"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 Add.i.c.ks--no man or woman has pity for Add.i.c.ks.

"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 Add.i.c.ks 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; Add.i.c.ks 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 Add.i.c.ks, who, heaped up on his lounge, was staring into vacancy.

"Brace up, Add.i.c.ks," 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. Add.i.c.ks, 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 Add.i.c.ks'

house. We soon had all the details of the raid. This is what had happened. Dwight Braman, a former 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 Add.i.c.ks was dissipating the a.s.sets 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 Add.i.c.ks' 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 Add.i.c.ks' 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. Add.i.c.ks instructed Fred Keller to rush the books of the company into a trunk, together with all the private papers in Add.i.c.ks' 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. Add.i.c.ks 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 Add.i.c.ks 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. Rogers had nothing to do with the Braman-Foster affair, but to satisfy Add.i.c.ks and make a.s.surance 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 Add.i.c.ks 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 Add.i.c.ks 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 a.s.sist us.

CHAPTER XXIII

TWO GENTLEMEN OF FRENZIED FINANCE

The enemy did not leave us long in suspense. Next day Braman and Foster arrived in New York, bursting with a n.o.ble 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 const.i.tutes 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 a.s.sistant 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 me of things I already had made myself familiar with, to wit, how he had at different times occupied similar roles 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 Add.i.c.ks, 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 Add.i.c.ks 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 pa.s.sing breeze.

I hurried back to Add.i.c.ks. "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 Add.i.c.ks 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 Add.i.c.ks' quarters in the Hoffman.

There was considerable excitement for the guests and the newspapers.

Doors were battered down, but the astute and slippery Add.i.c.ks 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.

Add.i.c.ks 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 Add.i.c.ks 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 n.o.body'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 pay on 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 partic.i.p.ated 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 acc.u.mulation 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 gla.s.ses, 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 Add.i.c.ks. 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."

"Somebody's word ought to be good," he commented.

"Only two men's words would be of any avail," I interrupted--"yours and Add.i.c.ks', and you have just made it clear that in this case neither would be worth the breath expended in pledging it."

FOOTNOTES:

[12] Since the above was published the American people have become aroused, and as this book is going to press, scores of the greatest financiers in America are having under oath confessions squeezed from them in a life-insurance investigation conducted by the State of New York--confessions which reveal such a condition of perjury, bribery, and habitual sequestration of funds, as to make my statement seem mild.

CHAPTER XXIV

BUYING A BUNCH OF STATES

I left Braman and went down to Mr. Rogers. After a careful canvas of the situation it was settled that the only way out was for Rogers to furnish the money to release the receivership, in consideration of which accommodation Add.i.c.ks should forfeit the old Boston companies to him through Bay State's failure to comply with the terms of the May contract which matured the following Monday. Rogers would administer these companies in trust, applying their earnings to the liquidation of the bonds, and after these latter had been paid off, would turn them back to the Bay State Company for the benefit of its stock; or he would release the companies to us whenever we could raise the money to redeem them.

Thus Rogers would make sure of the amount of his original investment, the million dollars profit the May 1st deal permitted him, while I should have secured for my friends and the public the amount of their investment in the property and a good profit for the stockholders to boot. To secure Add.i.c.ks' consent to this arrangement would be the difficulty; but there was one consideration that would probably induce him to give way--his terrible plight in case the receivership became permanent.

Having reached this point, the next problem was how to get the money.

Rogers refused absolutely to be a party to any payment that could be traced back to him. He pointed out the sources of hazard; first, through treachery on the part of Foster, Braman, or Add.i.c.ks, he might be accused of bribing a court officer, the receiver; Add.i.c.ks might blackmail him by charging him with conspiracy, or a conspiracy charge might be brought by Bay State stockholders, and he be held for tremendous damages. He refused to put himself into any such trap. I put forward a dozen ways to meet the emergency, but he would have none of them. Finally he suggested a method which was certainly perfect of its kind. He began by letting me into the secret that the chances of a McKinley victory in the election the following week looked pretty bad, and that the latest canva.s.s of the State showed that unless something radical were done, Bryan would surely win. Hanna had called into consultation half a dozen of the biggest financiers in Wall Street, and it was decided to turn at least five of the doubtful States. For this purpose a fund of $5,000,000 had been raised under Rogers' direction,[13] to be turned over to Mark Hanna and McKinley's cousin, Osborne, through John Moore, the Wall Street broker, who was acting as Rogers' representative in collecting the money. It would be legitimate for the National Committee to pay out money to carry Delaware, and he, Rogers, would arrange it that the coin to satisfy Braman and Foster should come through this channel. Thus he would be completely protected.