FOOTNOTES:[8]As a matter of fact, he did, later, in the peroration of an eloquent address before a public legislative hearing, electrify the law-makers with: "I here and now pledge my word, my fortune, and my sacred honor to the fulfilment of these promises."
[8]As a matter of fact, he did, later, in the peroration of an eloquent address before a public legislative hearing, electrify the law-makers with: "I here and now pledge my word, my fortune, and my sacred honor to the fulfilment of these promises."
[8]As a matter of fact, he did, later, in the peroration of an eloquent address before a public legislative hearing, electrify the law-makers with: "I here and now pledge my word, my fortune, and my sacred honor to the fulfilment of these promises."
In no walk of life is that head-light axiom, "Man proposes, God disposes," so often flashed plump in the eyes of enthusiastic travellers for their bewilderment or befuddlement as in finance. At this very moment of success I was, without knowing it, on the brink of ruin, owing to causes and conditions which were beyond human power to calculate or foresee. Here is what happened:
All the details of our bargain having at last been agreed upon verbally, it was proper the principals should get together and formally execute the documents which should bind the trade. We arranged to meet on a given Saturday at the beautiful stock-farm of Parker C. Chandler, Esq., the Bay State's general counsel, and as secrecy was important, a special train was to take the party the twenty-five miles out of Boston. By an unavoidable accident I missed the train, and in driving over the road in a bleak rain-storm, caught a violent cold. I was about three hours late, but when I arrived we went to work with a will and by seven o'clock, shortly before dinner, our contracts had been dictated to the stenographers and would be typed, ready to sign, by the time we came to our coffee.
That dinner was a thing to be remembered. No one in New England understands more admirably the art of dining than does Parker Chandler, and he gave us a feast worthy to celebrate the brilliant new combination which was to end all our troubles and lead us out of darkness into the light. As the cheese was being served I was seized suddenly with a terrible pain, which was followed by convulsions. They carried me to a bedroom; lawyers and capitalists wentscurrying after doctors, and in the confusion the documents which were all ready awaiting execution were put aside. It was obvious that at that moment I could not O.K. them. At last specialists from Boston arrived and it was diagnosed that I was suffering from an aggravated attack of appendicitis. At two o'clock in the morning, after a prolonged consultation, the consensus of opinion was that my next field of operations would be in another world.
It must have been some time a little later that I, awaking to a brief interval of consciousness, witnessed a tableau, the memory of which invariably rises to my mind's eye whenever I try to mitigate or subdue my feelings of hatred and disgust for Addicks. The room was dimly lit; the two doctors were at the foot of the bed; Addicks, standing beside them, was looking fixedly at me. I caught his eye; doped as I was with opiates I saw the cold, calculating expression of his face, which told me as plainly as words that he felt it was all up with me, that my usefulness to him was at an end, and that without a thought for my interests or a scintilla of regret, he was calculating how to turn my death to his advantage. An amused conviction of the man's heartlessness crept over me, and then I passed out into the land of dreams.
From that night until one bright morning ten days later, I was visiting other worlds than those of finance and gas; but on the tenth day they told me I had eluded the grim ferryman and, barring accident, might get out into the world again in five weeks. A suspicion which owed its origin to that glimpse of Addicks on the first night of my illness awakened in my mind, and the following day I sent for my principal attorney and demanded an exact statement of what had happened in the interval of my illness. He had kept close track of all that had occurred, and the facts he revealed, calloused as I was to the thought of Addicks' baseness, horrified me by their cold-blooded villany. My associates had gone ahead with a vengeance, without waiting a minute to see whether I should live or die. My offer to the Legislature had been withdrawn; Addicks had substituted his name for mine in all the documents, and then hehad traded with Rogers. It had been arranged between them that Whitney should go on and get the charter, which was to allow the company to sell gas at any price, for it was not to be under the supervision of the gas commissioners, who had pledged the public that the price of gas in Boston should not ever be more than $1 per one thousand feet. This obtained, a new corporation was to be organized, into which Rogers would merge his companies, and Addicks our Boston properties, in such a way as to leave Bay State stock and bondholders high and dry, while Addicks, Whitney, and Rogers reaped tremendous profits. These amiable plans were being hammered into shape at top speed, and unless I could get into harness at once, my friends and I would most certainly be ground up. Head-quarters had been opened at the Algonquin Club, and there Addicks, Whitney, Towle, and the lawyers and lobbyists were holding day and night sessions.
There was but one thing for me to do, and I lost not a moment. I sent for my doctors and said: "I will devote to-day, to-morrow, and next day to getting well; but on the fourth day I will be moved in a special car to Boston and then to the Algonquin Club." I explained the situation and showed them that regardless of all consequences this must be done.
I shall never forget the expression on the faces of these loyal associates of mine—Addicks, Whitney, and the others—when I dropped in upon their deliberations Saturday morning, four days later. My doctor, a nurse, and my lawyer accompanied me, and I was swathed in flannels and shawls. I got to a chair, dismissed my attendants, and launched in. What little I had to say would be brief, I told them, but "edgy." It was all that. I insisted that we should go right back to our old bargain exactly at the place we had left it the night I was taken ill. If they did not comply, I would make application for a receiver for the Bay State companies and give to the afternoon papers the inside facts of the affair from beginning to end. No one doubted either my ability or my determination to carry out my threat. We sent for the documents that had been prepared at Parker Chandler's, and inside of three hours these had been substituted and the several agreements entered into with Rogers formally renounced. I retired to bed that night with a chuckle of self-satisfaction, and a convincing appreciation of the truth of the axiom I have referred to.
The low-down treachery and double-dealing characterizing this transaction, the utter callousness to sacred obligations it exhibits in men of presumed high standing and personal honor, may surprise my readers. I assure them that several such episodes will be told in the forthcoming pages of this history. Indeed, among a certain school of eminent financiers, loyalty is no more than devotion to the opportunity of making the highest profit. If circumstances shift this from the side of their enlistment to that of an adversary, their arms and hearts go where their pockets lead. It must be remembered that the Hessian who "down-town" is steeped in perfidy, trickery, and fraud, may appear before the "up-town" world as a Christian citizen and an example of domestic virtue. The type is not uncommon nowadays of the pleasant and proper gentleman, prompt to knock down any one daring to asperse his veracity after five any evening and all day Sunday, but who considers himself free to engage in any dirty juggle or misrepresentation from 9a.m.to 4.45p.m.In office hours you run no risk in calling him a liar, for then he'll laugh at the joke and tell you business is business. However, the foregoing episode was an experience that left an indelible impression on my mind, and the hatred and disgust it engendered precipitated events out of which in the course of years came the offences and injuries that are responsible for the story of "Frenzied Finance."
The immediate results of my reappearance were not startling. Rogers raved at Addicks and especially at Whitney, but he was too old a student of men, and the monkeys Dame Fortune makes of them, to sulk over the facts he could not remedy. He soon resumed his former attitude of waiting for something to turn up, which indeed he had maintained ever since my unsuccessful effort to make terms with him.
Fate had not yet tired, however, of playing shuttlecock with our hopes. The world learned one morning of a new gas called acetylene, clear, brilliant, cheap, and simply made from calcium carbide. It would surely revolutionize gas-making the world over, and the company which could secure the right to it would have those who could not at its mercy. Addicks moved like a flash to gather in the advantage, and the announcement that the new gas had been proved a success was coupled in the press with the news that the Bay State Gas had captured the invention for New England, and was to pay millions for it. This did give a boost to our securities, and for a time it looked as though we had clinched our success with another rivet. What Addicks had done was this: He had bought the right, subject to the test of a big public demonstration. For this demonstration a fine flare-up was arranged. Eminent mayors, counsellors, and gas magnates were to attend in multitude, and if the invention met its engagements, there would be such a blaze of publicity and congratulations that we felt sure our new stock would go off like hot cakes. The demonstration proved in a most sensational way that acetylene was a failure—a tremendous explosion occurred; three men were killed, many others injured, and next day back went our stock to its old figures.
All this time I had sought most diligently for the real solution of our troubles—a method of purchasing Rogers' companies. A substantial guarantee there must be, not only for the performance of our financial engagements but to insure to Rogers the integrity of his properties while under the domination of Addicks. The difficulty was, in the weakened condition of the company, to put together any satisfactory guarantee. Others in our group had wrestled with the problem as strenuously as I had. Suddenly, a few days before May, 1896, the light came to me. All the time the solution had been in our hands, and, beset as we were, it had never occurred to any of us. We absolutely controlled the old Boston gas companies. They were intrinsically among the richest corporations in Massachusetts, and although their stocks were pledged for the $12,000,000 of bonds held by the public, they did not owe a dollar. Thoughthe terms of the agreement between the Bay State Company and the Mercantile Trust, which held their shares, precluded them from contracting any debts, they were empowered, through us, their officials, to buy or sell gas, and all their great wealth was behind such contracts. If, then, we agreed on their behalf to buy gas of the Brookline Company for a term of years at such a price and in sufficient quantities to give the latter concern a profit equal to ten per cent. dividends on its stock, surely we had complied with the very letter of Rogers' exaction. Testing the idea in one way and another, I found it sound as a bell. The problem after that was to get into shape for the substantial issue of new stock we must make to pay for our purchase. The banks and trust companies were loaded up with our securities pledged for loans, and before there could be any conviction behind our prosperity it behooved us to get all our valuables out of pawn. I went to Mr. Rogers and frankly told him I had solved our problem and his by a financial invention of my own. I entered into the details of our plan, explaining it would not even be necessary for us to buy any gas of him, because we would turn over a sufficient number of our own customers to the Brookline Company to secure to it the required profit. He saw in an instant the scheme with all its far-reaching possibilities, and assented. Then I broached the rest of my plan—we would pay him four and a half millions in six months. To do this we must sell stocks and bonds. Before we could do that it was necessary that he help us still further—he must buy of us all the bonds now in pledge and the stock of the Dorchester Gas Company, another Bay State asset up for security, all for the sum of a million and a half dollars. For this amount these securities would at once be released and turned over to him. Then he should resell them to us together with the Brookline Gas Company for six millions of dollars. There would be a formal turning over of the management of his properties so the public should be convinced that we really were the victors in the strife. Mr. Rogers saw my point, quickly ran over the details in his comprehensive way, and closed the trade without furtherbargaining. That time, thank Heaven, it was not within Addicks' power to thwart me.
On May 1st we made our settlement in compliance with the terms I had arranged. The six millions of dollars were to be paid November 1st. As the necessary options and sales could not legally run to our company, they were made to Henry M. Whitney, and he simultaneously transferred them to us, and we elected him a director of our different corporations. Rogers publicly resigned and turned over to us the control of the Brookline Company, and we elected our own management. To all intents and purposes we had won.
The settlement was the sensation of the day in financial circles, and I was the recipient of many generous congratulations. I had neither time nor inclination to take care of bouquets at that moment, however. I was too keenly aware of the difficulty of raising six millions of dollars in the limited period at our disposal. Times have changed since 1896. Then six millions was quite a large sum, larger than sixty millions now. That was before the halcyon period of "Frenzied Finance."
That six months between May 1st and November 1st was the most crowded period in all my experience up to that time. Events of consequence tumbled over one another in startling succession. We actually lived on sensations. In exercising the historian's right to choose the order of setting down incidents I am puzzled as to which to give precedence. Shall I begin with the sensational bribery of the Massachusetts Legislature which occurred within this period, or with the episode that was the exciting climax of that interval of trial? About this time, too, occurred the laying of the foundation of "Coppers" and Amalgamated, but that certainly requires a chapter to itself. However, as all are starry examples of what made "Frenzied Finance" possible, and as any one fits into my story as well ahead as behind the other two, I'll take them in the succession above set down.
The Whitney machine for the manufacture and moulding of legislation was complex but efficient. It achieved its wonders in broad daylight. Considering all it did and how that all was accomplished, the astonishing fact is that no outcry to speak of was ever raised at its performances. It was vastly bolder than Tammany and made fewer excuses for its grabbings. It must be remembered, however, that its chief engineer was a leading citizen, and his assistants all gentlemen of great respectability and admirable antecedents, and, in Boston, social and civic distinctions are shields behind which much may be concealed.
Corrupting a Legislature is not something a man may do with a fillip of his finger and thumb. However bold the operations, the convenances must be observed. When really large designs are entertained, the manipulator sets to beforethe preceding election and has his "lawyers" at work throughout the country interviewing candidates and ascertaining their feelings. Thus a certain percentage of votes are signed and sealed in advance, ready for delivery at the proper time. But there is always a crowd of new men who must be taken care of on the spot, and these must be approached with tact. Some amateurs have fanatical notions of honor which interfere with both their own and the interests of franchise-grabbers. To deal with all contingencies, to take care of captured votes and to shape legislative proceedings along safe lines, requires the services of almost an army of men.
At the head of Whitney's forces was his lawyer, George H. Towle, big of brain, ponderous of frame, and with the strength of an ox. A man of terrific temper, he knew not the meaning of the word fear. Nothing aroused him to such frenzy as to have to do with a legislator who unnecessarily haggled over the price of his vote or influence. On occasions when a lieutenant reported that Senator This or Representative That would not come into camp, Towle, with an oath, would say: "Take me to him, and I'll have his vote in ten minutes or there'll be occasion for a new election in his district to-morrow!"
Second in command was Mr. Patch, Towle's secretary and factotum, his exact opposite in every way. Where Towle was brutally straight to the point, Mr. Patch was as smooth an intriguer as ever connected himself with secrets by way of keyholes and transoms. It is a Beacon Hill tradition that for years Towle on final-payment day would have the members of the Massachusetts Legislature march through his private offices one at a time, and, handing each of them their loot, would proclaim: "Well, you're settled with in full, aren't you? That represents your vote on —— and on ——." Then he would loudly identify the bill and the particulars of the service, while behind a partition with a stenographer would be Mr. Patch, who after the notes had been written out would witness the accuracy of the stenographer's report. When the Legislature assembled again, old members, the same story goes, would be requested to call on Towle to renewacquaintanceship. Then he would allow them to look over his memoranda "just to keep them from being too honest," as he gently phrased it.
Subordinate to Towle and Patch was a long line of eminently respectable lawyers known over the Commonwealth as "Whitney's attorneys." These men assisted at nominations, orated at elections, and took care of the finer preliminary details. The first line of attack was composed of practical politicians of various grades—ex-senators or representatives, and local bosses, who were known as "Whitney's right-hand men." Below these were the ordinary lobbyists, the detectives, and runners, who kept "tabs" on every move and deed, day and night, of the members of the Legislature. This was the Whitney machine, and it worked together with that fine solidity and evenness which can be attained only by constant practice and much success. In comparison with this competent organization, an average "Tammany Gang," a "Chicago Combine," or a "St. Louis Syndicate" would look like a hay-covered snow-plough in August.
It is seldom the public is given an opportunity of seeing a picture, drawn to life, of the Legislature of one of the greatest States in the Union in the act of being bribed to grant the votaries of "Frenzied Finance," for nothing, those things which should and do belong to the people, and for which the "System's" votaries would willingly pay millions of dollars if they were compelled to. I shall dwell on the performance that ensued at this juncture of my story long enough to present an outline of such a proceeding.
Head-quarters for Whitney's Massachusetts Pipe Line were opened at Young's Hotel—Parlors 9, 10, and 11, Rooms 6, 7, 8, second story front. Parlors 9 and 10 were the general reception-room, while 11 was reserved for the commander himself and for important and "touchy" interviews. The rooms 4, 5, 6, 7, 8 were used for educational purposes. In the morning the place was deserted, but at noon the parlors began to fill up with the different officers of the "Machine" and their friends, trustworthy members of the Legislature. A little later an elaborate luncheon would be served, the supernumeraries eating in one room, Towle and his chiefsand the legislators in the other. At table the gossip of the morning session at the State House was exchanged and the work laid out for the afternoon legislative and committee sessions. Another interval of silence and peace until at 5.30 the real business of the day began. Mr. Patch was generally on the ground first, carrying the books in which the bribery records were kept, for be it remembered that the efficiency of the Whitney machine was largely due to the thoroughly systematic manner in which its operations were conducted. Nothing was left to chance or to any one's memory. In turn, the subordinates presented careful reports of the day's transactions. At 6.30 Mr. Towle would go over these documents, "sizing up" the actual results for submission later to the chief himself. Between 7.30 and 8.30 the "Machine" dined; the remains of the feast having been removed, the doors were locked and the books brought out.
If an outsider could possibly have obtained the entry to the head-quarters of the Whitney Massachusetts Pipe Line, say at nine o'clock any evening during the session, he might easily have imagined himself at the Madison Square Garden or at Tattersall's on the evening of the first day of an international horse-sale. This is what he would have seen: In Parlor 10, seated at a long table a dozen of Mr. Towle's chiefs, all in their shirt-sleeves, smoking voluminously; before each a sheet of paper on which is printed a list of the members of the Legislature; against every name a blank space for memoranda; at the head of the table Towle himself, frowning severely over a similar sheet having broader memoranda-spaces. One after another the chiefs call off the names of the legislators, reporting as they go along. The outsider would have heard droned monotonously: "..... from ..... not my man; ..... from ..... my man and .....'s man; seen to-day, stood same as yesterday; ..... from ....., raised price $20, making it $150; agreed; $10 paid on account, total of $90 due; raised because ..... told him that he had got $20 more from ....."
As each man reports the other chiefs and Towle discuss the details, and when a decision on disputed points is arrived at, Towle makes a memorandum on his blank, and the chiefconcerned records the order in the little note-book which each carries. All reports at last in, Towle retires to Room 11 and speedily returns with the "stuff," consisting of cash, stocks, puts, calls, or transportation tickets, which he deals out to the chiefs to make good their promises for the day. It would have been obvious to the outsider, as soon as he had learned what was being dealt in, that a large proportion of the members of the Great and General Court of Massachusetts had bargained with the different members of "the machine" to sell their votes not only in committee but in full session of the Legislature, and that the price was to be paid when the votes were cast, though something was invariably exacted on account, to tie the bargain. Payment was made in cash, calls on Bay State Gas or Dominion Coal, or transportation on any of the railroads in the United States or Canada. The latter appears to be a class of remuneration Towle favored, probably because it cost nothing.
The conference seldom closed for the day without Towle admonishing his subordinates: "The old man's getting dead sore at the way his leg is being pulled, and if you fellows don't get those countrymen to play a more liberal game, they'll just drive the boss out of the business, and then there'll be a slump in prices that'll make them prefer to stay home and farm."
You may ask here, Could such things happen without attracting public attention? Or are the citizens of Boston so habituated to the corruption of their Legislature that they could witness unmoved this wholesale bribing campaign conducted in full daylight from Young's Hotel? Thank Heaven, this is not so. There are in every American community honest, sturdy souls who can be depended on to come forward in emergencies and cry out aloud against a threatened political crime. Above the brute hubbub of a city's roar their voices are heard like the voice of conscience, and the hurrying throng pauses a second in its mad rush after dollars to listen to their tale of the Commonwealth's wrong. But what's in the air is not on earth. The practical politicians, whose affair it is to heed and counteract these honorable protests, laugh contemptuously at the vanity of any contest betweentheories and the "stuff." They know the overpowering logic of gold.
There were public meetings in Boston; good-government clubs throughout the State met and "resoluted"; citizens' organizations howled robbery and malfeasance. For a few weeks all Massachusetts seemed wrought up. From the space the papers gave the protestants one might have imagined that there was a chance for virtue, but the results of the clamor were more apparent than real. Day by day, night by night, the "machine" ground away at Young's, and as its product fell into the hopper Whitney and Towle only smiled at the clamor and awaited the moment when, as Towle coarsely put it, "the reformers would have yawped themselves to a standstill."
That day came at last. One by one, all in a perfectly orderly and methodical manner, the giving-bonds-to-compel-promises clauses, restrictive amendments and other people's safeguards had been voted down and the "Are you ready for the main question?" having been put in both houses, the Massachusetts Pipe Line Charter was duly passed and sent on to the governor. It required his signature to make the bill a hard-and-fast law, and that once appended, all Towle's "promises to pay" became due.
As the campaign neared a finish Whitney had, a number of times, informed his chiefs, and they the members of the Legislature, that the governor had given personal assurance that if the bill passed both houses, he would sign it. On this score all interested had been relieved of doubt, and immediately upon the Senate's favorable action Bay State and Dominion Coal shares advanced in price. During the period the governor had the bill under consideration there was an active and rising market and a great volume of transactions on the Stock Exchange. Apparently the day of our peace and prosperity had dawned at last. But we were not yet out of a gnarled Fate's clutches.
In the midst of a strenuous forenoon of trading, suddenly, without the slightest warning, both stocks began to sink in price like pigs of lead from a capsized boat. At once I was on the defensive. To prevent a wild market panic duringthe few minutes consumed in getting telephone connection with the State House, I had to purchase thousands of shares. I knew that something disastrous had happened, but was not prepared for the startling information that came over the wire: "The governor has vetoed the Whitney bill with a savage message." My informant told me that Towle and his men were making for head-quarters on a run. As I hung up the receiver, the bell rang again. In a second my telephone with Whitney's office was in the middle of a spasm.
"Have you got the news, Lawson?"
"Have I got it? The tape is screaming it.[9]Bay State and your stock are racing for the bottom," I replied.
"What shall we do? This is a thunderbolt."
"Do?" I replied. "It's for you to say what to do. That's your end, not mine, but from now until three o'clock one thing you must do, or there'll be no further thinking on the subject—protect Dominion Coal—have your brokers on the floor every second and tell them to buy all that's offered. Beat a slow retreat if you must, but prevent a wild break. Things at the Exchange are bad now. I'll take care of Bay State. Look out for Dominion at once, and when you are through I must see you—where?"
"At Young's in ten minutes."
"I'll be there."
Ten minutes later I was in Whitney's head-quarters. There pandemonium reigned; all the cocksureness and bluster of the "machine" had vanished, and it was a horde of clamorous and excited men I found struggling round Towle and Whitney, who vainly sought to stay the panic. It was not disappointment at the governor's message that had so stirred these hardened practitioners of politics, but the terror of impending loss. The majority of the Whitney band, lawyers, lieutenants, and water-carriers had bought one stock or both on margin, and had assured their friends it was safe to plunge to the limit.
On earth there is no more pitiable sight than the panic of a herd of novice stock-speculators suddenly awakened to a realization of their ruin. The ticker clicks a sort of death-watch as the merciless tape, without hitch or let up, reels off destruction. To such desperate beings the stock operator—the market-maker—is the straw to save them from drowning, and to him they turn as the one possible source of aid and hope. I only knew these men at sight's end, but they knew me and were sure in their abject plight that I could help them—by what wizardry they never stopped to think. They were terribly certain that unless the market turned, their brokers must have additional margin or their stock would be thrown overboard, sinking prices still lower and bringing down their friends' stock, and so on, like a row of falling bricks.
From their comfortable viewpoint of out-of-temptation virtue, my readers may regard these lawyers, lieutenants, and water-carriers of Whitney as bad men, deserving of no sympathy, meeting here a righteous punishment; but, my word for it—and I know the world and the human ants and spiders who inhabit it—while they bore no marks of immorality, they were the average men one meets in one's journey over the bridge between the two unknowns.
My talk with Whitney and Towle was brief and pointed. It was no time for pow-wow. It was the moment for action. Men who do things in stock-markets never waste time over milk that is in the gutter. How to get new milk to replace that spilt is their care.
"What are you going to do, Mr. Whitney?" I asked.
George Towle started to explain. I stopped him.
"The market is bad," I said, talking quickly. "If time is dribbled, it will be worse, and—and Boston will be a warm place for you, Towle. It would not surprise me if it got warm even for Mr. Whitney, when the desperate men who are filling the brokerage shops and the corridors outside demand a reason why they were egged on to buy stocks on Mr. Whitney's word that the governor would sign. No excuses now; I want to know from Mr. Whitney just what he proposes to do. You both told me the legislative end was none of my business, and, thank Heaven, it was not. You said it was your business. Now, how about it?"
Henry M. Whitney is a great general. He also can light his cigar, when the battle's on, with the friction of a passing cannon-ball.
"I'm going to pass it over the governor's veto," he instantly answered.
"Can you do it?" I asked.
"I can, for I must." He meant it. It needed but one look into his and Towle's eyes to see they both had read the message on the back of To-morrow's visiting-card.
"All right," I said. "Let your people have the word, and it must have no doubtful ring; tell your brokers to buy Dominion Coal, and don't let them stand on the order of their buying. Dominion Coal must be put back, regardless of how much it costs or how little you want what you must buy. I will turn Bay State before three if it is necessary to trade in the whole capital stock to do it."
As I came out of Parlor 11 to rush back to my office I said to the despairing men who crowded the corridor outside the head-quarters, and who had in their desperation thrown all caution or thought of concealment to the winds: "Coal and Gas look to me like good buys." The sudden revulsion of feeling was pathetic. In a minute the news had spread by way of them to their brokers and their suffering friends: "It's all right; Whitney and Lawson are buying stock." It got to the Exchange almost as soon as I did.
We turned the market.
That night Whitney and Towle's plans were mapped outto the army and their orders despatched with a vicious snap that plainly said: "Whoever attempts to put the Whitney machine in a hole will be shown no mercy." The morning papers announced that Whitney had picked up the gantlet Governor Wolcott had thrown at his feet, and—all roads led up Beacon Hill.
It was a quick, sharp set-to. Every man was lined up with a jerk, and when the line was tallied up and tallied down and Towle had consented to the last raise in price of votes and given away to the final squeeze, the word went up and down the ranks that the Whitney bill would, on the approaching last day of the session, go flying through both Houses over the governor's veto with a vote or two to spare. Again the prices of the two stocks shot upward.
Then, sharp and quick as a bolt of lightning, Fate, who apparently had been camped on the trail of Bay State Gas and Addicks from the first, let fly another of her quiver's contents. On the morning of the closing day of the session (the one selected for the Whitney coup), there slipped in and out amongst the Whitney legislative ranks a man with a story. As each legislator listened, his brow knitted and he nodded assent. The story was a simple one: In one of Whitney's former campaigns, desperate like this one, on payment-day Towle had gone back on his promises and forced the acceptance of a fifty-cents-on-the-dollar settlement; and, so the story now went, he, Towle, had put the saved fifty cents, a matter altogether of some $75,000, in his own pocket. Probably he was now going to repeat the operation on an even larger scale. In an hour there came to Young's Hotel a trusty messenger who delivered to Towle himself the ultimatum of the Great and General Court of the dear old Commonwealth: "Money in advance or no bill!"
Consternation reigned. The army was quickly recalled to head-quarters, and despatched back to the State House to put through every manœuvre known to the two veterans—but to no purpose. The Great and General Court stood its ground, openly defied the army and hurled back into Towle's teeth all his frantic threats. It was the last day, and the Great and General Court was intrenched inside the protecting wallsof the State House, and it knew that before it could be compelled to come forth to face Towle he must come to a decision. A terrible dilemma, surely, for the amounts promised had run up to such an enormous aggregate that it was impossible to pay all in so short a time, even if such had been Whitney and Towle's intention. Yet to pay one or a few of the dangerous malcontents meant to pay every one; the gang had firmly banded themselves together.
This was the real moment of panic. Even Whitney and Towle were at their wits' end. Finally, in desperation, and as a last resort, Whitney rushed to the governor, threw up his hands, and asked for mercy. "What would the governor sign?"
Massachusetts' able and fearless Governor Wolcott, who seemed to have been expecting some such outcome of the battle, gave his answer clear as an anvil-blow:
"You have told the people your company would give them cheap gas. Bind yourself to do it by amending the charter so that the highest price your gas can be sold at will be sixty cents. Then I will sign."
There was nothing else to do.[10]At the last minute theamendment was inserted. The governor's representative gave the word that it was satisfactory, and it passed.
I was in my office taking care of the market. Of the stampede I knew nothing. Suddenly came the word: "The Whitney bill has passed on the governor's recommendation." Both stocks started to jump; then a halt, then—I didn't try to stop the decline, for I saw something terrible had happened. In a few minutes the news was on the Street: "The charter was not worth the parchment upon which it was engrossed."
The biter had been fatally bitten.
The market closed with the tape and ticker fiercely, exultingly shouting "Ruin!" with each tick and slip: and that night Whitney's head-quarters was little better than a mob. Frantic men demanded money, money due to them for votes, money they had promised for margins to the brokers before the Stock Exchange opened the next day, and swearing desperate consequences to Whitney and Towle regardless of the effect upon themselves.
Early next morning there came to my office two wild-eyed, desperate creatures, Towle and Mr. Patch.
I had spent the night going over my accounts and those of which I had charge, and in addition to a quick, real loss of over a million dollars, I realized that the immediate future was so hung with dark clouds that I dared not anticipate what the coming day might mean to me and mine; but when I looked upon the big, powerful man, who had always seemed in any light in which I had heretofore beheld him to fear neither man nor God—when I looked and saw his plight I pitied him deeply, sincerely. He carried a large travelling-bag, and Mr. Patch two others.
"Lawson, for God's sake, don't do what they are all doing—don't upbraid me! I've got to get out into the world and be dead to all I know—family, friends, every one. If I stay, it's State's prison or worse, and Whitney says I mustgo. I've got all the papers together and Whitney has given me what cash he had on hand, and this check of $10,000. Do me one last favor, get me gold for it. I know I have no right to ask any favors of you, but think if you were in my place. I have a wife and children, and—" and the great, strong man wept like a child.[11]
I called my secretary, and in a short time George Towle with the $10,000 in gold and the bags of "evidence" faded out of my life and into the gray mist of eternity.
A few days after, a vessel dropped anchor off the island of Jamaica; George Towle's body was carried ashore and buried, and Mr. Patch was escorted back to the ship. A few days later, with weights of lead to carry it to its last resting-place at the ocean's bottom, the latter's dead body was dropped over the vessel's side. And somewhere floating the high seas are a venturesome sailor-captain and a crew, who when in their cups tell, 'tis said, strange tales of bags of gold and mysterious documents.
As for the members of the Great and Good Court of the old Commonwealth of Massachusetts for the year of our Lord One thousand eight hundred and ninety-six, they received, none of them could tell from where, their promised vote-money in the form of a yarn that the "stuff" belonging to them had been delivered to George Towle, but that Towle had decamped with it to foreign shores, where he was living in luxury with Mr. Patch.
'Tis writ that some crimes are so black and foul that they will not down, and when I read over what is written here, I wonder if there will not some day be another chapter of "Frenzied Finance" written by another pen than mine.
I sent two police officials to the island of Jamaica, and had the contents of the coffin marked "George H. Towle" photographed. I could not photograph the contents of the ocean's depths.
FOOTNOTES:[9]A stock operator's one reliable source of information is his ticker and tape. For the benefit of those of my readers who are unacquainted with the paraphernalia by which stock-markets and financial operations are conducted, I would say that the ticker is a small printing machine through which passes an endless paper tape. The machine is run by telegraph wires, and it prints upon the tape letters and figures which are abbreviations of the names and prices of all the stocks and commodities dealt in on the stock-exchanges and boards of trade throughout the world. The instant anything of moment happens anywhere, it is reflected by a rise or fall in the price of securities or commodities such as wheat, corn, pork, cotton, etc., that are dealt in in the different stock-exchanges or boards of trade. As soon as a share of stock or bushel of wheat is sold by one operator to another on the floors of the different exchanges, its price is within a second printed on the tapes in the different offices. Therefore what the ticker "ticks" out onto the tape is instantly read by operators throughout the world, and as "the tape never lies," operators turn to it for their real information. When the ticker begins to increase its clatter and the tape to travel fast, an operator will tell you its activity means something unusual is happening. The ticker begins to talk at ten o'clock each week-day morning and finishes at 3p.m., with the exception of Saturday, when the hour is 12 noon. These are the hours that the stock-exchanges are in session.[10]The charter as originally passed had gone through by a fair majority, but to pass it over the governor's veto was another matter. That required a two-thirds majority of both houses, and in the brief time at the disposal of the conspirators the securing of the additional votes was wellnigh impossible. From the necessities of the case such votes must cost much more than those of the original supporters of the bill, for it may be taken for granted that most of the members of the minority had already withstood such temptations as the Whitney faction had cared to offer. It was therefore a case of bringing into camp the most honorable and the most expensive members of the legislature, and without opportunity for strategy or manipulation. The sole recourse was rank, flat bribery, and that in full view of a mutinous following ready at the suggestion of the slightest favoritism to the new men to become actively hostile. The task was altogether too fraught with peril, to be undertaken. When they realized how threatening the situation really was, Whitney and Towle decided to make terms with the governor. The charter once obtained, they calculated that the obnoxious clause might be amended out of it at a subsequent session (as a matter of fact this charter, with its 60-cent clause, was afterward made the nucleus of the present Massachusetts Gas companies which has just been floated on a basis of $53,000,000 capital). Besides, the state of feeling of the legislators and conditions in the stock-market had both to be taken into consideration. It was not the fault of the legislators who had voted for the charter that the governor had vetoed it, for they had been given to understand by Mr. Whitney that he would not oppose it. They had delivered their goods, and now, if the governor's sanction could be had under any sort of a compromise, they would certainly hold Towle and Whitney responsible for failure to make whatever arrangements were necessary.[11]Towle told me, as he waited impatiently in my office for the gold, that in addition to the great losses the drop in price of the two stocks had inflicted on himself and his associates, there were losses on stocks held by legislators, who had plunged on assurances that the charter would go through, and that the amounts he would be called on to pay, if he remained, were far greater than could possibly be met.
[9]A stock operator's one reliable source of information is his ticker and tape. For the benefit of those of my readers who are unacquainted with the paraphernalia by which stock-markets and financial operations are conducted, I would say that the ticker is a small printing machine through which passes an endless paper tape. The machine is run by telegraph wires, and it prints upon the tape letters and figures which are abbreviations of the names and prices of all the stocks and commodities dealt in on the stock-exchanges and boards of trade throughout the world. The instant anything of moment happens anywhere, it is reflected by a rise or fall in the price of securities or commodities such as wheat, corn, pork, cotton, etc., that are dealt in in the different stock-exchanges or boards of trade. As soon as a share of stock or bushel of wheat is sold by one operator to another on the floors of the different exchanges, its price is within a second printed on the tapes in the different offices. Therefore what the ticker "ticks" out onto the tape is instantly read by operators throughout the world, and as "the tape never lies," operators turn to it for their real information. When the ticker begins to increase its clatter and the tape to travel fast, an operator will tell you its activity means something unusual is happening. The ticker begins to talk at ten o'clock each week-day morning and finishes at 3p.m., with the exception of Saturday, when the hour is 12 noon. These are the hours that the stock-exchanges are in session.
[9]A stock operator's one reliable source of information is his ticker and tape. For the benefit of those of my readers who are unacquainted with the paraphernalia by which stock-markets and financial operations are conducted, I would say that the ticker is a small printing machine through which passes an endless paper tape. The machine is run by telegraph wires, and it prints upon the tape letters and figures which are abbreviations of the names and prices of all the stocks and commodities dealt in on the stock-exchanges and boards of trade throughout the world. The instant anything of moment happens anywhere, it is reflected by a rise or fall in the price of securities or commodities such as wheat, corn, pork, cotton, etc., that are dealt in in the different stock-exchanges or boards of trade. As soon as a share of stock or bushel of wheat is sold by one operator to another on the floors of the different exchanges, its price is within a second printed on the tapes in the different offices. Therefore what the ticker "ticks" out onto the tape is instantly read by operators throughout the world, and as "the tape never lies," operators turn to it for their real information. When the ticker begins to increase its clatter and the tape to travel fast, an operator will tell you its activity means something unusual is happening. The ticker begins to talk at ten o'clock each week-day morning and finishes at 3p.m., with the exception of Saturday, when the hour is 12 noon. These are the hours that the stock-exchanges are in session.
[10]The charter as originally passed had gone through by a fair majority, but to pass it over the governor's veto was another matter. That required a two-thirds majority of both houses, and in the brief time at the disposal of the conspirators the securing of the additional votes was wellnigh impossible. From the necessities of the case such votes must cost much more than those of the original supporters of the bill, for it may be taken for granted that most of the members of the minority had already withstood such temptations as the Whitney faction had cared to offer. It was therefore a case of bringing into camp the most honorable and the most expensive members of the legislature, and without opportunity for strategy or manipulation. The sole recourse was rank, flat bribery, and that in full view of a mutinous following ready at the suggestion of the slightest favoritism to the new men to become actively hostile. The task was altogether too fraught with peril, to be undertaken. When they realized how threatening the situation really was, Whitney and Towle decided to make terms with the governor. The charter once obtained, they calculated that the obnoxious clause might be amended out of it at a subsequent session (as a matter of fact this charter, with its 60-cent clause, was afterward made the nucleus of the present Massachusetts Gas companies which has just been floated on a basis of $53,000,000 capital). Besides, the state of feeling of the legislators and conditions in the stock-market had both to be taken into consideration. It was not the fault of the legislators who had voted for the charter that the governor had vetoed it, for they had been given to understand by Mr. Whitney that he would not oppose it. They had delivered their goods, and now, if the governor's sanction could be had under any sort of a compromise, they would certainly hold Towle and Whitney responsible for failure to make whatever arrangements were necessary.
[10]The charter as originally passed had gone through by a fair majority, but to pass it over the governor's veto was another matter. That required a two-thirds majority of both houses, and in the brief time at the disposal of the conspirators the securing of the additional votes was wellnigh impossible. From the necessities of the case such votes must cost much more than those of the original supporters of the bill, for it may be taken for granted that most of the members of the minority had already withstood such temptations as the Whitney faction had cared to offer. It was therefore a case of bringing into camp the most honorable and the most expensive members of the legislature, and without opportunity for strategy or manipulation. The sole recourse was rank, flat bribery, and that in full view of a mutinous following ready at the suggestion of the slightest favoritism to the new men to become actively hostile. The task was altogether too fraught with peril, to be undertaken. When they realized how threatening the situation really was, Whitney and Towle decided to make terms with the governor. The charter once obtained, they calculated that the obnoxious clause might be amended out of it at a subsequent session (as a matter of fact this charter, with its 60-cent clause, was afterward made the nucleus of the present Massachusetts Gas companies which has just been floated on a basis of $53,000,000 capital). Besides, the state of feeling of the legislators and conditions in the stock-market had both to be taken into consideration. It was not the fault of the legislators who had voted for the charter that the governor had vetoed it, for they had been given to understand by Mr. Whitney that he would not oppose it. They had delivered their goods, and now, if the governor's sanction could be had under any sort of a compromise, they would certainly hold Towle and Whitney responsible for failure to make whatever arrangements were necessary.
[11]Towle told me, as he waited impatiently in my office for the gold, that in addition to the great losses the drop in price of the two stocks had inflicted on himself and his associates, there were losses on stocks held by legislators, who had plunged on assurances that the charter would go through, and that the amounts he would be called on to pay, if he remained, were far greater than could possibly be met.
[11]Towle told me, as he waited impatiently in my office for the gold, that in addition to the great losses the drop in price of the two stocks had inflicted on himself and his associates, there were losses on stocks held by legislators, who had plunged on assurances that the charter would go through, and that the amounts he would be called on to pay, if he remained, were far greater than could possibly be met.
So extraordinary a happening as the disappearance of George H. Towle and Mr. Patch, you think, should have furnished a national sensation. And this is the first you have ever heard of it. Bear in mind that here for the first time the facts of this case are set forth in their proper relation to one another, and without the fear or favor that has hitherto prevented them from being understood.
In Boston after the adjournment of the Legislature, however bitter the feeling of the men who had sold themselves, and those others who had lost their all in the crash of stock values that had followed Whitney's defeat, their own complicity enforced silence and prevented outcry. It was given out that George H. Towle and Mr. Patch, tired by their labors, had gone to the country for a brief sojourn. On their return there would be a settlement. And with these assurances, both legislators and lieutenants had, perforce, to be satisfied. Gradually, betrayers and betrayed drifted back to their own homes and their erstwhile avocations, and when the strange story of the disappearance and death of the chief actors in the Whitney drama came from over the seas, it fell on the heedless ears of men who had written off a loss and desired to forget the experience. A conspiracy of silence is easily organized among accomplices.
I myself was the greatest sufferer by the disaster. Banking on Whitney's assurance of success I had loaded up heavily with Bay State on my own account; and my customers pinning their faith to my predictions of a rise, had also bought heavily both of the gas stock and Dominion Coal. In my attempt to support the market when the first decline occurred, I had further increased my holdings, and, at the final break,thousands of shares purchased for my clients were left on my hands. So my loss was very large, many times larger than Whitney's. Like the others, I said nothing, crediting the expense to education, while Whitney silently tucked his emasculated charter into a crypt already furnished with other corporation derelicts, to await some fair opportunity of legislative or other resuscitation; for the instrument, shorn though it had been of its immediate availability, was by no means without real value. Probably in view of prospective contingencies, perhaps with a sense of what his error had cost me, he said to me: "Lawson, the Pipe Line charter is worthless now, but if at any time in the future it becomes valuable, you or your company shall have half of it."
If Henry M. Whitney had kept that promise, what a world of disaster and bitterness might have been averted. Generated in corruption, perhaps it is not strange that this charter has since been so fertile a breeder of dissension and ruin among all who have attempted to handle it. It may be accepted as an axiom of finance that double-dealing is as dangerous to the dealer as to his victim. The fierce conflicts that at intervals burst out in the financial world and like a cyclone spread dishonor and destruction broadcast, invariably are caused by some one man's treachery.
To return to my story. To all appearances, the gas war was over. We bore the palm of victory, but looming up before us was the task of getting together the six millions which Rogers must have by November 1st. That paid, the companies became permanently ours. It was a period of unremitting effort, but the prospects of success were excellent. Addicks had got ready a new lot of Bay State stock, and I had prepared the public to take it. With the proceeds of this stock and the securities which Rogers would turn over to us, we should have money enough to meet our engagement, always provided no slip-up occurred. Since the May 1st settlement our relations with Rogers had been satisfactory—I should say,myrelations—for he persistently kept Addicks and his crowd at a distance, refusing to have anything to do with them. But it's hard to keep a big pot boiling in the open without some intruder smelling the savor of your soupand sneaking up for a mouthful. Though secrecy had been solicitously preserved regarding the details of our bargain with the "Standard Oil" magnates, certain of the camp-followers of "Frenzied Finance" had nosed out the facts, and at the very moment when our position and prospects seemed most secure a plot was being laid, which, as after-events will show, came close to bringing about the destruction we had thus far managed to escape.
As the time of settlement drew near, it became necessary for me to have frequent conferences with Addicks and his directors, and we opened head-quarters at the Hoffman House in New York. It was my habit to come over for a short time every week, when we got together, reported progress, and discussed future moves. It was at one of these gatherings, on Friday, October 16th, that we had intimation of our peril. I had come down on the midnight train from Boston and was brimming over with pleasant news and agreeable anticipations. The day and all other things seemed good to me. The air was crisp and the morning sun gleamed brightly on the red and yellow autumn tints of the trees in Madison Square. For a moment I stood on the corner beside the naval monument watching the down-townward procession of cabs and coupés in which the spider aristocracy of finance makes its way to its webs in Wall Street and lower Broadway. In the parlor of Addicks' suite at the Hoffman the directors were gathered when I entered, and with them was Parker Chandler, the Bay State's general counsel. We got down to business at once. I told them how well our affairs were moving in Boston and listened to their tidings of progress elsewhere. We were all in the merry mood of success. The past was nothing but a bad dream; our thoughts were on the rich moments beyond November 1st when we should handle and know the real currency of our victory.
The telephone bell rang. Some one wanted Addicks quick.
Addicks stepped to the instrument. We all heard him say: "Hello." Then—"Is that you, Fred?" (Fred Keller was his personal secretary.) Then—"Yes, I hear you plainly. Repeat it." Then—a minute's wait while we listened. Then—"When will they get up there?" Then—"Send every one home, lock up and go over to the house, and call me on my wire." All this in his ordinary, well-attuned, even voice, without the emphasis of a word to show that the subject was a hair more important than any of the hundred and one ordinary messages which went to make up a large part of his daily life. The talk was so commonplace that we were none of us interested enough to even stop our chatter.
Addicks stepped from the telephone and in a "bring-me-a-finger-bowl" tone of voice said: "Tom, come into the other room for a minute; I want a word with you."
He passed ahead of me through a small parlor into his bedroom. I followed. He went straight to the bureau, took something from a drawer, slipped it into his pocket, turned and dropped upon a lounge. But a minute had elapsed since he had gone to the telephone. Could this gray ghost be the same man who a short time ago had been smiling so contentedly at Parker Chandler's last story? His face was the color of a mouldy lead pipe and seared with strange lines and seams. The eyes that met mine were dim and glazed, lustreless and dead as the eyes of a fish dragged from watery depths.
Courage is not character; it is temperamental. There is an impression that the man truly brave is he who can face sudden, unexpected misfortune or calamity without a tremor or a flicker to suggest his hurt. That is but a single phase and indicative of physical rather than moral qualities; or, perhaps, merely the callousness born of long exposure to danger. One of the bravest men I've ever known stood watching the ticker one day during a downward run. Suddenly I heard "My God, I'm ruined!" and he fell in a faint on the floor. And a certain bank officer, whom I knew to be an arrant coward when arrested for stealing a million, smiled at the policeman who had tapped his shoulder and asked him for a light for his cigarette. Addicks had not turned a hair as he hung up the telephone receiver, and here he was cowering in a mortal funk, abjectly hopeless.
"Lawson, the game's up," he said in a trembling voice. "That was Fred. He says Dwight Braman has had himself appointed receiver of Bay State; that he raided the Wilmington office immediately after he was appointed, brokeopen desks, and took all the papers he could find, and that in an hour or so he will be in Philadelphia and in possession of all my books and papers. He has a court order for the bank accounts and the right to take charge of our funds."
"This is a startler," I said; "what are we going to do?"
"The trap is perfect, and I'm in it. They've caught me with every bar down. Before, when they attempted to get a receivership, things were ready for them—books and papers packed for Europe and cash in charge of an unserved officer prepared at the first word to start for Canada. But now, a few days before election, when if I don't throw a lot of money into Delaware for my followers, they'll turn on me like wolves—they've caught me napping. It's a plot, sure—a receiver in possession, particularly Braman, and appointed in a way that shows deliberate calculation, proves it was done by some one who knows our situation to a 'T.' It means ruin for me and the company. You know I won't have a friend left on earth, and enemies now will rise up like snakes before a prairie fire."
It was indeed a stiff, tough turn, yet I was watching the man rather out of curiosity to note how he could take a reverse than out of sympathy. I don't believe there was another man on earth who, similarly placed, would not have aroused my pity; but Addicks—no man or woman has pity for Addicks.
"Well," I repeated, "what are we going to do?"
He did not reply for a moment. I continued to look at him. The eyes haunted me. I noted that the lines round the lids had deepened into furrows. He half raised himself from the lounge.
"I've said they would never get me, and they won't." Instinctively his hand sought the pocket into which he had dropped what he had taken from the dresser's drawer. Then I knew. The yellow streak showed plain at last. I had guessed from the start it was there.
The stock manipulator in common with the successful general must have the capacity to deal with the unexpected. The faculty to see a situation whole must be his, to focus instantly the lay of the land, the enemy's plans and strength,his own resources, the strategic possibilities of his position; and instantly, if necessity demands it, he must be ready with a new plan of campaign fitted to the first emergency. The more rapidly his mind works the safer are the interests he is guarding. But if he has not this capacity, he can never be a market manipulator.
For a moment I could not but pause to admire the devilish ingenuity of the trap that had been sprung on us. The state of affairs that Addicks revealed was about the worst imaginable. I had been on this particular war-path so long that my mind instantly grasped the possibilities of destruction that lay in this new attack. I saw November 1st—no money to pay Rogers; everything forfeited; Addicks in a nauseating scandal; and all those friends of mine who had put their funds into Bay State because of their confidence in my ability to win out slaughtered. No, it should not be if I could prevent it. Other storms we had met and weathered, why not this? Even if it were a tornado, we would "ride her out." Perhaps we should not be afloat when the rollers subsided, but at least we should be at rest—on the bottom. I turned to Addicks, who, heaped up on his lounge, was staring into vacancy.
"Brace up, Addicks," I said. "We are not knocked out yet. At least let us find out what has struck us."
I was some moments in arousing him from his condition of despair, but finally he pulled himself together, and piece by piece we went over the situation. I had to agree with him that he was in an end-to-end-center-pull trap. The cunning machinery he had set up to meet just such an emergency, now that it was in hostile hands, was rather a source of danger than of safety. There was but one way out of the complication—we must undo this receivership and release our properties and funds before November 1st. Addicks, when he got his thinking loom running, declared the receivership was all a "Standard Oil" plot to ruin him. I felt sure it was an independent operation, but there was no time for controversy.
The telephone bell rang again. It was Fred Keller, talking from Addicks' house. We soon had all the details of the raid. This is what had happened. Dwight Braman, aformer Boston broker, now a New York capitalist and promoter, had suddenly appeared in Wilmington, Del., accompanied by Roger Foster, a New York attorney representing Wm. Buchanan, one of the original holders of Bay State Gas income bonds. He held $100,000. They had gone before Judge Wales, and pleading that the interest on the bonds was in default and that Addicks was dissipating the assets of the company, had succeeded in inducing the judge to appoint Braman receiver. The whole performance was put through with such marvellous rapidity that not one of Addicks' innumerable henchmen had had a hint of it, and so no warning could be given in any direction. Braman, an adept in corporation try-outs, lost not a moment, for the instant his receivership appointment was signed he pounced down on the Delaware offices of the Bay State and seized everything they contained. He was waiting there for the first train to Philadelphia for the purpose of capturing the head offices of our corporation, which were located there, adjoining Addicks' private offices.
It was the moment for rapid action. We had an hour before Braman and Foster could reach Philadelphia, and in finance in that time continents' have been submerged and oceans pumped dry. Addicks instructed Fred Keller to rush the books of the company into a trunk, together with all the private papers in Addicks' safe, and to come at once to New York, where he would be beyond the jurisdiction of the Delaware court. We returned to the large parlor and hastily explained to the waiting directors what had occurred. Addicks instructed the Bay State secretary, who was present, to connect with the trunk upon its arrival and disappear. In the meantime the company's counsel advised that Addicks and the other directors barricade themselves in their rooms at the Hoffman to frustrate any attempt to get legal service on them, for we well knew that Braman and Foster, as soon as they realized they were balked in Philadelphia, would go to the New York courts for additional powers—which afterward they did.
This line of defence having been fully organized I hurried down town to 26 Broadway. I felt certain that Mr. Rogershad nothing to do with the Braman-Foster affair, but to satisfy Addicks and make assurance doubly sure I determined to see him. After being with him for five minutes I knew I had not been deceived. Rogers agreed with me that the situation looked as though it had been made for his interest, for it threatened to leave us absolutely at his mercy with nothing to prevent his checkmating Addicks at his own game. As I pointed out to him, however, there were disadvantages in the position which he must take into consideration. His acceptance of the opportunity would work such losses to the public and to my friends that though the responsibility might be laid to Braman and Foster, I would fight so viciously that no one would be spared. Besides, between the Addicks scandal and that other which we agreed must unquestionably lurk in the hasty appointment of the receiver, the whole affair must eventually be ventilated in court. It is always hard for Mr. Rogers to forego an advantage, but by this time he was tired of the wrangle and wanted peace, and, moreover, he did not relish the thought of court proceedings, so he admitted that my reasoning was good, and promised to do anything in his power to assist us.
The enemy did not leave us long in suspense. Next day Braman and Foster arrived in New York, bursting with a noble wrath at the failure of their coup in Philadelphia. An outrage had been worked upon them, upon the public, upon the majesty of the law. To hear their ravings one might have supposed them the evangelists of Justice righteously denouncing a desecration of the sacred altar; or, that we had deprived them of an inalienable right they had possessed to our property. It would have been humorous if the conditions had been less tragic.
No defender of property right is so vociferous as the financier who, having appropriated his neighbor's goods, argues that possession constitutes legal ownership. On a country road I once almost rode over two hoboes, who were so busy wrangling with one another that they had not heard my approach. I gathered that one of them, having filched a collection of laundry from a farmer's backyard, had placed it in charge of his mate while he went off for a second helping, and had returned just in time to stop the latter from decamping with the swag. The talk the original purloiner was giving his ungrateful assistant was one of the best expositions of virtue and honesty I've ever listened to.
We met the following Monday and in reply to my request that we talk things over, Foster delivered himself of an exalted exposition of the rights of deluded stockholders, the majesty of the law, and the stern duties of Mr. Braman, who, for the time being, had departed his private self and, until further notice, existed only as a rigid arm of the court. Just as I had arrived at the conclusion that I had got into the wrong shop, Braman took up the lecture by informing meof things I already had made myself familiar with, to wit, how he had at different times occupied similar rôles in other corporations' affairs and how relentlessly he had exposed mismanagement and peculation. I suggested to him that in most such cases the receiverships seemed to have been dismissed in favor of the former managers. He waved his hands and replied that in this particular case there was absolutely no chance of control being returned to Addicks, who had outrageously abused his trust; "although, of course (this as a sort of second thought) you know, Mr. Lawson, if Mr. Foster on behalf of his client should receive the amount of his claim and the proper fee, from whatever source, I should be powerless to prevent the dismissal of the receiver."
Braman and Foster were a delightful combination. As the talented Chimmie Fadden would say: "Dey knew dere biz from de bar to de till an' from de till by de way of de cash register to de wine-cellar, so's dey could do de circuit wid dere lamps blinked and dere hands tied." With their corporation mix-up records I was familiar, and after a few minutes' talk realized that it would be impossible to do anything with them until they had kicked up against one or two of the bricks Addicks was now with renewed energy preparing to cast into their pathway. I left with an agreement to see them the following day, and a parting reminder that all natural history showed that unpicked ripe plums were in great danger of being blown from the tree with every passing breeze.
I hurried back to Addicks. "It's the old game," said I; "they are on the box and have the lines, and know just how badly we need our coach, and it's only a case of how much 'inducement' we can stand."
I left him and went down to 26 Broadway. I had not wasted time, but they had been there ahead of me.
"Lawson," said Mr. Rogers, "this time Addicks is up against a real condition, and phenomenal work will have to be done or his race is run. Braman and Foster have been here and made a strong bid for a partnership with me, but I did as agreed and sent them away with a cold 'I'm in no way interested.'"
Foster and Braman secured an order from the New York courts to take possession of all property, money, papers, and books claimed by the company, and formally laid siege to Addicks' quarters in the Hoffman. There was considerable excitement for the guests and the newspapers. Doors were battered down, but the astute and slippery Addicks led them a merry chase until they finally caught him hiding in a freight elevator which he was using for a private staircase, only to find he had no books, papers, or money.
The week that ensued was full of trouble and incident for all concerned. Addicks led an expedition to Wilmington in an effort to get the court to call off the receivership, but had his labor and the expense of his lawyers for his pains. Braman and Foster dragged us through a weary round of special hearings and demands of various kinds in the different courts, but by Tuesday night of the second week their ardor had cooled considerably and they were as puzzled how to let go of the bull they had captured as we were to find a way to make them do so.
Bright and early Wednesday morning Braman called on me, and when he threw his coat and hat into a chair he must have dropped his receivership cloak too, for after he had carefully closed the door and made sure we were without witness he said:
"If there's any business to be done in this matter it must be done quick."
I admitted no one could possibly appreciate this more than I—but what could be done? After bluffing for an hour and exchanging honest views for fifteen minutes we agreed that the situation stood thus:
If nothing were done before the coming Sunday, the 1st, the receivership would be permanent; the stock, which had fallen to $3 per share, would remain at that figure or go lower; my friends, the public, and myself would be tremendous losers; all the past of Bay State, the doings of Addicks and Rogers, and the appointment of the receiver would come in for thorough investigation; an awful scandal would be aired in public; every one would be covered more or less with mud; and no one could possibly be the gainer but"Standard Oil," for Braman agreed with me that the deal we had made with Rogers would probably stand in the courts.
On the other hand, if an arrangement could be arrived at by which we could have the receivership discharged, the company returned to its officers, or our equities preserved, all would be gainers by the move, for it would be proof positive that whatever the obstacles, we could overcome them, and the stock would go flying upward again.
After we had set out all the advantages, disadvantages, and possibilities of the situation, I bluntly plumped Braman with that inevitable question of all such "sit-downs": "What's the price?" And Braman as plumply and bluntly answered: "Buchanan, Foster's client, must have the face of his bonds and interest, $150,000, and we must have at least $150,000 for our trouble and expense."
My long experience in corporation affairs, and my intimate knowledge of the practices which the "System" with its votaries has made habitual was such that I was proof against shock from anything that could possibly turn up in even extraordinary financial deals, but I was just a bit staggered by the business-like way Braman demanded for himself and Foster $150,000 and the coolness with which he further explained that they must divide their share with certain influential persons without whose hearty cooperation the tangling-up which had been so cleverly accomplished would have been impossible. He made no bones of showing me that once "we gave up" it would only be a matter of the number of minutes required to get details fixed before everything would be as it was before he had interfered. I dwelt upon the possibilities of the judge not following orders to the letter and the minute, but he only smiled and answered: "Leave all that to us; if we don't make good as agreed, we get no pay." He was fully alive to the dangers of the game, and he impressed upon me he would take nobody's word for anything. With him and Foster nothing but money talked, and it must not be of the marked-bill kind either, meaning he would not take anything which could be tied up by injunctions and lawsuits after the receiver had been dismissed. However, he would play fair. He would not ask us to payon anything but the actual delivery of the goods. He also frankly told me that he had named the very low figure, $150,000, because he expected to invest what he received in Bay State Gas stock at $3 and, upon its jumping to $10 or $20, to make half a million.
But this is outrageous, you say. You call the performance I have described by hard names! Surely our courts are not also the creatures of "frenzied finance"? you ask. I warn my readers that this narrative is no more than a record of events occurring within my own knowledge, and that dark and vicious as the pictures seem they are photographs of actual happenings. Nor should the public conclude that the dishonor and dishonesty revealed in connection with Bay State Gas are exceptional. On the contrary, such doings are the rule in the affairs of great financial corporations. Into the rigging and launching of almost every big financial operation in the United States during the last twenty years, double-dealing, sharp practice, and jobbery have entered; and, what is more, the men interested have participated in and profited thereby. To correct a popular fallacy I want to say that I am not referring here simply to moral derelictions but to actual legal crimes. If the details of the great reorganization and trustification deals put through since 1885 could be laid bare, eight out of ten of our most successful stock-jobbing financiers would be in a fair way to get into State or federal prisons. They do such things better in England. During the past ten years three "frenzied financiers" have practised their legerdemain in London—Ernest Hooley, Barney Barnato, and Whitaker Wright. The first is bankrupt and discredited; Barney Barnato jumped into the ocean at the height of his career, and Whitaker Wright, after numerous attempts to escape, was hauled up before an English judge and jury, promptly convicted and sentenced, and committed suicide by poison before leaving the court-room. I will agree at any time to set down from memory the names of a score of eminent American financiers, at this writing in full enjoyment of the envy and respect of their countrymen and the luxury purchased by their many millions, whose crimes, moral and legal, committed in the accumulation of these millions,would, if fully exposed, make the performances of Wright and Barnato seem like petty larceny in comparison.[12]But freedom and equality, as guaranteed us by the Declaration of Independence, have recently been capitalized, and "freedom" now means immunity from legal interference for financiers, while the latest acceptance of "equality" is that all victims of special privilege are treated alike by those who control and exercise such privilege. If the judges and the public prosecutors of these United States were equal to the sworn duties of their sacred offices, this "freedom" would have been confined long ago, and throughout this broad land there would be jails full of "frenzied financiers" who had imagined themselves licensed to rob the public.
But to return to Bay State Gas: "Braman," I said, "we see the situation through the same glasses, but before deciding as to prices let us see where the coin required is to come from. Until the receivership is dismissed not a cent can come from the Bay State treasury, so that eliminates Addicks. I, personally, am in such shape because of this same receivership that I can do nothing. So, as usual, it comes down to the man with unlimited money—Rogers. The question is, how to get Rogers to advance so large a sum in such a ticklish business? He does not want to get mixed up in a matter in which any one man's treachery might mean State's prison."