“We’re like a railroad,” he said. “No railroad is privately owned any more. It’s too big. It represents too much capital. Only the public is rich enough to own a railroad. It takes thousands of investors putting their money together to build a railroad. Then somebody works it for them and pays them dividends on their shares. We can do that,—put our shares on the New York Stock Exchange and sell out to the public.”
So he led them to Wall Street. The motive was theirs; the plan was his.
The American Steel Company was reorganized. Its capitalization was increased to take in properties hitherto jointly owned among them and for other purposes. They agreed to sell no shares except through John in order that all should fare alike. It was a verbal agreement. All of their private agreements were verbal and never so far had one been broken.
Enter John Breakspeare upon the Wall Street scene with something to sell.
The shares of the American Steel Company were duly listed on the New York Stock Exchange,—that is, they were added to the list of securities permitted to be dealt in there and allotted sign and booth in the great investment bazar.
People stared and passed by. It was a strange sign not only because it was new but for the reason also that the public knew only mining and railroad shares. The day of industrial company shares had not come. John was a pioneer in that line. He was a vendor unused to the ways of this fair with merchandise nobody had ever seen before.
He was not disappointed. He knew, if anybody did, that goods must be brought to the buyer’s attention. Nothing will sell itself, least of all seven per cent. shares for which there is instinctively neither hunger nor thirst. He knew also in principle how this kind of impalpable merchandise should be displayed. It has no appeal to any of the natural senses. Therefore it must be made to appeal to all of them at once, symbolically. How?
First to be engaged is the sense of sight. The shares move. They go up. People ask: “What is that?” They move again. People ask: “Why is that?” They continue to move, going up, then down a little, then suddenly up a great deal, and people say: “Here before our eyes is something doing,—a chance to make some money.” And when once they begin to say that all their senses and appetites are touched with expectation, for money, however derived, is in itself palpable. It is the symbol of all things whatever.
For the art of making shares go up and down in a manner to excite first attention, then curiosity and then an impulse to act for gain, there is a long, inartistic word. The word is manipulation. The stock market manipulator is an illusionist. Perched high upon some eerie crag of the Wall Street canyon, producing enchantment at a distance, he is himself invisible save to the initiate, and even they do not know what he intends or why, because what he seems to be doing is never at all what he is really doing. If it were, the lesser fauna—the wolves, the jackals, the foxes, apes and crows,—would anticipate his ends and take the quarry out of his hands. He makes shares rise when he is selling them and fall when he is buying them. He can take an unnoticed, unwanted thing like American Steel and cause it to become an object of extravagant speculative interest, so that tens of thousands hang over the tape and wait for the next quotation, betting whether it shall be up or down. Moreover, he is a ventriloquist. When he has made certain shares very active by the apparently simple though extremely intricate expedient of buying and selling them furiously through different brokers, no two of whom know they have the same principal,—when he has done this and people begin to ask the question, then answers suitable to his purpose are in everyone’s ears, saturate the atmosphere, and although he, the manipulator, is the source of them that fact is as little known as the fact that he was himself the solitary source of all the buying and selling that started the excitement. Not only is the public deceived; the fauna, too, will often be caught. All is flesh that rises to his lure. His work is sometimes legitimate, as when he creates a public demand for shares the proceeds of which go to build a railroad or some other great economic work so vast that the capital could not have been obtained in any other way; it is sometimes predatory, sometimes wanton.
At this time the pendragon of manipulators was one Sabath,—James Sabath,—feared by the wicked and righteous both. He was not a member of the Stock Exchange for he did not wish to be bound by the rules. There was no name on his door nor was his name in any directory or book of celebrities. Yet it was constantly on the lips of all men concerned in gains and losses from speculation. One might have asked in every bank in Wall Street who and where this Sabath was and one’s inquiry would have been received with utter blankness. Yet there would have been hardly a banker in Wall Street, certainly no very important one, who had not had transactions with him of an extremely intimate and delicate nature. Such is the way of men in the money canyon.