THE SUBSCRIPTION OPENS
When Mr. Rogers on returning from his conference with James Stillman and
William Rockefeller had given the word that the course was clear, I was
conscious of the necessity of clinching the decision so that there could
be no further backing and filling. I told Mr. Rogers so and suggested
that we insert at once the advertisement of the City Bank and the
Amalgamated Company in the New York papers, and that the following day I
have arrangements concluded with my advertising agents for their
publication throughout the country. The announcements appeared in New
York and the following day they were spread before the public in the
great papers of this country and England. Thus was Amalgamated launched.
With the appearance of these long anticipated announcements the pent-up
copper excitement burst forth, and an avalanche of queries began to pour
in upon us all. The interest was tremendous, and I felt certain we were
to reap a greater success than I had dared dream of. The days preceding
the opening of the subscription were taken up in answering a thousand
questions regarding conditions, in supervising the advertising, and
steering "Coppers" in the market. On the eve of the opening day Mr.
Rogers said to me:
"Lawson, at last we are to know how well your work has been done. The
time of talk ends to-night and after that we'll have facts to go upon.
What do you place the subscription at?"
"I'll stake my prospective profits that when the books close there will
be from forty to fifty millions subscribed and that when your 'Standard
Oil' experts have analyzed the subscriptions they will tell you that
three-quarters of all have come from the country--from my campaign--and
not over a quarter from the 'Standard Oil's' following and Wall Street,"
I answered. "Then you and Mr. Rockefeller will admit I was right when I
told you that the public will respond to open and fair treatment when it
is deaf and blind to stock trickery and manipulation."
"I do hope you are right," returned Mr. Rogers, in a quiet, earnest,
I-pray-it-may-really-be-so tone, "but if it is from six to ten millions
we will all take off our hats to you."
This defined the expectation of the man who above all others knew most
of what had been done to mature and perfect the venture. I realized that
none of the parties to the enterprise anticipated an extraordinary
success, and though I felt more confident than the others, I was far
from cognizant of the actual feeling abroad among the people. Monday
morning I got an inkling of what was coming. My office in Boston was the
centre of a dense mass of people from morning until night, and round the
National City Bank in New York crowds were gathered watching the throng
fight its way through the doors. Inside, a long line of men and women
headed for the subscription desk stood laden with checks and currency,
patiently awaiting their turn, and every mail brought sacks of orders.
The big banking and brokerage offices in the financial districts of
Boston, Philadelphia, and New York were packed with customers asking to
be shown the way to secure as much as possible of this easy money, while
the wires buzzed with messages and bids from the far West and from
Europe. The excitement knew no bounds. In my rooms at the Waldorf I sat
beside the telephone getting rapid reports from my lieutenants. From 26
Broadway I learned of the progress of events at the bank, and was
impressed with the fact that the prevailing excitement and the strain
were beginning to affect even the nickel-steel equilibrium of Mr. Rogers
himself. Indeed, he made no attempt to disguise his uneasiness, and told
me that William Rockefeller was in much the same condition. It was the
first venture of size these two strong wheelmen of "Standard Oil" had
undertaken without the co-operation of John D. Rockefeller, and it
appeared that he was considerably worked up over the public hubbub, and
so opposed to the whole Amalgamated affair that nothing short of a great
success could justify his subordinates' temerity. However one looked at
the situation, it was evident that Henry H. Rogers and William
Rockefeller were playing for the stake of their lives, though how great
the stake was no one at that time guessed. Since then they have steadily
forged ahead, both in riches and in influence, until to-day they have
actually supplanted John D. Rockefeller in the kingship of finance. At
that day, though his had always been the master-mind of "Standard Oil,"
I don't believe Mr. Rogers was worth, all told, over twelve to fifteen
millions, while to-day he is probably a hundred and fifty times a
millionnaire.
It must be remembered that there was good cause for trepidation over
this venture, for though the stock markets buzzed with "Coppers" it was
all guesswork as to how far the public would go with us. The question
was, What would they do now that our stock was within their reach? It
was a tremendous proposition we had put forth, for remember this was
before the period of the great trustifications, and ten to twenty
millions figured as the limit of large flotations. Even these were of
well-known properties and invariably were offered below par. To come
into the open, offering at $100 a share a brand-new stock capitalized at
$75,000,000, was breaking the record, and we might well wonder what was
before us.
So far as man could do I had safeguarded the public and my own
reputation, and believed that the assurances I had secured eliminated
all opportunities of fleecing investors. Mr. Rogers and Mr. Rockefeller
had each pledged me his solemn word, under no circumstances to sell to
subscribers over five million dollars of the stock, and to place at my
disposal the five millions cash received, to use in the open market for
the purpose of protecting the stock so that it should never decline
below par. That this promise should be kept was of the utmost
consequence. While "Standard Oil" held the large majority of the
Amalgamated stock and the public but a small minority, there was no
danger of the latter being slaughtered, whereas if the public was loaded
up with stock at $100 per share, it would be profitable for Rogers,
Rockefeller, and Stillman to practise the method I was fast beginning to
see was their favorite device for accumulating wealth--selling stock and
then dropping its price and taking it away from its holders at
twenty-five to fifty per cent. below what they had purchased it at. If
my plan of guarding against this possibility were adhered to, I knew
that there would be such a demand for the shares in the open market
after the allotment that when the second section of seventy-five or one
hundred millions came to be offered, it would be even more eagerly
sought than the first. So with the third and other sections
contemplated, until in time the whole stock would be distributed among
the investors of the world, and assuming that part of our enormous
profits would always be used to keep up its market price, there could be
no possible decline. Thus Amalgamated, like "Standard Oil" or a
Government bond, must always be worth more than par, first because there
would be value to justify it, and second because its holders would have
absolute confidence that the security could always be sold for as much
or more than they had paid for it.
So far, I had carefully refrained from discussing with Mr. Rogers how we
should go about securing our part of the subscription. I had not
forgotten it. Indeed, I had it well in mind and was ready to enter upon
the matter when it came up. An iron-bound contract held the Amalgamated
Company and the National City Bank over the signatures of a Rogers, a
Rockefeller, and a Stillman to allow the public to subscribe for
$75,000,000 of stock, and the terms were that every subscription must be
in the bank at noon, May 4th, and that each subscription must be
accompanied by a certified check of $5 for every share applied for. _As
we had agreed that the public should be sold but five millions of the
stock, that meant that we proposed to retain seventy millions of it
ourselves, but to obtain this allotment legally, we must comply with the
conditions of the advertisement exactly as outsiders had. So it was
necessary that we have a bid in before noon on Thursday for our seventy
millions, accompanied by a check for_ $3,500,000, _which would secure us
our quota provided the public subscription was no more than five
millions._ If the public subscription ran over five millions, then the
bank must throw out all additional subscriptions over that amount, for
the advertised contract specifically declared that all accepted
subscriptions would be allowed pro rata. By my suppression of the usual
condition that the Bank reserve the right to reject any part of any
subscription, it was absolutely precluded from the common method of
dealing with such an emergency and so could not reject _parts_ of
subscriptions. There was a way out--without practising fraud. If at noon
on Thursday the public had subscribed ten or fifteen millions then the
insiders must put in bids of $140,000,000 to $210,000,000, in which
event the entire subscription would be divided by allotting each
subscriber one share for every two or three subscribed.
I presumed then that some such method would be followed. It surprised me
at the time that Mr. Rogers should have given so little attention to so
vital a part of our programme, for he is in the habit of thoughtfully
thumbing over just such details to avoid slip-ups, but the idea that our
subscription would run into unwieldy amounts never occurred to him, and
he let things go, trusting to luck and "Standard Oil's" motto "To Hell
with the people anyway," to adjust the matter at the last moment. To-day
Henry H. Rogers, William Rockefeller, and James Stillman would each give
five millions from his private fortune if this seemingly unimportant
detail had then been provided for. Its neglect is the bloody
finger-print on the knife-handle of the murderer, it is the burglar's
footprint in the snow. In this case it furnishes the evidence of the
crime of Amalgamated.