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 noble 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 noble 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 noble 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 cashier of one of the small national banks in one of the old towns in a New England State. His father’s brother had been cashier 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, God-fearing, middle-class 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 cashier 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 sturdy 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 God 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 scrap-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 encompassed the astonishing rise. What point Mr. Lawson had to trade upon is his own asset, 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]

The frenzied brokers fought like madmen around the Sugar post. The wildest sort of excitement prevailed throughout the day. The rest of the floor was practically abandoned, and brokers crowded, pushed, elbowed, and yelled frantically in their efforts to fill orders. There was no warning. The sudden jump of the stock almost threw the brokers into a panic. Men became ferocious in their efforts to fill orders. Those on the outside made wild rushes to get into the whirlpool. Men who are generally calm fell over each other in their excitement. Scores of arms whipped the air, and men yelled themselves hoarse. So great was the din and so compact the yelling crowd that those on one side of the post did not know the bidding on the other. At one point Sugar was going at 159, and five feet away it was bringing 164. While almost at arm’s-length farther away it was going at 160, and farther around the post at 162.

The excitement became general among the offices of stock-brokers as the news flew on the ticker. Members of firms who were not on the floor gathered about the tickers in excited groups and watched the pyrotechnic fluctuations of Sugar to the exclusion of all other stocks. The quotations came out at two and three points apart. One minute the stock was away up, and the next it seemed to fall hopelessly. Then it would as suddenly soar upward again. It reached 170, and in five minutes it was down to 152.

[From the Boston Post, March 22, 1899]

Late in the afternoon Mr. Lawson was induced to give the following explanation of his movements in Sugar: “You know it is not conducive to the health of an active operator to talk on what he is doing, for if he expects to retain his hirsute adornment he must either keep jumping so lively that none of the expert scalpers who haunt the jungles of Wall Street can find him long enough in one spot to cut the floor from under him, or he must envelop himself in mystery so dense that all seeking for him will grow color-blind; but on this particular commodity Sugar I can depart from the standard formula.

“I have been twenty-nine years dodging the scalping-knives of Wall Street Comanches, and, although I am still here, I have many places on my head where the hair refuses to grow, and, strange to tell, almost all the bare spots are labelled ‘Sugar.’ I suppose that I have, during the past ten years, contributed money enough to Sugar to endow a fair-sized asylum for tailless bears. It has never seemed to matter whether I bought or sold, went long or short, the dollars which I secured by the employment of pick and shovel, brawn, muscle or gray matter, all seemed to follow one another into the relentless maw of that modern Saccharine Titanotherium.

“Way back in 1890 I invested the profits of my Lamson deal $700,000 in 10,000 Sugar at 84, and in a few days, amid brilliant fireworks, I bade it adieu, when it gracefully dropped below 50. Again, four years ago, I decided I could make no better long-time investment of $700,000 or $800,000 Electric profits than to short Sugar from 61 to 70. In eleven days it took $1,500 more than my profits to even up my accounts.

“Thinking these things over of late, I determined to make a final demand on astute and relentless Wall Street for my accumulated deposits a kind of please-give-me-back-my-losses demand. I carefully loaded up two weeks ago to the extent of 20,000 Sugar in the thirties, and feeling the atmosphere was redolent of opportunities, last Friday I bought 20,000 more, the last 5,000 of which in a rather open and frank way that seemed but fair to my scalping New York friends. Well, you know the rest. It took fire. I cleaned up something over $700,000, and put out a short line of 30,000 shares, the last of which I have covered to-day at something over $350,000 profit. Strange as it may seem, I was quit. I have struck a balance with Sugar, and it gets no more of my money.

“I am one of the few Bostonians who are contented to live in the knowledge that Wall Street is too big and bright and cute a metropolitan centre for country boys to monkey with, and you can say I am so tickled to get back my bait that I will never again, never, wander away from home. There is one moral that may be drawn by Wall and State streets from the last few days in Sugar. It is this: It is not necessary to-day, any more than it was in old days, to work deals with false stories or fakes. In doing what I did in Sugar I depended on no fakes nor stories. I simply followed Charley Osborne’s old admonition: ’If you want to bull stocks, buy ’em. If you want to bear ’em, sell ’em.’ I bought ’em and I sold ’em. These are Sugar facts as far as my movements have affected them!”

For years after, even up to to-day, this yarn turned up in the press in different parts of the world, and every time I read it I chuckled to myself, for I see a big manly fellow, president of a bank now and asking no odds of any, for he can buy 2,000 shares of Sugar at any time and draw his check to pay for it against a bank account honestly earned since the day his wife wrote that letter.

And I see a grateful mother teaching three youths to say a certain prayer, and then I forget the critics’ scathing sermons against stock gamblers. It does not pain me when my own children ask, “Why do they say such awful things about the stock operator?” I answer: “Oh, they mean no harm; they don’t know the stock gambler they write about.”

ONE OF THE SYSTEM’S SHADOWS

That my readers may not drop this chapter with a false idea of the results of the stock-broker’s efforts to “live and let live,” I will give them an illustration of one of the counterbalances of the law of compensations.

In the same year with the Sugar transaction, in an evil moment my mail brought me the following letter:

Dear Sir: I have read with interest your proclamations about “Coppers.” I am not a rich man, but I have about $20,000 lying idle which I should like to add to, and will put it into anything you advise.

The writer received the following answer from my secretary:

Mr. Lawson instructs me to say he received your letter of and he knows no better investment than the stock of the Amalgamated Copper Company, which will be offered for public subscription next week. In the advertising which will accompany the offer you will note that it is to pay 8 per cent., is now earning 16, and should sell at $150 or $200 per share. It will be offered at par. Not only does Mr. Lawson personally believe in every word in the advertisements, but they are vouched for by such men and institutions as the National City Bank of New York, Henry H. Rogers, William Rockefeller and others, whose names are synonymous with success in business affairs. Mr. Lawson does not hesitate to advise you to invest your $20,000 in this stock, provided you are not looking for an investment that is absolutely safe, that is, one that should not, in these times, pay you over 3-3/4 or 4 per cent.; but if you are looking for a semi-speculative investment, that is, one that will pay you over 6 per cent., and where the chances are good for large profits, he recommends this stock.

Later I received the following:

Upon your advice I purchased 200 shares of the Amalgamated stock at $100 per share. When the stock dropped to 80, remembering your strong advice I purchased 300 shares more, and after it had advanced to 120, thinking it was surely going to the 150 or 200 you mentioned, I bought 1,000, putting up my 500 shares as margin. It has now dropped back to 100, and the many stories I read in the papers are causing me much anxiety. Do you still believe as you first wrote me?

To which he received the following answer:

Mr. Lawson instructs me to say he received yours of . His faith in the Amalgamated property, the men who control and manage it, and the stock is the same as it always has been. He, like yourself, added to his holdings at 120, and as high as 129, and knowing what he does about the property, and what the men who control and manage it, and with whom he is intimately associated, say to him, he cannot believe the yarns which are appearing in the press are other than the vaporings of those stock-market critics who must write their opinions of prominent stocks even though they have no means of actually knowing anything about them.

While Mr. Lawson regrets that you have spread yourself out, as you say in your letter, he can only answer your question by the above, to wit, his faith in Amalgamated is the same as from the beginning.

Later I received the following from one of the penal institutions of the country:

You will observe by the postmark on this letter my present
place of residence. You probably knew that before, as the
press has had much to say about me of late.

I trust you and your associates are satisfied with yourselves when you observe the hell you have caused others. When I first wrote you about the Amalgamated stock I was an honest, prosperous man. I had never committed a crime nor done any great wrong to my fellow-beings. Relying upon what you said publicly and the well-known record of the Rockefellers and their partners, I committed acts which I now know to my everlasting sorrow I should not have committed. I had no intention of doing wrong, but when I saw ruin staring me in the face I used, as I supposed only temporarily, funds intrusted to me to protect my stocks from being slaughtered at declining prices by the sharks of brokers whom I dealt with. The rest is the old story. My wife and children are disgraced and oppressed with poverty, and I am serving a five years’ sentence in this institution, buoyed up only with the hope that I may live to face you and your kind, that you may have the pleasure of seeing the wreck you have wrought in the hope that I may satisfy a desire which night and day gnaws at my very soul, a desire to say to you, face to face: “Look upon a man who, although a branded criminal, is as much better than you and your associates as it is possible for one to be,” and to ask you how your wife and your children enjoy the luxuries they have when they know at what price they were secured, for I shall surely, if I live, insist upon your wife and children hearing from my lips what agonies a wife and children, who are as dear to me as yours are to you, have suffered because of your baseness.