THE MORNING AFTER
It was with a feeling of intense relief that I left Mr. Rogers and
returned to the Waldorf. At last I knew where I "was at": I was to play
a lone hand; my enemies were in front; there were no partners from whose
treacherous knife-blades I should have to protect my back. The path was
clear, and as I examined my position, I felt my old self again. Promptly
I called up my Boston brokers, who were at the Holland House, to say I
would drop in for them on my way downtown, and with a clear plan of
campaign in my mind, I determined to face the breakfasting crowd in the
big cafe downstairs.
Almost immediately I found myself in the centre of a knot of men who
began eagerly to press me for further particulars of the Amalgamated
subscriptions. We all know the story of the comedian informed in the
midst of a performance of his beloved wife's death, who yet must laugh
and antic to the end of the play. I appreciated the heavy-hearted
actor's plight as I surveyed the little throng so vitally interested in
their dollar affairs. I longed to mount a chair and tell them how they
had been duped, but my role called for different lines. It was my part
to feign satisfaction and my duty to keep every cent invested in our
enterprise from shrinking a mill. I pumped as much enthusiasm into my
speech as possible.
"You see what the papers say," I said. "That gives you all the
information I have, for although you may not think it, I have been
spending the night just as the rest of you have--in lands where all
flotations sell away over par. I'm going down to Wall Street just now.
After a while I'll have more to tell you."
The flutter of an eyelash, a hair-breadth of hesitation, a mumbled word
and there may be born in the mind of the investor that instinctive
distrust which is the beginning of panic. In a stock market as in a
powder magazine there are always dread possibilities of explosion, and
he who would survive must have incombustible nerves and an ice-packed
brain; asbestos assurances and an unblushing swagger have averted many
money conflagrations and set prices hill-climbing.
My little congregation had all the fluttering fugitiveness of the
investor-out-for-quick profits, and after a few generalities, I got down
to the one question they all longed to ask but none dared to
voice--"What can I sell my subscription for if I want to part with it?"
Raising my voice a trifle and looking straight at them:
"Don't get excited about what you read in print these next few days," I
said, as though some one had asked me the question, "for there will be
hogsheads of rumors unhooped, and remember that rumor prices are never
real money. The papers this morning say that any one can sell at 40 to
60 per cent. profit, but that hardly seems reasonable to me; in fact, if
I were any of you who have been allotted stock and could get such profit
as that overnight, I'd take it. All I'll do just now is this: I will
give 110 for any amount any of you want to sell, provided you sell right
now--and 10 per cent. profit is not so bad when you come to think it's
40 per cent. on what actual money you have put up."
In the vernacular of stocks this process I used is called "moulding
public opinion" and "making a market," and it had the expected effect on
that bright May morning which followed the closing day of the
Amalgamated flotation. I was not offered a share; in fact, there was a
loud guffaw, and it was a hundred to one wager that as I passed on to
another group each listener tumbled over his neighbor to get in first.
"110! That's a good joke! I wonder if he takes us for children!
Evidently he is out early this morning to catch any stray worms napping!
110 for something worth 160!"
Inside of ten minutes it was all over the Waldorf and on the wires,
"Look out for Lawson! He's trying to get Amalgamated at 110." And by the
time I got to the Holland, a block down the Avenue, the brokers and
investors gathered there were ready to give me the laugh with "You're
out early, we see, to pick up a bundle of easy money."
My first task had been accomplished to my own satisfaction. Inside of an
hour it would be flashed over the world that there was a firm reliable
market at 110 bid and almost any price asked for Amalgamated, and while
110 was not anything like the wild 140 to 160 that rumor gossiped of, it
represented such a good profit that it was sure to set the market off
with an all-round chipperness.
My readers must bear in mind that as yet there was no real Amalgamated
stock which could be sold, and no place to sell it if there had been,
for until each subscriber received official notice no one really knew
for certain that he had been allotted any stock, and until the
Amalgamated shares were listed on the Stock Exchange, there could be no
reliable market, although they could be traded in on the curb.
At the Holland House, I quickly outlined to my chief brokers my plans
for the day. Then together we started for Wall Street.
The hours that followed were busy ones, and confusing as well. Wall
Street was a-buzz with curiosity and from all sides poured questions.
"The Street," it was evident, had awakened to the fact that the
situation in Amalgamated disclosed a different line-up of conditions
from that which it had anticipated. As to whether the change was good or
bad no one dared hazard a guess. For the first time in my experience,
Wall Street was completely at sea. The shrewdest plungers and
manipulators, men to whom the tape yields up its secrets as the penitent
to the priest; to whom the ticker babbles the inner mysteries of
directors' meetings and deep-down deals--these men whose eyes, ears, and
noses decades of stock-play had trained to supernatural acuteness were
as impotent to track the truth as the veriest tyro. All admitted that
the conditions were unusual, that the subscriptions had far exceeded
expectation, that time would be required to get them straightened out.
Because of this it was natural that the market should be slow and in the
absence of definite facts it might easily look one price and be another.
If the subscription really were 412 millions and if each subscriber
would have a fifth of his allotment, then there was the usual chance for
trick playing and "Standard Oil" might be scheming to gather in this
valuable stock at 110 when its proper price mayhap was 140 to 160 or
more.
In Wall Street the best brains of all the Western world centre. Fortunes
are there waiting for brains to carve and take; stacked up there are
millions which he who has brains can pocket without a "by-your-leave."
Wall Street is the millionnaire's checker-board, but brains direct the
moves and make the plays. And with all its mordant wisdom, cynical
cunning, cold suspicion, Wall Street was baffled.
There was nothing to do but to continue my campaign of smiles and
cheerfulness, repeat my 110 bid in every quarter possible, and so keep
up the delusion. Late that afternoon I saw Mr. Rogers, who eagerly
interrogated me.
"Well, Lawson, what do you make out?"
"It is the most mixed-up mess 'the Street' has ever wrestled with," I
replied, "but one thing is clear: no one will dare to sell much until he
receives notice of just what he has been allotted, and then most will be
timid about selling until they have received the receipts. I don't see
how, if nothing definite leaks out, there can be much danger until after
they get their hands on the receipts, and by that time, of course, you
will have a fine market organized to take care of any offerings."
He flinched. I saw again that I had touched his sore spot, for at every
faintest suggestion that our profits should be used to protect the
market, he became as shy as a pick-pocket at a police parade.