LXVII
A Napoleonic Conception
Ever since the time when he bought two St. Louis newspapers, both of which were losing money, combined them, and made of them one of the most profitable newspaper properties in the country, Mr. Pulitzer's methods have been Napoleonic both in the brilliancy of their conception and in the daring of their execution. I may here record as a personal recollection the story of one of his newspaper achievements. The fact of it is well enough known; the details of its dramatic execution have never been told, I think.
In February, 1895, the government of the United States found it necessary to issue $62,300,000 in four per cent., thirty-year bonds, to make good the depletion of the gold reserve in the treasury. The bonds were sold to a syndicate at the rate of 104-¾. Once on the market, they quickly advanced in price until they were sold by the end of that year at 118, and, if any bank or investor wanted them in considerable quantities, the price paid was 122 or more.
At the beginning of the next year it was announced that the treasury would sell $200,000,000 more of precisely the same bonds, printed from the same plates, payable at the same time, and in all respects undistinguishable from those of the year before—at that time in eager popular demand at 118 to 122. It was also announced that the treasury had arranged to sell these bonds—worth 118 or more in the open market—to the same old Morgan syndicate "at about the same price" (104-¾), at which the preceding issue had been sold.
Mr. Pulitzer justly regarded this as a scandalous proposal to give the syndicate more than twenty-six millions of dollars of the people's money in return for no service whatever. The banks and the people of the country wanted these bonds at 118 or more, and banks and bankers in other countries were equally eager to get them at the same rate. It seemed to him, as it seemed to every other well-informed person, that this was a reckless waste of the people's money, the scandalous favoring of a syndicate of speculators, and a damaging blow to the national credit. But, unlike most other well-informed persons, Mr. Pulitzer refused to regard the situation as one beyond saving, although it was given out from Washington that the bargain with the syndicate was already irrevocably made.
Mr. Pulitzer set his editorial writers at work to make the facts of the case clear to every intelligent mind; to show forth the needlessness of the proposed squandering; to emphasize the scandal of this dealing in the dark with a gang of Wall Street bettors upon a certainty; and to demonstrate the people's readiness and even eagerness to subscribe for the bonds at a much higher rate than the discrediting one at which the Treasury had secretly agreed to sell them to the syndicate.
When all this had been done, to no purpose so far as I could see, inasmuch as the response from Washington was insistent to the effect that the sale was already agreed upon, Mr. Pulitzer one afternoon summoned me to go at once to Lakewood, where he was staying at the time. The train by which alone I could go was to arrive at Lakewood after the departure of the last train thence for New York that evening, and I mentioned that fact over the telephone. For reply I was asked to come anyhow.
When I got there night had already fallen, and as I was without even so much as a handbag, I anticipated a night of makeshift at the hotel. But as I entered Mr. Pulitzer's quarters he greeted me and said:
"Come in quickly. We must talk rapidly and to the point. You think you're to stay here all night, but you're mistaken. As this is your night to be in charge of the editorial page, you must be in the office of the World at ten o'clock. I've ordered a special train to take you back. It will start at eight o'clock and run through in eighty minutes. Meanwhile, we have much to arrange, so we must get to work."
A Challenge to the Government
E. O. Chamberlin, the managing editor of the news department of the World, was there and had already received his instructions. To me Mr. Pulitzer said:
"We have made our case in this matter of the bond issue. We have presented the facts clearly, convincingly, conclusively, but the Administration refuses to heed them. We are now going to compel it to heed them on pain of facing a scandal that no administration could survive.
"What we demand is that these bonds shall be sold to the public at something like their actual value and not to a Wall Street syndicate for many millions less. You understand all that. You are to write a double-leaded article to occupy the whole editorial space to-morrow morning. You are not to print a line of editorial on any other subject. You are to set forth, in compact form and in the most effective way possible, the facts of the case and the considerations that demand a popular or at least a public loan instead of this deal with a syndicate, suggestive as it is of the patent falsehood that the United States Treasury's credit needs 'financing.' You are to declare, with all possible emphasis that the banks, bankers, and people of the United States stand ready and eager to lend their government all the money it wants at three per cent. interest, and to buy its four per cent. bonds at a premium that will amount to that."
He went on in this way, outlining the article he wanted me to write.
"Then, as a guarantee of the sincerity of our conviction you are to say that the World offers in advance to take one million dollars of the new bonds at the highest market price, if they are offered to the public in open market.
"In the meanwhile, Chamberlin has a staff of men sending out despatches to every bank and banker in the land, setting forth our demand for a public loan instead of a syndicate dicker, and asking each for what amount of the new bonds it or he will subscribe on a three per cent. basis. To-morrow morning's paper will carry with your editorial its complete confirmation in their replies, and the proposed loan will be oversubscribed on a three per cent. basis. Even Mr. Cleveland's phenomenal self-confidence and Mr. Carlisle's purblind belief in Wall Street methods will not be able to withstand such a demonstration as that. It will compel a public loan. If it is true that the contract with the syndicate has already been made, they must cancel it. The voice of the country will be heard in the subscription list we shall print to-morrow morning, and the voice of the country has compelling power, even under this excessively self-confident administration. Now, you're faint with hunger. Hurry over to the hotel and get a bite to eat. You have thirty minutes before your special train leaves."
I hurried to the hotel, but I spent that thirty minutes, not in eating but in making a written report, for my own future use, of Mr. Pulitzer's instructions. The memorandum thus made is the basis of what I have written above.
The climax of the great national drama thus put upon the stage was worthy of the genius that inspired it. The responses of the banks and bankers—sent in during the night—showed a tremendous oversubscription of the proposed loan at a price that would yield to the government many millions more than the syndicate sale offered, and there remained unheard from the thousands and tens of thousands of private persons who were eager to buy the bonds as investment securities. In the face of the facts thus demonstrated, it would have been political suicide for the men in control at Washington to refuse a public loan and to sell the bonds to the syndicate for millions less than the people were eager to pay for them. The administration yielded to moral force, but it did so grudgingly and with manifest reluctance. It cut down the proposed loan to the minimum that the Treasury must have, and it hedged it about with every annoying device that might embarrass willing investors and prevent the subscriptions of others than banks and bankers. In spite of all such efforts to minimize the administration's defeat, the bond issue was promptly taken up at a price that saved many millions to the Treasury, and within a brief while the very bonds that Mr. Cleveland and Mr. Carlisle had so insistently desired to sell to the syndicate at 104-¾ were very hard to get in the open market at 133 or more.
The Power of the Press
I have related this incident with some fullness because I know of no other case in which the "power of the press"—which being interpreted means the power of public opinion—to control reluctant political and governmental forces, has been so dramatically illustrated.
The only other case comparable with it was that in which not one newspaper but practically all the newspapers in the land with a united voice saved the country from chaos and civil war by compelling a wholly unwilling and very obstinate Congress to find a way out of the electoral controversy between Tilden and Hayes. No newspaper man who was in Washington at any time during that controversy doubts or can doubt that the two Houses of Congress would have adhered obstinately to their opposing views until the end, with civil war as a necessary consequence, but for the ceaseless insistence of all the newspapers of both parties that they should devise and agree upon some peaceful plan by which the controversy might be adjusted.
At the time when the prospect seemed darkest I asked Carl Schurz for his opinion of the outcome. He replied, with that intense earnestness in his voice and words which his patriotism always gave to them in times of public danger:
"If left to the two Houses of Congress to decide—and that is where the Constitution leaves it—the question will not be decided; on the contrary, the more they discuss it, the more intense and unyielding their obstinate determination not to agree will become. If it isn't settled before the fourth of March, God only knows what the result will be—civil war and chaos are the only things to be foreseen. But if left alone, as I say, the two Houses of Congress will to the end refuse to agree upon any plan of adjustment. The outlook is very gloomy, very discouraging, very black. Only a tremendous pressure of public opinion can save us from results more calamitous than any that the human mind can conceive. If the newspapers can be induced to see the danger and realize its extent—if they can persuade themselves to put aside their partisanship and unite in an insistent demand that Congress shall find a way out, a peaceful result may be compelled. Fortunately, the Southern men in both houses are eager for the accomplishment of that. They and their constituents have had enough and to spare of civil war. They may be easily won to the support of any plan that promises to bring about a peaceful solution of the controversy. But public opinion, as reflected in the newspapers, must compel Congress, or nothing will be done."