v
The Orient & Pacific deal brought on the inevitable crisis. Valentine was in Paris. An American correspondent took the news to him at his hotel and asked for comment upon it. He blurted his astonishment. He knew nothing about it, he said, and believed it was untrue. This was unexpected news. The correspondent cabled it to his New York paper together with the statement that Valentine would cut his vacation and return immediately. Wall Street scented a row. It was rumored that Valentine was coming home to depose Galt; also that the purchase of the Orient & Pacific would be stopped by injunction proceedings. Comment unfriendly to Galt began to appear in the financial columns of the newspapers. Great Midwestern stock now was very active in the market. This gave the financial editors their daily text. They spoke of its being manipulated, presumably by insiders, and it filled them with foreboding to remember that the man now apparently in command of this important property was formerly a Stock Exchange speculator, with no railroad experience whatever.
We easily guessed what all this meant. Galt had no friends among the financial editors. He did not know one of them by sight or name. But Valentine knew them well, and so did those bankers who had lost control of the Orient & Pacific. The seed of prejudice is easily sown. There is a natural, herd-like predisposition to think ill of a newcomer. That makes the soil receptive.
Galt was serene until one day suddenly Jonas Gates died of old age and sin, and then I noticed symptoms of uneasiness. I wondered if he was worried about those papers I had witnessed in his private office on the day the Great Midwestern failed. The executors of course would find them.
On reaching New York Valentine’s first act was to call a meeting of the board of directors. He was blind with humiliation. First he offered a resolution so defining the duties and limiting the powers of the chairman of the board as to make that official subordinate to the president. Then he spoke.
Owing to the sinister aspect of the situation and to the importance of the interests involved he felt himself justified in revealing matters of an extremely confidential character. It had come to his knowledge that there existed between the chairman and the late Jonas Gates a formal agreement by the terms of which Gates pledged himself to support Galt for a place on the board of directors and Galt on his part, in consideration of a large sum of money, undertook first to gain control of the company’s affairs and overthrow the authority of its president.
Would the chairman deny this?
But wait. There was more. In the same way it had come to his knowledge that two other agreements existed as of the same date. One provided that when Galt had gained control of the company’s policies he would cause it to buy the Orient & Pacific railroad in which Gates was then a large stockholder. The third was a stipulation that a certain part of Gates’ profit on the sale of his Orient & Pacific stock to the Great Midwestern should apply on Galt’s debt to him. Would the chairman deny the existence of these agreements?
Still not waiting for a reply, not expecting one in fact, he offered a second resolution calling for the resignation of Henry M. Galt as chairman of the board; his place to be filled at the pleasure of the directors.
Galt all this time sat with his back to Valentine gazing out the window with a bored expression. His onset was dramatic and unexpected.
With a gesture to circumstances he rose, thrust his hands in his pockets, and began walking slowly to and fro behind Valentine.
“I hate to do it,” he said. “I like Old Dog Tray, here. But he won’t stay off the track. If he wants to get run over I can’t help it.... Those agreements he speaks of,—without saying how he got hold of them,—they are true. I had a lot of G. M. stock when the company went busted. The stock records will show it. I was in a tight place and went to Gates for money to hold on with. He laughed at me. Didn’t believe the stock was worth a dollar, he said. I spent hours with him telling him what I knew about the property, showing him its possibilities. I had made a study of it. I spoke of the Orient & Pacific as a road the G. M. would have to control. ‘That would suit me,’ he said. ‘I’ve just had to take over a large block of that stock for a bad debt.’ I said, ‘All the better. With your stock accounted for it will be easier to buy the rest.’ And so it was. But that’s ahead of the story. Gates said one trouble with the G. M. was Valentine. I knew that, too. The end of it was that I persuaded him. He took everything I had and loaned me the money. The agreement was that the stuff I pledged with him for the loan could be redeemed only provided my plans for the development of the G. M. were realized and certain results appeared. Otherwise he was to keep it. It was the devil’s own bargain. I was in a hole, remember, ... had the bear in my arms and couldn’t let go, ... and you all knew Gates.”
Valentine interrupted. He spoke without looking around.
“One of your plans for the development of the Great Midwestern was the elimination of the president.”
“Exactly,” said Galt. “The president at that time was not president, but receiver. He was receiver for a property he had managed into bankruptcy.... Well, that part of the agreement has been kept. There ain’t any doubt about who’s running the G. M. I’m running it, subject to the approval of the directors. Five minutes after I was elected chairman of this board I took the traffic manager’s resignation in that room out there under threat of having him indicted for theft. He was the president’s friend. I did this without the president’s sanction or knowledge. The place was rotten with graft. We were paying extortionate prices for equipment and materials because the equipment makers and the material men were our friends. Our pockets were wide open. Listen to this!”
From typewritten sheets he read a wrecking indictment of the old Valentine management, setting out how money had been lost and wasted and frittered away, how the company had been overcharged, underpaid and systematically mulcted. He gave exact figures, names, dates and ledger references.
“She’s all right now,” he said. “Clean as a grain of wheat. I’m telling you what was. I don’t intimate that the president took part in plucking the old goose. I don’t say that. He was too busy making public speeches on the miseries of railroads to know what was going on.”
Valentine was not crushed. He showed no sense of guilt. No one believed him guilty in fact. What he represented, tragically and with great dignity, was the crime of obsolence. A stronger man was putting him aside in a new time. He started to speak, but Potter spoke instead.
“I move to strike all this stuff off the record,” he said, “and let matters rest as they are.” He pushed back his chair. Everyone but Valentine arose. There was no vote. Officially nothing had been transacted. The president was left sitting there alone, with his resolutions in front of him.
All that Galt said was true. It was probably not the whole truth. His transaction with Gates seemed on the face of it too strange to be so briefly and plausibly explained. One fact at least he left out, which was that Gates hated Valentine with a fixation peculiar to cryptic old age. Nobody knew quite why. He was possibly more interested in revenge upon Valentine than in the future of the Great Midwestern. It may be surmised also that he had some intuition of Galt’s latent power, just as Mordecai had, and placed a bet on him at long, safe odds. It was Galt who took the risk. And as for the Orient & Pacific deal, that did not require to be defended on its merits, for there was already a profit in it for the company.
After this Valentine should have resigned. Instead he carried the fight outside, over all persuasion. It became a nasty row. He publicly attacked the company’s purchase of the Orient & Pacific, denounced Galt personally, and solicited the stockholders for proxies to be voted at the annual meeting for directors who would support him. His acquaintance with the financial editors, several of whom were his warm friends, gave him an apparent advantage. All the newspapers were on his side.
But nobody then knew how Galt loved a fight. He poured his essence into it and attained to a kind of lustful ecstacy. His methods were both direct and devious. To win by a safe margin did not satisfy him. It must be a smashing defeat for his opponent. He, too, appealed to the stockholders. Valentine in one way had played into his hands. His complaint was that Galt had seized the management. Well, if that were true, nobody but Galt could claim credit for the results, and they were beginning to be marvelous. Great Midwestern’s earnings were improving so fast that Galt’s enemies must resort to malicious innuendo. They said he was a wizard with figures, which was true enough, and that possibly the earnings were fictitious, which was not the case at all.
Long before the day of the annual meeting Galt had a large majority of the stockholders with him. Nevertheless, he sent me abroad to solicit the proxies of foreign stockholders. They were easy to get. I was surprised to find that the foreigners, who are extremely shrewd in these matters, with an instinct for men who have the money making gift, had already made up their minds about Galt. They had been watching his work and they were buying Great Midwestern stock on account of it.
When it came to the meeting Valentine had not enough support to elect one director. His humiliation was complete. Then he resigned and Galt was elected in his place, to be both chairman and president.
He was not exultant. For an hour he walked about the office with a brooding, absent air. This was his invariable mood of projection. He was not thinking at all of what had happened. He put on his hat and stood for a minute in the doorway. Looking back he said, “Hold tight, Coxey,” and slammed the door behind him.