Every catastrophe was bound to happen.
On a rainy Wall Street morning in late December, with no sign or gesture of anguish, the Great Midwestern Railroad gave up its corporate existence and died.
It was a shapeless event.
Ten men sat around the long table in the Board Room smoking, fidgeting, irritably watching the time. These were the eminent directors. They were men whose time nobody could afford to waste,—enterprisers in credit, capital, oil, coal, metals and packing house products. They wished the obsequies to begin promptly and be as brief as possible, for they had many other things to mind. Yet the president, with nothing else to do, had kept them waiting for nearly five minutes. This had never happened before. However, when he came and silently took his place at the head of the table he looked so dismal that they forgave him, and the ceremony might have been brought off with some amiability of spirit but for a disagreeable incident at the beginning.
The disturber was Jonas Gates, a dry, mottled little man, indecorously old and lewdly alert, with a shameless, impish sense of pleasantry. He practiced usury on a large scale as a kind of Stock Exchange pawn broker, lending money to people in difficulties at high rates of interest until they had nothing more to pledge and then cutting them off at the pockets. He knew some of everybody’s secrets and much more than he knew he guessed by the magic formula that he was sure of nothing worse of himself than was generally true of his neighbors. He was hated for his tongue, feared for what he knew and respected for his wealth, which was one of the largest private fortunes of that time.
This Jonas Gates, cupping his hands to his mouth and making his voice high and distant, as one calling to the echoes, inquired at large:
“Are there any stockholders present?”
Everyone was scandalized. Several were without pretense of concealing it. He surveyed their faces with amused impudence. Then spreading his hands at each side of his mouth and making his voice hoarse, like a boy calling into an empty hogshead, he inquired again:
“Are there any stockholders present?”
It was a ghastly joke. There is no law forbidding a director to part with his shares when the omens foretell disaster. It is commonly done in fact in the anonymous mist of the stock market, only you never mention it. The convention is that all stockholders have equal rights of partnership. But as directors are the few who have been elected by many to act as managing partners, and since it is necessary for managing partners to have first access to all information, it follows from the nature of circumstances that they are inside stockholders and that the others are outside stockholders; and it follows no less from the nature of mankind that the outsiders invariably suspect the insiders of selling out in time to save themselves.