused me with a cold stare which told me even before he spoke
that I had better have kept my suspicions to myself.
"I have heard of no one putting you in on any Anaconda," he said
sarcastically. "You have not given any one any orders, have you, nor
sent any one your check to pay for any, have you?"
I was nettled at his tone. "That is all I wanted to know," I answered.
"Of course, Anaconda will have a still bigger rise, and if we have all
we care to buy for the new company, no one will object to my telling the
public what a good thing it is and putting them aboard now."
I was on perilous ground. He gave me an ugly glare which I knew meant
real danger as he slowly said: "I think, Lawson, you have done all that
is necessary for you to do for the public in letting them in on the
things you already have, and for some time any one who interferes with
the market on Anaconda stock, which I consider fairly belongs to Mr.
Rockefeller and myself, will not find his investment a profitable one."
"Well and good, Mr. Rogers," I answered. "If you consider the market
yours, I will not interfere, but I wanted to know just how it stood."
"You know now, and I shall expect you not only to keep out of it, but to
see that it is handled in such a manner that all others stay out--all
others except sellers," which meant that not only was no one to get any
of the benefits on this stock, but that innocent holders were to be
enticed into selling, that "Standard Oil" might buy before the real rise
came.
As I write these sentences I marvel at my patience, and my blood
tingles with the thought of how, if the opportunity were again mine, I
should reply to such an imperious mandate. If men said and did at the
crucial moment all the wise, strong things that occur to them afterward,
this would be a different world. The brave and scornful words I should
have uttered I choked back, and, as countless others had done before me,
I bowed my head and--submitted. Conscience and honesty slunk sadly into
the background as I flaunted off on the arms of policy and discretion,
pirouetting to the jingling music of golden shekels.
Great fortunes are seldom achieved without sacrifice of morals--or at
least of pride--and ambition makes meaner cowards of us than conscience.
Then and there I might have made a martyr of myself by threatening an
exposure of the whole bad scheme and defying "Standard Oil" to do its
worst; but martyrs seldom give themselves to the flames, and looking
back dispassionately from the vantage-ground of the present, I doubt
seriously if by denouncing the conspiracy I should have done more than
discredit myself.
The interview ended, I returned to Boston and at once began the
execution of the new plans, the remoulding of the public and the
purchase of the Parrott mine.
Parrott was an active mine earning a large revenue and with something
over 200,000 shares of capital stock. For the purpose of Mr. Rogers'
plan its inclusion was essential, for it was well known and helped cover
up the inflation in his consolidation.
Possession of 100,000 shares would give control, and the public would
imagine when the announcement of its purchase was made that this meant
ownership of most of the entire capital stock. Indeed, it afterward
developed that this was one of the conditions Mr. Rogers and William
Rockefeller relied on to deceive investors, for it was a natural
assumption that nearly all of Anaconda and Parrott were included in the
consolidation, and in estimating the value of the properties the public
would multiply the market prices of their shares by the total capital
stock and assume the result represented the assets of the amalgamation.
For instance, the valuation of 1,200,000 shares of Anaconda at $70, and
200,000 shares of Parrott at $68--the prices at the time Amalgamated was
floated--would represent respectively $84,000,000 and $13,600,000;
whereas the company owned only 602,000 shares of Anaconda and a few
shares over 100,000 of Parrott, selling for in all about $48,600,000.
The control of Parrott was in the hands of certain wealthy Connecticut
brass manufacturers, and, just previous to my receiving orders from Mr.
Rogers to acquire the property, they were so anxious to sell this mine
that they had given my brokers, Brown, Riley & Co., of Boston, an option
on a majority of their shares at $10 per share, agreeing to pay a large
commission should a good customer be secured. Before I could clinch at
this figure they took advantage of the excitement in "Coppers" to bid up
the stock, so that when I began operations Parrott was in the market at
$15, and I offered $20 for the majority of the shares. An intimation of
our purpose must have leaked, for other shrewd owners, also Connecticut
men, bid the price up still higher until I was forced to raise my limit
to $30 per share--quite an advance on $10. On that figure we all agreed
and the papers were prepared, but at the last moment a young man "butted
in"--I think he was the son-in-law of one of the owners, who turned up
with an option, and declared he could get $40 per share for the
property. We were trapped, for the alternative presented was to forego
the purchase or pay the price demanded. There was a conference, at which
I denounced the "hold-up" in strenuous terms; but the son-in-law proved
equal to the emergency and stood by his guns, though some of the old
gentlemen declared his exaction was unwarrantable. In the discussion
there developed a queer fact--the son-in-law told us that the property
was a good deal richer than any one thought: he had discovered that a
certain section of rich ore in which there were several millions of
dollars had been walled up by some designing person for his own purpose
and the mine was easily worth $40 per share. I had heard stories of this
kind before and frankly professed incredulity. The son-in-law agreed to
reveal the ore to any one we might send to the mine, and so one of our
most trusted engineers was despatched with him to Butte on the
agreement that if he were convinced that the walled-up values were all
that had been indicated, we should pay $40. If not, $30 would be the
price. The twain started at once; our expert was convinced, and we paid
four millions instead of one, two, or three. Strange to say, the
subsequent operations of the mine have never revealed the walled-up
values; instead, there has been developed a queer lot of litigation, the
tendency of which suggests strange uses of that extra million. Anyway,
the trade was made, and the gentleman of the Nutmeg State went home
chuckling at the thought that though there was a "Standard Oil," there
were others.
"Standard Oil" never forgets. Sometimes it may get left at the post, but
always it catches up in the running--so as to be in the lead at the
tape. When I reported the conclusion of this Parrott deal to Mr. Rogers,
he said:
"Lawson, all's fair in a trade"; but I shall never forget the expression
his face wore as he went on. "Just give me the name, Lawson, again, of
that particular individual in this particular trade, that I may remember
him hereafter." He spoke in a low, intense tone, and each word was
separated from the preceding one by a dwelling stop. I gave him the name
and the identification marks to go with it, and felt satisfied that even
if the Nutmeg financier lived to be a thousand and Henry H. Rogers kept
him company, there would surely come an evening-up which would be the
worse for the erstwhile victor. Sure enough it came soon afterward, for
the able Connecticut man, embarrassed at possessing so much uninvested
money, came to us to ask advice about reinvesting it. The "Standard Oil"
magnate was most sympathetic and generous, and pointed out the obvious
advantages offered by the great new company Amalgamated, which would be
out in a few days at $100 per share, and doubtless would sell soon
afterward for $150 per share. The Nutmegite nibbled and then swallowed
bait and hook whole, for when the subscription was announced his agents'
names were found opposite a large block. Later on he applied to us for
consolation and advice, for the stock he had bought at $100 and $124 was
then selling at $33. We figured out for him that after all he had little
to complain of; "for you see," we explained, "fair exchange is no
robbery, and you have had just a fair exchange. You sold us your
property inflated four times, and we sold it back to you under another
name at about the same percentage."
Before the fireworks began, Anaconda sold in the market at $25 per
share, and Parrott, as I have shown, at $10, and in addition to the
enormous profits which Mr. Rogers and Mr. Rockefeller made in the
Amalgamated Company proper, they cleared some $15,000,000 to $20,000,000
on their outside purchases of Anaconda, and some $25,000,000 to
$30,000,000 more later by selling it short (as I shall show hereafter),
at the tremendously high prices which were obtained by leading the
public as well as myself to believe that they intended to purchase the
entire stocks of both companies for the Amalgamated--that is, it was
given out that the sections which were to come after were to have these
minority holdings included in them. They sold Anaconda short in enormous
quantities between $50 and $70, and Parrott between $50 and $68;
afterward they bought them at $14 and $16 respectively, and no one knows
how many millions these gentlemen are taking in now, for both stocks are
again on the return trip, selling at the present writing at $32 and $30
respectively.