“Say rather that the exigency is a great king, Mr. Secretary. You will then aid me as I ask you.”
“Yes.”
“Thank you, Mr. Secretary. In the future any favor you may ask of me, personal or official, will not be denied.”
CHAPTER XIX.
“The arms are fair when borne with just intent.”
It was blue Monday in Wall Street. It was the beginning of the second week of the most disastrous panic ever known in the history of finance. Capital fled, affrighted, to its strong boxes, and refused to come forth at any rate of interest, or upon any security. Values had been going downward without reaction for six days. The yellings and shoutings in the stock board were such as might have been indulged in by escapees from an asylum for violent lunatics. Fortune after fortune had been swept into the vortex in a vain attempt to stay the current. Stocks which had ranked for years as among the most reliable of investments, descended the grade as rapidly as the “fancies.” Northwestern had fallen from $112 to $60; Western Union from $80 to $45, and Lackawana from $138 to $70, and even at these prices more stock was apparently offered than found purchasers.
The conspirators were, apparently, successful. Three men whose combined wealth already aggregated $300,000,000, had produced this storm of disaster merely to increase their millions, regardless of ruined homes. They sold their own stock as they had plotted, seventy-five millions of it at full rates, and seventy-five millions at an average reduction of fifteen per cent, early the preceding week, and before Morning had perfected his arrangements, or appeared upon the scene. Their subsequent short sales were made at lower prices than they had estimated, for others came in competition with them, as vendors. They locked up both the currency received from their sales, and the currency they had borrowed, so effectually that merchants, brokers, and others, who were unable to obtain the usual banking accommodations, were compelled to throw upon the market their holdings of bank, railroad, and telegraph stock.
Wolf, who personally led the bear raid in the board, followed prices down with fresh lines of shorts, to an amount beyond that originally intended, and at the close of the previous week, the short sales of the conspirators amounted to $400,000,000. In one particular they had miscalculated, for, after stocks had fallen twenty per cent, the brokers who purchased them refused to loan them again for resale on the customary margin, but believing, or affecting to believe, that prices would advance with greater celerity than they had receded, they demanded an amount of money as margin equal to the difference between the existing market price of the stock loaned and the market price that ruled before the break.
This demand was made under the direction of Morning, who did not appear in public, but, from his private office on Broadway, sent orders to a dozen different brokers whose services had not been engaged by the Gray-Claybank-Wolf syndicate. After the first break, Morning was the purchaser of nine-tenths of the stock sold, and after each purchase the money paid for the stock, with the margin added, was locked up in the vaults of one of his brokers, or in banks not under the control of the conspirators. In this way the syndicate had been compelled to add $60,000,000 to the $140,000,000 they had received from the sale of their own stock.
On the morning of the second Monday of November, 1895, the “Gold King” was the owner, by purchase, of stocks which had cost him $400,000,000, but which were worth, at the prices which prevailed before the raid, $600,000,000.
These stocks had been loaned to the conspirators by Morning, repurchased by him, loaned and repurchased again, until he now held in his control two hundred millions of money, put up by the syndicate as margin, or security, for the delivery to him of stocks which needed only to be restored to their former value to cause the conspirators to lose $200,000,000, and Morning to gain that sum. If, however, prices could be kept at panic figures until the conspirators could turn buyers, and cover their shorts, they would gain $200,000,000, which would be filched from whomsoever had been compelled to sell.