_ On August 4, 1896, the city of Chicago, and for that matter the
entire financial world, was startled and amazed by the collapse
of American Match, one of the strongest of market securities, and
the coincident failure of Messrs. Hull and Stackpole, its ostensible
promoters, for twenty millions. As early as eleven o'clock of the
preceding day the banking and brokerage world of Chicago, trading
in this stock, was fully aware that something untoward was on foot
in connection with it. Owing to the high price at which the stock
was "protected," and the need of money to liquidate, blocks of
this stock from all parts of the country were being rushed to the
market with the hope of realizing before the ultimate break. About
the stock-exchange, which frowned like a gray fortress at the foot
of La Salle Street, all was excitement--as though a giant anthill
had been ruthlessly disturbed. Clerks and messengers hurried to
and fro in confused and apparently aimless directions. Brokers
whose supply of American Match had been apparently exhausted on
the previous day now appeared on 'change bright and early, and at
the clang of the gong began to offer the stock in sizable lots of
from two hundred to five hundred shares. The agents of Hull &
Stackpole were in the market, of course, in the front rank of the
scrambling, yelling throng, taking up whatever stock appeared at
the price they were hoping to maintain. The two promoters were
in touch by 'phone and wire not only with those various important
personages whom they had induced to enter upon this bull campaign,
but with their various clerks and agents on 'change. Naturally,
under the circumstances both were in a gloomy frame of mind. This
game was no longer moving in those large, easy sweeps which
characterize the more favorable aspects of high finance. Sad to
relate, as in all the troubled flumes of life where vast currents
are compressed in narrow, tortuous spaces, these two men were now
concerned chiefly with the momentary care of small but none the
less heartbreaking burdens. Where to find fifty thousand to take
care of this or that burden of stock which was momentarily falling
upon them? They were as two men called upon, with their limited
hands and strength, to seal up the ever-increasing crevices of a
dike beyond which raged a mountainous and destructive sea.
At eleven o'clock Mr. Phineas Hull rose from the chair which sat
before his solid mahogany desk, and confronted his partner.
"I'll tell you, Ben," he said, "I'm afraid we can't make this.
We've hypothecated so much of this stock around town that we can't
possibly tell who's doing what. I know as well as I'm standing
on this floor that some one, I can't say which one, is selling us
out. You don't suppose it could be Cowperwood or any of those
people he sent to us, do you?"
Stackpole, worn by his experiences of the past few weeks, was
inclined to be irritable.
"How should I know, Phineas?" he inquired, scowling in troubled
thought. "I don't think so. I didn't notice any signs that they
were interested in stock-gambling. Anyhow, we had to have the
money in some form. Any one of the whole crowd is apt to get
frightened now at any moment and throw the whole thing over. We're
in a tight place, that's plain."
For the fortieth time he plucked at a too-tight collar and pulled
up his shirt-sleeves, for it was stifling, and he was coatless and
waistcoatless. Just then Mr. Hull's telephone bell rang--the one
connecting with the firm's private office on 'change, and the
latter jumped to seize the receiver.
"Yes?" he inquired, irritably.
"Two thousand shares of American offered at two-twenty! Shall I
take them?"
The man who was 'phoning was in sight of another man who stood at
the railing of the brokers' gallery overlooking "the pit," or
central room of the stock-exchange, and who instantly transferred
any sign he might receive to the man on the floor. So Mr. Hull's
"yea" or "nay" would be almost instantly transmuted into a cash
transaction on 'change.
"What do you think of that?" asked Hull of Stackpole, putting his
hand over the receiver's mouth, his right eyelid drooping heavier
than ever. "Two thousand more to take up! Where d'you suppose
they are coming from? Tch!"
"Well, the bottom's out, that's all," replied Stackpole, heavily
and gutturally. "We can't do what we can't do. I say this, though:
support it at two-twenty until three o'clock. Then we'll figure
up where we stand and what we owe. And meanwhile I'll see what I
can do. If the banks won't help us and Arneel and that crowd want
to get from under, we'll fail, that's all; but not before I've had
one more try, by Jericho! They may not help us, but--"
Actually Mr. Stackpole did not see what was to be done unless
Messrs. Hand, Schryhart, Merrill, and Arneel were willing to risk
much more money, but it grieved and angered him to think he and
Hull should be thus left to sink without a sigh. He had tried
Kaffrath, Videra, and Bailey, but they were adamant. Thus cogitating,
Stackpole put on his wide-brimmed straw hat and went out. It was
nearly ninety-six in the shade. The granite and asphalt pavements
of the down-town district reflected a dry, Turkish-bath-room heat.
There was no air to speak of. The sky was a burning, milky blue,
with the sun gleaming feverishly upon the upper walls of the tall
buildings.
Mr. Hand, in his seventh-story suite of offices in the Rookery
Building, was suffering from the heat, but much more from mental
perturbation. Though not a stingy or penurious man, it was still
true that of all earthly things he suffered most from a financial
loss. How often had he seen chance or miscalculation sweep
apparently strong and valiant men into the limbo of the useless
and forgotten! Since the alienation of his wife's affections by
Cowperwood, he had scarcely any interest in the world outside his
large financial holdings, which included profitable investments
in a half-hundred companies. But they must pay, pay, pay heavily
in interest--all of them--and the thought that one of them might
become a failure or a drain on his resources was enough to give
him an almost physical sensation of dissatisfaction and unrest,
a sort of spiritual and mental nausea which would cling to him
for days and days or until he had surmounted the difficulty. Mr.
Hand had no least corner in his heart for failure.
As a matter of fact, the situation in regard to American Match had
reached such proportions as to be almost numbing. Aside from the
fifteen thousand shares which Messrs. Hull and Stackpole had
originally set aside for themselves, Hand, Arneel, Schryhart, and
Merrill had purchased five thousand shares each at forty, but had
since been compelled to sustain the market to the extent of over
five thousand shares more each, at prices ranging from one-twenty
to two-twenty, the largest blocks of shares having been bought at
the latter figure. Actually Hand was caught for nearly one million
five hundred thousand dollars, and his soul was as gray as a bat's
wing. At fifty-seven years of age men who are used only to the
most successful financial calculations and the credit that goes
with unerring judgment dread to be made a mark by chance or fate.
It opens the way for comment on their possibly failing vitality
or judgment. And so Mr. Hand sat on this hot August afternoon,
ensconced in a large carved mahogany chair in the inner recesses
of his inner offices, and brooded. Only this morning, in the face
of a falling market, he would have sold out openly had he not been
deterred by telephone messages from Arneel and Schryhart suggesting
the advisability of a pool conference before any action was taken.
Come what might on the morrow, he was determined to quit unless
he saw some clear way out--to be shut of the whole thing unless
the ingenuity of Stackpole and Hull should discover a way of
sustaining the market without his aid. While he was meditating
on how this was to be done Mr. Stackpole appeared, pale, gloomy,
wet with perspiration.
"Well, Mr. Hand," he exclaimed, wearily, "I've done all I can.
Hull and I have kept the market fairly stable so far. You saw
what happened between ten and eleven this morning. The jig's up.
We've borrowed our last dollar and hypothecated our last share.
My personal fortune has gone into the balance, and so has Hull's.
Some one of the outside stockholders, or all of them, are cutting
the ground from under us. Fourteen thousand shares since ten
o'clock this morning! That tells the story. It can't be done just
now--not unless you gentlemen are prepared to go much further than
you have yet gone. If we could organize a pool to take care of
fifteen thousand more shares--"
Mr. Stackpole paused, for Mr. Hand was holding up a fat, pink digit.
"No more of that," he was saying, solemnly. "It can't be done.
I, for one, won't sink another dollar in this proposition at this
time. I'd rather throw what I have on the market and take what I
can get. I am sure the others feel the same way."
Mr. Hand, to play safe, had hypothecated nearly all his shares
with various banks in order to release his money for other purposes,
and he knew he would not dare to throw over all his holdings, just
as he knew he would have to make good at the figure at which they
had been margined. But it was a fine threat to make.
Mr. Stackpole stared ox-like at Mr. Hand.
"Very well," he said, "I might as well go back, then, and post a
notice on our front door. We bought fourteen thousand shares and
held the market where it is, but we haven't a dollar to pay for
them with. Unless the banks or some one will take them over for
us we're gone--we're bankrupt."
Mr. Hand, who knew that if Mr. Stackpole carried out this decision
it meant the loss of his one million five hundred thousand, halted
mentally. "Have you been to all the banks?" he asked. "What does
Lawrence, of the Prairie National, have to say?"
"It's the same with all of them," replied Stackpole, now quite
desperate, "as it is with you. They have all they can carry--every
one. It's this damned silver agitation--that's it, and nothing
else. There's nothing the matter with this stock. It will right
itself in a few months. It's sure to."
"Will it?" commented Mr. Hand, sourly. "That depends on what
happens next November." (He was referring to the coming national
election.)
"Yes, I know," sighed Mr. Stackpole, seeing that it was a condition,
and not a theory, that confronted him. Then, suddenly clenching
his right hand, he exclaimed, "Damn that upstart!" (He was thinking
of the "Apostle of Free Silver.") "He's the cause of all this.
Well, if there's nothing to be done I might as well be going.
There's all those shares we bought to-day which we ought to be
able to hypothecate with somebody. It would be something if we
could get even a hundred and twenty on them."
"Very true," replied Hand. "I wish it could be done. I, personally,
cannot sink any more money. But why don't you go and see Schryhart
and Arneel? I've been talking to them, and they seem to be in a
position similar to my own; but if they are willing to confer, I
am. I don't see what's to be done, but it may be that all of us
together might arrange some way of heading off the slaughter of
the stock to-morrow. I don't know. If only we don't have to
suffer too great a decline."
Mr. Hand was thinking that Messrs. Hull and Stackpole might be
forced to part with all their remaining holdings at fifty cents
on the dollar or less. Then if it could possibly be taken and
carried by the united banks for them (Schryhart, himself, Arneel)
and sold at a profit later, he and his associates might recoup
some of their losses. The local banks at the behest of the big
quadrumvirate might be coerced into straining their resources still
further. But how was this to be done? How, indeed?
It was Schryhart who, in pumping and digging at Stackpole when he
finally arrived there, managed to extract from him the truth in
regard to his visit to Cowperwood. As a matter of fact, Schryhart
himself had been guilty this very day of having thrown two thousand
shares of American Match on the market unknown to his confreres.
Naturally, he was eager to learn whether Stackpole or any one else
had the least suspicion that he was involved. As a consequence
he questioned Stackpole closely, and the latter, being anxious as
to the outcome of his own interests, was not unwilling to make a
clean breast. He had the justification in his own mind that the
quadrumvirate had been ready to desert him anyhow.
"Why did you go to him?" exclaimed Schryhart, professing to be
greatly astonished and annoyed, as, indeed, in one sense he was.
"I thought we had a distinct understanding in the beginning that
under no circumstances was he to be included in any portion of
this. You might as well go to the devil himself for assistance
as go there." At the same time he was thinking "How fortunate!"
Here was not only a loophole for himself in connection with his
own subtle side-plays, but also, if the quadrumvirate desired, an
excuse for deserting the troublesome fortunes of Hull & Stackpole.
"Well, the truth is," replied Stackpole, somewhat sheepishly and
yet defiantly, "last Thursday I had fifteen thousand shares on
which I had to raise money. Neither you nor any of the others
wanted any more. The banks wouldn't take them. I called up Rambaud
on a chance, and he suggested Cowperwood."
As has been related, Stackpole had really gone to Cowperwood direct,
but a lie under the circumstances seemed rather essential.
"Rambaud!" sneered Schryhart. "Cowperwood's man--he and all the
others. You couldn't have gone to a worse crowd if you had tried.
So that's where this stock is coming from, beyond a doubt. That
fellow or his friends are selling us out. You might have known
he'd do it. He hates us. So you're through, are you?--not another
single trick to turn?"
"Not one," replied Stackpole, solemnly.
"Well, that's too bad. You have acted most unwisely in going to
Cowperwood; but we shall have to see what can be done."
Schryhart's idea, like that of Hand, was to cause Hull & Stackpole
to relinquish all their holdings for nothing to the banks in order
that, under pressure, the latter might carry the stocks he and the
others had hypothecated with them until such a time as the company
might be organized at a profit. At the same time he was intensely
resentful against Cowperwood for having by any fluke of circumstance
reaped so large a profit as he must have done. Plainly, the present
crisis had something to do with him. Schryhart was quick to call
up Hand and Arneel, after Stackpole had gone, suggesting a conference,
and together, an hour later, at Arneel's office, they foregathered
along with Merrill to discuss this new and very interesting
development. As a matter of fact, during the course of the afternoon
all of these gentlemen had been growing more and more uneasy. Not
that between them they were not eminently capable of taking care
of their own losses, but the sympathetic effect of such a failure
as this (twenty million dollars), to say nothing of its reaction
upon the honor of themselves and the city as a financial center,
was a most unsatisfactory if not disastrous thing to contemplate,
and now this matter of Cowperwood's having gained handsomely by
it all was added to their misery. Both Hand and Arneel growled
in opposition when they heard, and Merrill meditated, as he usually
did, on the wonder of Cowperwood's subtlety. He could not help
liking him.
There is a sort of municipal pride latent in the bosoms of most
members of a really thriving community which often comes to the
surface under the most trying circumstances. These four men were
by no means an exception to this rule. Messrs. Schryhart, Hand,
Arneel, and Merrill were concerned as to the good name of Chicago
and their united standing in the eyes of Eastern financiers. It
was a sad blow to them to think that the one great enterprise they
had recently engineered--a foil to some of the immense affairs
which had recently had their geneses in New York and elsewhere
--should have come to so untimely an end. Chicago finance really
should not be put to shame in this fashion if it could be avoided.
So that when Mr. Schryhart arrived, quite warm and disturbed, and
related in detail what he had just learned, his friends listened
to him with eager and wary ears.
It was now between five and six o'clock in the afternoon and still
blazing outside, though the walls of the buildings on the opposite
side of the street were a cool gray, picked out with pools of black
shadow. A newsboy's strident voice was heard here and there calling
an extra, mingled with the sound of homing feet and street-cars
--Cowperwood's street-cars.
"I'll tell you what it is," said Scbryhart, finally. "It seems
to me we have stood just about enough of this man's beggarly
interference. I'll admit that neither Hull nor Stackpole had any
right to go to him. They laid themselves and us open to just such
a trick as has been worked in this case." Mr. Schryhart was
righteously incisive, cold, immaculate, waspish. "At the same
time," he continued, "any other moneyed man of equal standing with
ourselves would have had the courtesy to confer with us and give
us, or at least our banks, an opportunity for taking over these
securities. He would have come to our aid for Chicago's sake.
He had no occasion for throwing these stocks on the market,
considering the state of things. He knows very well what the
effect of their failure will be. The whole city is involved, but
it's little he cares. Mr. Stackpole tells me that he had an express
understanding with him, or, rather, with the men who it is plain
have been representing him, that not a single share of this stock
was to be thrown on the market. As it is, I venture to say not a
single share of it is to be found anywhere in any of their safes.
I can sympathize to a certain extent with poor Stackpole. His
position, of course, was very trying. But there is no excuse--none
in the world--for such a stroke of trickery on Cowperwood's part.
It's just as we've known all along--the man is nothing but a
wrecker. We certainly ought to find some method of ending his
career here if possible."
Mr. Schryhart kicked out his well-rounded legs, adjusted his
soft-roll collar, and smoothed his short, crisp, wiry, now
blackish-gray mustache. His black eyes flashed an undying hate.
At this point Mr. Arneel, with a cogency of reasoning which did
not at the moment appear on the surface, inquired: "Do any of you
happen to know anything in particular about the state of Mr.
Cowperwood's finances at present? Of course we know of the Lake
Street 'L' and the Northwestern. I hear he's building a house in
New York, and I presume that's drawing on him somewhat. I know
he has four hundred thousand dollars in loans from the Chicago
Central; but what else has he?"
"Well, there's the two hundred thousand he owes the Prairie
National," piped up Schrybart, promptly. "From time to time I've
heard of several other sums that escape my mind just now."
Mr. Merrill, a diplomatic mouse of a man--gray, Parisian, dandified
--was twisting in his large chair, surveying the others with shrewd
though somewhat propitiatory eyes. In spite of his old grudge
against Cowperwood because of the latter's refusal to favor him
in the matter of running street-car lines past his store, he had
always been interested in the man as a spectacle. He really
disliked the thought of plotting to injure Cowperwood. Just the
same, he felt it incumbent to play his part in such a council as
this. "My financial agent, Mr. Hill, loaned him several hundred
thousand not long ago," he volunteered, a little doubtfully. "I
presume he has many other outstanding obligations."
Mr. Hand stirred irritably.
"Well, he's owing the Third National and the Lake City as much if
not more," he commented. "I know where there are five hundred
thousand dollars of his loans that haven't been mentioned here.
Colonel Ballinger has two hundred thousand. He must owe Anthony
Ewer all of that. He owes the Drovers and Traders all of one
hundred and fifty thousand."
On the basis of these suggestions Arneel made a mental calculation,
and found that Cowperwood was indebted apparently to the tune of
about three million dollars on call, if not more.
"I haven't all the facts," he said, at last, slowly and distinctly.
"If we could talk with some of the presidents of our banks to-night,
we should probably find that there are other items of which we do
not know. I do not like to be severe on any one, but our own
situation is serious. Unless something is done to-night Hull &
Stackpole will certainly fail in the morning. We are, of course,
obligated to the various banks for our loans, and we are in honor
bound to do all we can for them. The good name of Chicago and its
rank as a banking center is to a certain extent involved. As I
have already told Mr. Stackpole and Mr. Hull, I personally have
gone as far as I can in this matter. I suppose it is the same
with each of you. The only other resources we have under the
circumstances are the banks, and they, as I understand it, are
pretty much involved with stock on hypothecation. I know at least
that this is true of the Lake City and the Douglas Trust."
"It's true of nearly all of them," said Hand. Both Schryhart and
Merrill nodded assent.
"We are not obligated to Mr. Cowperwood for anything so far as I
know," continued Mr. Arneel, after a slight but somewhat portentous
pause. "As Mr. Schryhart has suggested here to-day, he seems to
have a tendency to interfere and disturb on every occasion.
Apparently he stands obligated to the various banks in the sums
we have mentioned. Why shouldn't his loans be called? It would
help strengthen the local banks, and possibly permit them to aid
in meeting this situation for us. While he might be in a position
to retaliate, I doubt it."
Mr. Arneel had no personal opposition to Cowperwood--none, at
least, of a deep-seated character. At the same time Hand, Merrill,
and Schryhart were his friends. In him, they felt, centered the
financial leadership of the city. The rise of Cowperwood, his
Napoleonic airs, threatened this. As Mr. Arneel talked he never
raised his eyes from the desk where he was sitting. He merely
drummed solemnly on the surface with his fingers. The others
contemplated him a little tensely, catching quite clearly the drift
of his proposal.
"An excellent idea--excellent!" exclaimed Schryhart. "I will join
in any programme that looks to the elimination of this man. The
present situation may be just what is needed to accomplish this.
Anyhow, it may help to solve our difficulty. If so, it will
certainly be a case of good coming out of evil."
"I see no reason why these loans should not be called," Hand
commented. "I'm willing to meet the situation on that basis."
"And I have no particular objection," said Merrill. "I think,
however, it would be only fair to give as much notice as possible
of any decision we may reach," he added.
"Why not send for the various bankers now," suggested Schryhart,
"and find out exactly where he stands, and how much it will take
to carry Hull & Stackpole? Then we can inform Mr. Cowperwood of
what we propose to do."
To this proposition Mr. Hand nodded an assent, at the same time
consulting a large, heavily engraved gold watch of the most ponderous
and inartistic design. "I think," he said, "that we have found
the solution to this situation at last. I suggest that we get
Candish and Kramer, of the stock-exchange" (he was referring to
the president and secretary, respectively, of that organization),
"and Simmons, of the Douglas Trust. We should soon be able to tell
what we can do."
The library of Mr. Arneel's home was fixed upon as the most suitable
rendezvous. Telephones were forthwith set ringing and messengers
and telegrams despatched in order that the subsidiary financial
luminaries and the watch-dogs of the various local treasuries
might come and, as it were, put their seal on this secret decision,
which it was obviously presumed no minor official or luminary would
have the temerity to gainsay. _