The Romance and Tragedy of a Widely Known Business Man of New York

by William Ingraham Russell

CHAPTER XIII

PROSPEROUS DAYS

My business in 1879 returned me nearly sixteen thousand dollars, a satisfactory increase over the previous year.

My wife and I had become much attached to "Sunnyside," and as the owner was willing to sell it to us for just what it had cost to build, plus one thousand dollars for the land, we bought it. We then spent eleven hundred dollars in improvements, and when finished our home had cost us sixty-five hundred dollars.

It was certainly a very attractive place for that amount of money. To be sure it was only an unpretentious cottage, but a pretty one, and the interior had been so successfully though inexpensively treated in decorations and appointments that the general effect attracted from our friends universal admiration.

As our neighbor, Charlie Wood, put it on his first inspection, we had succeeded in making a "silk purse out of a sow's ear." His remark rather grated on us, but it was characteristic of the man and we knew it was simply his way of paying us a compliment.

In January a broker in the trade, not a competitor for the reason that he was a specialist in a line that I did not cover, gave me a large order, for future delivery.

He told me it was a purchase on speculation for himself and another party whom he named, and that not only should I have the resale but they would give me one-eighth interest in the transaction.

Up to that time I had never been interested to the extent of a single dollar in the markets in which I dealt as a broker nor had I any speculative clientage, I was certain the operation would be successful provided they did not hold on for too large a profit and overstay the market. I accepted the order as he offered it, but stipulated that I should have the right at any time to close out my interest in the deal.

The purchase was made and a few weeks later long before time for delivery, I found a buyer who would pay a clear ten thousand dollars profit. In vain I urged them to accept it. Then with their knowledge I sold my interest and secured my twelve hundred and fifty dollars.

They held on, took delivery at maturity, and finally after several months I resold for them at a loss of nearly forty thousand dollars.

In the negotiations I came into personal contact only with the broker. The other party was a wealthy Hebrew merchant then doing business on Broome Street. He was at that time supposed to be worth possibly a million and was just getting in touch with my line of trade. A few years later he became a most important factor and still later was allied with Standard Oil interests.

At his death in 1902 he left to his heirs many millions of dollars. I attended his funeral and truly mourned and respected the man, for while for many years we were active business competitors, in the days of trouble he was one of the very few ready to extend a helping hand.

In the first three months of 1880, including my profit in the transaction just mentioned, I made six thousand dollars. I was now in a position where if hard times came I could accept them with reasonable complacency.

My success had broadened my views and given me a keener insight into the possibilities of my business. I became convinced that in earning capacity it was about at the top notch.

There were several features then becoming prominent that led me to this conclusion. The Standard Oil Company had absorbed all the refining concerns and had then established its own broker. It paid him a salary for his services and he paid to the Company the brokerages he collected from the sellers. I had been doing a large business with the constituent companies which would now cease. The leading firm with which my relations had been most intimate had taken into its employ as a confidential man my most active competitor and I knew his influence would work against me to the utmost. New competitors, young men who had been clerks in the trade, were coming into the field. Then a movement looking to a reduction in the rate of brokerage was being agitated.

I had no doubt about being able to keep up with the procession, but it looked to me as if the procession would be too slow and if it was to be a funeral march I proposed to look on rather than take part. I had been through the stages of creeping, then walking, and now I wanted to run.

The problem was before me and I thought I saw the solution.

The business being done by brokers covered several different articles. The most important of these, that is, the one on which the most brokerages were earned, happened to be the one article that the Standard Oil Company was the largest buyer of, that the leading firm was most interested in, and that the talk of reduced brokerage was aimed at.

My plan was to drop that entirely and also everything else except one particular staple commodity in which I would be a specialist. I had for two or three years done a large business in this and had made a profound study of that branch of the trade.

It was yet in its infancy but I believed in a rapid and important growth. How rapid that growth has been is shown by the fact that in 1879 the consumption in the United States was less than five thousand tons. It has increased every year since and is now thirty-six thousand tons per year.

Another point that decided me on the commodity I was to handle exclusively was its adaptability to speculative operations. In London for many years it has been a favorite medium of speculation and I believed I could build up a speculative clientele and thereby largely increase my brokerage account.

As business continued good through the spring and early summer I concluded to delay my action until the fall. Each month I was adding to my surplus and there was no need for haste.