Frenzied Finance Part 24

Thus began Amalgamated, that extraordinary dollar-thing which shot up in a night and grew as grows the whirlwind, until even its creators wondered at its mightiness. It waxed greater and stronger while the world watched and waited, until finally there came that tremendous and unprecedented culmination when lines of investors fought round the portals of the greatest money mart in America, the National City Bank, for a chance to obtain the $100 shares of this $75,000,000 inst.i.tution.

And the world wondered indeed when it was announced that Amalgamated had been oversubscribed over $300,000,000.

Thus began Amalgamated. It might have brought to all the world good-will and happiness, and to the men who made it much glory and the great regard of their fellows. Instead, it has wrought havoc and desolation, and its Apache-like trail is strewn with the scalped and mutilated corpses of its victims. The very name _Amalgamated_ conjures up visions of hatred and betrayal, of ambush, pitfalls, and a.s.sa.s.sination. It stands forth the Judas of corporations, a monument to greed and a warning to rapacity. May the story that I am to tell so set forth its infamies and horrors that never again shall such a monster be suffered to violate and defile our civilization.

CHAPTER XI

THE COPPER CAMPAIGN OPENS

My plans for the great copper campaign were most carefully diagrammed, then spread before Mr. Rogers and Mr. Rockefeller, who, before approving, tested every detail of them. The formal scope of our action decided on, it was agreed that I should be free to work in my own way, and it was understood that I should, as far as possible, carry the campaign on my own shoulders, using to the limit my personal capital and credit. "Coppers" was to be a Lawson operation on the face of it, and I was determined, for many reasons, to avail myself of "Standard Oil's"

aid only in taking care of completed transactions and not at all in the preliminary negotiations. This was not always possible, but my att.i.tude in the matter and my desire to make a brilliant showing explain the straits I was sometimes put to in conducting some of my deals. From the start I had a big personal stake in the success of my campaign, for at the time I first showed Mr. Rogers my hand I had 46,000 shares of b.u.t.te & Boston, and my following among the public owned as many more. They had agreed that the profits on this stock, when it was taken into the consolidation, should be mine entirely in payment of my own work and risk.

There was another transaction I had in mind which also fairly belonged to me. As I have stated, I had undertaken to dispose of Bay State Gas stock, and by this time I had succeeded in placing a large number of the shares. The proceeds, $2,300,000, were in the treasury of the company.

Now the charter of Add.i.c.ks' company permitted it to buy, sell, and deal in anything and everything, and I saw here a good opportunity to enable Bay State to earn the balance of the money necessary to relieve its indebtedness to Mr. Rogers--between four and six millions of dollars.

So I explained to Mr. Rogers that as soon as our copper deal had progressed to a point where there was absolutely no risk, and a large gain was a.s.sured, I would make a bargain with Bay State whereby for a part of the profits I would pilot the investment of the company's cash in b.u.t.te & Boston. This proposition he considered fair, and he agreed that neither he nor Mr. Rockefeller would consider themselves "in" on that bargain, save as indirectly profiting by it through the successful winding up of their Boston gas investments.

It is impossible for any great move to be begun in the stock-market without some suggestion getting into the air which notifies "the Street"[19] that "something is up." Not long after my alliance with Rogers had been formally arranged, the atmosphere of State Street grew thick with rumors about "Coppers." Some of these announced that I had hitched up with "Standard Oil"; others denied it; between them all a movement was created, and the leading stocks became very active and increased rapidly in price.

We had agreed that the first companies to go into our consolidation should be b.u.t.te & Boston, Boston & Montana, Calumet & Hecla, Osceola, Quincy, Tamarack, and any other of the long-established properties of which we could get hold. It would be difficult, we knew, to purchase the control of the Calumet & Hecla, for its owners thought too highly of their investment to part with it, but it was safe to buy whatever was offered, and if we acc.u.mulated less than a majority of the shares we could easily resell at a large profit. I began my operation with Boston & Montana stock, buying cautiously and obtaining it at fair prices, and this transaction, though conducted quietly, added fresh fuel to the rumor blaze. Finally Boston became so excited over the situation that I came out with a public statement in which I frankly showed what I was trying to do. In all such affairs, however, the explanations of any man known in his business as a stock speculator or manipulator are never accepted as true. It is a.s.sumed that such announcements are merely blinds to disguise his real purpose; that they are feints or manoeuvres in his campaign. So when I declared that I was working out plans for the consolidation of all good Boston "Coppers," and that a.s.sociated with me were the strongest capitalists in the world, a laugh went up from a goodly portion of "the Street." The hireling news bureaus shrieked at my presumption and the absurdity of my combination, and when after a hot day's operations I was quoted in the financial press as telling my followers that it was "Standard Oil" money which was to back "Coppers," Barron, whose News Bureau moulded opinion for the opposing copper magnates, came out with a statement:

"Lawson is spreading in his peculiar underground ways that the Standard Oil crowd is looking into Coppers. Just enough countrymen swallowed his yarns to enable him to boost prices over six points to-day, but by to-morrow, when the Rockefellers or Rogers of Standard Oil put their foot down on his transparent lies, those who were foolish enough to listen to his ridiculous fakes will find they must sell at a loss. We can say, on a high authority in Standard Oil, that they have never bought nor contemplate buying a share of any copper stock."

My enemies were numerous and powerful, and there were many other announcements of the same character as Barron's tending to cast ridicule on my movement and expose me as a falsifier. Indeed, notwithstanding the merits of the plan and the benefit it must confer on all copper properties, I was a.s.sailed as fiercely as though I had advocated anarchy or had prepared a scheme of wholesale plundering. In stock affairs innovations are resented and resisted even more fiercely than in other walks of life, and the Boston money crowd fought me tooth and nail. The t.i.tles I acquired in those days were varied and startling. For one set I was a "charlatan," "wizard," "fakir," an "unprincipled manipulator"; in another I was a "copper king" or a "prince of plungers." Feeling ran high, and prices rose and fell in the most erratic and extravagant fashion. Certain stocks advanced or receded from five to ten points in as many hours or minutes. Fortunes were made and lost daily. Many people, confused by the conflict of opinions and announcements, sold their holdings, only to repurchase at higher prices as prices continued to mount. So fiercely was I attacked that it almost seemed at times as if my enemies might prevail in spite of the great powers at my back.

Indeed, there were tense moments when my fate as well as my plans trembled in the balance. Several times I was sent for by Rogers and his colleagues for a war council, and sometimes, as I detailed my lines of defence and enumerated my resources, I suspected that even these storm-seasoned warriors were tiring of the fray.

The fiercest fighting at that early period centred round b.u.t.te & Boston and Boston & Montana. Many a spirited engagement we fought on the floor of the Exchange. Perhaps the fiercest of these began when, after a strenuous rush one morning, I rapidly carried the price of b.u.t.te up.

This exploit so enraged my adversaries that they got together and organized a powerful combination against me. This included several of the leading banks and trust companies of Boston that held large amounts of stocks as collateral for my loans. At a given moment it was arranged that all these loans, aggregating millions of dollars, should be called; and further to intensify the complication they expected to bring about, a great friend in common attempted to scare Mr. Rockefeller and Mr.

Rogers by informing them that the t.i.tles to the copper properties were defective, and that a man, then unknown, named Heinze, who had made himself very strong with the Montana courts, was about to make a move to confiscate them. There was a hurry call for me from New York, and this time the explanations had to be very full, for "Standard Oil" had an impression that while my general plan might be meritorious, it was possible that I had the details "skewed." However, I satisfied them as to the facts and then hurried back to tackle my own problem, for these individual engagements I handled myself, using my own personal resources to take care of them. The emergency that had developed thus suddenly was so serious as to be alarming, and it devolved on me to act, and at once. Blows in finance are like those at sea--the most dangerous are the quick-come-quick-go kind. I recalled one I had run into a short time before on my sailing yacht. We were broad-reaching down the New England coast, close in, with a 20-knot sou'wester blowing. Suddenly, without apparent reason, my skipper put the wheel hard down and brought the craft up standing. A second later a "twister" from the hills. .h.i.t us, and adroitly he headed her into it.

"How in the world did you know that was coming?" I asked.

"I smelt her, sir," the old sea-dog replied, "just smelt her."

For those unacquainted with the freaky ways of our New England coast winds it may be explained that when a "twister" off the hills gets ready to do business in a 20-knot sou'wester it sends no messenger boys ahead to distribute its itinerary handbills. You hear one shriek and the blow is upon you; and woe betide the unthinking skipper who attempts holding his craft to her course or paying her off till she catches it full. He is likely to have mourners at home if a married man, and "cussing"

owners if the craft is not his own. As my old sea-dog afterward wisely observed: "When you smell a land 'twister,' act first and think atterwards, or your widow 'ill get blear-eyed watching for you to make harbor."

In the stock-market it was decidedly a case of "act first and think atterwards." The "twister" was a fierce one, for not only were my stocks a.s.sailed, but the rumor machines were turning out all sorts of yarns affecting my credit, as the knowledge gradually filtered through the market that my loans had been called. My stocks broke badly, and when the market closed it really seemed as though I might have to verify the report that they would wind me up the next day.

It was at this particular stage that the Bay State was let into the deal. I had a long consultation with Add.i.c.ks that night and showed him my hand. He agreed that with what I already had of the stock and "Standard Oil's" backing, the venture came as near being an absolutely sure thing as could ever be found in stocks. My proposition was that I should secure for the Bay State Company 50,000 shares of b.u.t.te at an average of 20 to 25, and that I should have half the profits of the venture provided they aggregated over two millions of dollars. Coming to Add.i.c.ks in this emergency was cold-blooded business on my part, and, it goes without saying, was frozen-blooded business on his, for he evidently saw then what I did not until later, that there was an excellent opportunity to practise his pet game--make money and double-cross his partner while doing so. We clinched the deal that night, and next day in the market I turned the tables, for I took every share my opponents offered for sale, and the stock, instead of dropping out of sight, became firm, then began to mount, and never after fell again.

The Bay State's venture showed a profit afterward of four millions of dollars, but of my share of this large sum I was deprived, as I will detail later.

At this juncture there occurred one of those strange and sad fatalities which with its attendant circ.u.mstances helps to explain why those of us who play with stock-markets grow superst.i.tious. I have spoken of my secretary, Mr. Vinal, a man of admirable discretion and absolute loyalty, who was my right hand in executing the minutiae of the various operations I then was engaged in. In such affairs the fidelity of one's aides must be beyond all question, for if the merest detail of one's plans leaks out at the critical moment, one is undone beyond recovery.

After my talk with Add.i.c.ks I had laid out the campaign for the next day's engagement and called in Vinal to explain to him his own part. He was to attend to taking up and transferring the loans that had been called, and I armed him with my power of attorney and blank checks, instructing him to put these matters through without further consultation with me, for my entire time must belong to my brokers during the battle of prices which I knew must inevitably come with the stroke of the gong that opened the Exchange next morning at ten, and which would rage until its close at three. As I had antic.i.p.ated, the a.s.sault was fierce. It was give and take, charge and retreat, all day. A few minutes after twelve, Vinal pushed through a crowd of brokers to me and said: "I'm about half through my shifting, but a telephone has just come from Mrs. Lawson saying that something has happened at the school and will I at once get a carriage and bring your daughters home. It will take half an hour. Shall I go?" I replied: "You had better, but get back as quickly as possible." A minute later a thought occurred to me, and I sent a boy to call Vinal back. He reported that my secretary had jumped into "Ben's" cab ("Ben" was a cabman whose stand had been in front of my office, 33 State Street, since my boyhood days). I returned to the fray.

Fifteen minutes later the appalling message that startled all Boston at the time came over the ticker tape: "Terrible Explosion! Boston Gas Company's pipes in the Subway have blown scores to death." Then there floated in to me a rumor, vague, indefinite, that Vinal was a victim. I jumped into a cab and in a few moments was at the undertaker's to whose place the corpses were being removed. The undertaker stepped up to me and said: "Poor Vinal! Don't look at him, for it is frightful. He was on the very apex of the explosion, and he and 'Ben' were both instantly killed and are frightfully burned. The only thing recognizable is this envelope, which I found among the rags that were left of his coat." He handed me over the large envelope in which I had seen Vinal that very morning depositing the various doc.u.ments, checks, and securities which he required for his day's operations. It was burned around the edges, but the contents were uninjured, and among the papers was a carefully prepared memorandum showing to a dot where my secretary had left off in his exchanges. He had evidently just finished making notes, for so carefully arranged were the contents of the envelope that all that was necessary to complete the business was to turn it over to Vinal's a.s.sistant. No further explanation was required. That envelope represented two millions of money and securities.

Poor Vinal! Another victim of that soulless corporation hag, Boston Gas, to prolong whose life he had spent some of the best years of his own.

Vinal was very dear to me. He had filled my canteen, held my ammunition, and carried my knapsack through many a hard-fought battle, willingly allowing others to do the cheering in victory, but reserving to himself the right to suggest and console when the clouds lowered and we were left alone on the field of defeat or the dusty road of retreat. Poor Vinal! He was worth a hundred copper deals or corporation hags.

Between death and life, success and failure, what a hair's-breadth after all. If Vinal had stubbed his toe, or had been able to take the first cab he found; if he had heard my call which would have brought him back; if he had tarried a moment longer in the Young Men's Christian a.s.sociation where he had stopped to deliver a message, he would have escaped. The thought did not occur to me at the moment, for Vinal's death was too keen a personal sorrow to allow me to estimate my own narrow escape, but if that envelope, so miraculously preserved, had been burned as were the other papers in my secretary's pocket, there might have been no Amalgamated. "Coppers" must have dropped back to the lowly place from which Rogers had lifted them, for I should have been financially ruined.

To show the marvelous workings of Him who tempers the wind to the shorn lamb: At the same moment that I was called away from my guns, the commanding general of the opposing forces received the same call. The aged mother of the President of the Boston & Montana and b.u.t.te & Boston, while riding in her carriage, had been a victim of the same explosion.

FOOTNOTES:

[19] "The Street" is a general term used to designate the stock operators, the fraternity in New York being known as Wall Street, in Boston as State Street, and in Philadelphia as Broad Street; these streets are the centre of the financial districts of their respective cities, the Stock Exchanges being situated on them.

CHAPTER XII

THE BUNCOING OF THE STOCKHOLDERS OF UTAH

This was veritably a period of financial delirium in Boston. No one talked or thought of aught but "Coppers," at least no one with a spare dollar or good credit. The air was full of mysterious yarns and the Stock Exchange was hung with Aladdin lamps. From every nook and corner of State Street, from the c.h.i.n.ks between its sedate old cobblestones, came forth copper-mines--mines undreamt of before and unheard of since.

Innumerable devices were rigged to take advantage of the prevailing intoxication. The prices of the strong properties leaped up with breath-taking rapidity. The copper epidemic spread over New England and began to extend in constantly widening circles through the rest of the country, while from England, France, and Germany came daily news of symptoms which proved that the infection had crossed the ocean. I, with my hands full, kept two secretaries busy shooing away industrious promoters who came at me in armies with old and new copper properties, which I might have on my own or any old terms.

In the midst of this excitement I had my first real demonstration of the "System's" method of making dollars from nothing. Well as I thought I knew the stock game, I'll admit that I looked on open-mouthed, like the veriest novice, at the magic wrought by the simple use of the name "Standard Oil." Even now I can hear myself as I gasped: "Heaven help the people if this sort of thing can be done in America, for Heaven alone has power to help them."

The Boston and New York brokerage house of Clark, Ward & Co. had promoted the Utah Consolidated Mining Company of Utah. It was less than two years old, and its 300,000 shares had been kicked from gutter to curb and curb to gutter at from $2 to $4 per share. Samuel Untermyer, the astute corporation lawyer who, on his own account and as the representative of a large European clientele, had long been interested in "Coppers," had taken hold of Utah, and believing it a good thing had bought large quant.i.ties of its stock for himself and his European connections. Under the stimulus of my campaign the price of this stock had leaped to 17 or 18, and rumor had it that Utah was a prospective factor in my consolidation. One day Mr. Rogers asked me if I were in any way responsible for these rumors, and I replied that I knew nothing more about them than that they were in circulation.

"Good," replied Rogers. "Do this, then--send word that we propose to issue a denial that we are to have anything to do with Utah Consolidated, and bring me their answer."

I carried the message in person. The Utah people were absolutely panic-stricken. Such an announcement meant destruction to the pretty price-fabric they were rearing, and they begged to be allowed to make a proposition to Rogers before he should declare himself. This was their proposal: That Mr. Rogers should admit their property to the consolidation provided he found it good enough; that every facility should be accorded his experts to examine the mine; and that if the report was favorable, and they were convinced that it would be, and he decided to take hold, he should be given an option on a block of stock way below the market.

This offer I took back to Mr. Rogers, who smiled one of his thin, easy smiles, and questioned me closely about the genuineness of the market for this stock. Could 50,000 shares be sold readily? I a.s.sured him that when it once became known that we were even looking at Utah it would be easy to sell 100,000 shares and at constantly advancing prices.

"All right," said Mr. Rogers, "if you're sure of this we'll go ahead.

Tell them we'll take a sixty-day option on 50,000 shares, no liability to us, at--well, we'll be liberal, say at 15, and when you mention the price impress upon them that I know it cost them but $2 to $4."

I returned at once and began negotiations, but, as is usually the case, the fact that "Standard Oil" was nibbling leaked before I had clinched the option, and before we had even begun to examine the property, prices had advanced until there was a profit of $500,000 for us in the transaction. To look over the Utah property Mr. Rogers sent his son-in-law, Broughton, and in a short time I got word to feed out the 50,000 shares on the market at the best prices obtainable, and to borrow it for delivery in such ways that the Clark-Ward-Untermyer contingent should suspect nothing about it. No information was given me as to the expert's report, and I was absolutely ignorant whether it was good, bad, or indifferent, though from the fact that we were to sell the stock I inferred that it was unfavorable. The public took the 50,000 shares at between 32 and 36, much as an elephant takes in water after a thirsty tramp across sandy deserts--the shares were just sucked in without a gulp or a gasp. I did not know until long afterward that the purchasers were the English holders who had contributed the greater part of the 50,000 shares to meet our option--in other words, were buying back from us their own stock at more than twice the price we were to pay them for it, and that their eagerness was due to confidential information that the expert's examination had disclosed such richness that the price would surely jump to over $100 when "Standard Oil" a.s.sumed the management. Just where they acquired this information or how it was put in their path was a matter I never found out. As I have previously demonstrated, "Standard Oil" has its own system of wires and underground pa.s.sages and rumor bureaus. It works in mysterious ways its wonders to perform.

This section of the deal was soon wound up, and the transaction showed us a profit of $1,000,000. That is, we had sold 50,000 shares which we did not possess, but which were ours on demand, for $1,000,000 more than we should have to pay their owners for them. When I reported my success to Mr. Rogers he expressed complete satisfaction, and ordered me to inform the Utah people that another 50,000 shares must be added to the option, as he could not think of tacking the great name of "Standard Oil" to an enterprise in which he had less than a third interest; indeed, he was not sure that he would consider less than a one-half ownership. This second request was a bitter pill to the Clark-Ward-Untermyer crowd, who hated to surrender for such a low figure this tremendous parcel of a stock that was now selling fast at 40 per share. There was no gainsaying the soundness of Rogers' reasoning, however: "Who made it worth 40? Who but 'Standard Oil'? And what will happen if 'Standard Oil' declares that it will not take Utah into the consolidation?" The bare suggestion threw the Utah contingent into one of those hundred-in-the-shade, twenty-below-zero sweats, which resemble the moisture upon steam-pipes that pa.s.s through cold-storage boxes. They succ.u.mbed. At the moment the option was signed over to us it represented a profit of $1,000,000 more, and when we sold it, it netted us $1,250,000, for the market was still climbing. This latter phenomenon was not surprising, for it should be borne in mind that when our demand for the second 50,000 shares was made, the heavy Utah stockholders were called together and it was explained to them by their own managers--not by "Standard Oil" or by Mr. Rogers mind, for "Standard Oil" never makes false statements--that the expert's examination had developed such wealth that "Standard Oil," the mighty of mighties, had insisted on having at least 100,000 shares; but that, of course, "Standard Oil"

could not be asked to pay over twenty for stock which had cost its original owners but $2 to $4. What was there to do? The stockholders just gave up, and then once more climbed over one another in the market to get back their precious shares as best they could.

Just to keep the conditions of the transaction at this stage before my reader's mind, I'll repeat that the Clark-Ward-Untermyer people had now given us the right to buy of them 100,000 shares of their stock (_at a price $2,250,000 less than we had already sold it for_), with the understanding--not in words or in writing, of course, because "Standard Oil" never makes a promise in writing, but implied as sacredly as though it had been set down and attested under oath--that we would take and pay for their stock and engage with them in their enterprise, giving them the benefit of our experience, our capital, and our prestige. I say they had every reason to a.s.sume that we were acting in absolute good faith, and no ground to suppose that there was any ulterior motive behind our negotiations. It must be remembered that this occurred some years ago, before the "System's" perfidy was a calculated contingency.

The knife was now in, but the "System" had still to corkscrew it in the wound.

CHAPTER XIII