Frenzied Finance Part 19

FEBRUARY 23, 1905.

_My Dear Mr. Foster_: I received your letter of the 21st inst., and in reply will say, if I have done you any wrong in my story, "Frenzied Finance," or otherwise, it has been unintentional, and I regret it, and I seek this, the first opportunity, to give my regrets the same wide circulation as my original statements.

As I wrote you previous to the publication of the magazine containing the parts you refer to, I try to exercise the greatest care in allowing nothing to appear in my story but facts--facts I know to be facts, and in addition only such facts as are absolutely necessary to my work, which is the portrayal of those events of the past essential to a proper understanding by the people of the evils that have been done them, and how they have been done, that they may do what is necessary to undo them and to prevent their repet.i.tion in the future, and, in addition, such facts as it is fair for me to use. I repeat what I said to you then: I have absolutely no feeling in regard to you other than an intense desire to do you exact justice.

I dealt with you in the entire Bay State receivership affair in connection with Mr. Braman and I thought that I had every reason to believe that his Bay State Gas purchases were for your joint account; but now that you a.s.sure me they were not, I hasten to have such a.s.surances chase my original story with the hope that they may speedily overtake it.

My information that you had been sued by Mr. Buchanan came to me in a way that left no doubt in my mind of its correctness--no doubt until I received your letter. Papers were sent to me some time ago by reputable attorneys in a suit of Buchanan against Braman and, I understood, yourself, along the lines outlined in my story, with the request that I allow my deposition to be taken, so that Buchanan could get at the facts in his attempt to recover the moneys claimed.

Your a.s.surances to the contrary in regard to this matter I also hasten to start on the road you point out, and I will see that both statements are expunged from my book.

You are in error in thinking that I did not wish to see you when you were in Boston. I did not know in either case of your desires until it was too late to see you. I certainly would have had a "sit-down" with you if it had been possible.

Again a.s.suring you not only that it is a pleasure to set forth the facts you have called to my attention, but that I am your debtor inasmuch as you have given me an opportunity to perform that duty which I owe to every individual my story treats of--to state facts and only facts with which they have been connected--believe me,

Yours truly, THOMAS W. LAWSON.

FOOTNOTES:

[16] See foot-note on pages 189 and 190.

CHAPTER XXVII

COURT CORRUPTION AND COIN

The closing scene of this most significant drama was enacted on Sat.u.r.day morning in the Wilmington Circuit Court-room. There was nothing in the cold formality of the proceedings to indicate that here was the _denouement_ of a serio-comedy in which greed and ambition had clashed in a battle for millions; nor in the amiable indifference of the men who got within the enclosed s.p.a.ce below the judge's desk to suggest the murderous pa.s.sions and fierce hatreds raging beneath the surface of the prevailing calm.

The _dramatis personae_ were gathered in little groups representing the separate interests--Add.i.c.ks and some of his lieutenants; my partner at the telephone; John Moore's partner and Rogers' counsel with their heads together; Braman and Foster nearer the judge, their eyes wandering toward two dress-suit cases piled before John Moore's partner, which, it was understood, contained the money. At a glance it was impossible to tell the one containing Buchanan's share from the other laden with the receivership loot, but each was tagged, and it was evident that possibilities of a mix-up had been carefully guarded against. Behind Braman was his clerk, and in the rear of the court-room sat as many of Add.i.c.ks' thugs as could squeeze into the narrow s.p.a.ce reserved for spectators. They, too, eyed the dress-suit cases avidly, for the information had been pa.s.sed around that these innocent receptacles contained the "stuff," of which the "Boss" was about to be robbed.

Court came to order. Foster rose, announced that the claims of his client had been satisfied, and made a formal motion to dismiss the receivership. The Court formally consented, and as the clerk was entering the dismissal in his minute-book my partner telephoned the facts to me. I sent back the word that my directors were resigning--had resigned--that Rogers' directors were being elected--had been elected--that the Boston gas companies were now transferred to Rogers.

My partner whispered my words to John Moore's partner and Rogers'

counsel. At once the two dress-suit cases, each loaded with currency, were slipped to Braman and Foster. At the same time the messenger who was to telephone to their broker rose and quickly left the court-room. A brief period was consumed in signing receipts, certificates, and other legal papers, and then the performance was over. Add.i.c.ks rose and went out among his henchmen in the rear, who eagerly surrounded him. In the bustle Braman and Foster, each with his own booty, fled.

Let us see what was happening at the Boston end of the wire while all this dumb show was being enacted in the Wilmington court-house. My directors and officials were lined up against the walls of the directors' room in the Boston Gas Light Company's office like so many members of young John D. Rockefeller's Sunday-school cla.s.s, inasmuch as they were prepared to listen, sing, or shout "Amen!" at any time they received the nod of the cla.s.s-leader. In an adjoining room Rogers'

counsel had a similar line-up, with the difference that my men were about to shed the crowns which the others were waiting to receive, and which would transform them from humble business men into royal gas kings. Through the open wire I was in such close touch with the scene in the Wilmington court-room that I was almost sure I heard the subdued weeping of the blindfolded Lady of the Scales on the bills which occupied such a prominent part in the disreputable proceedings. Nothing now could impede the course of events, so I concluded to take Time by the headgear and secure what Bay State stock was in the market before Braman and Foster got in their work. Over another wire which was at my elbow I gave the word "go!" to my own brokers in Boston and New York, and when a few minutes later they told me they were securing thousands of shares, and that the stock was climbing toward 10, I could not repress an inward chuckle at the thought that the money we had so reluctantly parted with would spread over only one-half or one-third the surface it was originally intended to cover.

It was all over in a few minutes, and when my partner said, "It's done,"

and "By Jove, there go Dwight Braman and Roger Foster on the dead run with a dress-suit case apiece!" I held my sides as Parker Chandler in his inimitable way bawled: "Tom, let's leave our straw hats on the pegs, for we'll probably be back next spring figuring out how to pump air enough through the gas-measuring meters to pay for that money we've just loaned Braman and Foster for a day or two."

Braman and Foster, as I have observed before, knew their business. The danger to which $175,000 in currency would be exposed, in a territory controlled by Add.i.c.ks, had appealed to their cautious instincts, and once outside the court-room they literally took to their heels and ran for a corner of the railway yard, where awaiting them was a special car and engine. They jumped aboard, yelling to the engineer: "Let her go."

In the meantime eager-eyed ruffians searched the streets and hung round the hotels, looking for two men with dress-suit cases. A hundred of them were on the station platform, awaiting the departure of the regular train. Ten minutes before leaving-time one of the henchmen appeared among the gang, and pa.s.sed round the word that the gents and the "stuff"

had got off by a special, and it was no use waiting any longer. Later that afternoon, Add.i.c.ks, to use his own words, in one of his rendezvous, "dealt out his own good money in place of that he had hoped would take care of the people's rights."

It was a fierce session of the Stock Exchange that Sat.u.r.day morning.

Shortly before closing time a new set of brokers were frantically grabbing for Bay State stock round 10, and Monday morning, when all the world knew that the receivership had been lifted and our company was itself again, the same crowd continued to buy fiercely. To these eager purchasers I resold all that I had previously gathered, and enough short besides, to compensate me for some of the losses I had previously suffered, for this latter I was enabled to repurchase at half price, when news came that another suit had begun against Bay State. This latter drop in price so shattered the nerves of Braman and Foster that they retired, having made up their minds that they did not know quite as much about one end of "frenzied finance" as they did about the other. As a matter of fact, nothing came of the suit in question, for it was evident when the transfer of the Boston gas companies to Rogers' control became known, that Bay State Gas receiverships had played their last successful engagement.

My readers will not object if I again call their attention to the inevitable workings of the law of compensation. The losses occasioned by the market action of Bay State stock in these four days so mixed up Braman and Foster in their financial accounts that later they were sued by their client, Buchanan, who in court stated that he in turn was so confused as to what was done in connection with this business that he really knew less after it was over than before the suits were brought.

But one thing was indelibly impressed upon his mind--that his bonds had disappeared in the whirl and he had not received anything for them. I think this suit is still pending.

CHAPTER XXVIII

PEACE AT LAST

When the curtain fell on the closing scene of the performance in the Delaware court there ensued a brief interval of quiet in the affairs of Bay State Gas. Rejoicing in the temporary diversion of public attention, the chief actors proceeded to a.s.sume their former roles, and soon affairs began to move at their old gait. Rogers took possession of all the Boston gas companies and patiently awaited the coming down the pike of some traveller with more money than brains. Having successfully corrupted the State of Delaware, Add.i.c.ks was being measured for the senatorial toga, when accidentally the blind lady dropped her scales on his unprotected head, which catastrophe laid him out long enough to enable another to sneak the prize he had so long striven for. We are not at present concerned with the affairs of Delaware, and it suffices to say in pa.s.sing, that after a heated contest one Richard Kenney was chosen to the senatorial seat Add.i.c.ks had so long coveted, and that this man, a typical Delaware vote-rancher, after being sworn in as United States Senator, was brought back to Wilmington and tried for robbing a Delaware bank, his accomplices being some other heelers of Add.i.c.ks. The disclosures made in the trial showed that the case in all characteristics conformed to the Add.i.c.ks standard of indecency, for the bank officials, not satisfied with "blowing in" every dollar of deposits and capital the inst.i.tution owned or controlled, had actually "lifted"

in addition the building in which the bank was situated. One of the court functionaries who had heard the evidence tersely remarked: "Talk about stealing a red-hot stove: this is a case where they took the funnel with it to keep the draught going until they set it up in a new location!"

But Delaware, as my readers have doubtless gathered long ere this, is its own kind of a country, and rewards and punishments are so perversely adjusted that it seems a sort of Topsyturvydom. In this instance certain of Add.i.c.ks' heelers went to State's prison and death; Kenney returned to the Senate to help make laws for the great free people of America, while the chief conspirator, with a threat to sue the blindfolded lady for damage done, began to set out the pieces on the Bay State Gas chessboard with a view to trying certain new moves that had occurred to his perpetual-motion mind.

The situation of Bay State Gas stock was fully understood by the public.

While Rogers had possession of the Boston companies, he simply held them in trust, and must give them up whenever the parent corporation had coin enough to redeem them. The securities were still in the hands of the public and my friends, and my own duty to get Bay State Gas on its feet was plain. It was again a case of raising money, and to do this we had the issue of securities which we were preparing to float just before Foster and Braman swooped down on us. Add.i.c.ks agreed that if I would undertake the marketing of this stock, he would issue only enough of it to redeem the properties from Rogers. His directors met and formally "resoluted" on this point, and I felt satisfied before going ahead that there was no danger of this money being put in jeopardy without actually stealing it. The company, for the nonce, had no other business but to pay office rent and clerk hire, and in spite of Add.i.c.ks' financial immorality, all who knew him were aware he took no chances of ever getting himself sent to jail. So I began to sell the stock in the open market.

_PART II_

CHAPTER I

THE MAGIC WORLD OF FINANCE

Though this is the twentieth century and enlightenment is supposed to prevail throughout this broad land of ours, the majority of people still regard the world of finance as the world of magic. Within the fairy realm of finance the laws of nature apparently are suspended, and, overnight, wonders are worked. The ordinary mortal, wise in all other walks of life, sees the man who yesterday stood beside him at the plough or at the bench emerging from the mysterious portals bearing the fruits of the endeavors of a hundred or a thousand lives, although a moment ago he pa.s.sed through them with nothing. Who can deny the magic that thus demonstrates its power, or fail to accord veneration to the magicians that work such marvels? No wonder the ordinary mortal feels that he has no license to enter the world of finance save on his knees, hat in hand, bearing tribute to the divinities enthroned within this enchanted territory.

It is my purpose to do away with this extraordinary deception and to show it up as one of the artifices with which tricksters, since the beginning of the world, have imposed upon the people. There should be nothing in finance that any man or woman of ordinary intelligence and experience cannot understand, and I purpose to explain here the machinery of the "System" so that every one will exactly understand it from headlight to rear-end lantern. Many intelligent people have no clear idea of what a certificate of stock or a bond really is, and the words "money," "stock-exchange," and "finance" are mere terms which they glibly use without knowledge of their meaning.

It is not difficult to understand the grocery or the dry-goods business.

Standard articles of well-known form are sold by weight or measure over the counters for fair prices. The patrons of such businesses insist on knowing what they are buying--what they are to get in exchange for the money which is the fruit of their labor, and then, after they have been told, and they trade, they require that the goods be as described or they will know why not. The average American would consider it a huge joke should his grocer undertake to induce him to buy one hundred times more sugar than he could use, on the ground that he might find in the sugar bags when he reached home gold and diamonds. But would he not wrathfully seek the police if, after opening his sugar bag, for which he had paid $1, he found it contained only 50 cents' worth of sugar? He would tell you if you met him at this stage: "You can bet that chap on the corner cannot get away with any such trick as that--not in America.

He might in Zanzibar or in the kingdom of the Sultan of Sulu, but I will show him he cannot rob Americans in these enlightened times." The grocer would be hustled to jail without a "by your leave," and thenceforward his name would be a by-word among all honest tradesmen.

And so it goes in every business but finance--finance, the most important of all, the business into which is merged all other businesses, the business of taking and preserving the results of all other businesses, of all other human endeavor. Over our land to-day are big, able Americans, long-headed and experienced, adept at a jack-knife swap or a horse trade--industrious farmers, hard-handed miners, shrewd manufacturers, each in his own line a good business man, yet these st.u.r.dy traders, whom the "gold-brick" artist or the "green-goods"

pract.i.tioner would never dream of tackling, come weekly into Wall Street, or into such branch shops as exist in every community on the continent, and are done out of their savings like the veriest "come-ons." Humbly they take, in return for the gold earned with the sweat of their brows, a piece of paper of a given value which they return later and exchange for half the amount the paper cost them originally. In the s.p.a.ce between purchase and sale fifty per cent. of their investment has disappeared--has been filched away, but yet they have no resentment. They evince none of the feelings of the man whose pocket has been picked or whose till has been robbed. On the contrary, their sentiment is of admiration for the banker, the broker, the financier through whose agency their money has been lost.

Take, for instance, the prosperous tanner who goes to his banker with $100,000, the fruit of ten years' success, and exchanges this sum for 1,000 shares of Steel Preferred. Now, if he were to examine this security with half the thought or investigation he gives to a $500 car-load of bark, he would learn that there was not 20 cents on the dollar of real value behind it. In six months the eminent tanner is again at the banker's offering for sale his thousand shares of steel. In the meantime it has declined in value and he has to part with it for $50,000. But he does not complain; indeed, he bows his way out of the palatial office of the great man and is full of sincere thanks when the banker promises to let him know the next good thing on the market.

Suppose our tanner had purchased ten cars of tan bark and found that each car-load was short ten per cent. Would he not at once go to his attorney and exclaim emphatically that he would spend thousands rather than let the scoundrel who had tricked him get away with his swag?

Suppose our grocer waxing rich invests his funds in the Sugar trust. He thinks he knows all there is to be known about sugar. The business of the trust is to make the sweet commodity and sell it to the people. No mystery or magic, surely, about this simple pursuit. Yet when our grocer invests his savings, the sugar stock is many dollars more valuable than when, scared into selling by fluctuations which he cannot see any reason for, he tries to get back his investment. So many times have investors been milked of their savings by this one trust during the past twenty years that in the coffers of its creators and jugglers are hundreds of millions of money that once belonged to the people for which they have received absolutely nothing in return.