Reminiscences of a Stock Operator

by Edwin Lefevre

I convinced myself that whatever was wrong was wrong with me and not with the market. Now what could be the trouble with me? I asked myself that question in the same spirit in which I always study the various phases of my trading problems. I thought about it calmly and came to the conclusion that my main trouble came from worrying over the money I owed. I was never free from the mental discomfort of it. I must explain to you that it was not mere consciousness of my indebtedness. Any business man contracts debts in the course of his regular business. Most of my debts were really nothing but business debts, due to what were unfavourable business conditions for me, and no worse than a merchant suffers from, for instance, when there is an unusually prolonged spell of unseasonable weather.

Of course as time went on and I could not pay I began to feel less philosophical about my debts. I’ll explain: I owed over a million dollars—all of it stock-market losses, remember. Most of my creditors were very nice and didn’t bother me; but there were two who did bedevil me. They used to follow me around. Every time I made a winning each of them was Johnny-on-the-spot, wanting to know all about it and insisting on getting theirs right off. One of them, to whom I owed eight hundred dollars, threatened to sue me, seize my furniture, and so forth. I can’t conceive why he thought I was concealing assets, unless it was that I didn’t quite look like a stage hobo about to die of destitution.

As I studied the problem I saw that it wasn’t a case that called for reading the tape but for reading my own self. I quite cold-bloodedly reached the conclusion that I would never be able to accomplish anything useful so long as I was worried, and it was equally plain that I should be worried so long as I owed money. I mean, as long as any creditor had the power to vex me or to interfere with my coming back by insisting upon being paid before I could get a decent stake together. This was all so obviously true that I said to myself, “I must go through bankruptcy.” What else could relieve my mind?

It sounds both easy and sensible, doesn’t it? But it was more than unpleasant, I can tell you. I hated to do it. I hated to put myself in a position to be misunderstood or misjudged. I myself never cared much for money. I never thought enough of it to consider it worthwhile lying for. But I knew that everybody didn’t feel that way. Of course I also knew that if I got on my feet again I’d pay everybody off, for the obligation remained. But unless I was able to trade in the old way I’d never be able to pay back that million.

I nerved myself and went to see my creditors. It was a mighty difficult thing for me to do, for all that most of them were personal friends or old acquaintances.

I explained the situation quite frankly to them. I said: “I am not going to take this step because I don’t wish to pay you but because, in justice to both myself and you, I must put myself in a position to make money. I have been thinking of this solution off and on for over two years, but I simply didn’t have the nerve to come out and say so frankly to you. It would have been infinitely better for all of us if I had. It all simmers down to this: I positively cannot be my old self while I am harassed or upset by these debts. I have decided to do now what I should have done a year ago. I have no other reason than the one I have just given you.”

What the first man said was to all intents and purposes what all of them said. He spoke for his firm.

“Livingston,” he said, “we understand. We realise your position perfectly. I’ll tell you what we’ll do: we’ll just give you a release. Have your lawyer prepare any kind of paper you wish, and we’ll sign it.”

That was in substance what all my big creditors said. That is one side of Wall Street for you. It wasn’t merely careless good nature or sportsmanship. It was also a mighty intelligent decision, for it was clearly good business. I appreciated both the good will and the business gumption.

These creditors gave me a release on debts amounting to over a million dollars. But there were the two minor creditors who wouldn’t sign off. One of them was the eight-hundred-dollar man I told you about. I also owed sixty thousand dollars to a brokerage firm which had gone into bankruptcy, and the receivers, who didn’t know me from Adam, were on my neck early and late. Even if they had been disposed to follow the example set by my largest creditors I don’t suppose the court would have let them sign off. At all events my schedule of bankruptcy amounted to only about one hundred thousand dollars; though, as I said, I owed well over a million.