A DISASTROUS NEWSPAPER WINDUP
During the progress of the New Orleans meeting, I purchased a controlling interest in the New York Daily America—a newspaper patterned after the Morning Telegraph—from a group of members of the Metropolitan Turf Association, who had sunk about $75,000 in the enterprise. The Morning Telegraph was in the hands of a receiver. I calculated that, by transferring the Maxim & Gay advertisements from the Morning Telegraph to the Daily America, I could make the Daily America pay and force the Morning Telegraph out of the field. Later, the late William C. Whitney, who was a shining light on the turf as well as in finance, was induced to purchase the Morning Telegraph. Then trouble began to brew for me.
One morning I was summoned to the offices of August Belmont on Nassau Street.
"For the good of the turf, you must omit your Maxim & Gay advertisements from the Daily America and other newspapers hereafter," declared Mr. Belmont on my entering his room.
"Why?" asked I.
"They flagrantly call attention to betting on the races," he replied.
"But you allow betting at the tracks."
"Yes," he replied, "but public sentiment is beginning to be aroused against betting, and an attack is bound to result."
It occurred to me that at that very time Mr. Whitney was engaged in disposing of his stock in various traction enterprises in New York to Mr. Belmont and his syndicate, and that in all probability Mr. Whitney had sought the assistance of Mr. Belmont to put the Daily America out of business in this way. It was apparent that the Daily America would lose money fast without the Maxim & Gay advertising. Maxim & Gay, too, would practically be compelled to close up shop if it could not advertise. I promised to consider.
Returning to the Daily America office, I decided to pay no attention to Mr. Belmont's request, having become convinced that it was conceived in the interest of the Morning Telegraph.
A few days later I was again summoned over the 'phone to Mr. Belmont's office. When I was ushered into Mr. Belmont's presence he said:
"If you don't quit advertising the Maxim & Gay Company in the Daily America, I will see William Travers Jerome, and he will stop you."
Mr. Jerome was then District Attorney, and the idea of doing anything that Mr. Jerome considered illegal appalled me.
"If Mr. Jerome sends word to me that the Maxim & Gay advertising is illegal, I will discontinue it," I said.
I did not hear from Mr. Jerome, and so went on with the advertising.
Within a few weeks the Washington race meeting opened at Bennings. When the Maxim & Gay staff reached there, we were all informed that the Post-office department was about to begin an investigation into our business affairs, and all of our staff voluntarily appeared before the inspectors and underwent an examination. Our books were also submitted. This investigation, coming on the heels of Mr. Belmont's threat, convinced me that the influence of Mr. Belmont and Mr. Whitney reached all the way to Washington, and I concluded that if I did not discontinue the Maxim & Gay advertising in the Daily America, and then, of course, discontinue the Daily America, they would make serious trouble. So I hung out the white flag. I announced my retirement from the Maxim & Gay Company and offered to sell my newspaper to Mr. Whitney.
My exchequer was low. Nearly every dollar I had made in the Maxim & Gay enterprise had been lost by me in plunging on the races myself.
During the following week Mr. Whitney received me at his palatial home on Fifth Avenue just after his breakfast hour. He interviewed me for about an hour, obtained my price on the paper, which was what I had put into it, namely $60,000, and promised to cable to Colonel Harvey, then, as now, the distinguished editor of the Harper publications, who was in Paris, asking his advice, saying that Colonel Harvey advised him in all newspaper matters. I did not hear from Mr. Whitney again; but I did discover that my business manager was in close communication with Mr. Whitney and that the state of my financial condition every evening was being religiously reported to him.
A few weeks later I was compelled to put the paper in the hands of a receiver, and a representative of Mr. Whitney bought it for $6,500, or about 10 cents on the dollar, and put it to sleep, leaving the field to the Morning Telegraph. From that moment the Morning Telegraph, which for a short period had been refusing all tipster advertising, resumed the acceptance of such business and has continued that policy up to this day.
A year after I retired from Maxim & Gay, Attorney-General Knox decided that racehorse tipping is an offense against the old lottery law, and those who now advertise tips instruct that no money be sent by mail.
Having lost the Daily America and having "blown" the Maxim & Gay Company, I was again broke. But my credit was good, particularly among race-track bookmakers. That Summer, 1904, I became a race-track plunger, first on borrowed money and then on my winnings. By June I had accumulated $100,000. In July I was nearly broke again. In August I was flush once more, having recouped to the extent of about $50,000. Early in September I went overboard; that is to say, I quit the track losing all the cash I had and owing about $8,000 to a friendly bookmaker.
Disgusted with myself, I longed for a change of atmosphere. I stayed around New York a few days, when the yearning to cut away from my moorings and to rid myself of the fever to gamble became overpowering. I bought a railroad ticket for California and, with $200 in my clothes, traveled to a ranch within fifty miles of San Francisco, where I hoed potatoes, and did other manual labor calculated to cure race-trackitis. In less than six weeks I felt myself a new man, and decided to stick to the simple life forevermore—away from race-tracks and other forms of gambling.
But I didn't.
CHAPTER II
Mining Finance at Goldfield
I had never visited San Francisco. Being close to the city of the Golden Gate—within fifty miles—I decided to "take a look." So one evening, in the late Fall of 1904, I packed my grip and within two hours was comfortably housed in the old Palace Hotel.
The first man I met on entering the lobby was W. J. Arkell, formerly one of the owners of Frank Leslie's Weekly and of Judge.
"Hello, Bill!" I exclaimed. "What are you doing here?"
"Same as you," he answered. "Morse trimmed me in American Ice, and I'm broke. I am in hock to the hotel. They think I am worth $2,000,000. I haven't 20 cents."
During the evening we consoled each other over a series of silver gin fizzes, several of which Arkell paid for with the stub of a pencil. My companion promulgated a scheme for the quick putting on their feet of two Eastern rovers adrift in the big Coast city, and that night there was formed the W. J. Arkell Advertising Agency. Then the horse-tipping firm of "Jack Hornaday" was established. I declared that I preferred to have little to do with it except to show "Willie" how it had been done in New York by Maxim & Gay.
"I will do it for you, Bill," I said; "but no more for me—I've had enough."
"Jack Hornaday" advertisements appeared daily in all the San Francisco papers. Capable clockers and handicappers were hired and some excellent information was obtained. Race-goers got a run for their money.
But something happened. The race-track trust, which enjoyed a big pull in the San Francisco Examiner office, soon realized that somebody outside of the inner circle was getting the public's money, and every day that "Jack Hornaday" tipped a loser the Examiner carried on its sporting page a notice to the effect that "Jack Hornaday's" tip had resulted very disastrously to his clients.