Read CHAPTER XL of Frenzied Finance Vol. 1: The Crime of Amalgamated , free online book, by Thomas W. Lawson, on


This was veritably a period of financial delirium in Boston. No one talked or thought of aught but “Coppers,” at least no one with a spare dollar or good credit. The air was full of mysterious yarns and the Stock Exchange was hung with Aladdin lamps. From every nook and corner of State Street, from the chinks between its sedate old cobblestones, came forth copper-mines mines undreamt of before and unheard of since. Innumerable devices were rigged to take advantage of the prevailing intoxication. The prices of the strong properties leaped up with breath-taking rapidity. The copper epidemic spread over New England and began to extend in constantly widening circles through the rest of the country, while from England, France, and Germany came daily news of symptoms which proved that the infection had crossed the ocean. I, with my hands full, kept two secretaries busy shooing away industrious promoters who came at me in armies with old and new copper properties, which I might have on my own or any old terms.

In the midst of this excitement I had my first real demonstration of the “System’s” method of making dollars from nothing. Well as I thought I knew the stock game, I’ll admit that I looked on open-mouthed, like the veriest novice, at the magic wrought by the simple use of the name “Standard Oil.” Even now I can hear myself as I gasped: “Heaven help the people if this sort of thing can be done in America, for Heaven alone has power to help them.”

The Boston and New York brokerage house of Clark, Ward & Co. had promoted the Utah Consolidated Mining Company of Utah. It was less than two years old, and its 300,000 shares had been kicked from gutter to curb and curb to gutter at from $2 to $4 per share. Samuel Untermyer, the astute corporation lawyer who, on his own account and as the representative of a large European clientele, had long been interested in “Coppers,” had taken hold of Utah, and believing it a good thing had bought large quantities of its stock for himself and his European connections. Under the stimulus of my campaign the price of this stock had leaped to 17 or 18, and rumor had it that Utah was a prospective factor in my consolidation. One day Mr. Rogers asked me if I were in any way responsible for these rumors, and I replied that I knew nothing more about them than that they were in circulation.

“Good,” replied Rogers. “Do this, then send word that we propose to issue a denial that we are to have anything to do with Utah Consolidated, and bring me their answer.”

I carried the message in person. The Utah people were absolutely panic-stricken. Such an announcement meant destruction to the pretty price-fabric they were rearing, and they begged to be allowed to make a proposition to Rogers before he should declare himself. This was their proposal: That Mr. Rogers should admit their property to the consolidation provided he found it good enough; that every facility should be accorded his experts to examine the mine; and that if the report was favorable, and they were convinced that it would be, and he decided to take hold, he should be given an option on a block of stock way below the market.

This offer I took back to Mr. Rogers, who smiled one of his thin, easy smiles, and questioned me closely about the genuineness of the market for this stock. Could 50,000 shares be sold readily? I assured him that when it once became known that we were even looking at Utah it would be easy to sell 100,000 shares and at constantly advancing prices.

“All right,” said Mr. Rogers, “if you’re sure of this we’ll go ahead. Tell them we’ll take a sixty-day option on 50,000 shares, no liability to us, at well, we’ll be liberal, say at 15, and when you mention the price impress upon them that I know it cost them but $2 to $4.”

I returned at once and began negotiations, but, as is usually the case, the fact that “Standard Oil” was nibbling leaked before I had clinched the option, and before we had even begun to examine the property, prices had advanced until there was a profit of $500,000 for us in the transaction. To look over the Utah property Mr. Rogers sent his son-in-law, Broughton, and in a short time I got word to feed out the 50,000 shares on the market at the best prices obtainable, and to borrow it for delivery in such ways that the Clark-Ward-Untermyer contingent should suspect nothing about it. No information was given me as to the expert’s report, and I was absolutely ignorant whether it was good, bad, or indifferent, though from the fact that we were to sell the stock I inferred that it was unfavorable. The public took the 50,000 shares at between 32 and 36, much as an elephant takes in water after a thirsty tramp across sandy deserts the shares were just sucked in without a gulp or a gasp. I did not know until long afterward that the purchasers were the English holders who had contributed the greater part of the 50,000 shares to meet our option in other words, were buying back from us their own stock at more than twice the price we were to pay them for it, and that their eagerness was due to confidential information that the expert’s examination had disclosed such richness that the price would surely jump to over $100 when “Standard Oil” assumed the management. Just where they acquired this information or how it was put in their path was a matter I never found out. As I have previously demonstrated, “Standard Oil” has its own system of wires and underground passages and rumor bureaus. It works in mysterious ways its wonders to perform.

This section of the deal was soon wound up, and the transaction showed us a profit of $1,000,000. That is, we had sold 50,000 shares which we did not possess, but which were ours on demand, for $1,000,000 more than we should have to pay their owners for them. When I reported my success to Mr. Rogers he expressed complete satisfaction, and ordered me to inform the Utah people that another 50,000 shares must be added to the option, as he could not think of tacking the great name of “Standard Oil” to an enterprise in which he had less than a third interest; indeed, he was not sure that he would consider less than a one-half ownership. This second request was a bitter pill to the Clark-Ward-Untermyer crowd, who hated to surrender for such a low figure this tremendous parcel of a stock that was now selling fast at 40 per share. There was no gainsaying the soundness of Rogers’ reasoning, however: “Who made it worth 40? Who but ‘Standard Oil’? And what will happen if ‘Standard Oil’ declares that it will not take Utah into the consolidation?” The bare suggestion threw the Utah contingent into one of those hundred-in-the-shade, twenty-below-zero sweats, which resemble the moisture upon steam-pipes that pass through cold-storage boxes. They succumbed. At the moment the option was signed over to us it represented a profit of $1,000,000 more, and when we sold it, it netted us $1,250,000, for the market was still climbing. This latter phenomenon was not surprising, for it should be borne in mind that when our demand for the second 50,000 shares was made, the heavy Utah stockholders were called together and it was explained to them by their own managers not by “Standard Oil” or by Mr. Rogers mind, for “Standard Oil” never makes false statements that the expert’s examination had developed such wealth that “Standard Oil,” the mighty of mighties, had insisted on having at least 100,000 shares; but that, of course, “Standard Oil” could not be asked to pay over twenty for stock which had cost its original owners but $2 to $4. What was there to do? The stockholders just gave up, and then once more climbed over one another in the market to get back their precious shares as best they could.

Just to keep the conditions of the transaction at this stage before my reader’s mind, I’ll repeat that the Clark-Ward-Untermyer people had now given us the right to buy of them 100,000 shares of their stock (at a price $2,250,000 less than we had already sold it for), with the understanding not in words or in writing, of course, because “Standard Oil” never makes a promise in writing, but implied as sacredly as though it had been set down and attested under oath that we would take and pay for their stock and engage with them in their enterprise, giving them the benefit of our experience, our capital, and our prestige. I say they had every reason to assume that we were acting in absolute good faith, and no ground to suppose that there was any ulterior motive behind our negotiations. It must be remembered that this occurred some years ago, before the “System’s” perfidy was a calculated contingency.

The knife was now in, but the “System” had still to corkscrew it in the wound.