Frenzied Finance Part 7

This was certainly quick action. Boston's best was breathless for a minute. Then some one suggested that in so weighty a matter it would be necessary for solicitors to investigate, for the families owning the stock to be consulted and agree before a proper basis could be arrived at on which to dispose of their holdings.

Add.i.c.ks' genius was equal to the occasion. "I regret, gentlemen, any seeming haste, but this is the situation: I am going to invest fifteen or twenty millions, or perhaps thirty or forty, in city gas properties, and as the project will require quite a bit of financiering, I have got to round it up at once, in time to slip over to London to lay it before my a.s.sociates, ----, ----, and ----" (naming some of the great English lords of finance), "with whom you, gentlemen, are probably well acquainted. I think you will, after you have given the matter a little thought, agree with me that it would be a mistake to postpone the conversion of these magnificent Boston plants to the water-gas system until after other cities I have in mind are reconstructed. You see we can turn over but one city at a time, the system being new and competent engineers and builders few."

The painful thought took shape in the minds of the distinguished little gathering that if they were not careful, Monte Cristo might actually slip out of their town without working any of the promised golden marvels.

"Just what is your idea, Mr. Add.i.c.ks, of how this gigantic piece of business could be done?" one asked.

"Simple, simple"--the great Colonel Sellers of eye-water fame never looked more cool and unconcerned when calling attention to the facts, "100,000,000 of people, two eyes each, a bottle of my patent eye-wash for each at a dollar a bottle, and eye-wash made at a net cost of a dime a barrel"--"simple, simple; you name your price, I pay it, and the thing is done."

Some one pointed out that the gas properties were valued very high. That in the Boston, for instance, the par value of each share was $500--and that it was improbable Mr. Add.i.c.ks could buy it for less than--than eight hundred.

"Of course, of course; I am not buying gas companies that are not well thought of by their present owners," returned Add.i.c.ks. "I think you underestimate the value of the Boston Company's stock when you say $800.

Naturally, as a conservative business man I wish to buy as reasonably as possible, but as I know what the future of your company will be under the water-gas change, I consider $1,000 a share cheap; and if you say so, will take it now--majority, minority and all--at that price."

This was strong talk. In spite of their proverbial frigidness under all conditions, Boston's best began to get fidgety.

"Indeed," went on the Monte Cristo from Philadelphia, "I'll do better than that. On second thought I will give you $1,200 a share. Think it over and we'll have another sit-down to-morrow."

It took Add.i.c.ks but a few days to trade, for at each sitting the staging was more enticing and the call from his a.s.sociates in London more insistent. Minor difficulties were magnificently waved away. A number of scions of Boston's best families had good paying positions in the different companies; what would Mr. Add.i.c.ks do with them?

"Simple, simple," he replied; "double the time of contract and the salary; no favor to them or you; good men are very hard to get, you know."

One episode that occurred about this time was allowed to get into print when the stocks and bonds were being floated, by way of showing what a tremendous fellow Add.i.c.ks was. In a hired hack he had driven up to the club from State Street. A snow-storm was raging. After Add.i.c.ks had been in the club a few moments word was brought in to him that the driver had found his sable overcoat inside the carriage. Add.i.c.ks stepped into the vestibule to speak to the driver, and next day it was all over the club-house and through the "Street" that the prodigal Philadelphian, overcome at the thought of the unfortunate driver in his scanty clothing exposed to the cruel storm, had said: "My good man, take that coat as a present from me."

For the truth of the story I do not vouch, nor for that other which explains that the door-boy who spread this tale of generosity said afterward, when discharged, that Add.i.c.ks himself had told him what he had done, and at the same time had given him a five-dollar bill. He would have sworn the moment before that he heard Add.i.c.ks tell the driver to take the coat to his apartments.

Add.i.c.ks got what he came to Boston for--the Boston, Roxbury, and South Boston Gas companies. He did what he said he would, built a new one, the Bay State of Ma.s.sachusetts, and turned them all into the Bay State of Delaware, and the Bay State of Delaware turned them out on the public in exchange for their savings to the extent of $19,000,000 in the form of bonds and stock. Add.i.c.ks, to use his own language, "cleaned up around $7,000,000," and turned to new fields, fields suited to his peculiar genius.

As he looked over the United States he found but one great city which had not already been captured by "Standard Oil" or some of its disciples--Brooklyn, N. Y. To the present day Rogers swears Add.i.c.ks'

only reason for coming to Brooklyn was to hold up the "Standard Oil"

"trustification." Add.i.c.ks retorts with: "I saw it first." Whatever the facts, in 1892 Rogers in the midst of tagging the different companies was surprised and angered to find that Add.i.c.ks had slipped in ahead and had secured one of those necessary to the success of his plan. He quickly served notice on the man from Delaware to "git," and Add.i.c.ks, flushed with an unbroken chain of victories, as promptly returned the notice with, scrawled across its face, a variation of Rogers' pet phrase--for it must be remembered Add.i.c.ks never "cusses"--"I'll see you in heaven first."

If there is any one time when Henry H. Rogers is quicker of action than any other, it is when his notice to "git" in a stock deal has been returned with "sa.s.s."

The ink was hardly dry on Add.i.c.ks' answer before the Master of "Standard Oil" and his hosts were upon him, but not where the Philadelphian looked for them. While he awaited their attack in Brooklyn, N. Y., he received a series of hurry-up calls from his lieutenants in Boston. Rogers had bought the insignificant Brookline Gas Company, which supplied gas to one of the suburbs of Boston. It was only a $300,000 affair, but it possessed charter rights to come into any and all of the streets of Boston. This was a characteristic "Standard Oil" attack. It came out of a clear sky, and before the public had even a warning of it they were witnessing a war which looked as though it had been years in maturing.

Rogers let it become public knowledge that the entire "Standard Oil"

forces were to be brought to bear to crush Add.i.c.ks and that untold millions would, if necessary, be spent in the effort. In reality he had most carefully mapped out a cyclonic campaign which he believed would not call for an expenditure of over $500,000, and which he was sure would in a few months drive Add.i.c.ks out of Brooklyn, N. Y., and bring him to his knees in Boston. His fight began in earnest in 1894. Gas in Boston was $1.25 per thousand cubic feet, and the rate yielded a good profit to the Add.i.c.ks companies. Rogers served notice that he would parallel with the Brookline Company every pipe of the different Boston companies and would reduce the price of gas to $1. Simultaneously he attacked the Add.i.c.ks stocks and bonds in the market, his charters in the Legislature, and took away from him the contracts to supply the munic.i.p.ality of Boston with gas. For a time Add.i.c.ks struck back savagely. Then, as the fight became hotter, he gave it up in Brooklyn, and concentrated all his resources on repelling the savage inroads Rogers was making in Boston. By this time the contest had grown to such proportions and so much bad blood had been engendered that Rogers declined to be mollified by Add.i.c.ks' surrender in Brooklyn and refused to retire from Boston unless Add.i.c.ks repaid "Standard Oil's" entire outlay and got down on his knees in public--a demand that called forth one of Add.i.c.ks' sardonic smiles.

Add.i.c.ks had at this time additional difficulties to face. He had spread out his financial commitments, and now he found his stocks and bonds all declining. It was obvious to State and Wall streets that Rogers was in a fair way to drive the buccaneer from Philadelphia to the wall.

It is at this stage that I come into the story.

CHAPTER XII

STOCK-BROKERS NOT ALL BAD

Right here, before plunging deeper into the current of events which led to the organization of Amalgamated--for what has gone before is only that which I deem necessary setting for the story, necessary in order that my readers may clearly take in its meaning--it is only fair to them and to myself for me to say that my life has been spent in the stock-market for the purpose of gain. I have never in my stock operations set myself up for a philanthropist nor in any way posed as a reformer, nor pretended to be a bit better than the business I had chosen for a livelihood. From the first day until now I have endeavored to keep strictly to the principle that I would never knowingly deceive any man, woman, or child who, out of confidence in me, risked their money in speculation or investment. At the same time it should be remembered that the stock-brokerage business often makes queer bedfellows. Moreover, the true stock-operator is sometimes tempted to buckle on his armor and get into an exciting fight solely for the combat's sake, and then he may not be over-concerned about the rights and wrongs of the contention, if upon both sides are lined up professional captains of finance. The minister, the college professor, the dry-goods merchant, may exclaim against this, but they have never known the delicious tingle which, since the abolition of the tournaments of old, can be felt only on the great financial battlefields. If the critics of the stock-gambler could be put through a single minute of a thousand I have known they would be less brash in their denunciations.

And let it be remembered that in these terrific dollar-wars there is as much opportunity for heroism, for generosity, for kindly deeds, as ever physical fighting affords. I read here in the papers of the n.o.ble act of a captain in the navy who has taken his life in his hands; in another place of a rich man who has given a million to create a charity. On the same page that these men are eulogized I will find references to "Jim Keene, the stock-gambler," etc., "heartless, soulless stock-sharp," etc.

"Jim Keene, Stock-gambler," keeps no press agent to flaunt his kindly acts, but from the n.o.ble things I know he has done, and the things others with whom I am personally acquainted know he has done--men, women, and children saved from misery, pain, and death, at the risk of ruin to himself--I'll warrant the celestial scroll shows to his record as many deeds of mercy and n.o.ble daring as are credited to any soldier or philanthropist who has achieved worldly fame in recent years.

The desire for sudden wealth is strong in all parts of our American community. Men want money, and women too, for a score of reasons--some good, some bad--and the stock-market is the magical place where miracles occur and dollars multiply themselves overnight. The agent for all the cupidity of the world is the stock-broker, and he sees life from a strange angle.

Hundreds of letters come to me daily from all kinds of people, who have no other call upon me than their belief that, having at some previous time profitably followed my advice or advice credited to me, they have a right, when "the papers say" I am doing or going to do this, that, or the other thing in stocks, to come to me with their troubles. In 1899 there reached me from a woman a picture of her husband, herself, her three children, and the aged father and mother of her husband. I wish I might print it, but I dare not through fear that they would be recognized. The letter accompanying it was one of the most touchingly pathetic I have ever read. I investigated the case. The statements made were absolutely true. The woman's husband was the cas.h.i.+er of one of the small national banks in one of the old towns in a New England State. His father's brother had been cas.h.i.+er before him. The family's past was thickly strewn with all those simple honors and good things which are so often the heritage of families of the old, self-respecting, G.o.d-fearing, middle-cla.s.s communities of New England and like long-settled sections of the country. On his death-bed the uncle confessed that for years he had carried upon the books of the bank a shortage which had arisen from mistakes. Her husband, to keep the family's name from stain, had continued to keep this buried, which was an easy thing to do, as when he was moved up from teller to cas.h.i.+er at his uncle's death the two positions were combined into one. The wife explained that her husband had let her into the fearful secret, and together they had carried it until it had eaten its way into their hearts. At last the man could no longer stand the strain. He had followed my printed sayings about the market, and now had made the fatal plunge. He had bought upon margin 2,000 shares of Sugar stock to see if it were not possible to make up quickly a shortage of over $20,000, because I had said Sugar was going right up; and then horror of worse than death had seized the wife and she had given me the awful secret, and a description, a word picture of what would happen if I had made a mistake.

She could go no further. She did not need to. I read the letter. I saw the picture, and even I, who believed myself from long years of experience with such affairs immune--I, too, became horror-stricken. It was no affair of mine. I had not said Sugar was going up; as is often the case, some newspaper had printed what another operator had said and credited it to me. I was not even operating in Sugar, nor at the time particularly interested in it. I could not return the letter nor have any communication with these persons without in a way becoming their accomplice. The woman had said that with the purchase her husband had given orders to sell the stocks at twelve points' rise.

Try as I might to look at the matter in a cold-blooded business way the picture haunted me--the old gentleman proud of his family's long record of st.u.r.dy honesty, the old mother's faith in her boy, the wife seeing on each of her children the brand of a felon father, and the husband watching each day's market prices to see whether they had brought him a verdict which meant State's prison or permanent relief from the haunting fear which had become his never-absent shadow; and I read and reread the closing lines of the faithful wife: "Mr. Lawson, you will put Sugar up?--you surely will, just this once--and we will teach the children to pray for you and yours, and G.o.d answers this kind of prayers, you know He does."

The picture haunted me; I saw it in the market prices; I heard the story in each tick of the ticker and each rustle of the tape; and every time my eye caught "SUG," the stock-exchange abbreviation for Sugar, I winced, as one does at the dentist's probe--well, I could not stand it.

I determined to put up Sugar--that is, I determined to try. Little the woman knew what she asked when she wrote: "You will put up Sugar?" She had read that a stock operator works magic, but it had never entered her head that his wand was a stick of dynamite a thousand times concentrated--a stick of dynamite that the law of stock-market averages shows goes off in his hand nine out of every ten times it is handled, and that when it goes off there is nothing more for the handler but the minister, the flowers, and the head-stone; indeed, often the explosion leaves nothing with which to buy even a head-stone! Little she thought that it might strain the wealth of the Bank of England to move Sugar up twelve points. I moved it up, and it went so easy--oh, so easy!

that--well, I will let the first description I pick from my sc.r.a.p-book from among a hundred from the daily press tell the story:

[From the _Boston Journal_, March 17, 1899]

LAWSON'S LUMP

HIS COFFEE SWEETENED WITH QUARTER OF A MILLION--MADE IT IN SUGAR THURSDAY IN TWO HOURS' TRADING

A quarter of a million in a day!

That was Thomas W. Lawson's record for March 16, 1899.

The celebrated "Unthroned King of State Street" was on top of the Sugar market; that is the reason of it all.

Sugar was the big card of stock speculation yesterday.

Indeed, the stock had one of the wildest days in its history, and its high price--$170--reached amid great excitement--is the highest on record. The speculation was something tremendous, and it has been through the speculation that the people who have been under the impression that the markets were drifting into a dull and uninteresting condition have had a sudden awakening.

From the opening it quickly advanced to 149, receded a point or more, and shortly after noon started sharply upward. The demand for it came so rapidly that the tape could not keep up with it, and the excitement grew as the demand increased.

The scenes on the floors of both the New York and local boards were most exciting. Blocks of 500 and 1,000 shares changed hands frequently, and at one time the quotation in the Boston market was fully four points behind that of the New York list. The small army of shorts scrambled to get covered up, and everybody was in a fever of wild excitement over the marvellous movement. Before it had culminated the price reached 170, or a gain of twenty-nine points over the opening--the most remarkable display of strength in so short a period of time that this remarkable stock has ever shown.

Broker Lawson did the buying, and while the excitement was running high he bought freely. He had taken 20,000 shares all told before the advance had fairly gotten under way at from 143-1/2 to 144. At 170 he gave an order to sell 20,000 shares at a limit of 155, and obtained an average of over 160, thereby netting an estimated snug profit of $250,000 or more within two hours. Asked as to whether the strength in Sugar meant a settlement of the Sugar war, Mr. Lawson smiled and said: "There has never been any Sugar war."

The conservative people on the Street are disposed to regard the whole movement as a piece of clever manipulation.

[From the _Boston Herald_, March 16, 1899]

Mr. Thomas W. Lawson was the mover in the deal, and his orders for 20,000 shares early in the day excited other buying, which encompa.s.sed the astonis.h.i.+ng rise. What point Mr. Lawson had to trade upon is his own a.s.set, if he had any point, and it would not matter so far as the event was concerned whether he had a point. The market was in a position to respond to orders of these dimensions, and it did respond.

[From the _New York Journal_, March 17, 1899]