Then he turned to me, rocking back strongly on his heels and clasping his hands behind his square head.

"I meant that," he said; "there is more power in the pen of one honest writer in the service of an honest, fearless newspaper than in all the wealth and cunning of the 'System.'"

THE MUNROE & MUNROE EPISODE

There came a time in the first twelve months of my "Frenzied Finance"

crusade when people rather took the att.i.tude that I was exaggerating conditions and that neither Wall Street nor the "System" was so bad as I had depicted them. About this time, following the so-called Lawson panic, occurred the Munroe & Munroe _esclandre_, the details of which plainly showed eminent financiers in the vulgar business of stock-washing. I frankly treated the subject in _Everybody's_, and as it is part of the history of the movement, I reproduce the pa.s.sage:

The average man is p.r.o.ne to lose sight of perfidy in magnitude and to say, when he hears all the facts: "At least these rascals hunt big game." I wish to say here that such distinction is undeserved. The "System" is omnivorous. Its insatiable maw yawns as greedily for the ten-cent pieces of the people as for the thousands of the larger investor. It is as avid and relentless in devising ant-traps as elephant-snares. There fell into my hands recently certain valuable doc.u.ments in the meanest of contemporary swindles, which reveal the connection of the National City Bank, certain of its officers and other important financial interests, with a plot to fleece the f.a.g ends of the public. The details of the Munroe & Munroe-Montreal & Boston conspiracy have been widely published, and the world is well acquainted now with the two Munroes, graduates of a "gents' furnishing-goods" shop in Montreal, introduced into high finance in New York, organizing with the a.s.sistance of the great Rockefeller-Stillman-Rogers bank a copper corporation with shares at a par value of five dollars. There never was such barefaced exploitation as was used on behalf of this proposition.

It was advertised as a bonanza; investors were guaranteed against loss by an a.s.surance that their stock would double and treble in price, and that the company would stand ready at all times to buy back shares at cost. The intention was plainly to entice into the Montreal & Boston people of very limited means, who could ill afford to lose their savings.

The sudden panic, brought about by the warning to the people of the traps that were being set for them, caught napping many of the "System's" votaries, large and small, and before they could get their different devices even-keeled from the shock caused by that single blast of truth, the public got a peep 'tween decks into the machinery. Among those whose port-holes were blown wide open was the Munroe & Munroe-City Bank-Montreal & Boston outfit, whose scheme went down like a card-house in the blow. A receiver was at once appointed to take care of the debris. This mishap revealed an amazing condition of affairs. With only $2,000 capital, Munroe & Munroe had arranged with the great National City Bank to honor their checks for immense sums every day, the proceeds being used to carry on a series of fict.i.tious transactions in Montreal & Boston stock for the purpose of beguiling the public into purchasing it.

The affair was a ten-days' wonder, and was finally squelched by the great bank's throwing over its vice-president, Archibald G. Loomis, who had bravely shouldered the responsibility for the transaction. At writing, two professional gamblers, who seem to have been the princ.i.p.al victims of the underwriting end of the swindle, are being settled with, and the whole affair will soon be buried from public gaze.

The episode was, on the whole, so foul in its revelation of greed that even Wall Street was horrified--not at the arrant double-dealing exposed, but that the "System" should descend to such vulgar malpractice. The doc.u.ments now in my possession, which I shall publish later in my story, include the original underwriters' agreement, which, at great cost of time and money, has so far been kept from the public, and they show some of the greatest bankers in the land deliberately planning, by the use of fraudulent papers and bogus agreements, to beguile investors to adventure their money in a scheme the sole purpose of which was the enrichment of its organizers. The whole performance reveals a depravity so profound and a greed so heartless that the people may well tremble for the safety of their savings intrusted to the custody of men of this type. It also proves my contention that the "System," while depending on burglary for its largest returns, does not despise the small profits of the pick-pocket.

FOOTNOTES:

[21] Groups of Stock-Exchange members each day appear to buy from other groups great quant.i.ties of shares of different stocks at advancing prices.

In reality all the brokers--the ones appearing to buy and those who sell to them--are in league with each other, and none of the transactions is actual. The performance bears the same relation to legitimate Stock-Exchange trading that the purchase and sale of a gold brick among confederates at a circus do to the genuine work of the gamblers and pick-pockets who are really attending to business around them. On certain days in the months I refer to, when the official records of the Stock Exchange told that one and a half million shares had been bought and sold, and prices had advanced until the aggregate increase in the worth of the stocks dealt in amounted to hundreds of millions of dollars, not more than a few thousand shares of real stock changed hands. The rest was barefaced fraud for the purpose of deceiving the millions of investors and speculators throughout the country who are dependent upon the daily press and "market letters" for information in regard to investments for their savings.

[22] Arthur McEwen and James Creelman are among the strongest and ablest of American newspaper writers. Their names are not as familiar to the readers of magazines as some others, but they are, perhaps, the most highly paid men in journalism to-day, and they have a well-earned reputation for independence and personal integrity. Mr. McEwen, who is now one of the editors of the New York _American_, is known throughout the country as a fearless exponent of corporate villainies. Mr. Creelman is a distinguished member of the New York _World's_ editorial staff, and has interviewed more of the world's great men than any other journalist living. From their standing in their profession, their well-known hatred of hypocrisies and shams, their wide experience in estimating men of all degrees--the verdict of Mr. Creelman and Mr. McEwen, as set forth in their papers, should be conclusive.

III

EXPLANATIONS

The revelations I delivered to the public in my story of "Frenzied Finance," together with the accompanying expositions of insurance and other rottenness in the "Critics" department, were not accepted without protest from my correspondents. Though the majority of the letters that came to me in shoals from all parts of the country have been generous in their appreciation of my work, many have seriously taken my methods to task and dubiously questioned my motives. The most salient and satisfactory expression of these doubters was a letter that came to me from a New York banker, to which I replied at length, for it afforded me the opportunity to get before my readers in general many matters about which explanations seemed due them. The letter was as follows:

NEW YORK.

_Dear Sir_: I have read all that you have written in _Everybody's Magazine_, and have been unusually interested.

If you will consult the Amalgamated subscription list you will see my house is down for quite a large amount. For this reason and others, and as an old member of our Stock Exchange, I naturally follow such writings as yours. At the beginning I agreed with most bankers in believing that you were actuated by a desire to get even with Mr. Rogers, Mr.

Rockefeller, or Mr. Add.i.c.ks; but as your tale progressed I thought I perceived a sincere desire to carry out some genuine work of reform in the system of conducting the stock business; then when you began your advertising work last December, I shifted again and felt that your efforts were probably for personal gain.

Since then I have noted your every move with an acute interest, for I became convinced that you were going to work considerable mischief before you got through. Of late you have been so bold--and I believe I voice the opinions of the large majority of men connected with financial affairs when I say _dangerous_--that I cannot resist writing you as I do herewith.

You advertise through the daily press and in your "Critics"

pages that you are doing all in your power to create unrest and fear among the people for the purpose of frightening them into selling their stocks and bonds, and you go further and openly make the most astounding of statements, the most dangerous and vicious--that you will endeavor to have all the people owning deposits in banks, trusts, and insurance companies withdraw them in concert.

I will be frank and state that if I did not know your business career, and had not read your writings, I should dismiss this latter statement of yours by calling on the proper authorities to take cognizance of you as a most dangerous lunatic, but as your business career and your writings show you to be an able financier, a successful business man, an advanced thinker and brilliant writer, I feel that mental derangement cannot be the cause of this remarkable proceeding.

Therefore I challenge you, as one who professes to be an honest man, to answer at once the inclosed list of questions fully and unqualifiedly in your magazine before you make any more extraordinary and, I believe, perilous public requests; and I warn you that if you do not do so, I shall consider it my duty to make public through the press of this country, and in other places where you have been advertising your vicious theories, that you have not dared to make answer. In other words, I shall, after the next issue of _Everybody's Magazine_, if it does not contain your answers, publish broadcast a copy of this letter, and in all fairness and sincerity, I warn you I shall not be deterred from doing this by any excuse you may make that my letter was received too late for the July number of the magazine, or that more important matters take up your s.p.a.ce. I have, by diligent research, ascertained that you will have at least forty-eight hours from the time this letter is placed in your hands before the section containing your "Lawson and His Critics" pages is sent to press; or, to be plainer, I can have advertis.e.m.e.nts inserted in the same section as that containing your "Critics" pages if I hand in my copy forty-eight hours after you will have received my letter.

Therefore you have sufficient time to formulate your answer, and you know as well as I that, in the present excited condition of the public mind, which has been created largely by your public statements, there can be nothing more deserving of s.p.a.ce in _Everybody's Magazine_ than the answers to my questions. You must realize, sir, that in all sections of the country small holders of stocks are not only selling their holdings, but that small depositors in banks and trust companies are already beginning to withdraw their deposits, that already many small banks have failed because of this feeling of apprehension. So far as Wall Street is concerned, legitimate business is practically dead, and you have, for the time being at least, killed it. I will not add what ill your attacks have worked in the large insurance companies, for it is, I am sorry to say, patent to all that there is but little life-insurance business being done at present by the very large companies, and at best it will require years to live down the unsettlement you have wrought in the people's confidence in this worthy and time-proven inst.i.tution.

These are the questions I want answers to, and answers in keeping with those broad professions of honesty and keen regard for the best interests of the people which you have been making.

Earnestly and respectfully yours, ----

1. Do you know economics and finance, money, banking, credits, corporations, and business in their broad relations to the people, the American Government, and natural law, and the relation each holds to the other, or is your knowledge confined to the skimming and smattering such as any alert and bright stock speculator would naturally pick up in years of experience as a broker and manipulator?

2. Do you not know that in all times there have been, and must naturally be, very rich men, and that necessarily there can be but very few of these, and that where they are there must be very many times as many poorer ones, very poor ones?

3. Do you not know that there must be billions of dollars'

worth of stocks and bonds in America, and that they must not only increase but increase very rapidly, and that their existence instead of being evidence of great evil is proof positive of the great prosperity of the whole country and the whole people, and that it is the sacred duty of all the people down to the very poorest, who own none of these, to guard, protect, and maintain their price, and not the duty of any honest man to destroy or shrink the value of this evidence of real wealth?

4. Do you not know that a large portion of all these stocks and bonds is owned by the ma.s.ses of the people; that if they should be frightened into selling them there would be no place to put the vast sums they would receive for them, as the banks could not profitably use this cash if it were added to what is deposited now, and that the only sufferers by this frightened and forced selling would be the people whom you profess to be working for?

5. Do you not know that if the people should start on a given day to withdraw their money from the banks and trust companies throughout this country, there would be the worst calamity in this country that the world has ever witnessed; that all lines of business would be disorganized; that the country would be set back a very long time, and that the princ.i.p.al sufferers would be the working people and the farmers, and, in fact, all those cla.s.ses you profess to be working for; and do you not know that in the middle of this calamity you would probably be lynched and perhaps torn limb from limb by the crazed and deluded people, who would then see the danger of your teachings?

6. Do you not know that the result of the people's selling their stocks and bonds in concert would be a great drop in their price, and that the people's raiding the banks and trust companies of their deposits would also bring about a tremendous drop in the price of stocks and bonds; that the only ones who can possibly benefit are the bears who sell short; that these bears have no legitimate standing in the business world, and should have none, and that in the broadest sense of the term they are not honest men?

7. Do you not know that the greatest inst.i.tution in this country to-day is life insurance, and that if you disturb the confidence of the people in life insurance their families will be deprived of the greatest source of income at a time when most in need of it?

8. Do you not know that there can be no new remedy for the present condition of affairs, even if it is really as bad as you picture it, and that the only remedy or cure possible is a more honest enforcement of our present laws, a more honest conduct of our present enormous business, and a more intelligent recognition by the working people and farmers of the inevitable natural laws? Also that there can be nothing more pernicious than this constant teaching them that their interests are opposed to the interests of the very rich cla.s.s?

9. Did you not write your story to advertise yourself for the purpose of making money out of the following your disclosures would bring you and for the purpose of making money for _Everybody's Magazine_?

10. Do you not own the largest part of _Everybody's Magazine_, and has not your part of the profits received from that source since you began your story been very large?

11. Do you not sell stocks short before each of your advertis.e.m.e.nts, and are not the press stories and the one now current in Wall Street that you made over a million dollars in the decline which preceded the appearance of the June _Everybody's_, true?

12. Are you going to commit the crime of calling out bank and trust company deposits?

13. If you make such a call, and it is answered, and there is a destructive panic and a number of the big New York banks and trust companies fail, what will you do?

14. If the ma.s.ses should sell their stocks and bonds and get their money, what would then happen?

15. Do you dare say to your readers now and unqualifiedly, that you have a real remedy for the present financial evils, and that it will show when it is given that it is anything more than some new scheme by which you personally are to get the people's money?

16. Do you dare to say now to your readers unqualifiedly that this remedy will show conclusively that it has not been invented since you began your story of "Frenzied Finance"?

17. Do you dare tell your readers now and unqualifiedly that you personally did not make money out of what you call the "Amalgamated swindle"?

18. Do you dare tell your readers now and unqualifiedly that you have not made money, and an enormous amount of it--very much more than all you have spent in connection with your work of "Frenzied Finance"--out of the people since your story began?

I will state in fairness to you before you make answer to the above questions that it is now my intention to take your answers into court in a suit which will be brought, and that if you have made answers different from those you make under oath you will be held up to the scorn of the whole American people.

I replied:

I admire your smartness. Of the thousands of letters I have recently received yours is the cunningest. If I do not answer your shrewd and adroitly put questions in the brief s.p.a.ce at my disposal, you will discredit my work. If I take offence at your way of putting your questions, you will have the pretext you are evidently looking for.

Then, your closing warning is so manly and generous! I must not lie, because, if I do, you will expose me in court! You thought that would make good reading after I had refused to make reply in this issue, and you had advertised your letter. Again, you probably figured that as my June chapter was all taken up with my story and there was no room for the insurance article I had promised, I should need all my "Critics"

s.p.a.ce this month for it; so, all in all, I guess you were pretty sure I could not answer your apparently fair and honest questions.