Frenzied Finance Part 1

Frenzied Finance.

by Thomas W. Lawson.

FOREWORD

There will be set down in this book, in as simple and direct a fas.h.i.+on as I can write it, the story of Amalgamated Copper and of the "System"

of which it is the most flagrant example. This "System" is a process or a device for the incubation of wealth from the people's savings in the banks, trust, and insurance companies, and the public funds. Through its workings during the last twenty years there has grown up in this country a set of colossal corporations in which unmeasured success and continued immunity from punishment have bred an insolent disregard of law, of common morality, and of public and private right, together with a grim determination to hold on to, at all hazards, the great possessions they have gulped or captured. It is the same "System" which has taken from the millions of our people billions of dollars, and given them over to a score or two of men with power to use and enjoy them as absolutely as though these billions had been earned dollar by dollar by the labor of their bodies and minds. Yet in telling the story of Amalgamated, the most brazen and voracious maw of this "System," I desire it understood that I take no issue with men; it is with a principle I am concerned.

With the men I have had close and intimate intercourse, and from my knowledge of the means they have used, and the manner in which they have used them, and the causes and effects of their performances, I have no hesitation in stating that the good they have done, the evils they have created, and the indelible imprints they have made on mankind are the products of a condition and not of their individualities, and that if not one of them had ever been born the same good and evil would to-day exist. Others would have done what they did, and would have to answer for what has been done, as they must. So I say the men are merely individuals; the "System" is the thing at fault, and it is the "System"

that must be rectified. Better far for me not to tell the story I am going to tell; better far for the victims of Amalgamated not to know who plundered them and how, than to have them know it only to wreak vengeance on individuals and overlook the "System," which, if allowed to continue, surely will in time, a short time, destroy the nation by precipitating fratricidal war.

The enormous losses, millions upon millions--to my personal knowledge over a hundred millions of dollars--which were made because of Amalgamated; the large number of suicides--to my personal knowledge over thirty--which were directly caused by Amalgamated; the large number of previously reputable citizens who were made prison convicts--to my personal knowledge over twenty--directly because of Amalgamated, were caused by acts of this "System" of which Henry H. Rogers and his immediate a.s.sociates were the direct administrators; and yet Mr. Rogers and his immediate a.s.sociates, while these great wrongs were occurring, led social lives which, measured by the most rigid yardstick of mental or moral rect.i.tude, were as near perfect as it is possible for human lives to be. As husbands, fathers, brothers, sons, friends, they were ideal, cleanly of body and of mind, with heads filled with sentiment and hearts filled with sympathies; their personal lives were like their homes and their gardens--revealing only the brightest things of this world, the singing, humming, sweet-smelling things which so strongly speak to us of the other world we are yet to know. As workers in the world's vineyards, they labored six days and rested upon the Sabbath, and gave thanks to Him from whom all blessings flow that He allowed them, His humble creatures, to have their earthly being. And yet these men, to whose eyes I have seen come the tears for others' sufferings, and whose voices I have heard grow husky in recounting the woes of their less fortunate brothers--these men under the spell of the brutal code of modern dollar-making are converted into beasts of prey, and put to shame the denizens of the deep which devour their kind that they may live.

In the harness of the "System" these men knew no Sabbath, no Him; they had no time to offer thanks, no care for earthly or celestial being; from their eyes no human power could squeeze a tear, no suffering wring a pang from their hearts. They were immune to every feeling known to G.o.d or man. They knew only dollars. Their relatives of a moment since, their friends of yesterday and long, long ago, they regarded only as lumps of matter with which to feed the whirring, grinding, gnas.h.i.+ng mill which poured forth into their bins--dollars.

In telling the story of Amalgamated I hope to have profited by my long and intimate study of this cruel, tigerishly cruel "System," so as to be able to deaden myself to all those human sympathies which I have heard its votaries so many times subordinate to "It's business." I shall try only to keep before me how the Indians of the forest, as our forefathers drove them farther and farther into the unknown West, got bitter consolation out of the oft-chanted precept of their white brethren of civilization, "An eye for an eye, a tooth for a tooth," reminding myself that whatever of misery or unhappiness my story may bring to the few, it will be as nothing to that which they have brought to the many.

In asking for the serious, earnest consideration of the public, I shall be honest in giving to it my qualifications, my motives, and my desires for writing this narrative. For thirty-four years I have been actively connected with matters financial. As banker, broker, and corporation man, I have, from the vantage-point of one who actually handled the things he studied, studied the causes which created the conditions which made possible the "System" which produced the Amalgamated affair. In my thirty-four years of business experience I have seen the great fortunes, which are the motive power of the "System" referred to, come out of the far West as specks upon the financial horizon and grow and grow as they travelled Eastward, until in their length, breadth, and thickness they obscured the rising sun. At short range I have seen the giant money machine put together; I have touched elbows with the men who made it, as they fitted this wheel and adjusted that gear, while at the same time I broke bread and slept with the every-day people who, with the industry of the ant and the patience of the spider, toiled to pile in the pennies, the nickels, and the dimes which have kept the "System's"

hopper full.

At my first meeting with the creators of Amalgamated it was clearly and distinctly understood that under no circ.u.mstances would I enlist in that "System's" interests other than for such special services as, after due thought and investigation, I should decide to be such as I could in fairness to myself and my clients work for; and when I give the details of this first meeting in my narrative it will be evident to its readers that in telling the story of Amalgamated I am violating no confidence, nor in any way encroaching upon the niceties of that business code which is, and should be, the foundation of all legitimate financial dealings, nor in any way misusing knowledge which, if acquired under other circ.u.mstances, might be sacred.

Amalgamated was one service the "System" asked of me. It was created because of my work. It was largely because of my efforts that its foundation was successfully laid. It was very largely because of what I stood for and because of the public's confidence in the fulfilment of the promises I made that the public invested its savings to an extent of over $200,000,000; and it was almost wholly because of the broken promises and trickery of the creators of the "System" that the public lost the enormous sums it did.

My motives for writing the story of Amalgamated are manifold: I have unwittingly been made the instrument by which thousands upon thousands of investors in America and Europe have been plundered. I wish them to know my position as to the past that they may acquit me of intentional wrong-doing; as to the present that they may know that I am using all my powers to right the wrongs that have been committed, and as to the future that they may see how I propose to compel rest.i.tution.

My desire in writing the story of Amalgamated, while tinged perhaps with hatred for and revenge against the "System" as a whole and some of its votaries, is more truly pervaded with a strong conviction that the most effective way to educate the public to realize the evils of which such affairs as the Amalgamated are the direct result, is to expose before it the brutal facts as to the conception, birth, and nursery-breeding of this the foremost of all the unsavory offspring of the "System." Thus it may learn that it is within its power to destroy the brood already in existence and render impossible similar creations.

In the course of my task I shall describe such parts of the general financial structure as will place my readers, especially those unfamiliar with its more complicated conditions, in a mental state to comprehend the methods by which the savings they think are safely guarded in the banks, trust and insurance companies, are so manipulated by the votaries of frenzied finance as to be in constant jeopardy. I shall show them that while the press, the books, the stump, and our halls of statesmans.h.i.+p are full to overflowing with the whys, wherefores, and what-nots of "tariff," "currency," "silver," "gold," and "labor"; while our market systems are perfected educational machines for disseminating accurate statistics about the necessaries and luxuries of life, the water and land carriers, real estate, and other material things which the people have been taught to believe are the only things that vitally affect their savings; that while they imagine they understand the system by which speculation and investments are controlled and worked, and that the causes and effects of this system are at all times get-at-able by them through their bankers and their brokers; there is a tangible, complicated, yet simple trick of financial legerdemain, operated twenty-four hours in each day in the year, and which the press, the books, the politicians, and the statesmen never touch upon--a trick by means of which the savings of the people and the public funds of the Government, whether in the national banks, savings-banks, trust or insurance companies, are always at the absolute service and mercy of the votaries of frenzied finance.

Therefore, in the course of my story of Amalgamated will come a few kindergarten pictures of how the necessaries and luxuries of the people are "incorporated"; of how the evidences of corporation owners.h.i.+p are manufactured; of the individuals who "manufacture" them; of the individuals who control and make or unmake their values; of the meeting-place of these individuals, within and without the stock-exchanges; of some of the corporations and of some of the signs and tokens of corporation owners.h.i.+p; of some of their histories; of some of their doings, and of some of their contemplated doings. These kindergarten pictures I will endeavor to paint, not in that "over-the-head" verbosity or "under-the-feet" profundity and intricacy of the political economy pedant, which are as the canvases of the Whistler school to the ma.s.ses; but rather will I use the brush of the artisan who in giving us our white fences, our gray cottages, and our green blinds sets off those things which make up the pictures the people really understand and dearly prize.

In the last few years the public has heard many stories of this Juggernaut "System," which has grown to be the greatest private power in our land--greater almost than the power which governs the nation, because it is not only great within itself but by its peculiar workings is really a part of the power which governs the people. Particularly has it been told the story of Standard Oil by Mr. Henry D. Lloyd in his able work, "Wealth Against Commonwealth," and by Miss Ida M. Tarbell in her recent historical sketches; but however thorough these writers may have been in gathering the facts, statistics, and evidences, however relentless their pens and vivid their pictures, they dealt but with things that are dead; things that to the present generation are but skeletons whose dry and whitened bones cannot possibly bring to the hearts, minds, and souls of the men and women of to-day that all-consuming pa.s.sion for revenge, that burning desire for justice, without which no movement to benefit the people can be made successful.

In telling my story I shall, for I must, tell it fairly, and to make sure of this I pledge myself to keep to the exact facts as they occurred, not allowing myself to be overawed by their greatness into contracting them, nor to be tempted by their littleness into expanding them. In doing this I know, because of the peculiarity of the subject and my intimate relation to it, no other way than to do it in the first person. As I have already stated, I would prefer to deal with my subject through the principles involved rather than with the men concerned; but as I shall be compelled to call spades spades, I must, of necessity, use the names of men and of inst.i.tutions fearlessly and without favor.

In the beginning it will be necessary, for that clear understanding of the whole subject which is one of my princ.i.p.al objects, to treat at sufficient length the Bay State Gas intricacies and trickeries, in which in a certain sense Amalgamated had its being. This will compel me to devote a chapter to one of the most picturesquely notorious characters of the age, John Edward O'Sullivan Add.i.c.ks, of Delaware, Everywhere, and Nowhere.

The main part of my narrative must of necessity deal with the two real heads of Standard Oil and Amalgamated, Mr. Henry H. Rogers and Mr.

William Rockefeller; and with the biggest financial inst.i.tution of America, if not of the world, the National City Bank of New York, and its head and dominating spirit, Mr. James Stillman.

An important chapter should be that devoted to the conception and formation of the United Metals Selling Company, which was specially organized to control the copper industry of the world without coming within the restrictions of the laws for the prevention or regulation of monopolies.

I shall also deal at length with a notorious character, who, like the spot upon the sun, looms up in all American copper affairs whenever they appear in the full vision of the public eye--Mr. F. Augustus Heinze, of Montana.

There will be a chapter of more or less length devoted to one of the most important episodes in Amalgamated affairs, wherein I shall describe one of Wall Street's most picturesque, able, and intensely interesting men, Mr. James R. Keene.

I shall touch on a bit of the nation's history in which within a few days of the national election of 1896 a hurry-up call for additional funds to the extent of $5,000,000 was so promptly met as to overturn the people in five States and thereby preserve the destinies of the Republican party, of which I am and have always been a member.

I shall draw a picture of two dress-suit cases of money being slipped across the table at the foot of a judge's bench in the court-room, from its custodian to its new owners, upon the rendering of a court decision; and I shall show how the new owners frustrated a plot having for its object their waylaying and the recovery of the bags of money.

I shall devote some s.p.a.ce to pointing out the evils and dangers of the latter-day methods of corrupting law-makers, and show how one entire Ma.s.sachusetts Legislature, with the exception of a few members, was dealt with as openly as the fishmongers procure their stock-in-trade upon the wharves; how upon the last day of the Legislature, because their deferred cash payments were not promptly forthcoming, its members turned, and made necessary the hurried departure for foreign sh.o.r.es of a great lawyer and his secretary, with bags of quickly gathered gold, and all evidences of the crimes committed and attempted; how after the s.h.i.+p arrived at an island in foreign seas the great lawyer's dead body received hurried burial, and his secretary's was later dropped, with weights about its feet, to the ocean's depths; and how ever since the natives whisper among themselves their gruesome suspicions.

I shall devote a chapter to the doings of certain financial reputation sandbaggers and blackmailers; show how through their agencies they hold up corporations and their managers for large sums, which upon being paid start into motion a perfected system for the false moulding of public opinion for the purpose of making more easy the plundering of the people. I shall photograph the men and draw accurate diagrams of the machinery through which their nefarious trade is carried on.

My story will carry me down Wall Street, into the Stock Exchange, through its hundred and one or million and one open and hidden pa.s.sages, and into State Street, that ever-hung hammock of financial somnolence, and into the courts of justice of New York, New Jersey, Pennsylvania, Delaware, Ma.s.sachusetts, and Montana, and into many other interesting abodes of justice and injustice, of trickery, fraud, and simple, honest trustfulness.

When my story is ended and the great American people, whose simple but proud boast is that they cannot be fooled in the same place by the same methods and the same instruments twice, know as much as I now know of Amalgamated and its relation to the "System" which has for years as boldly, as coa.r.s.ely, and as cruelly robbed them as the coolie slaves are robbed by their masters--it will be for them to decide whether my story has been, because of the facts which entered into it, so well told that they will not be satisfied with the rest.i.tution of the vast sums which the Amalgamated took from them, which United States Steel took from them, and which other financial enterprises took in lesser amounts but by equally flagrant methods; but will demand the overthrow of the "System" itself. It will be for them to decide; and if their decision should be for a conclusive revolt, I shall be amply repaid for the pains and the miseries which must necessarily follow in the wake of a task such as the one I undertook when I decided to tell the story of Amalgamated.

FRENZIED FINANCE

THE STORY OF AMALGAMATED

_PART I_

CHAPTER I

THE TORTUOUS COURSE OF AMALGAMATED

Amalgamated Copper was begotten in 1898, born in 1899, and in the first five years of its existence plundered the public to the extent of over one hundred millions of dollars.

It was a creature of that incubator of trust and corporation frauds, the State of New Jersey, and was organized ostensibly to mine, manufacture, buy, sell, and deal in copper, one of the staples, the necessities, of civilization.

It is a corporation with $155,000,000 capital, 1,550,000 shares of the par value of $100 each.

Its entire stock was sold to the public at an average of $115 per share ($100 to $130), and in 1903 the price had declined to $33 per share.

From its inception it was known as a "Standard Oil" creature, because its birthplace was the National City Bank of New York (the "Standard Oil" bank), and its parents the leading "Standard Oil" lights, Henry H.

Rogers, William Rockefeller, and James Stillman.

It has from its birth to present writing been responsible for more h.e.l.l than any other trust or financial thing since the world began. Because of it the people have sustained incalculable losses and have suffered untold miseries.

But for the existence of the National City Bank of New York, the tremendous losses and necessarily corresponding profits could not have been made.

I laid out the plans upon which Amalgamated was constructed, and, had they been followed, there would have been reared a great financial edifice, immensely profitable, permanently prosperous, one of the world's big inst.i.tutions.

The conditions of which Amalgamated was the consequence had their birth in Bay State Gas. To explain them I must go back a few years.

In 1894 J. Edward Add.i.c.ks, of Delaware, Everywhere, and Nowhere, the Boston Gas King, invaded the gas preserves of the "Standard Oil" in Brooklyn, N. Y., and the "Standard Oil," to compel him to withdraw, moved on his pre-empted gas domains in Boston, Ma.s.s.

Late in 1894 a fierce battle was raging in Boston between Gas King Add.i.c.ks and Gas King Rogers; the very air was filled with denunciation and defiance--bribery and munic.i.p.al corruption; and King Add.i.c.ks was defeated all along the line and in full retreat, with his ammunition down to the last few rounds.

Early in 1895 I took command of the Add.i.c.ks forces against "Standard Oil."