The frenzied brokers fought like madmen around the Sugar post. The wildest sort of excitement prevailed throughout the day. The rest of the floor was practically abandoned, and brokers crowded, pushed, elbowed, and yelled frantically in their efforts to fill orders. There was no warning. The sudden jump of the stock almost threw the brokers into a panic. Men became ferocious in their efforts to fill orders.
Those on the outside made wild rushes to get into the whirlpool. Men who are generally calm fell over each other in their excitement. Scores of arms whipped the air, and men yelled themselves hoa.r.s.e. So great was the din and so compact the yelling crowd that those on one side of the post did not know the bidding on the other. At one point Sugar was going at 159, and five feet away it was bringing 164.
While almost at arm"s-length farther away it was going at 160, and farther around the post at 162.
The excitement became general among the offices of stock-brokers as the news flew on the ticker. Members of firms who were not on the floor gathered about the tickers in excited groups and watched the pyrotechnic fluctuations of Sugar to the exclusion of all other stocks. The quotations came out at two and three points apart. One minute the stock was away up, and the next it seemed to fall hopelessly. Then it would as suddenly soar upward again. It reached 170, and in five minutes it was down to 152.
[From the _Boston Post_, March 22, 1899]
Late in the afternoon Mr. Lawson was induced to give the following explanation of his movements in Sugar: "You know it is not conducive to the health of an active operator to talk on what he is doing, for if he expects to retain his hirsute adornment he must either keep jumping so lively that none of the expert scalpers who haunt the jungles of Wall Street can find him long enough in one spot to cut the floor from under him, or he must envelop himself in mystery so dense that all seeking for him will grow color-blind; but on this particular commodity--Sugar--I can depart from the standard formula.
"I have been twenty-nine years dodging the scalping-knives of Wall Street Comanches, and, although I am still here, I have many places on my head where the hair refuses to grow, and, strange to tell, almost all the bare spots are labelled "Sugar." I suppose that I have, during the past ten years, contributed money enough to Sugar to endow a fair-sized asylum for tailless bears. It has never seemed to matter whether I bought or sold, went long or short, the dollars which I secured by the employment of pick and shovel, brawn, muscle or gray matter, all seemed to follow one another into the relentless maw of that modern Saccharine t.i.tanotherium.
"Way back in 1890 I invested the profits of my Lamson deal--$700,000--in 10,000 Sugar at 84, and in a few days, amid brilliant fireworks, I bade it adieu, when it gracefully dropped below 50. Again, four years ago, I decided I could make no better long-time investment of $700,000 or $800,000 Electric profits than to short Sugar from 61 to 70. In eleven days it took $1,500 more than my profits to even up my accounts.
"Thinking these things over of late, I determined to make a final demand on astute and relentless Wall Street for my acc.u.mulated deposits--a kind of please-give-me-back-my-losses demand. I carefully loaded up two weeks ago to the extent of 20,000 Sugar in the thirties, and feeling the atmosphere was redolent of opportunities, last Friday I bought 20,000 more, the last 5,000 of which in a rather open and frank way that seemed but fair to my scalping New York friends. Well, you know the rest. It took fire. I cleaned up something over $700,000, and put out a short line of 30,000 shares, the last of which I have covered to-day at something over $350,000 profit. Strange as it may seem, I was quit. I have struck a balance with Sugar, and it gets no more of my money.
"I am one of the few Bostonians who are contented to live in the knowledge that Wall Street is too big and bright and cute a metropolitan centre for country boys to monkey with, and you can say I am so tickled to get back my bait that I will never again, never, wander away from home. There is one moral that may be drawn by Wall and State streets from the last few days in Sugar. It is this: It is not necessary to-day, any more than it was in old days, to work deals with false stories or fakes. In doing what I did in Sugar I depended on no fakes nor stories. I simply followed Charley Osborne"s old admonition: "If you want to bull stocks, buy "em. If you want to bear "em, sell "em." I bought "em and I sold "em. These are Sugar facts as far as my movements have affected them!"
For years after, even up to to-day, this yarn turned up in the press in different parts of the world, and every time I read it I chuckled to myself, for I see a big manly fellow, president of a bank now and asking no odds of any, for he can buy 2,000 shares of Sugar at any time and draw his check to pay for it against a bank account honestly earned since the day his wife wrote that letter.
And I see a grateful mother teaching three youths to say a certain prayer, and then I forget the critics" scathing sermons against stock gamblers. It does not pain me when my own children ask, "Why do they say such awful things about the stock operator?" I answer: "Oh, they mean no harm; they don"t know the stock gambler they write about."
ONE OF THE SYSTEM"S SHADOWS
That my readers may not drop this chapter with a false idea of the results of the stock-broker"s efforts to "live and let live," I will give them an ill.u.s.tration of one of the counterbalances of the law of compensations.
In the same year with the Sugar transaction, in an evil moment my mail brought me the following letter:
_Dear Sir_: I have read with interest your proclamations about "Coppers." I am not a rich man, but I have about $20,000 lying idle which I should like to add to, and will put it into anything you advise.
The writer received the following answer from my secretary:
Mr. Lawson instructs me to say he received your letter of ---- and he knows no better investment than the stock of the Amalgamated Copper Company, which will be offered for public subscription next week. In the advertising which will accompany the offer you will note that it is to pay 8 per cent., is now earning 16, and should sell at $150 or $200 per share. It will be offered at par. Not only does Mr.
Lawson personally believe in every word in the advertis.e.m.e.nts, but they are vouched for by such men and inst.i.tutions as the National City Bank of New York, Henry H.
Rogers, William Rockefeller and others, whose names are synonymous with success in business affairs. Mr. Lawson does not hesitate to advise you to invest your $20,000 in this stock, provided you are not looking for an investment that is absolutely safe, that is, one that should not, in these times, pay you over 3-3/4 or 4 per cent.; but if you are looking for a semi-speculative investment, that is, one that will pay you over 6 per cent., and where the chances are good for large profits, he recommends this stock.
Later I received the following:
Upon your advice I purchased 200 shares of the Amalgamated stock at $100 per share. When the stock dropped to 80, remembering your strong advice I purchased 300 shares more, and after it had advanced to 120, thinking it was surely going to the 150 or 200 you mentioned, I bought 1,000, putting up my 500 shares as margin. It has now dropped back to 100, and the many stories I read in the papers are causing me much anxiety. Do you still believe as you first wrote me?
To which he received the following answer:
Mr. Lawson instructs me to say he received yours of ----.
His faith in the Amalgamated property, the men who control and manage it, and the stock is the same as it always has been. He, like yourself, added to his holdings at 120, and as high as 129, and knowing what he does about the property, and what the men who control and manage it, and with whom he is intimately a.s.sociated, say to him, he cannot believe the yarns which are appearing in the press are other than the vaporings of those stock-market critics who must write their opinions of prominent stocks even though they have no means of actually knowing anything about them.
While Mr. Lawson regrets that you have spread yourself out, as you say in your letter, he can only answer your question by the above, to wit, his faith in Amalgamated is the same as from the beginning.
Later I received the following from one of the penal inst.i.tutions of the country:
You will observe by the postmark on this letter my present place of residence. You probably knew that before, as the press has had much to say about me of late.
I trust you and your a.s.sociates are satisfied with yourselves when you observe the h.e.l.l you have caused others.
When I first wrote you about the Amalgamated stock I was an honest, prosperous man. I had never committed a crime nor done any great wrong to my fellow-beings. Relying upon what you said publicly and the well-known record of the Rockefellers and their partners, I committed acts which I now know to my everlasting sorrow I should not have committed. I had no intention of doing wrong, but when I saw ruin staring me in the face I used, as I supposed only temporarily, funds intrusted to me to protect my stocks from being slaughtered at declining prices by the sharks of brokers whom I dealt with. The rest is the old story. My wife and children are disgraced and oppressed with poverty, and I am serving a five years" sentence in this inst.i.tution, buoyed up only with the hope that I may live to face you and your kind, that you may have the pleasure of seeing the wreck you have wrought--in the hope that I may satisfy a desire which night and day gnaws at my very soul, a desire to say to you, face to face: "Look upon a man who, although a branded criminal, is as much better than you and your a.s.sociates as it is possible for one to be," and to ask you how your wife and your children enjoy the luxuries they have when they know at what price they were secured, for I shall surely, if I live, insist upon your wife and children hearing from my lips what agonies a wife and children, who are as dear to me as yours are to you, have suffered because of your baseness.
CHAPTER XIII
THE "SYSTEM" VERSUS WESTINGHOUSE
In 1894 I had just wound up one of the most strenuous and successful financial campaigns I ever engaged in. This was the Westinghouse deal, of which the papers were full at the time. George Westinghouse, to whom the world owes the air-brake and countless improvements in electrical machinery, having surmounted the difficulties that clog the early steps of the inventor who would be his own master, had taken rank, some years before, among the prominent public figures of the day. The various corporations in America bearing his name had prospered amazingly; his ingenious appliances had displaced home products in the European market; and t.i.tles and decorations had been conferred on the inventor, though these last, like the st.u.r.dy American he is, Westinghouse had put aside.
This great success was wholly the fruit of George Westinghouse"s personal endeavor. It owed nothing to extraneous influences. It had been accomplished along those manly, independent, Yankee lines which have made that name synonymous with hustle and success in every part of the civilized world. Above all, the man had organized and developed his companies without the aid of the "System" or without truckling to its votaries. In consequence he had incurred the deadly hatred of some of its lords paramount.
In the business world Westinghouse"s great rival was the General Electric Company. To mention "Westinghouse" and "General Electric" in the same breath was to speak of a thing and its ant.i.thesis. Everything George Westinghouse was or had been the General Electric was not and had never been. The General Electric had been and was by leave of the "System"; in fact, was one of the very foremost examples of its methods. Its high-priest was J. Pierpont Morgan; its home, Wall Street; its owners, the princ.i.p.al votaries of the "System." It had grown because of their favor and by means of the rankest exhibitions of knock-down-and-drag-out methods of consolidation of all compet.i.tors but--Westinghouse.
Just previous to 1894 Westinghouse had rejected a dazzling scheme of uniting the two inst.i.tutions on an immense capitalization which would have absorbed millions and millions of the people"s savings and earned millions in commissions for its projectors. Wall Street"s indignation at his hardihood knew no bounds, and at the time of which I write the yegg-men of the "System" were laying for him with dark-lantern and sand-bag.
To appreciate the story of what the "System" tried to do to George Westinghouse and what he withstood, one must know the man. He embodies in many ways the conception of what the ideal American should be. His remarkable six feet and odd of physique and his fertile, powerful brain are the admiration of all true men with whom he comes in contact. In spite of his unparalleled success and the acc.u.mulation of a great fortune, he retains the same simplicity of manner and conduct that characterized him when working at the bench for weekly wages, and with all his shrewdness and force of character he has preserved a simple, honest, childlike belief in humanity. Single-handed he conducted all his great enterprises on a plain, patriarchal basis, using their revenues for extensions, and depending on his faithful and well-satisfied stockholders for such further accessions of capital as the business might in his judgment need. About the time General Electric was most anxious to bolster up its jerry-built structure with the solid Westinghouse concern, the latter inst.i.tution had begun the erection of some big new plants which required immediately several millions additional capital. Westinghouse prepared to apply to his stockholders for the required funds, and the announcement was to be made at the annual election soon due. Suddenly the financial sky became overcast.
The stock-market grew panicky and money as scare in Wall Street as rain in Arizona in May. It was just such a situation as the "System" might have brought about to accomplish its fell designs had it possessed the power to work miracles.
And the "System" took care of its advantage. At a tense moment in that soul and nerve trying period, with Wall and State streets full of talk about General Electric"s probable absorption of Westinghouse, General Electric being then at its highest price, $119 per share, the Westinghouse companies held their annual meetings and the big inventor, confidently facing his stockholders, quite regardless of conditions which he thought could have no possible bearing on his concern"s splendid prospects, came forward with his demand for the millions required to complete the projects already under way. This was the signal. From all the stock-market sub-cellars and rat-holes of State, Broad, and Wall streets crept those wriggling, slimy snakes of b.a.s.t.a.r.d rumors which, seemingly fatherless and motherless, have in reality multi-parents who beget them with a deviltry of intention: "George Westinghouse had mismanaged his companies"; "George Westinghouse, because of gross extravagance, had spread himself and his companies until they were involved beyond extrication unless by consolidation with General Electric"; these and many more seeped through the financial haunts of Boston, Philadelphia, and New York, and kept hot the wires into every financial centre in America and Europe, where aid must be sought to relieve the crisis. There came a crash in Westinghouse stocks, and their price melted. From amidst the thunder and lowering clouds emerged the "System." "Notwithstanding the black eye the name of everything Westinghouse had received, it would stand by and consolidate and save the day!" But the "System" and its everything-gauged-by-machinery votaries had reckoned without their host. George Westinghouse was too strong a man to be thus easily shaken down. He threw back his mighty shoulders, shook his big head, and flung his great private fortune into the market to stay the falling prices of his securities. The movement was too strong against him at the moment, and his millions were but a temporary help. He got on the firing-line himself and did a thousand and one things that only a brave, honest, and democratic Yankee would or could do--everything but accept the cunning aid offered him by the "System" or its votaries. He knew too well that the friendly mask concealed a foe and that the kid-gloved hand extended him had a dagger up its sleeve.
These were the conditions when I, as an expert in stock-market affairs, was called in for a.s.sistance. Here was this sound, st.u.r.dy inst.i.tution standing for everything that was best and self-supporting in American finance adrift on the Wall Street shoals, and it seemed almost a hopeless task to attempt its rescue. But it was a task eminently worth while, and I undertook it with all the energy I could command.
The problem was to restore the Westinghouse stocks to their former high price, and, confidence being re-established, to sell the new treasury stock at such a figure as would pay for the plants and other projects the company had under way. The completion of these meant greatly increased earnings and such an advance in facilities and economy of manufacture as would surely seal the fate of General Electric if it competed with Westinghouse under the new conditions. Small wonder "Standard Oil"s" whole strength was bent to force the alliance.
My fight had hardly begun when I saw it was to be opposed by all the forces of General Electric and the "System," and I concluded defeat was sure unless by a counter movement on their stock I could keep them so busy that they would have no time to interfere with Westinghouse.
Thereupon I laid out that attack on everything connected with General Electric which created so much consternation at the time. To this day, if my enemies are asked to name the act which most conclusively justifies their hatred of me, they will point to my terrible General Electric raid. They will tell you I broke the stock from 118 to 56 in a day, and thereby caused one of our most disastrous panics; that I continued to hammer it to 20, that I compelled reorganization, and then did not let up. They will show you that the misery and ruin I wrought were beyond calculation. I will only say that, of any of the things I am proud of having done, I am proudest of what I did in General Electric, and, willingly, I would give over five years of my life to go through the experience again.
It was a most arduous campaign, and our fate trembled many times in the balance. By dint of hard, overtime work, and what my enemies were pleased to call rank manipulation, we drove Westinghouse stock back to its former price, after which a strong syndicate was formed to take the new stock, and the righted inst.i.tution at once magnificently swept on its international career which to-day is at its height.
Though I had taken up the Westinghouse cause as a business venture and its successful termination was most profitable to me, I had entered into the campaign with the ardor of a lawyer defending a client unjustly accused of a heinous crime. But there was this difference--if in spite of his efforts the lawyer fails to convince the jury of his client"s innocence it means no detriment to his fortune or his reputation, whereas all I had and was were involved in this stock-exchange struggle.
The great rewards that are the guerdon of success in financial fights are balanced by the terrific consequences of defeat. The broker general engaged in surrounding his enemy requires every dollar he and his princ.i.p.als can pledge or beg, and where great forces are in conflict millions are burnt up to seize any vantage, as Kuroki sacrifices a regiment to gain a hill. I had won for myself as well as for Westinghouse, but if the fortunes of the war had been on the other side, I must certainly have been wiped out.
CHAPTER XIV
THE ALLIANCE WITH ADd.i.c.kS
It was part of my method of conducting my stock-brokerage business to expose through the medium of the press or through market letters the stocks of corporations I thought rotten. It was also my way to work up bull campaigns in stocks that seemed to be selling for less than they were worth. With Add.i.c.ks or the "Standard Oil" I had no connection. I had watched the Philadelphian"s operations and had my eye marketwise on his bonds and stock, particularly on his stock, which was 100,000 shares of the Bay State Gas Company of Delaware, of a par value of fifty dollars each, and which became very active in the market shortly after it was created, at just under par. I thought I saw in the scheme the ordinary, cold-blooded, stock-jobbing, unloading-on-the-public affair. I had heard recounted the man"s wonderful doings, particularly his recklessness in the purchase of the Boston companies; I "sized up" his mighty effort to be the tremendously rich good fellow as inspired by the idea and the purpose of giving his "stuff" in the stock-market a good send-off; and from the start I had put his property on my "to-be-watched memoranda" as one I might at the proper time let daylight into.