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The Romance and Tragedy

W >> William Ingraham Russell >> The Romance and Tragedy




Just when the value began to rise, the London market halted. This
at once checked the advance in New York and for the time being we
had a waiting game on our hands, it being quite impossible for our
market to advance above the London parity and remain there. We must
wait for London.

After a moderate reaction London again advanced and we bought
here freely everything that was offered. Again London halted. All
through November conditions were the same; a few days of strength,
then a reaction, meanwhile our stock had been largely increased. At
the beginning of December our advices from London led us to believe
that all hesitation would now disappear and the market rapidly
advance. Our holdings were already enormous, but we had no reason
to doubt the success of our operations, and continued our purchases.




CHAPTER XXXVI

THE SHIP FOUNDERS



December 17, 1895, will ever remain in the memory of business men,
at least of this generation, as the day when President Cleveland
transmitted to Congress his Venezuelan message, a piece of jingoism
which was entirely uncalled for and resulted in disastrous consequences
to the commercial interests of the country. It came as a flash of
lightning from a clear sky. It was the direct and immediate cause
of a stock and money panic in Wall Street which, while it added
largely to the wealth of certain individuals, brought disaster and
ruin to many.

If, my reader, you do not already know, ask any well-informed stock
broker of that period who it was that sold the market short on an
enormous scale during the few days prior to the message, and when
he tells you the name draw your own deductions. You will not
require to be a Sherlock Holmes.

We knew just before this fateful day that at last we had undertaken
an operation which was to result in loss, and a heavy one, but we
never dreamed it was to be our Waterloo--nor would it have been
except for the acute stringency in the money market, the result of
that Venezuelan message.

Our commitments for the end of December and first week of January
were unusually heavy. We met them with increasing difficulty until
the twenty-eighth of December and then came our failure.

I was dazed at the extent of the catastrophe. I could not realize
that a business which I had built up from nothing to a volume of
nearly fifteen millions a year with more than eight hundred active
accounts on the books, and out of which I had made a fortune, was
swept away, leaving me only a mountain of debt.

Alas, it was only too true. The liabilities were nearly one
and one-half millions. Of course, there were large assets, mostly
merchandise, but everything was gone, and my wife threw in "Redstone,"
which had cost me forty thousand dollars, with the rest.

As soon as I recovered myself, I had a meeting with my creditors, all
of whom were most kindly disposed, and my statement was accepted
without any examination of the books of the firm. Outside of
our regular bankers we had heavy loans in which there were large
equities. Arrangements were made and these loans taken up at once.

Our position had been so prominent and our holdings were so large,
the news of the failure caused a heavy decline, which carried
the price down to almost the lowest figure in the history of the
trade; but not one ton of our stock was thrown on the market and we
ourselves liquidated the business over a period of several months.

Our former clerk, the broker, George Norman, also failed, claiming
our failure as the cause.

In our operations it was often necessary to cover our identity
by using a broker's name, an established custom in many lines of
business. We had favored George largely and our business had been
very profitable to him. We did not know at the time, but learned a
little later, that prices on the contracts made through him were on
our books in excess of the prices he had paid the seller, whereas
they should have agreed. This really made him a principal instead
of a broker. Actually he had bought of sellers for his own account
at one price and sold to us at a higher price, he making the
difference in addition to his commissions. His representations to
us were always that the price we were paying him was the lowest
the seller would accept.

Norman also had been operating on his own account, and by failing
escaped his losses. The general opinion of the trade was that he
really made money by his failure.

On our books at the time of the failure were a number of discretionary
accounts. All of these clients were our friends, and most of them
had been with us for many years and had received their investments
back in profits over and over again. In order to do justice to all
we had to syndicate these accounts. The combined capital was large
and the operations had always been very profitable.

These clients had come to us without our solicitation and it was
distinctly understood from the start that their investment was
at their own risk. All this money was now lost. We had no legal
liability, but we did feel, as they were friends, that there was a
moral responsibility and we told them one and all we would accept
it.

We did something else for them; a few knew it at the time and showed
their appreciation. Some of them will not know it until they read
it here.

Every one of those clients could have been held as an undisclosed
partner, for a very large part of our losses were made in the December
operations for the syndicate. Morally, they were not responsible,
for they never intended assuming any such liability, nor would we
have allowed them to; but legally, technically, they were liable,
and we saved them, keeping the burden where it had fallen, on our
own shoulders. We had one discretionary account that was not in the
syndicate. It was the account of Albert Caine. This was operated
under our guarantee against loss, we taking half the profits
as compensation for the guarantee. Although this account stood in
Albert's name, it was his wife's money and her investment. It had
been running for a long time and profits had been paid her to the
extent of about forty-seven hundred dollars.

Although we had not the affection for the Caines we had for others
in our circle of friends, we were extremely intimate. I have told
of our amusement fund and of how residing near each other we were
meeting them continually. They had visited us at "Redstone," at
Great Neck, and at Monmouth Beach, and I hardly expected they would
be the first to desert us. They were--and worse.

As soon as Caine heard of the failure he began a search for property
to attach. He told a mutual friend that papers were being drawn to
attach the horses and carriages and the house furniture. For some
reasons he changed his mind, which was just as well, as all were
beyond his reach.

Then he made a statement reflecting on me, giving as his authority
my bankers, on whom he had called. This I took up at once. I knew
it was false.

Without letting him know the object, I arranged an interview at
my lawyer's office, which he attended, accompanied by his lawyer.
I had asked George Todd to be there as a witness who could relate
an account of the interview to our mutual friends. Caine, when he
saw Todd, objected to his presence, but he remained.

My lawyer repeated the statement and asked Caine if he had made it.
He replied, "Yes." He asked him if the banker had told him this,
and he answered, "No."

Then Todd said, "Albert, do I understand you to say that this
statement you made and said you had heard from the bankers, you
admit having made, and now say that you did not hear it, and that
it was a lie"? To which he replied, "Yes," and burst into tears.
That ended the interview and thereafter the Caines were ostracised
by our circle of friends.

A little later Mrs. Caine commenced suit. Just to tease her
I fought the case, claiming that while guaranteeing against loss,
I had not guaranteed profits, and that these should be deducted.
After keeping her on the "anxious seat" for about two years she
secured a judgment for the full amount, and she owns to-day the
only judgment against me. She would have had more money now had
she remained a friend.

There were two of my liabilities that distressed me far more than
the others and one of these caused me the keenest anguish of mind.
At the time of the settlement of the Slater estate, Mr. Pell, Mrs.
Slater's father, was a creditor for fourteen thousand dollars. Frank
had been using this money and had paid Mr. Pell ten per cent. per
annum on it, not regarding it as a matter of interest, but merely
to give the old gentleman, who was out of business and becoming
feeble, a certain amount of income. Mr. Pell asked me as a favor
to take this money and do the same for him as Frank had been doing.
I did so, and later he added two thousand dollars to the amount,
so that I owed him in all sixteen thousand dollars.

The other liability was for twenty-five thousand dollars due to Mrs.
Slater. There had been a time a year or two back when temporarily
my resources were pretty well tied up, and I then borrowed this
amount of Mrs. Slater. When I asked her at the time if she wanted
to help me out, she replied, "I am only too delighted, Walter, to
do anything you ask," and she meant it. The loan was made without
security and was an act of purest friendship. To make it she had
to withdraw the money from her invested funds and of course I told
her this would not diminish her income.

It was this liability to Mrs. Slater that caused me such torture
of mind. The one thing that slightly relieved this feeling was the
knowledge that neither she nor Mr. Pell wanted the money. If the
income could be kept up, and this I hoped to accomplish, I could
take my own time for repayment of the principal.

My mail was crowded for days with letters of sympathy. Practically
all our out-of-town customers wrote us, and to their kindly
expressions of regret for our disaster was added the hope that we
would continue in business, and promises of hearty support in the
matter of sending us their orders.

With our competitors it was different. One or two called on us and
were sincere in their regret. Others, as we met them, talked the
same way, but we knew they did not mean it; and one, a Sunday-school
teacher whom I described in an earlier chapter as doing business on
a paving-stone heart, was reported to me as having made derogatory
remarks regarding us.

As soon as this report reached me, I went at once to his office,
and while his face crimsoned in his confusion at being confronted,
he denied that he had made the remark. I accepted his denial, though
I did not believe him. I had no more use for him than for the sort
of Christianity of which he is an example, and thereafter I treated
him with the barest civility.




CHAPTER XXXVII

THE FAMILY AND FRIENDS



One of my friends once said to me, "Stowe, it is worth all the
trouble you have had to find out what a noble woman your wife is";
and his wife added, "She is the bravest woman I ever knew."

Did not I know full well the bravery of the woman?

Had not her character and nobility of soul been revealed to me time
and again in the troubles that beset us in the early years of our
married life? True, this catastrophe immeasurably overshadowed
anything that had come to us before, but I knew how my wife would
take it and I was not disappointed.

If it were possible, she loved me more than ever. Her constant
effort was to cheer me up, keep up my courage by imparting her own
brave spirit to mine. Never a word of regret for all the luxuries
and many comforts that must now be given up, never a suspicion of
despondency. Only the brightest of smiles and most tender caresses
were lavished on me by my devoted wife, and with all was her earnest
desire to do what she could to lighten my burdens and to share in
the struggle before us.

The same spirit animated the children. One and all they supported
me by their strong affection shown in every possible way.

Immediately following my disaster the loyalty and regard of my
social friends, with the one exception of the Caines, was shown
on all sides. Kindly letters and personal calls were numerous and
did much to relieve the terrible feeling of despondency that weighed
me down.

The bright particular star in this firmament of friends was Mrs.
Slater. She had made a heavy loss that she could ill afford and
she accepted it without a shadow of reproach to me. Of course she
expected and hoped that at some time I would be able to repay her,
but this thought did not influence her in her stanch friendship.
Had she known there was no possible hope of my ever repaying her,
her feeling toward me would have been the same. Mrs. Caine, who
knew her, while calling and in a spirit of malice endeavored to
turn her against me. As a result, the call was never returned, and
the acquaintance ceased.

At this time I was seeking no favors from friends except in
one little matter in which I was assisted by George Todd and Will
Curtice. They were not called upon for financial aid, but they
guaranteed my carrying out an agreement which made them jointly liable
to the extent of four thousand dollars. I fulfilled my obligation
and then returned their guarantee.

The spirit shown by the tradespeople with whom I had dealings touched
me deeply. I had always been prompt in the settlement of bills and
immediately after my failure every account of this character was
paid at once. Of course we immediately cut off all unnecessary
expense.

King, the well-known up-town fish dealer, had been serving
us oysters and fish regularly each day. We were through now with
course dinners and these items were cut out. The next day I received
a letter from him, from which I quote:

"I want your trade if it's only a pound of codfish a week, and you
can pay once a month, once a year, or whenever it pleases you."

Then there was old Tom Ward, the coal dealer. I had in my cellar
about thirty tons of coal and I called at his office to get him to
send for it and pay me what he could afford to. As I entered the
door he sprang forward with outstretched hand, saying, "Mr. Stowe,
I am glad to see you, and I want to say you're the whitest little
man on the West Side, and I have a few hundred dollars in the bank.
If you want them you're welcome to them." My tailor, with whom
I had traded for a great many years, told me I could always have
anything in his shop and no bills would be rendered until asked
for. And so it was with all.

Of the house on Eighty-sixth Street, I had a lease at three
thousand dollars a year. My landlord, Mr. W. E. D. Stokes, told
me to "remain until the end of the lease and not bother about the
rent." I accepted this offer for one month. The Misses Ely, where
the girls attended school, called on my wife and asked her to
continue the girls for the rest of the school year without charge.
The larger tradesmen, such as Tiffany, Altman; Arnold, Constable,
and the like, all wanted our account kept on their books, but we
were through with the pomps and vanities and had no use for them.
My coachman offered me his savings and with the house servants it
was the same.

Before the end of January arrangements had been completed for
our new scale of living. The horses and carriages, representing
an investment of ten thousand dollars, I sold for less than two
thousand. There was no time to look for buyers and I made a forced
sale. Of the contents of our home we sold nothing except a panoply
of armor and one piece of bronze. These, Mrs. Veidler, who had
always admired them, bought, and added to the appointments of her
Fifth Avenue home.

At Westfield, N. J., we were offered a large house with modern
conveniences, well-stocked conservatory, and attractive grounds,
at a rental of fifty dollars per month. This we accepted, and on
the eighth of February took possession.

Before leaving the city we were entertained at a series of dinners
and theatre parties given by our friends of the "Immortal Ten,"
and though these occasions were somewhat saddening, partaking of
the nature of a farewell honor to a fallen "Prince," we appreciated
the compliment.




CHAPTER XXXVIII

"W. E. STOWE & CO., INCORPORATED"



At the suggestion of my attorneys, I decided to continue the business
as a corporation.

The reason for this was that I wanted to continue under the same
firm name and not as an agent, and while aside from Caine there were
no antagonistic creditors, it was deemed wise to provide against
any possibility of such appearing later on and jeopardizing the
new capital which I expected to raise without difficulty.

As a matter of fact no creditor except Caine ever assumed such an
attitude.

Under the laws of West Virginia a corporation was organized as W.
E. Stowe & Co., Incorporated.

The charter was made broad enough to cover every possible branch
of the business and the capital stock fixed at twenty-five thousand
dollars with liberty to increase to one million.

The organization was completed by electing as officers members of
my family, and the ten per cent required by law to be paid in was
raised in part by my wife by the sale of personal property and the
remainder by myself in a loan from a gentleman who was one of the
heaviest losers in the operations carried on for our friends.

My bankers, within certain reasonable limits and restrictions,
promised me their assistance, and I believed I would soon again be
on the highway to prosperity.

The first step was to raise the twenty-two thousand five hundred
dollars to complete the capitalization.

This seemed easy; why not? There was my friend Viedler; a man worth
several millions. He had been warmly sympathetic in his expressions
of regret at my misfortune. He and Mrs. Viedler had always shown a
cordial fondness for us, which we reciprocated. The social intimacy
had been close and always delightful.

At first I thought I would ask him for the entire amount, then
concluded to ask for five thousand dollars, really believing he
would comply with pleasure and offer more if wanted.

I wrote him asking for the money as a loan, telling him the purpose
for which it was wanted and offering to give him a lien on my
library, if he so desired, as security.

By return mail came a brief reply, typewritten and signed by his
secretary: "Mr. Viedler makes no more personal loans."

That was the sum and substance of the communication, and the first
intimation I had that another friend had deserted us. It was such
a surprise that I did not fully realize the fact until I had re-read
the letter.

Some months later I was informed, to my complete astonishment, that
Mr. Viedler had some feeling against me because I had not protected
him on that note for five thousand dollars he held and which it will
be remembered I gave to Banford in 1893 without any consideration
and solely as a matter of accommodation to him. The pearls which
I held as security for the money due me from Banford, had been, at
Viedler's request, consigned to him for sale, under an agreement
by which Banford was to pay out of the proceeds to Mr. Viedler the
amount of the note with interest. At the time of the consignment
I handed to Mr. Viedler's secretary an order on Banford directing
him to do this.

If Mr. Viedler had considered that note my liability it is most
singular he did not demand payment at its maturity early in 1894.

As soon as I learned of his feelings in the matter I wrote him on
the subject and asked for an interview that we might go into every
detail of the transaction. This he declined, and it became evident
to me he knew there was no cause for the feeling he claimed to
have, and his refusing to aid me was simply for the reason he did
not want to, which, of course, was his indisputable right.

Well; Viedler had failed me, who next?

On my desk, amongst the letters of sympathy received immediately
after my failure, was one from a prominent Wall Street man, whom
I had known for many years and who for a time had been one of
my neighbors at Knollwood. I wrote to him about the same as I had
written Viedler.

The return mail brought his reply, written personally, expressing
regret that he was "unable to assist me as he was a large borrower
himself."

All stock brokers are large borrowers in their business, but here
was an instance in which this universal custom was given as an
excuse for not making a loan of five thousand dollars to a friend
in trouble.

And who was this man? Here is what Thomas W. Lawson had to say of
him in one of the chapters of "Frenzied Finance":


J*** M*** deserves more than a mere passing mention here, for he was
at this time a distinguished Wall Street character and one of the
ablest practitioners of finance in the Country. During the last
fifteen years of his life, M*** was party to more confidential
jobs and deals than all other contemporaneous financiers, and he
handled them with great skill and high art. Big, jolly, generous,
a royal eater and drinker, an associate of the rich, the friend of
the poor, a many-times millionaire.


Another friend off the list--but there were many left. Now for the
next one. "The third time a charm"--perhaps.

Again I turned to the letters on my desk. This time I took up one
from a former mayor of New York. A man widely known, politically,
socially, and as a philanthropist.

His kind letter when received had been a pleasant surprise to me.
I had known him but a few years and could not claim a very close
intimacy, though he had always been most cordial and our families
were acquainted. As I re-read his letter it seemed to me as if it
invited me to address him under just such circumstances as then
existed.

Again, and for the third time, my messenger went forth seeking for
the friend who would help a man when he is down.

The reply came promptly enough and brought me the information that
my friend did not "desire to invest in any new business."

I had not asked him to; my request was for a loan, but his answer
was all-sufficient.

Despondency followed. Where is the use? I asked myself. "To succeed
is to win fame; to fail, a crime." "The world has no use for an
unsuccessful man." Thus I gave up the attempt to raise a sum of
money that, before I made the effort, seemed but a trifle, "light
as air."

During the summer two of our Connecticut friends, who had been
members of the syndicate, between them made me a loan of six thousand
dollars, and this gave me a capital of eighty-five hundred dollars.
With this I attempted to save what I could of the enormous business
I had built up. How absurd it seemed, and yet my courage was far
from gone.




CHAPTER XXXIX

THE STRUGGLE COMMENCED



By midsummer of 1896 the liquidation of the affairs of the old
firm was practically completed; that is, in so far as related to
the conversion of our assets into cash and payment of the proceeds
to our creditors. These payments were very large, but there was
still a heavy deficiency, which I hoped in time to pay in full with
interest, gigantic as the burden seemed.

Every business day found me at my office working early and late as
I had never worked before. With but one clerk and an office-boy, a
vast amount of detail had to be undertaken by myself. Night after
night my thoughts were almost constantly on plans to keep together
the business I had established.

I was fighting an octopus. My competitors all were arrayed against
me with a force I had never before experienced. They spared no
effort to crush the man who had beaten them over and over again in
battles for commercial supremacy. It was their turn now and they
showed no mercy.

But how different was the warfare waged on me! In the days gone
by I had struck them powerful blows, straight from the shoulder;
but a foul blow?--never! No man, living or dead, can or could say
I did not fight fair. Nor did I ever press an advantage unduly or
profit by the necessities of a competitor.

Here was one enemy, sneaking through the trade with his lying tongue,
always under cover, doing his utmost to injure me. Had that man
forgotten the day in 1888 when he came to my office and told me he
would be ruined unless our London friends would accept a compromise
from him and asked me to cable urging them to do so? Had he forgotten
how on the following day, when I showed him the reply reading,
"Risk of buyers does not concern us. Cannot assist," he raised his
hands, and shouting, "My God! what shall I do"? almost collapsed?
_Surely_ he must have forgotten how I told him that I would stand
between him and ruin, allowed him to settle on his own terms, and
carried him along for years.

Here was another enemy, a different stripe of man. He sat in
his palatial office and never let an opportunity pass to thrust a
knife in my back. His blows, less coarse and brutal, were even more
effective, for they were backed by the weight of great wealth and
respectability. An adept in the refinement of cruelty, between
Sundays, when as a vestryman of a prominent church he presumably
asked forgiveness of his sins, he did all that he could by false
insinuations to help along the work of putting down and out forever
the man who had never done him an injury, or conquered him in any
way not warranted by fair and generous business competition.

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