“Now,” I said, “this group of successful men can only handle the large units that the exigencies of the time are demanding if they have additional financial facilities given them. Those facilities our company should provide.”
I explained how many groups of men had formed real estate corporations, only to discover that even then their resources were inadequate to handle all the profitable business that was coming to them. I told of some of my own larger transactions; how I always had to get others to help me finance them, and how, therefore, such a company as the one we proposed forming would undoubtedly become the syndicate manager of some of the larger operations. I told him if he had no objections, we could secure large deposits. Olcott replied that my plans would in no way conflict with his corporation, and that I should do any business that I deemed profitable. He asked me whom I wanted on the board, and I told him that I should like to have some representatives of the Mutual Life Insurance Company, who were then the largest investors in mortgages on New York City real estate, and suggested Messrs. Juilliard and Jarvie, the two best known and most influential members of its board.
We settled on a number of other directors, and a few days later Stillman sent word that he wanted some of the stock. Olcott agreed that he should only be given some of the stock if he consented to serve on the Executive Committee. Post and Southack, who had brought the message, hesitated to deliver this answer, as they thought we ought heartily to welcome Stillman’s interest in our corporation, and when they put the proposition to Mr. Stillman, he asked them, in his mystifying manner, whether this was an ultimatum. They hesitated to admit it. They were really afraid of him, and he was simply tantalizing them about his acceptance, which he finally gave them. He was allotted only 200 shares, and within a year he sent for me and in his peculiar teasing way told me that he was dissatisfied with his connection with the company. When I asked him why, he said that he had not a sufficiently large interest. I had to coax Olcott to sell 300 of his 1,000 shares for as much as he had paid for his entire 1,000. I doubt if I could have persuaded him to sell to any one else. It was simply, as he put it, that he wanted the satisfaction of making “that smart neighbour of his”—as he often called Stillman, their offices in adjoining buildings—“put him on velvet in this transaction.”
I shall tell later on how, several times, I had to go on bended knees to have some of these men accept what seemed to me tremendous profits.
I was now ready to proceed to business, as president of the Central Realty, Bond & Trust Company.
CHAPTER V
FINANCE
I HAD suddenly been catapulted from my comparatively unknown law office into the very midst of high finance. I was president of a board of directors in which but a few weeks ago I should have rejoiced to have been the junior member. My associates were all leaders in their various pursuits, and gloried in the power and wealth that they had accumulated while struggling to reach these eminent positions.
At first I was but a silent observer amongst a lot of gladiators. Here was a set of dominators watching a newcomer who also had dared to try to reach the top, and had the good sense to court their coöperation. To most of them real estate was a closed book. They had looked upon it as what might be called a frozen commodity, while they had dealt in liquid assets. They were anxious to see whether this novice could capitalize real estate equities. Stories of the successes that I had had in real estate had been told and exaggerated until, even to these big money-makers, they seemed attractive. Each one prided himself that his joining the other eminent leaders in this enterprise increased its chances of success. The fact that the stock was selling at double its issue price within three months showed that the public was ready to discount the possibilities. They bought me on my past performances. To them I was just a new machine which must demonstrate its capacity. I simply had to make good, or be displaced.
My position as president of this company involved me in a series of financial encounters with the biggest men in Wall Street, encounters that are worth describing because they illustrate the methods by which the great fortunes of the greatest period of expansion in American finance were made. I have not heard of any man who had intimate business relations with the financial giants of that period, who has described, from his own experience, the intrigues and passions, the personalities and methods, of those men who dominated the financial structure of America. My experiences with them were not connected with their biggest deals, but they were thoroughly representative of all their operations—and, as such, I feel they are of historical interest and especially so as they are exceptional revelations of a type of exceptional men whose business activities have influenced the great development of American Commerce. I might almost entitle this chapter: “How Big Financial Deals Are Made.” It is a very human story—full, I mean, of human nature, with its foibles of ambition, jealousy, hatred, pride, and cunning.
When, as president of my Board of Directors, I sat at the head of the table at our meetings, and looked down either side of the table, my eyes fell upon at least half a dozen of the greatest financial giants of the day—men who, as heads of enormous and often clashing interests, represented nearly every element in the epic struggle for the financial supremacy of America—that savage struggle which the public at large sensed but vaguely, and which it saw clearly only at the great moments of climax, as when the veil was lifted by the famous life insurance investigation, and later by the Pujo investigation. About this board were six representative financiers. These men were as diverse in their appearance and character and their methods as the interests they personified. The battle between the banks on the one hand and the trust companies on the other, was represented by James Stillman and Frederic P. Olcott. Stillman, as became the champion of the older type of institutions, the banks, was a perfect example of the well-built man of the world, sartorially correct, soft spoken, with a tendency toward cynical humour, and with a tongue capable of devastating sarcasms, while Olcott, as became the representative of the more recent competitors in the general banking business, the trust companies, was a type of the rough-and-ready, physically powerful, hard-spoken, tumultuous fighter. There was nothing conciliatory in his make-up. He rather enjoyed wrangling with his competitors, and prided himself on never having become money-mad, and looked commiseratingly on those who had. He was more interested in this financial struggle as a test of intellectual prowess, but wanted to remain an amateur gladiator rather than to become a professional wealth accumulator. Olcott’s burly figure, carelessly clad, surmounted by a huge, bucket-like head, adorned with unbelievably big and protruding ears, and illuminated with eyes that could glare terrifyingly, was in striking contrast with Stillman’s smooth-buttoned figure, his keen, distinguished face, and eyes that menaced by their subtlety and gleam of concentrated will, but whose whole manner betokened a measured, studied self-restraint.