On Thursday, the day following, the Scheftels company was again compelled to purchase stock on the Curb in excess of sales to the extent of 7,600 shares, while on the same day the buy orders of house customers exceeded their orders to sell at least three to one. The professional selling was now accompanied by rumors on the Curb which spread like the smell of fire that trouble of some dire sort was pending for the Scheftels company. Most of this emanated from an embittered brokerage quarter and we paid little attention to it.
On the succeeding day, Friday, November 5th, the professional selling was quieted to a point that compelled the Scheftels company to go long of only 6,600 shares on the day in its Curb market operations. The purchase of so small a block of stock excited no suspicion in the Scheftels camp, although it should have, because Scheftels' customers on this day purchased more than four times as much stock as they ordered sold, pointing conclusively to a great public demand and much shorting by professionals.
Then came the coup de main.
THE ASSAULT ON ELY CENTRAL
The 6th day of November fell on a Saturday. The New York Sun of that morning published under a scare head a vicious attack on the Ely Central promotion. The attack was based on an article which was credited in advance to the Engineering & Mining Journal and appeared in the Sun ahead of its publication in that weekly. The Sun had been furnished with advance proofs. The Ely Central project was stamped as a rank swindle. Everybody identified with it was raked over and I, particularly, was pictured as an unprincipled and dangerous character, entirely unworthy of confidence and at the moment engaged in plucking the public of hundreds of thousands. It was stated that the Ely Central property had been explored in the early days of the Ely camp and found of no value whatsoever from a mining standpoint. The Scheftels corporation was accused of setting out in a cold-blooded way to swindle investors on a bunco proposition.
I was in my apartment at the Hotel Marie Antoinette at 9 A.M. when I read the Sun's story. The Scheftels company had thrown $85,000 behind the market during the three preceding market days to hold it against the attack of professionals.
I called the Scheftels office on the 'phone and gave instructions that a certified check for $40,000 be sent to Wasserman Brothers, members of the New York Stock Exchange, with orders to purchase 10,000 shares of Ely Central at $41/8, which was the quotation at the close on the afternoon before. Orders to buy 15,000 shares more at the same figure were distributed among other brokers. The single order was given to Wasserman Brothers because I thought it good strategy. They are a house of undoubted great responsibility and it seemed to me that their presence in the market on the buying side would have an excellent tonic effect.
During the two hours' session I held the 'phone, receiving five minute reports from the scene of action. Mr. Goodwin was at my side. At ten minutes to twelve the brokers had reported the purchase, on balance, of 24,225 shares. Had they purchased 675 shares more they would have completed the orders that were outstanding and it would have been up to me to decide whether to lend further support or not. By that time my figures showed that the Scheftels corporation had thrown behind the market $200,000 in four days to hold it and I was beginning to have "that funny feeling." During the last few minutes of the Saturday Curb session the selling ceased and it seemed that possibly my fears were unfounded.
On Sunday, the 7th, my hopes went a-glimmering. All the New York papers featured scathing articles, using as authority the Engineering & Mining Journal's attack, which had appeared on the previous afternoon. Dispatches indicated, too, that the papers of Boston, Chicago, Los Angeles and San Francisco had played it up on the front page as the most shocking mining-stock scandal of the century.
By Monday, the whole country had been plastered with the sensation. Of course my early Past, all of which was a family affair and had transpired fourteen years prior, long before I essayed to enter the mining promotion field, was dragged out of the skeleton-closet. It lent verisimilitude to the stories.