Frenzied Finance Part 5

[3] It must be remembered that the Amalgamated Company never owned all the capital stock of the Anaconda, but, on the contrary, only a few shares over 600,000, which represented the ownership of the Haggin-Tevis-Daly people, and which they had turned in for a lump sum before the market price had advanced. The control of the Parrott, owned by the Amalgamated Company, was purchased for a lump amount from Franklin Farrell and his a.s.sociates for the sum of $4,000,000-odd, not $12,190,000. The Colorado Smelting and Mining Company was also purchased in a lumped batch of Senator Wolcott, not at $7,000,000, but for $2,000,000-odd, while the tremendous advance in the price of Anaconda in the market from 30 to 70 was due to the operations of Messrs. Rogers and Rockefeller for their private account, out of which they made a large additional profit.

There can be no possibility of mistake or successful misrepresentation of these figures: first, because the Anaconda figures are known not only to Mr. Rogers, William Rockefeller, and myself, but to J. B. Haggin, and to the estates of Tevis and Marcus Daly; the Colorado figures, to a.s.sociates of Senator Wolcott and to his estate; and the Parrott figures, to Mr.

Farrell who received the money, and to a large number of those to whom he had to account; and, further, these figures will all be demonstrated in open court in suits outside of any with which I have to do, which are now being brought or are pending.

[4] As a matter of fact, the people lost even more than thirty-six millions of dollars on this part of the Amalgamated transaction, because "Standard Oil" did not sell all the 750,000 shares at $100 per share ($75,000,000) at that time. They retained two-thirds of them, which at a later date they fed out to the public at $115 per share, and at a still later date they took them back at $33 per share.

CHAPTER VII

JUGGLING WITH MILLIONS OF THE PEOPLE'S MONEY

For the purposes of the transaction I have just described the machinery of a great bank or trust company was essential. The vast profit gained here was absolutely "made" through the instrumentality of the National City Bank of New York, but some other tractable inst.i.tution would have been equally efficient. In order that my readers may focus such great financial concerns as this National City Bank, I give right here brief resumes of its career and resources and of those of two of its affiliated inst.i.tutions:

NATIONAL CITY BANK New York City

JAMES STILLMAN, _President_.

The "City Bank" was chartered by the New York Legislature in 1812, and reorganized as a National Bank July 17, 1865. The capital paid in was $1,000,000. Moses Taylor held the office of president for thirty-four years, and died in 1892, when Percy R. Pyne, son-in-law of Moses Taylor, was elected president and held office until the election of James Stillman, of Woodward & Stillman, cotton merchants, when the capital stock of the bank was increased to $10,000,000, and again increased to $25,000,000. The sworn report of the officers and directors filed with the Controller of the Currency shows that the condition of the bank, January, 1904, was:

RESOURCES

Loans and discounts $114,507,919.20 Overdrafts secured and unsecured 162.90 United States bonds to secure circulation 3,220,000.00 United States bonds to secure United States deposits 12,937,000.00 United States bonds on hand 60,120.00 United States bond account 4,450,000.00 Premiums on United States bonds 1,354,013.00 Stocks, securities, etc. 16,709,241.62 Banking-house furniture and fixtures 200,000.00 Due from national banks (not reserve agents) 4,727,461.12 Due from State banks and bankers 644,288.80 Exchange for clearing-house 31,000,935.34 Checks and other cash items 798,843.22 Notes of other national banks 209,015.00 Fractional paper currency, nickels, and cents 684.63 Lawful money reserve in bank, viz.: Specie $36,928,350.00 Legal tender notes 7,100,000.00 44,028,350.00 Redemption fund with U. S. Treasurer (5% of circulation) 161,000.00 Due from U. S. Treasurer other than 5% redemption fund 204,105.95

Total $235,213,140.78

LIABILITIES

Capital stock paid in $25,000,000.00 Surplus fund 8,900,000.00 Undivided profits, less expenses and taxes paid 8,503,038.26 _National bank notes outstanding_ 3,180,000.00 _Due to other national banks_ $36,469,683.95 _Due to State banks and bankers_ 5,903,473.87 _Due to trust companies and savings-banks_ 29,210,461.00 Provident reserve fund 30,000.00 Dividends unpaid 519.00 _Individual deposits subject to check_ 82,576,884.06 Demand certificates of deposit 43,790.00 _Certified checks_ 10,752,671.01 _Cashier's checks outstanding_ 7,631,619.78 _United States deposits_ 12,937,000.00-- 185,556,102.67 United States bonds 4,155,000.00

Total $235,213,140.78

THE NEW YORK LIFE INSURANCE COMPANY

The company was incorporated by special act of the New York Legislature in 1841. It is the third largest insurance company in the United States. The a.s.sets of the company January 1, 1892, were $125,947,290, and income $31,854,194.

In 1904 the a.s.sets were $352,652,048; income, $88,269,531.

THE NATIONAL SHAWMUT BANK, OF BOSTON

This inst.i.tution was incorporated in 1898 with a paid-in capital of $3,000,000. In 1904 its total resources, also liabilities, were $63,471,639, of the same general character as those of the National City Bank of New York.

A calm examination of these figures, illuminated by the explanation of the "System's" methods I have previously given, will awaken the American people to a comprehension of what use "high finance" makes of the savings of the public intrusted to it for legitimate investment.

Nor must it be supposed for one minute that the insurance company and the Boston bank which I have used for ill.u.s.trations differ in any way from scores and scores of their kind which are as absolutely "steered"

in their operations by the National City Bank of New York as the National City Bank of New York is absolutely "steered" by its president, James Stillman, or as James Stillman is absolutely "steered" by "Standard Oil," the Private Thing, or as "Standard Oil," the Private Thing, is absolutely "steered" by its supreme heads, Henry H. Rogers, William Rockefeller, and John D. Rockefeller. And if any doubt remains in the minds of my readers of the absolute power of "Standard Oil," the Private Thing, to "make" dollars at will, or of the dead-sure working of their "heads-I-win-and-tails-you-lose" gambling game, I ask them carefully to a.n.a.lyze the above statements in connection with the facts in the Amalgamated transaction which just precede them.

Fourteen years ago the National City Bank pa.s.sed out of the legitimate management of old-fashioned business men of the Moses Taylor stamp and into the hands of the "System," the Private Thing. Then its capital was $1,000,000; it is to-day $25,000,000, and after having paid out millions in dividends and other profits it has, in addition, a surplus of $16,000,000, and it has the absolute power to juggle with a total of $235,000,000, $36,000,000 of which belong to other national banks, $6,000,000 to State banks and bankers, $29,000,000 to trust companies and savings-banks, $82,000,000 to individual depositors, $10,000,000 to the holders of certified checks, $7,000,000 to the holders of cashiers'

checks, $13,000,000 to the Government directly, and $4,000,000 in Government bonds, to say nothing of scores of hundreds of millions more through its affiliated inst.i.tutions. And all this juggling is done in such a fearless manner that we find it in the Amalgamated deal loaning in one transaction an amount so great that if it had been lost, the bank's entire capital would have been more than completely wiped out.

That my readers may not base their conclusions upon this one transaction of this mighty engine of the "System," vicious as it shows on the surface and destructive as it really was to the thousands who were parties to it, _I will later in this story show the National City Bank in another section of the Amalgamated deal, doing things which in intention and in result were so much bolder and grosser that this transaction will by comparison appear pure and legitimate_.

During the past thirty years the American people have become so used to enormous figures in connection with corporations and trusts that they have not stopped to discriminate between different cla.s.ses of fortunes nor to figure out that fortunes of certain kinds are absolute self-evidence that they were acquired by illegal methods, and that if allowed to multiply the people will surely be enslaved and the republic destroyed. For instance, there are in New York City alone dozens of national and savings-banks and insurance and trust companies which control money enough to make them practically omnipotent in whatever direction their controllers exert their power. I will name but seven, showing what enormous amounts their managers control; and let it be borne in mind that all such inst.i.tutions are linked together by the "System" as firmly and surely as any human things can be linked. The Equitable, Mutual, and New York Life Insurance companies have a combined capital of $1,200,000,000 of a.s.sets, a yearly income of $230,000,000, and $4,500,000,000 of insurance in force; the National City Bank, United States Trust, Mercantile Trust, and Union Trust companies $30,000,000 capital, and $45,000,000 surplus, and they have the vast sum of $450,000,000 of the people's money to juggle with.

CHAPTER VIII

"STANDARD OIL" INVESTS "MADE DOLLARS" IN GAS

And now I shall have to go back a bit in my story. After "Standard Oil"

had firmly established, through the agency of the curb,[5] the value of the 1,000,000 shares of Standard Oil, the corporation seller of oil, at between $600,000,000 and $800,000,000, and had used it as collateral in securing control of the four cla.s.ses of money inst.i.tutions I have named--the national and savings-banks and trust and insurance companies--it proceeded to use the funds thus controlled to manipulate the stocks of great public corporations for its own profit, forming them into trusts with capitals far beyond their values, represented by new stocks and bonds, which it sold to the public at prices aggregating a hundred to five hundred per cent. over the old capitalization. It then engaged in a wonderfully clever campaign to work off on the people--directly, the very rich people, but indirectly, the people as a whole--through inst.i.tutions which exist because of the people's savings--the $600,000,000 to $800,000,000 of Standard Oil stock which had at this stage served the princ.i.p.al use for which it had been created. It must be borne in mind that while "Standard Oil" is grinding out "made dollars," its owners never for an instant lose sight of that dim, distant day of reckoning when the people will awaken to their losses. The "Rogerses" and the "Rockefellers" know well that the public cannot always be kept in ignorance of the methods of the "System" by which it has been plundered, and that once it is in possession of the secret of how the savings of the many have become the property of the few, there may be reprisals of such a nature as will compel the "System"

to yield up its gains. They know that when that day comes it will not be best for them to have their enormous fortunes in such get-at-able property as real estate, in which so many of the legitimately acquired American fortunes are invested. In a quiet way, therefore, they have put the bulk of their "made dollars" into unrecorded forms, such as Government bonds; bonds and preferred stocks of what they consider non-duplicatable franchise corporations such as railroads, which require rights of way; into munic.i.p.al public service enterprises, such as gas companies, the existence of which depends upon rights of way for pipes; and into the stocks of banks and trust and insurance companies, which they believe the people will never dare attack because their savings are largely deposited in them.

I would not have my readers think that the princ.i.p.al motive actuating "Standard Oil" in parting with its Standard Oil stock is doubt of its present intrinsic worth, for such is not the case. The masters of "Standard Oil" are very able, far-seeing men, and they know that so thoroughly have the American people been educated to the crimes which created Standard Oil, the crimes by which it has existed and does exist, that no pa.s.sage of time or "pious-ing" of latter-day methods, will ever blind them to its iniquities, and that when reprisal day comes, as come it surely will, the first thing the people in their frenzy will look for will be Standard Oil. This is the reason which, more than any other, influences them in selling to others an enterprise which has up to the present time not only enjoyed tremendous prosperity, but which has as yet met with no obstacle or hindrance.

Of all forms of tangible investment "Standard Oil" has looked most favorably upon gas stocks, and its secret devices have been worked overtime in consolidating gas companies throughout the United States. In a general way, as manufacturers of illuminating oil, "Standard Oil" had early become familiar with the problems of supplying large communities--cities--with gas light; and with the advent of water-gas, as sellers of petroleum they controlled an important factor in the production of that volatile commodity. All the talent of the "System,"

trained in "handling" munic.i.p.al authorities, came into play in this big new business of lighting cities--a business which perforce became a monopoly as soon as the powerful tentacles grasping it were recognized as "Standard Oil."

At the time my story opens (1894) "Standard Oil" had already captured the gas-lighting corporations of certain of the great cities of the United States, including the immensely rich ones of New York (directly), Philadelphia and Chicago (indirectly); and for two years previously had been besieging the several independent Brooklyn companies for the purpose of consolidating them into a single gigantic corporation. This project it has since accomplished. Its intention is to weld this corporation with the great one that already holds the monopoly of Manhattan.

The task of diagramming a territory for invasion is one after Henry H.

Rogers' own heart. His campaigns are planned with Napoleonic power and foresight. When the capture of Brooklyn was decided on, the several corporations to be subdued were "sized up" as to their revenues and liabilities; the resources of their stockholders were studied out, and a plan of action organized to separate each one from his shares at "hard-pan" prices. In the "Standard Oil" armory there are many instruments of "persuasion," and he is indeed a hardy fellow who can resist the various "trying-out" processes to which mutineers are subjected. This obstinate capitalist will be summarily knocked on the head; that other inveigled into a dark corner by a strong-arm man; another group owe money to one of the "System's" banks and a brief spell on the financial rack will weaken their grip. Sooner or later all succ.u.mb. While such details as these were being attended to, lines were being strung here and there to bring about the pa.s.sage by the city of Brooklyn and the Legislature of New York State of ordinances and laws which should allow this and compel that to be done, and so rivet the various links of the great venture.

While in the midst of this campaign, to which Henry H. Rogers' genius, matured in many a hard-fought business battle, foresaw an early and easy triumphal termination, there came athwart his victorious path a financial guerilla, "balloony," mysterious, yet as sticky as a jelly-fish, who was destined to exert a most maleficent influence on his after-life. Fate hangs no red lights at the cross-roads of a man's career. No "p.r.i.c.king of his thumbs," no strange portents warned the Master of "Standard Oil" that the impudent Philadelphia swashbuckler who dared interfere with the execution of his plan to fetter the "System's"

yoke to the necks of the citizens of Brooklyn was the factor that destiny had chosen to shape the ends that he had rough-hewn.

The financial guerilla was J. Edward O'Sullivan Add.i.c.ks, votary of rotten finance, perpetual candidate for the United States Senate, wholesale debaucher of American citizenship and all-round corrupter of men--J. Edward O'Sullivan Add.i.c.ks, a corporation political trickster, who has done more to hold up American laws, American elective franchises, and American corporations to the scorn of the civilized world than any other man of this or any previous age.

FOOTNOTES:

[5] The New York "curb" is the latest invention in finance, coming closely upon the heels of the invention of trusts, and it holds the same relation to the New York Stock Exchange that Private Things hold to corporations.

Before a stock can be bought and sold on the New York Stock Exchange, there must be submitted to the governors a description of what the stock is, which must be of such tangibility that any one who cares to investigate may find there every detail and particular of the property represented, set forth with the utmost exact.i.tude. But on the "curb" stocks can be traded in without responsible sponsors or descriptions that mean anything. In other words, a stock may be bought and sold there, which is so vague and indefinite as to be little more than a name, and it is through the "curb"

that the value of "Standard Oil" stock is established, for it is daily bought and sold there at the steadily held prices of 650 to 800, and the press of the world makes daily record of these prices.

CHAPTER IX

A VOTARY OF THE "SYSTEM"

The "System" has all sorts of votaries. About J. Edward O'Sullivan Add.i.c.ks there is nothing that remotely suggests coworkers of the types of Mr. Rogers and William Rockefeller. A description that left him in any part a duplicate of either would do him and them a grievous wrong.

Henry H. Rogers and William Rockefeller have two sides, their social side and their business side. Socially, they are good men; in business they work evil. J. Edward O'Sullivan Add.i.c.ks is a bad man, socially, in business, in every way. The term "bad man" is used advisedly. My idea of a "bad man" is that like a bad dollar he is a counterfeit. A counterfeit has all the appearances of reality, and is yet devoid of its properties and virtues. So with Add.i.c.ks. It is easy to find men who will declare by all that is sacred that Henry H. Rogers is one of the best fellows in the world, though as many more will as earnestly proclaim him the fiend incarnate. About Add.i.c.ks, among those who know the man, there is but one opinion. I have yet to meet the man, woman, or child who would say aught of Add.i.c.ks, after a month's acquaintance, other than, "Don't mention him! He is the limit." And it will be said with the calm of dispa.s.sionate conviction, as one might speak of a stuffed tiger in a dime-museum jungle.