Turpentine stock had declined fifty points in fifteen business hours. It meant a shrinkage in the market value of the company’s capital stock of $15,000,000. The shrinkage in the self-esteem of some of the pool was measurable only in billions.
Sharpe notified his associates that the pool had completely realized—i.e., had sold out—and that he would be pleased to meet them at his office on Monday—this was Thursday—at eleven A.M., when he would have checks and an accounting ready for them. He refused himself to Greenbaum, Wechsler, Zeman, Shaffran, and others who called to see what could be done to save their reputations from the wreck of Turpentine. The stalwart private secretary told them that Mr. Sharpe was out of town. He was a very polite man, was the secretary; and an amateur boxer of great proficiency.
Failing to find Sharpe, they hastily organized a new pool, of a self-protective character, and sent in “supporting” orders. They were obliged to take large quantities of stock that day and the next in order to prevent a worse smash, which would hurt them in other directions. They found themselves with more than 50,000 shares on their hands, and the price was only 26 @ 28. And merely to try to sell the stock at that time threatened to start a fresh Turpentine panic.
They met Sharpe on Monday. His speech was not so short as usual. He had previously sent to each man an envelope containing a check and a statement, and now he said, in a matter-of-fact tone:
“Gentlemen and Greenbaum, you all know what I did for Turpentine on the up-tack. Around 62 I began to strike some stock which I couldn’t account for. I knew none of you had any for sale, of course, as you had pledged me your honorable words not to sell, save through me. But the stock kept coming out, even though the sellers borrowed against it, as if it were short stock, and I began to fear I had met an inexhaustible supply. It is always best on such occasions to act promptly, and so, after driving in the real shorts, I sold out our stock. The average selling price was 40. If it had not been for that mysterious selling it would have been 80. After commissions and other legitimate pool expenses, I find we have made nine points net, or $1,029,600, of which 25 per cent., or $250,000, come to me according to the agreement. It is too bad some people didn’t know enough to hold their stock for 90. But I find Wall Street is full of uncertainties—there is so much stupidity in the district. I trust you are satisfied. In view of the circumstances, I am. Yes, indeed. Good-day, gentlemen; and you too, Greenbaum, good-day.”
There was nothing tigerish about him. He was affable and polished; they could see that he seemed pleased to the purring point. He nodded to them and went into his inner office.
They blustered and fumed among themselves and gained courage thereby and tried Sharpe’s door and found it locked. They knocked thereon, vehemently, and the ubiquitous private secretary came out and told them that Mr. Sharpe had an important engagement and could not be disturbed, but that he was authorized to discuss any item of the statement, and he had charge of all the vouchers, in the shape of brokers’ reports, etc. So they expressed their opinions of the private secretary and of his master rather mildly, and went out, crestfallen. Outside they compared notes, and in a burst of honesty they confessed. Then, illogically enough, they cursed Sharpe. The pool was not “ahead of the game.” They had so much more stock on their hands than they desired, that in reality they were heavy losers!
And as time wore on they had to buy more “Turp”; and more “Turp”; and still more “Turp.” They thought they could emulate Sharpe and rush the price up irresistibly, at any rate up to 50. They declared a dividend of 2 per cent on the stock. But they could not market Turpentine. Again and again they tried, and again and again they failed. And each time the failure was worse because they had to take more stock.
It is now quoted at 16 @ 18. But it is not readily vendible at that figure; nor, indeed, at any price. Opposition distilleries are starting up in all the turpentine districts, and the trade outlook is gloomy. And the principal owners of the stock of the American Turpentine Company, holding among them not less than 140,000 out of the entire issue of 300,000 unvendible shares, are the famous “Greenbaum Skindicate.”