CLOUDS IN THE WESTERN SKY
A new black cloud showed itself on the horizon. A labor war was threatened in Goldfield. It was very apparent, from the conduct of George Wingfield, that he was baiting the miners, and it appeared to be the general opinion of the people of Goldfield that he was trying to precipitate trouble. The miners had asked for higher wages. The Sullivan Trust Company, which was operating seven properties with a monthly pay-roll of $50,000, was the first to express a willingness to grant the terms. Wingfield and Nixon refused. The miners asked for arbitration. It was refused. The mines were then shut down for a few days and the terms of the leases were extended.
Heavy selling in all Goldfield stocks took place during the shut-down. Rumors could now be heard on every side that Wingfield and Nixon were dumping overboard big blocks of stock. Could it be possible that they themselves were scuttling the ship that had given them such glorious passage?
Again the Sullivan Trust Company was called upon to stand behind the market.
Soon a cry of distress was heard in the camp from investors and stock brokers who had overloaded themselves with securities and who were in debt to the banks to the extent of millions, with stock of the camp put up as collateral. Inquiry revealed the fact that all Goldfield and Tonopah banks were overloaded. This condition had been brought about by the liberal terms which had been granted by the Wingfield-Nixon banks during the "ballooning" of Goldfield Consolidated, when the confederacy, according to common belief, was unloading millions of dollars' worth of stocks in the small companies and was using the proceeds to finance their purchase of the stock of several of the integrals that formed the big merger.
I began to get next to myself and to "smell a rat." I had never had so much as an argument with either Mr. Wingfield or Mr. Nixon, had never been engaged in any business transactions with them, and the campaign against the trust company, which I felt sure had been conceived at the outset in the interests of the Republican political machine, I now suspected was part of a general scheme to get hold of anything and everything that was valuable in the camp. By smashing the Sullivan Trust Company they could hurt the Democratic party of the State, with which we were affiliated, and for which it was currently believed we were supplying the sinews of war. By smashing us they might also cripple the bank with which we were doing business, and which in both Goldfield and Tonopah, particularly Tonopah, was a formidable competitor of their banking interests. And thus they might also facilitate a decline in the market which would shake out of their holdings borrowers at their banks.
I figured it out this way: Wingfield and Nixon knew that we had foolishly attempted to support the market for our stocks, that other promoters in Goldfield had done likewise, and that investors and brokers in Goldfield had borrowed heavily from all of the banks. John S. Cook & Company were calling for more collateral from their customers, and real estate was being added to the pledges of mining securities. What more easy, even though diabolical, than to "bear" the market, shake out the stockholders in various important mines of the camp, take their stocks away from them by foreclosure, and get possession again, at bankrupt-sale prices, of the millions of dollars' worth of securities which they had unloaded during the boom?
If this was the scheme of Wingfield and Nixon, what transpired could not have been patterned more perfectly.
Mr. Wingfield walked the streets day and night, armed to the teeth, and openly dared any of the miners to "get him." He threatened another shut-down, a reduction of wages, the installation of change-rooms at the mines and other dire things, all seemingly calculated to rouse the ire of the mine-workers.
The miners fell for the bait, became belligerent and nasty and did things with which the community was not in sympathy. Day by day the situation became more critical.
During one of the shut-downs which ensued, Senator Nixon revealed his hand by convening a meeting of the executive committees of the two Goldfield stock exchanges. He insisted that the exchanges close, arguing that the prices of stocks should be allowed to recede in sympathy with the labor troubles. No thought was his for the men of the camp who were committed to the long side of the market at boom prices and who had worked day and night to create the boom which had thrown into the laps of Wingfield and Nixon riches far beyond the dreams of avarice. The brokers refused to close the exchanges.
Goldfielders were slow to grasp the real import of what was transpiring. Things were very much unsettled. Optimism would rule to-day on apparently inspired rumors that the differences between the mine owners and the miners were about to be patched up. The next day gloom would pervade the camp because of the unfavorable action by the union on the peace plans. Nightly conferences were held. It was impossible to get an accurate line on the situation. Crowds gathered about Miners' Union Hall, where the meetings were held, and everyone sought something tangible on which to base his market operations. The officers of the union were in and out of the market, taking advantage of their official positions to anticipate every favorable or unfavorable development.
It was a critically sensitive market situation. The drift, however, was unmistakably downward. Values began to melt like snow in a Spring thaw.
Through it all the Sullivan Trust Company stood valiantly behind its securities in all markets where they were traded in—to the limit. I was bull-headed. I had never before been through a mining-camp boom of such proportions, and I failed to recognize that a reaction must ensue, whether it was forced by Wingfield and Nixon or not. Tens of thousands of shares of Sullivan stocks were thrown at our brokers on the San Francisco Stock Exchange and New York Curb from day to day, and we took them all in, refusing to allow the market to yield to the pressure.