After Wolff and Kane and Gordon told me that they had formed their syndicate to put up six millions in cash there was nothing for me to do but wait for the money to come in. I had urged the vital need of haste. Nevertheless the money came in driblets. I think it took four or five installments. I don’t know what the reason was, but I remember that I had to send out an S O S call to Wolff and Kane and Gordon.
That afternoon I got some big checks that brought the cash in my possession to about four million dollars and the promise of the rest in a day or two. It began to look as though the syndicate might do something before the bull market passed away. At best it would be no cinch, and the sooner I began work the better. The public had not been particularly keen about new market movements in inactive stocks. But a man could do a great deal to arouse interest in any stock with four millions in cash. It was enough to absorb all the probable offerings. If time urged, as I had said, there was no sense in waiting for the other two millions. The sooner the stock got up to 50 the better for the syndicate. That was obvious.
The next morning at the opening I was surprised to see that there were unusually heavy dealings in Consolidated Stove. As I told you before, the stock had been waterlogged for months. The price had been pegged at 37, Jim Barnes taking good care not to let it go any lower on account of the big bank loan at 35. But as for going any higher, he’d as soon expect to see the Rock of Gibraltar shimmying across the Strait as to see Consolidated Stove do any climbing on the tape.
Well, sir, this morning there was quite a demand for the stock, and the price went up to 39. In the first hour of the trading the transactions were heavier than for the whole previous half year. It was the sensation of the day and affected bullishly the entire market. I heard afterwards that nothing else was talked about in the customers’ rooms of the commission houses.
I didn’t know what it meant, but it didn’t hurt my feelings any to see Consolidated Stove perk up. As a rule I do not have to ask about any unusual movement in any stock because my friends on the floor—brokers who do business for me, as well as personal friends among the room traders—keep me posted. They assume I’d like to know and they telephone me any news or gossip they pick up. On this day all I heard was that there was unmistakable inside buying in Consolidated Stove. There wasn’t any washing. It was all genuine. The purchasers took all the offerings from 37 to 39 and when importuned for reasons or begged for a tip, flatly refused to give any. This made the wily and watchful traders conclude that there was something doing; something big. When a stock goes up on buying by insiders who refuse to encourage the world at large to follow suit the ticker hounds begin to wonder aloud when the official notice will be given out.
I didn’t do anything myself. I watched and wondered and kept track of the transactions. But on the next day the buying was not only greater in volume but more aggressive in character. The selling orders that had been on the specialists’ books for months at above the pegged price of 37 were absorbed without any trouble, and not enough new selling orders came in to check the rise. Naturally, up went the price. It crossed 40. Presently it touched 42.
The moment it touched that figure I felt that I was justified in starting to sell the stock the bank held as collateral. Of course I figured that the price would go down on my selling, but if my average on the entire line was 37 I’d have no fault to find. I knew what the stock was worth and I had gathered some idea of the vendibility from the months of inactivity. Well, sir, I let them have stock carefully until I had got rid of thirty thousand shares. And the advance was not checked!
That afternoon I was told the reason for that opportune but mystifying rise. It seems that the floor traders had been tipped off after the close the night before and also the next morning before the opening, that I was bullish as blazes on Consolidated Stove and was going to rush the price right up fifteen or twenty points without a reaction, as was my custom—that is, my custom according to people who never kept my books. The tipster in chief was no less a personage than Joshua Wolff. It was his own inside buying that started the rise of the day before. His cronies among the floor traders were only too willing to follow his tip, for he knew too much to give wrong steers to his fellows.
As a matter of fact, there was not so much stock pressing on the market as had been feared. Consider that I had tied up three hundred thousand shares and you will realize that the old fears had been well founded. It now proved less of a job than I had anticipated to put up the stock. After all, Governor Flower was right. Whenever he was accused of manipulating his firm’s specialties, like Chicago Gas, Federal Steel or B. R. T., he used to say: “The only way I know of making a stock go up is to buy it.” That also was the floor traders’ only way, and the price responded.
On the next day, before breakfast, I read in the morning papers what was read by thousands and what undoubtedly was sent over the wires to hundreds of branches and out-of-town offices, and that was that Larry Livingston was about to begin active bull operations in Consolidated Stove. The additional details differed. One version had it that I had formed an insiders’ pool and was going to punish the over-extended short interest. Another hinted at dividend announcements in the near future. Another reminded the world that what I usually did to a stock I was bullish on was something to remember. Still another accused the company of concealing its assets in order to permit accumulation by insiders. And all of them agreed that the rise hadn’t fairly started.