YES, "BUSINESS IS BUSINESS"
The offices of the trust company were furnished on an elaborate scale, resembling the interior of a banking institution of a large city. The offices became the headquarters of Eastern mining-stock brokers whenever they arrived in camp.
One morning J. C. Weir, a New York mining-stock broker, whose firm held an option from the trust company on 100,000 shares of Stray Dog stock, was ensconced in one of the two luxuriously furnished rooms used as executive offices. Mr. Weir's firm was one of our selling agents in New York. He was the dean of mining-stock brokers in New York City. In those early days the telephone service of Goldfield was not yet perfected, and it was only necessary for a person, in order to overhear any talk over the telephone in our offices, to lift the receiver from the nearest hook and listen. It was reported to me that Mr. Weir had been availing himself of this method of learning things at first hand.
"Say, Rice," said Mr. Sullivan one morning, "Weir hears your messages every time you are called on the 'phone. He takes advantage of you. I wish you would let me fix him."
"All right; what do you want to do?" I answered.
"Say," said Mr. Sullivan, "Campbell, our engineer, is in Manhattan. I'll call him up from the public station and tell him to 'phone you some red-hot news about mine developments on Stray Dog, and I'll see to it that Weir is in his office at the time you get the message. If Weir don't steal the news and grab a big block of Stray Dog on the strength of it, I'm a poor guesser."
All of our options to brokers were to expire on the 15th of March and this was the 13th.
At four o'clock in the afternoon I was in my room. Mr. Weir was at the desk in the room opposite. The 'phone bell rang.
"Hello," I said, "who is this?"
"Campbell, at Manhattan," was the response.
"What's the news, Jack?" I asked.
"We've just struck six feet of $2,000 ore! It's a whale! Never saw a mine as big as this one in my life! Don't sell any more Stray Dog under $5 a share!" shouted Mr. Campbell.
"Bully, Jack," I said, "but keep that information to yourself. Don't tell your mother, and don't let any more miners go down the shaft. Close it up until I am able to buy back some of the stock I sold so cheap."
Fifteen minutes later Mr. Sullivan and I met Mr. Weir leaving the room.
"Weir," said I, "your option on Stray Dog expires on the 15th at noon. So far, your New York office has ordered only 85,000 shares of the 100,000 that were allotted to you. We have decided to close subscriptions on the moment and wish you would wire your New York office not to sell any more."
"You are wrong," said Mr. Weir; "why, when I left New York we had oversold our entire allotment! If the office has not notified you of this, it has been a slip. We will, in fact, need at least 25,000 shares more."
"You can't have them," said I.
"Not in a thousand years!" put in Mr. Sullivan.
Mr. Weir sent a bunch of code messages to New York. All the next day Mr. Sullivan spent with Mr. Weir. He allowed Mr. Weir to cajole him into letting him have the entire block of stock. Finally, it was agreed between Mr. Weir and Mr. Sullivan that Mr. Sullivan would give him the additional stock whether I consented or not. Surreptitiously, according to Mr. Weir's idea, Mr. Sullivan was yielding to him, without my knowledge and against my wishes.
Next day the Sullivan Trust Company shipped to Mr. Weir's firm in New York 25,000 shares of Stray Dog attached to draft at 45 cents a share. The draft was paid. The avenging angel kept hot on Mr. Weir's trail, for right on the heels of the New York broker's Stray Dog purchase came a calamity which almost obliterated the market values of Nevada mining stocks and particularly those of the shares of Manhattan mining companies. San Francisco was destroyed by earthquake and fire. Not less than half of the capital invested in Manhattan stocks had come out of the city of San Francisco. The earthquake was fatal to Manhattan.
The San Francisco Stock Exchange, which was the principal market for Manhattan mining shares, was compelled to discontinue business for over two months. Brokers and transfer companies lost their records, and the Coast's property and money loss was so appalling that no more money was forthcoming from that direction for mining enterprises. Every bank in Nevada closed down, just as every California bank did, the Governors of both States declaring a series of legal holidays to enable the financial institutions to gain time. Nevada banks, as a rule, had cleared through San Francisco banks, and practically all of Nevada's cash was tied up by the catastrophe.
The Sullivan Trust Company faced a crisis. I had decided it was good business to lend support to Jumping Jack in the stock market when the Manhattan boom began to relax from its first tension, and had accumulated several hundred thousand shares at an average of 35 cents. The Trust company had only $8,000 in gold in its vaults on the day of the 'quake. Moneys deposited in bank were not available. Of the $8,000 in gold coin, $6,500 was paid two days after the earthquake to the Wells-Fargo Express Company for an automobile which was in transit at the time, and for which Wells-Fargo demanded the coin. It was impossible to hypothecate mining securities of any description in Nevada or San Francisco. With the Sullivan Trust Company's funds tied up in closed-up banks, and with an unsalable line of securities in its vaults, it was "up against it."
For a period it looked as if we must go to the wall. For two months we eked out a bare subsistence by the direct sale of Manhattan securities at reduced prices to the Eastern brokers. This purchasing power came largely from brokers who were "short" of stocks to the public on commitments made at a much higher range of prices and needed the actual certificates for deliveries.
It took the Nevada banks and the San Francisco Stock Exchange more than sixty days to rehabilitate themselves. No sooner did the San Francisco Stock Exchange open for business than it became possible for the Sullivan Trust Company to borrow some much needed cash on Manhattan securities, of which it had a plethora. Through members of the San Francisco Stock Exchange, it obtained in this way in the neighborhood of $100,000. Goldfield banks supplied another $100,000 a little later by the same process. Then the clouds rolled by.