Old Gorgon Graham / More Letters from a Self-Made Merchant to His Son

by George Horace Lorimer

Old Ham was a sure-thing packer, like myself, and let speculating alone, never going into the market unless he had the goods or knew where he could get them; but when he did plunge into the pit, he usually climbed out with both hands full of money and a few odd thousand-dollar bills sticking in his hair. So when he came to me one day and pointed out that Prime Steam Lard at eight cents for the November delivery, and the West alive with hogs, was a crime against the consumer, I felt inclined to agree with him, and we took the bear side of the market together.

Somehow, after we had gone short a big line, the law of supply and demand quit business. There were plenty of hogs out West, and all the packers were making plenty of lard, but people seemed to be frying everything they ate, and using lard in place of hair-oil, for the Prime Steam moved out as fast as it was made. The market simply sucked up our short sales and hollered for more, like a six-months shoat at the trough. Pound away as we would, the November option moved slowly up to 8½, to 9, to 9½. Then, with delivery day only six weeks off, it jumped overnight to 10, and closed firm at 12¼. We stood to lose a little over a million apiece right there, and no knowing what the crowd that was under the market would gouge us for in the end.

As soon as 'Change closed that day, Old Ham and I got together and gave ourselves one guess apiece to find out where we stood, and we both guessed right—in a corner.

We had a little over a month to get together the lard to deliver on our short sales or else pay up, but we hadn't had enough experience in the paying-up business to feel like engaging in it. So that afternoon we wired our agents through the West to start anything that looked like a hog toward Chicago, and our men in the East to ship us every tierce of Prime Steam they could lay their hands on. Then we made ready to try out every bit of hog fat, from a grease spot up, that we could find in the country. And all the time the price kept climbing on us like a nigger going up a persimmon tree, till it was rising seventeen cents.

So far the bull crowd had managed to keep their identity hidden, and we'd been pretty modest about telling the names of the big bears, because we weren't very proud of the way we'd been caught napping, and because Old Ham was mighty anxious that Percy shouldn't know that his safe old father had been using up the exception to his rule of no speculation.

It was a near thing for us, but the American hog responded nobly—and a good many other critters as well, I suspect—and when it came on toward delivery day we found that we had the actual lard to turn over on our short contracts, and some to spare. But Ham and I had lost a little fat ourselves, and we had learned a whole lot about the iniquity of selling goods that you haven't got, even when you do it with the benevolent intention of cheapening an article to the consumer.

We got together at his office in the Board of Trade building to play off the finals with the bull crowd. We'd had inspectors busy all night passing the lard which we'd gathered together and which was arriving by boat-loads and train-loads. Then, before 'Change opened, we passed the word around through our brokers that there wasn't any big short interest left, and to prove it they pointed to the increase in the stocks of Prime Steam in store and gave out the real figures on what was still in transit. By the time the bell rang for trading on the floor we had built the hottest sort of a fire under the market, and thirty minutes after the opening the price of the November option had melted down flat to twelve cents.

We gave the bulls a breathing space there, for we knew we had them all nicely rounded up in the killing-pens, and there was no hurry. But on toward noon, when things looked about right, we jumped twenty brokers into the pit, all selling at once and offering in any sized lots for which they could find takers. It was like setting off a pack of firecrackers—biff! bang! bang! our brokers gave it to them, and when the smoke cleared away the bits of that busted corner were scattered all over the pit, and there was nothing left for us to do but to pick up our profits; for we had swung a loss of millions over to the other side of the ledger.

Just as we were sending word to our brokers to steady the market so as to prevent a bad panic and failures, the door of the private office flew open, and in bounced Mr. Percy, looking like a hound dog that had lapped up a custard pie while the cook's back was turned and is hunting for a handy bed to hide under. Had let his cigarette go out—he wore one in his face as regularly as some fellows wear a pink in their buttonhole—and it was drooping from his lower lip, instead of sticking up under his nose in the old sporty, sassy way.

"Oh, gov'ner!" he cried as he slammed the door behind him; "the market's gone to hell."