Some twelve years ago or so, in the early days of Californian immigration, a curious little business humbug came off about six miles from Monterey. A United States officer, about the year 1850, was on his way into the interior on a surveying expedition, with a party of men, a portable forge, a load of coal, and sundry other articles. At the place in question, six miles inland, the Lieutenant's coal wagon "stalled" in a "tule" swamp. With true military decision the greater part of the coal was thrown out to extricate the team, and not picked up again. The expedition went on and so did time, and the latter, in his progress, had some years afterward dried up the tule swamp. Some enterprising prospectors, with eyes wide open to the nature of things, now espied one fine morning the lumps of coal, sticking their black noses up out of the mud. It was a clear case--there was a coal mine there! The happy discoverers rushed into town. A company was at once organized under the mining laws of the state of California. The corporators at first kept the whole matter totally secret except from a few particular friends who were as a very great favor allowed to buy stock for cash. A "compromise"

was made with the owner of the land, largely to his advantage. When things had thus been set properly at work, specimens of coal were publicly exhibited at Monterey. There was a gigantic excitement; shares went up almost out of sight. Twelve hundred dollars in coin for one share (par $100) was laughed at. About this time a quiet honest Dutchman of the vicinity pa.s.sing along by the "mine" one evening with his cart, innocently and unconsciously picked up the whole at one single load and carried it home. Prompt was the discovery of the "sell" by the stockholders, and voluble and intense, it is said, their profane expressions of dissatisfaction. But the original discoverers of the mine vigorously protested that they were "sold" themselves, and that it was only a case of common misfortune. It is however reported that a number of persons in Monterey, _after_ the explosion of the speculation, remembered all about the coal-wagon part of the business, which they said, the excitement of the "company" had put entirely out of their heads.

An equally unfounded but not quite so barefaced humbug came off a good many years ago in the good old city of Hartford, in Connecticut, according to the account given me by an old gentleman now deceased, who was one of the parties interested. This was a coal mine in the State House yard. It sounds like talking about getting sunbeams out of cuc.u.mbers--but something of the sort certainly took place.

Coal is found among rocks of certain kinds, and not elsewhere. Among strata of granite or basalt for instance, n.o.body expects to find coal.

But along with a certain kind of sandstone it may reasonably be expected. Now the Hartford wiseacres found that tremendously far down under their city, there was _a_ sort of sandstone, and they were sure that it was _the_ sort. So they gathered together some money,--there is a vast deal of _that_ in Hartford, coal or no coal--organized a company, employed a Mining Superintendent, set up a boring apparatus, and down went their hole into the ground--an orifice some four or six inches across. Through the surface stratum of earth it went, and bang it came against the sandstone. They pounded away, with good courage, and got some fifties or hundreds of feet further. Indefinable sensations were aroused in their minds at one time by the coming up among the products of boring, of some chips of wood. Now wood, shortly coal, they thought.

They might, I imagine, have brought up some pieces of boiled potato or even of fresh shad, provided it had fallen down first. They dug on until they got tired, and then they stopped. If they had gone down ten thousand feet they would have found no coal. Coal is found in the new red sandstone; but theirs was the old red sandstone, which is a very fine old stone itself, but in which no coal was ever found, except what might have been put there on purpose, or possibly some faint indications. The hole they made, however, as my informant gravely observed, was left sticking in the ground, and if he is right is to this day a sort of appendix or tail to the well north-west corner of the State House Square. So, I suppose, any one who chooses can go and poke down there after it and satisfy himself about the accuracy of this account. Such an inquirer ought to find satisfaction, for "truth lies in the bottom of a well" says the proverb. Yet some ill natured skeptics have construed this to mean that all will tell lies sometimes, for--as they accent it, even "Truth _lies_, at the bottom of a well!"

Still a different sort of business humbug, again, was a wonderful story which went the rounds about fifteen years ago, and which was cooked up to help some one or other of the various enterprises for new routes by Central America to California. This story started, I believe, in the "New Orleans Courier." It was, that a French Doctor of Vera Paz in Guatemala, while making a ca.n.a.l from his estate to the sea, discovered, away up at the very furthest extremity of the Gulf of Honduras, a vast ancient ca.n.a.l, two hundred and forty feet wide, seventy feet deep, and walled in on both sides with gigantic ma.s.ses of rough cut stone. The Doctor at once gave up his own trifling modern excavation, and plunged into an explanation of this vast ancient one, as zealously as if he were probing after some uncertain bullet in a poor fellow's leg. The monstrous ca.n.a.l carried him in a straight line up the country, to the south-westward. Some twenty miles or so inland it plunged under a _volcano!_

But see what a French doctor is made of!

Cutting down the great, old trees that obstructed the entrance, and procuring a canoe with a crew of Indians, in he went. The ca.n.a.l became a prodigious tunnel, of the same width and depth of water, and vaulted three hundred and thirty five feet high in the living rock. Nothing is said about the bowels of the volcano, so that we must conclude either that such affairs are not planted so deep as is supposed, or that the fire-pot of the concern was shoved one side or bridged over by the ca.n.a.llers, or that the Frenchman had some remarkably good style of Fire Annihilator, or else that there is some mistake!

Eighteen hours of incessant travel brought our intrepid M.D. safe through to the Pacific Ocean; during which time, if the maps of that country are of any authority, he pa.s.sed under quite a number of mountains and rivers. The trip was not dark at all, as shafts were sunk every little way, which lighted up the interior quite well, and then the volcano gave--or ought to have given--some light inside. Indeed, if the doctor had only thought of it, I presume he would have noticed double rows of street gas lamps on each side of the ca.n.a.l! The exclusive right to use this excellent transit route has not, to my knowledge, been secured to anybody yet. It will be observed that ships as large as the Great Eastern could easily pa.s.s each other in this ca.n.a.l, which renders it a sure thing for any other vessel unless that shrewd and grasping fellow the Emperor Louis Napoleon, has got hold of this ca.n.a.l and is keeping it dark for some still darker purposes of his own--as for instance to run his puppet Maximilian into for refuge, when he is run out of Mexico--it is therefore still in the market. And my publication of the facts effectually disposes of the Emperor's plan of secrecy, of course.

IV. MONEY MANIAS.

CHAPTER XXIV.

THE PETROLEUM HUMBUG.--THE NEW YORK AND RANGOON PETROLEUM COMPANY.

Every sham, as has often been said, proves some reality. Petroleum exists, no doubt, and is an important addition to our national wealth.

But the Petroleum humbug or mania or superst.i.tion, or whatever you choose to call it, is a humbug, just as truly, and a big one, whether we use the word in its milder or its bitterer sense.

There are more than six hundred petroleum companies. The capital they call for, is certainly not less than five hundred million dollars. The money invested in the notorious South Sea Bubble was less than two-fifths as much--only about $190,000,000.

Now, this petroleum business--very much of it--is just as thorough a gambling business as any faro bank ever set up in Broadway, or any other stock speculation ever conjured up in Wall Street--as much so, for instance, as the well known Parker Vein coal company.

I shall here tell exactly how those well known and enterprising financiers, Messrs. Peter Rolleum and Diddle Digwell proceeded in organizing the New-York and Rangoon Petroleum Company, of which all my readers have seen the advertis.e.m.e.nts everywhere, and of which the former is the Vice President and managing officer, and the latter Secretary. In June 1864, neither of these worthy gentleman was worth a cent. Rolleum shinned up and down in some commission agency or other, and Digwell had a small salary as clerk in some insurance or money concern. They barely earned a living. Now, Rolleum says he is worth $200,000; and Mr.

Secretary Digwell, besides about $10,000 worth of stock in the New York and Rangoon, has his comfortable salary and his highly respectable "posish"--to use a little bit of business slang.

Mr. Rolleum was the originator of the scheme, and let Digwell into it; and together they went to work. They had a few hundred dollars in cash, no particular credit, an entirely unlimited fund of lies, a good deal of industry, plausibility, talk, and cheek, considerable acquaintance with business, and an instinctive appreciation of some of the more selfish motives commonly influential among men.

First of all, Rolleum made a trip into the oil country. Here, while picking up some of his ordinary agency business, he looked around among the wells and oil lands, talking, and examining and inquiring of everybody about everything, with a busy, solemn face, and the air of one who does _not wish_ it to be supposed that he has important interests in his care. Then he talked with some men at (we will say) t.i.tusville and thereabouts; told all about his valuable business connections in New York City: and after getting a little acquainted, he laid before each of half-a-dozen or so of them, this proposition:

"You can have a good many shares of a first cla.s.s new oil company about to be formed just for permitting your name to be used in its interest, and for being a trustee." A thousand shares apiece, he said; to be valued at five dollars each, the par value however, being ten dollars.

Five thousand dollars each man, and to be made ten thousand, as soon as the proposed puffing should enable them to sell out. After a little hesitation, a sufficient number consented. There was nothing to pay, something handsome to get, and all they were asked for it was, to let a man talk about them. What if he did lie? That was his business.

This fixed four out of the nine intended trustees.

Rolleum also obtained memoranda or printed circulars showing the amounts for which a number of oil land owners would sell their holes in the ground or the room for making others, and describing the premises. He now flew back to New York, and went to sundry persons of some means and some position but of no great n.o.bility, and thus he said:

"Here are these wealthy and distinguished oil men right there on the ground who are going to be trustees of my new company.

"You serve too, won't you? One thousand shares for your trouble--five thousand dollars. No money to pay--I will see to all that. Here are the lands we can buy,"--and he showed his lists. The bribe, and the names of those already bribed, influenced them, and this secured three more trustees. Two more were needed, namely the President and Vice President. Rolleum himself was to be the latter; his next move was to secure the former.

This, the most critical part of the scheme, was cunningly delayed until this time. Rolleum went to the Honorable A. Bee, a gentleman of a good deal of ability, pretty widely known, not very rich, believed (perhaps for that reason) to be honest, no longer young, and of a reverend yet agreeable presence. Him the plausible Rolleum told all about the new Company; what a respectable board of trustees there was going to be--and he showed the names; all either experienced and substantial men of the oil country, or reputable business men of New York City. And they have agreed to serve, in part because they know what a very honest company this is, and still more because they hope that the Honorable A. Bee will become President.

"My dear Sir," urged Rolleum, sweetly, "this legitimate business enterprise _must_ succeed, and _must_ secure wealth, reputation, and influence to all connected with it. We know that you are above pecuniary considerations, and that you do not need our influence, or anybody's. We need yours. And you need not do any work. I will do that. We only need your name. And merely as a matter of form, because the officers are expected to be interested in their own company, I have set apart two thousand shares, being at half par or $5 a share, $10,000 of stock, to stand in your name. See how respectable all these Trustees are!" And he showed the list and preached upon the items of it.

"This man is worth so many millions, that man is such an influential editor. Could I have obtained such names if this were not a perfectly square thing?"

Ten thousand dollars will go some ways towards squaring almost anything, with many people, even if it is a mere matter of form; and so the old gentleman consented. This fixed the whole official "slate."

Now to set up the machine.

In a few days of sharp running and talking, Rolleum and Digwell accomplished this, as follows:

_First_, they hired and furnished handsomely, paying cash whenever they couldn't help it, a couple of pleasant first floor rooms close to Wall Street. No dingy desk-room up in some dark corner or attic, for them.

Respectability is the thing for Rolleum.

_Second_, they hired a lawyer to draft the proper papers, and had the New York and Rangoon Petroleum Company "Duly incorporated under the mining and statute laws of the State of New York," with charter, by-laws, seal, officers' names, and everything fine, new, grand, magnificent, impressive, formal, respectable and business-like.

_Third_, they now had every requisite of a powerful, enterprising and highly successful corporation, except the small trifles of money, land and oil. But what are these, to such geniuses as Rolleum and Digwell?

Singular if having invented and set the trap, they could not catch the birds!

They _bought_ about three pints of oil, for one dollar; and that settled one part of the question. They bought it ready sorted and vialled and labelled; some crude and green, some yellowish, some limpid as water, half a dozen or so of different specimens. These, in their tall vials of most respectable appearance, they placed casually on the mantel-piece of the outer office. They were specimens of the oils which the company's wells are confidently expected to yield--when they get 'em!

Last of all--land and money. Subscriptions to capital stock are to furnish money, money will buy land. And _saying we've got land_ will procure subscriptions.

"It's not much of a lie, after all," said Rolleum, confidentially, to brother Digwell. "When we've _said_ we've got it for awhile, we _shall_ get it. It's not a lie at all. It's only discounting the truth at sixty days!"

So he and Digwell went to work and made a splendid prospectus and advertis.e.m.e.nt, the latter an abridged edition of the former. This prospectus was a great triumph of business lying mixed with plums and spices of truth, and all set forth with taking "display lines."

It began with a stately row of names: New York and Rangoon Petroleum Company; Honorable Abraham Bee, President; Peter Rolleum, Esq., Vice President; Diddle Digwell, Esq., Secretary; and so on. With cool impudence it then gave a list headed "Lands and Property"--not saying "of the Company" for fear of a prosecution for swindling. But the list below began with the words "the oil lands _to be conveyed_ to the Company are as follows:" "that's exactly it" quoth Rolleum--"no lie there, at any rate. They _are_ to 'to be conveyed' to us--if we choose--just as soon as we can pay for them." And then the list went on from "No. 1" to "No. 43," giving in a row all those memoranda which Rolleum had obtained in Venango County and the region round about, of the descriptions of the real estate which the landsharks up there would be glad to sell for what they asked for it.

The Prospectus said the capital of the company was one million dollars, in one hundred thousand shares at ten dollars each. But _in order to obtain a_ WORKING CAPITAL, twenty thousand shares are offered for a _limited period_ at five dollars each, not subject to further a.s.sessment.

And it added, though with more phrases, something to the following effect: Hurry! Pay quick! Or you will lose your chance! In conclusion the whole was wound up with many wise and moral observations about legitimate business, interests of stockholders, heavy capitalists, economical management, and other such things; and it bestowed some rather fat compliments upon the honorable Abraham Bee and the Trustees.

Having concocted this choice morsel of bait, they set it in the great stream of newspapers, there to catch fish. In plain terms, with some cash and some credit--for their means would not even reach to pay in advance the whole of their first advertising bill--they managed to have their advertis.e.m.e.nt published during several weeks in a carefully chosen group of about thirty of the princ.i.p.al newspapers of the United States.

The whole web was now woven; and Rolleum and Digwell, like two hungry spiders, squatted in their den, every nerve thrilling to feel the first buzz of the first fly. It was natural that the scamps should feel a good deal excited: it was life or death with them. If a confiding public, in answer to their impa.s.sioned appeal, should generously remit, they were made men for life. If not, instead of being rich and respected gentlemen, they were ridiculous, detected swindlers.

Well--they succeeded. So truthful is our Great American Nation--so confiding, so sure of the truth of what is said in print, even if only in the advertising columns of a newspaper--so certain of the good faith of people who have their names printed in large capitals and with a handle at one end--that actually these fellows had a hundred thousand dollars in bank within ten weeks--before they owned one foot of land, or one inch of well, or one drop of oil, except those three pints in the vials on the office shelf!

And remember this is no imaginary case. I am giving point by point the exact transactions of a real Petroleum Company.

Everything I have told was done, only if possible with a more false and baseless impudence than I have described. And scores and scores of other Petroleum Companies have been organized in ways exactly as unprincipled.