ENTER H. M. WHITNEY

It is not surprising that there should now have ensued an interval of silence and peace in the Boston gas war. Disheartened, disgusted, disappointed, I had to take stock of our position. However enraged I might be at the new revelation of Addicks’ extraordinary veniality, the other elements in the situation remained as before. I could see nothing for me to do but to resume the tactics I had employed previous to the meeting with Rogers. My friends’ interests had to be protected, and to do that war must be waged until a vulnerable spot in Rogers’ armor had been found. But it was some days before I could screw my enthusiasm back to fighting-pitch. In the mean time Rogers did nothing. He, too, was waiting for new developments.

To this extent the situation had altered, however: I knew just where I stood with Rogers, and he realized the consequences of pressing us into a corner. I knew he would sell his company and retire from the field if I could find a way to pay him for so doing. He knew that if he turned the screws too hard I would as a last resort turn the tables by throwing Bay State Gas into bankruptcy. I tried many times and in many ways to find means to bring about a termination of the struggle, but to no purpose. Our extremity was such that it was impossible to do more than protect our companies from a receivership. To raise new capital to deposit as collateral with Rogers was out of the question, for the public, looking on at what was evidently most disastrous warfare, was in no temper to buy new stock.

The lull in our hostilities was only a pause between battles. It suddenly came to an end January, 1896, when a new enemy appeared in the field. Henry M. Whitney, who had built up Boston’s electric street-railway system, and who, from his frequent dealings with the Massachusetts Legislature in obtaining franchises, had the reputation of carrying that body in his waistcoat-pocket, came before this Legislature with a proposition for a charter for a new and independent gas company. Up to this time Whitney had had no relation with the gas public. He based his new departure on the claim that he had come into possession of a patented device through which it became possible to turn the low-grade sulphuric coal of Nova Scotia into coke without sacrificing either the valuable by-products, such as ammonia, tar, etc., or illuminating gas. This was a very remarkable pretension, for we had long ago eliminated these low-grade coals from consideration as material for gas-making; but if Whitney’s device actually was what he claimed, undoubtedly he would be a dangerous competitor. Whitney’s petition set forth further, that because of the exceedingly low price of this Province coal and its richness in by-products he could afford to sell gas to consumers at 50 cents per thousand feet (the legal charge was then $1 per thousand feet), a price which would enable the great manufacturing institutions and all the steam and heating plants to use gas economically for fuel purposes.

The thing was sprung one day and was all over town before night. There were interviews and pamphlets floridly setting forth Mr. Whitney’s good intentions toward gas consumers.

Mr. Whitney was, and is, one of Boston’s most important citizens, at the present time president of the Chamber of Commerce, and a brother of the “System’s” most Machiavelian votary, the late William C. Whitney. The application, backed by his prestige, and the roseate dreams of cheap gas it conveyed, created a sensation in Boston. Evidently he intended to have it seem that the people were in favor of the new charter, for simultaneously there appeared notices in the press calling for three distinct citizens’ meetings. There seemed to be general rejoicing that at last the odious Standard-Oil Addicks-Bay State Gas outfit with all its corruption and unwholesome wrangling was to be deposited outside the city walls.

The experience of any man who has had to do with political and financial affairs invariably shows him that nothing ever happens of itself. Thunderbolts do descend from clear skies, but an enemy and not nature has hurled them. A clever tactician will always look for his antagonist’s hand behind any isolated or detached fluctuation of public feeling which bears in the slightest degree upon his problem. In going over the circumstances, looking for the correct interpretation of the appearance in our field of this second Richmond, I took into consideration the fact that H. M. Whitney was deep in a speculative venture, Dominion Coal, which owned vast tracts of these low-grade coal lands in Nova Scotia, and it was known he had been trying vainly to utilize their products in the locomotives of the Boston & Maine Railroad and several other ventures in which he was a controlling factor. In one way it seemed reasonable that if Whitney really had found a way to get something out of his coal, he was justified in making the best possible use of it. On the other hand, I could not but see how the new project brought about the very situation at which Rogers had so long been aiming. Selling gas at 75 or 50 cents, the new company would absolutely command the business; the old companies must go bankrupt, pass into a receiver’s hands, and in due course would be absorbed by the Whitney corporation. That would leave but one gas company in complete control of the Boston field, and it would not be bound to continue the low prices when competition had disappeared, but would be legally free to go back to the old rates of $1 and $1.25. In a combination which so completely went Rogers’ way, surely his fine slim Italian hand might be perceived at the throttle.

Once I had made up my mind by what we were confronted, I lost no time. Inquiries revealed that Whitney’s alleged control of the Legislature was not exaggerated. In fact, it seemed eager to do his bidding in any direction. There was no space for negotiation or deliberation, so I returned his bomb with another, which, exploding in his breastworks, created as much of a sensation as his own had done. I did not believe Whitney could do with Nova Scotia coal the things he claimed, but, whether or not, if he got his charter, Rogers’ object would be accomplished. If he were absolutely bound, however, under heavy bonds to do exactly as he had promised, his proposition would be so loaded that it might go off in his own hands and blow him to pieces. The next day I went personally before the Legislature and agreed to pay the State of Massachusetts $1,000,000 for the charter Whitney had applied for, and offered to give bonds to do all the things Whitney would give bonds to do on receipt of it.

This proceeding caused a halt. It startled the public and set the Whitney forces agape. My proposition was decidedly novel, and on its face absurd the State could not under the law accept a million dollars or any other sum for its charter but, on the other hand, it was the quickest-acting horse-sense producer that could possibly have been brought to bear. It was discussed everywhere. Men said: “Why not? If the State has a valuable thing to give away, why should it not go to the one who will pay the people the most money for it?” I had outflanked the enemy, and if he gave battle it would have to be on my conditions. Whitney was furious, and his privately owned Legislature cursed me for interfering with its plans; but he and they recognized my advantage, and that night I had a call from Mr. Whitney and his attorney, George Towle.

“What are you trying to do, Lawson?” Whitney asked.

“Only trying to protect from destruction the Boston gas companies of which I am vice-president and general manager,” I replied.

“But my proposition is a perfectly legitimate one,” Whitney objected. “I have got hold of this invention, which enables me to utilize my Dominion coal in such a way that we can make coke out of it, and at the same time get all the gas. This coal is cheap to produce and costs little per ton to bring in. So I can sell gas cheaper than you can make it.”

“And we have a plant for the manufacture and distribution of gas which has cost us seventy years and millions of dollars to get together, and we have also the customers to whom you must sell your cheap gas,” I returned. “If you can really do what you claim, why not go ahead, make your gas, and sell it to us? We will distribute it to the people and we will divide the profit, and you will make as much as though you did it all, for you will not have a fight on hand nor be obliged to build up a duplicate plant. That’s all you can do now; you cannot get a charter to duplicate our plant, because whatever price you offer the Legislature for it we will go you a few hundred thousand better.”

We argued for hours. I showed him that if he finally prevailed and got what he was after, his charter would bind him to the absolute fulfilment of his promise under bonds that would make it unprofitable and dangerous. He finally made up his mind that such a victory was not worth winning, and he said to me:

“What kind of a hitch-up can I make with you and your companies?”

“Any fair one,” I replied. “This is the situation as I see it, and I’m going to be frank: You say you have a good scheme, but you certainly have a Legislature, and you have evidently entered into a compact with Rogers whereby he is to utilize what you have, to knock us on the head. Now we have fairly checkmated you, and Rogers is out. Seems to me you owe it to us and yourself to give us the same chance you offered him. Let us utilize your plans to save ourselves and to knock Rogers on the head. But first, are you free to go on with us without explaining things to ’Standard Oil’?”

Whitney assured me that his arrangement with Rogers was tentative, depending on whether he could get the charter and could carry out his other plans.

After some further manoeuvring we agreed that we should withdraw our offer from the Legislature, that Whitney should secure the new charter, and that it should be so worded as expressly to allow his company to lay pipes, manufacture, buy or sell gas, and to consolidate any or all of the existing or new gas companies in the State of Massachusetts; and that when the charter was granted it should belong equally to the Addicks Boston gas companies and to Whitney. Upon their part the Boston gas companies would buy of the new company all the gas it produced at something less than it was costing them to manufacture it under the old process. That bound us to nothing dangerous, and we were not forced to take Whitney’s gas unless he actually got the results he promised.

At this time I knew nothing whatever of the workings or the wire-pullings of State legislatures. My business life had been engaged at the stock end of corporate transactions, and I had not troubled myself about franchises, or how they were obtained, being content to play my part with the manufactured product with which we dealt on the market. In a general way I knew political corruption existed. That Rogers had obtained favors for his Brookline Company through bribing officials I had good grounds to believe; I had read of strange doings in connection with H. M. Whitney’s West End Railway franchise obtained from the Massachusetts Legislature amid an accompaniment of much public scandal; but being quite without personal experience I had no clear conception of how things were done and, innocently enough, I asked Whitney before we parted:

“How is it possible for you to get this valuable charter from the Legislature, particularly with such a strong and honest man as Roger Wolcott in the governor’s chair, when Addicks has been trying continuously for four or five years, regardless of expense, to secure an ordinary one under which he can combine our gas companies?”

George Towle answered for Whitney:

“Lawson, that part of the transaction is no affair of yours. Mr. Whitney will absolutely guarantee to deliver all those goods, and should it prove necessary to override the governor in getting them, he will guarantee to do that too. You can call all that done the minute we sign papers.”

There was no doubt the new combination was a winner for both of us. If Whitney got the charter, he would be in a position to make a lot of money out of his Dominion Coal stock, which would surely go up with a bound in company with Bay State Gas stock when it became known that our companies were in the new deal. Besides, all the talk he would make over the value of the charter would help create a market for new stock which we would issue for the purpose of obtaining funds to buy Rogers out. Later, if Whitney’s invention was what he imagined, his own profit would run into millions and our properties, having the sole right to distribution, would be stronger than ever. That meant resuscitation of Bay State Gas, and that all the stocks and bonds held by my friends and the public would return splendid profits.

I tested the scheme in all its aspects and found only one weak spot in it. We, the Boston companies, were to “go snags” with Whitney in the results of a legislative game in which he was to bear the expense of getting a charter, and as Whitney and Towle said it was to cost them $250,000 to $300,000 to get it, it looked as if there would be some nasty business done at the State House.

I do not set up for a saint, nor to possessing exclusive virtues which distinguish me from the ordinary American citizen who does business for gain. In reiterating that the bribery end of our “hitch-up” with Whitney did not appeal to me, I am neither pluming nor crowning myself; I am merely stating a fact. This was an emergency, however, I could not regard as a mere personal concern. It was my duty to care for the interests of a great property which must not be endangered by my scruples, and I was willing to be advised by my business friends in the matter. I went round among my most conservative banking, business, and newspaper connections and put hypothetical questions to them bearing on my difficulty. In nearly all instances the replies were the same, and the subject seemed to be regarded as a joke what were legislatures for, anyway, but to be “fixed”? All who did business with legislatures “fixed” them, and Whitney was certainly the star “fixer.” I frankly stated that I considered bribing a legislator as a low-down crime and that I did not believe it was done in our strait-laced old Commonwealth as freely as they all seemed to imagine. Thereupon I was sarcastically referred to my Bell Telephone, New Haven, and Boston & Maine Railroad friends, to the organizers of trust companies, and to many other representative pillars of social and business society who had had occasion to deal with the State. I started at once a round of investigation among men who would talk frankly to me, and discovered that a most iniquitous condition existed. Massachusetts senators and representatives were not only bought and sold as sausages or fish are in the markets, but there existed a regular quotation schedule for their votes. Many of the prominent lawyers of the State were traffickers in legislation, and earned large fees engineering the repeal of old laws and the passage of new ones. Agents of corporations nominated candidates for office, and paid the expenses of their election in return for votes for a favorite measure and promises to “do business.” The Legislature was organized on the same basis; its executive officers were chosen because of their subservience to certain corporation leaders; committees were rigged to do given things and prevent other things from being done. Above all, I learned that the chance of a citizen of Massachusetts obtaining a charter from the Legislature of his State, unless he had money to put up for it, was about as good as a hobo’s of securing a diamond and ruby studded crown at Tiffany’s by explaining that he wanted it. In fact, the citizen’s request would be regarded by senators and representatives very much as Tiffany’s would regard the hobo’s as a joke first, then as an impertinence.

Right here I desire to say to my readers and especially to all those hypocritical and ignorant people who, imagining any strong statement must express a strong prejudice and not a fact, will cry, “He overstates! He exaggerates!” that in years after when I had full opportunity to study at close range the Massachusetts Legislature, its workings and those who worked it, all the impressions I had received at this time were absolutely confirmed. I do not hesitate to state, then, that:

The Massachusetts Legislature is bought and sold as are sausages and fish at the markets and wharves. That the largest, wealthiest, and most prominent corporations in New England, whose affairs are conducted by our most representative citizens, habitually corrupt the Massachusetts Legislature, and the man of wealth connected with such corporations who would enter protest against the iniquity would be looked on as a “class anarchist.” I will go further and state that if in New England a man of the type of Folk, of Missouri, can be found who, after giving over six months to turning up the legislative and Boston municipal sod of the past ten years, does not expose to the world a condition of rottenness more rotten than was ever before exhibited in any community in the civilized world, it will be because he has been suffocated by the stench of what he exhumes.

To return to my story, after my investigations I again saw Whitney and Towle, and they, not relishing my remarks on the subject of bribery, told me frankly to attend to my own part of the affair and leave their part to them. At this stage I called in Addicks, our corporation counsel, and some of the largest holders of Bay State bonds and stock, and put before them the bargain I had arranged with Whitney. They all agreed it was an excellent combination, and ratified the terms I had proposed to Whitney. It was further agreed that Whitney should make over to us one-half ownership in the new company, which we were to transfer to the Bay State Company after the charter had been granted.

There was every reason at this stage in the deal to regard victory as assured, for it did look as though the flapping sails on our much-buffeted and battered craft were at last to be filled with a lusty breeze strong enough to carry us to the harbor we had so long been trying to make. Besides what we ourselves could do and had already done, we now had Whitney for an ally in the deal, and certainly he was a stock-selling power throughout New England. He had agreed to go before the Legislature and the public, and pledge his word that his scheme would do all the wonderful things he had promised for it. And when amid acclamation the charter was awarded and it became known that we were its beneficiaries, I could see our stock soaring.