An accurate list of the buyers and sellers was sent in every day by his lieutenants, for all but the most skilful operators invariably betray themselves when they attempt to sell a big block of stock. He scanned it very carefully now, and put two and two together; and he made certain inquiries and put four and four together—four names and four other names. He saw through the time-worn device of the fictitious short selling. He knew the only people who would dare sell such a large amount must be his colleagues. He also was convinced that their breach of faith was not a concerted effort, because if they had discussed the matter they would have sold a smaller quantity. He knew where nearly every share of the stock was. It was his business to know everything about it.
“Two,” he said to his secretary, “may play at that game.” And he began to play.
By seemingly reckless, plunging purchases he started the stock rushing upward with a vengeance-–63, 64, 65, 66, four points in as many minutes. The floor of the Stock Exchange was the scene of the wildest excitement. The market—why, the market was simply Turpentine. Everybody was buying it, and everybody was wondering how high it would go, Greenbaum and the other seven included. It looked as if the stock had resumed its triumphant march to par.
Then Sharpe called in all the stock his brokers were loaning to the shorts, and he himself began to borrow it. This, together with the legitimate requirements of the big short interest, created a demand so greatly in excess of the supply that Turpentine loaned at a sixty-fourth, at a thirty-second, at an eighth, and finally at a quarter premium over night. It meant that the shorts had either to cover or to pay $25 per diem for the use of each 100 shares of stock they borrowed. On the 31,400 shares that the syndicate was borrowing it meant an expense of nearly $8,000 a day; and in addition the stock was rising in price. The shorts were losing at the rate of many thousands a minute. There was no telling where the end would be, but it certainly looked stormy for both the real and the fictitious shorts.
Mr. Sharpe sent a peremptory message to Greenbaum, Lazarus & Co.; I. & M. Wechsler; Morris Steinfelder’s Sons; Reis & Stern; Kohn, Fischel & Co.; Silberman & Lindheim; Rosenthal, Shaffran & Co.; and Zeman Bros. It was the same message to all:
“Send me at once all your Turpentine stock!”
There was consternation and dismay, also admiration and self-congratulation, among the recipients of the message. They would have to buy back in the open market the stock they had sold a few days before. It would mean losses on the treasonable transactions of fully a quarter of a million, but the pool “stood to win” simply fabulous sums, if Mr. Sharpe did his duty.
There were some large blocks of stock for sale at 66, but Sharpe’s brokers cleared the figures with a fierce, irresistible rush, whooping exultantly. The genuine short interest was simply panic-stricken, and atop it all there came orders to buy an aggregate of 31,400 shares—orders from Messrs. Greenbaum, Wechsler, Lindheim, Steinfelder, Reis, Fischel, Shaffran, and Zeman. The stock rose grandly on their buying: 4,000 shares at 66; 2,200 at 66⅜; 700 at 67⅝; 1,200 at 68; 3,200 at 69½; 2,000 at 70; 5,700 at 70½; 1,200 at 72. Total, 31,400 shares bought in by the “Skindicate.” Total, 31,400 shares sold by Samuel Wimbleton Sharpe to his own associates in the great Turpentine pool. In all he found buyers for 41,700 shares that day, but it had taken purchases of exactly 21,100 to “stampede the shorts” earlier in the day, and in addition he held 17,800 shares acquired in the course of his bull manipulation, which had not been disposed of when he discovered the breach of faith, so that at the day’s close he found himself not only without a share of stock manipulatively purchased, but “short” for his personal account of 2,800 shares.
The newspapers published picturesque accounts of the “Great Day in Turpentine.” A powerful clique, they said, owned so much of the stock—had “cornered” it—that they could easily mark up the price to any figure. They called it a “memorable squeeze.” It was hinted also that Mr. Sharpe had been on the wrong side of the market, and one paper gave a wealth of details and statistics in bold, bad type to prove that the wily bear leader had been caught short of 75,000 shares, and had covered at a loss of $1,500,000. A newspaper man whose relations with Sharpe were intimate asked him, very carelessly: “What the deuce caused the rise in Turpentine?” and Sharpe drawled: “I don’t know for a certainty, but I rather imagine it was inside buying!”
On the next day came the second chapter of the big Turpentine deal. Mr. Sharpe, having received the pool’s 114,400 shares, divided it into three lots, 40,000 shares, 50,000 shares, and 24,400 shares. The market had held fairly strong, but the lynx-eyed room traders failed to perceive the usual “support” in “Turp” and began to sell it in order to make sure. There was enough commission-house buying and belated short-covering to keep it moderately steady. Then the room traders redoubled their efforts to depress it, by selling more than there were buying orders for; also by selling it cheaper than was warranted by the legitimate demand for the stock. It was a favorite trick to offer to sell thousands of shares lower than people were willing to pay, in order to frighten the timid holders and make them sell; which in turn would make still others sell, until the movement became general enough to cause a substantial fall.