The low-down treachery and double-dealing characterizing this transaction, the utter callousness to sacred obligations it exhibits in men of presumed high standing and personal honor, may surprise my readers. I assure them that several such episodes will be told in the forthcoming pages of this history. Indeed, among a certain school of eminent financiers, loyalty is no more than devotion to the opportunity of making the highest profit. If circumstances shift this from the side of their enlistment to that of an adversary, their arms and hearts go where their pockets lead. It must be remembered that the Hessian who "down-town" is steeped in perfidy, trickery, and fraud, may appear before the "up-town" world as a Christian citizen and an example of domestic virtue. The type is not uncommon nowadays of the pleasant and proper gentleman, prompt to knock down any one daring to asperse his veracity after five any evening and all day Sunday, but who considers himself free to engage in any dirty juggle or misrepresentation from 9 a.m. to 4.45 p.m. In office hours you run no risk in calling him a liar, for then he'll laugh at the joke and tell you business is business. However, the foregoing episode was an experience that left an indelible impression on my mind, and the hatred and disgust it engendered precipitated events out of which in the course of years came the offences and injuries that are responsible for the story of "Frenzied Finance."
The immediate results of my reappearance were not startling. Rogers raved at Addicks and especially at Whitney, but he was too old a student of men, and the monkeys Dame Fortune makes of them, to sulk over the facts he could not remedy. He soon resumed his former attitude of waiting for something to turn up, which indeed he had maintained ever since my unsuccessful effort to make terms with him.
Fate had not yet tired, however, of playing shuttlecock with our hopes. The world learned one morning of a new gas called acetylene, clear, brilliant, cheap, and simply made from calcium carbide. It would surely revolutionize gas-making the world over, and the company which could secure the right to it would have those who could not at its mercy. Addicks moved like a flash to gather in the advantage, and the announcement that the new gas had been proved a success was coupled in the press with the news that the Bay State Gas had captured the invention for New England, and was to pay millions for it. This did give a boost to our securities, and for a time it looked as though we had clinched our success with another rivet. What Addicks had done was this: He had bought the right, subject to the test of a big public demonstration. For this demonstration a fine flare-up was arranged. Eminent mayors, counsellors, and gas magnates were to attend in multitude, and if the invention met its engagements, there would be such a blaze of publicity and congratulations that we felt sure our new stock would go off like hot cakes. The demonstration proved in a most sensational way that acetylene was a failure—a tremendous explosion occurred; three men were killed, many others injured, and next day back went our stock to its old figures.
All this time I had sought most diligently for the real solution of our troubles—a method of purchasing Rogers' companies. A substantial guarantee there must be, not only for the performance of our financial engagements but to insure to Rogers the integrity of his properties while under the domination of Addicks. The difficulty was, in the weakened condition of the company, to put together any satisfactory guarantee. Others in our group had wrestled with the problem as strenuously as I had. Suddenly, a few days before May, 1896, the light came to me. All the time the solution had been in our hands, and, beset as we were, it had never occurred to any of us. We absolutely controlled the old Boston gas companies. They were intrinsically among the richest corporations in Massachusetts, and although their stocks were pledged for the $12,000,000 of bonds held by the public, they did not owe a dollar. Though the terms of the agreement between the Bay State Company and the Mercantile Trust, which held their shares, precluded them from contracting any debts, they were empowered, through us, their officials, to buy or sell gas, and all their great wealth was behind such contracts. If, then, we agreed on their behalf to buy gas of the Brookline Company for a term of years at such a price and in sufficient quantities to give the latter concern a profit equal to ten per cent. dividends on its stock, surely we had complied with the very letter of Rogers' exaction. Testing the idea in one way and another, I found it sound as a bell. The problem after that was to get into shape for the substantial issue of new stock we must make to pay for our purchase. The banks and trust companies were loaded up with our securities pledged for loans, and before there could be any conviction behind our prosperity it behooved us to get all our valuables out of pawn. I went to Mr. Rogers and frankly told him I had solved our problem and his by a financial invention of my own. I entered into the details of our plan, explaining it would not even be necessary for us to buy any gas of him, because we would turn over a sufficient number of our own customers to the Brookline Company to secure to it the required profit. He saw in an instant the scheme with all its far-reaching possibilities, and assented. Then I broached the rest of my plan—we would pay him four and a half millions in six months. To do this we must sell stocks and bonds. Before we could do that it was necessary that he help us still further—he must buy of us all the bonds now in pledge and the stock of the Dorchester Gas Company, another Bay State asset up for security, all for the sum of a million and a half dollars. For this amount these securities would at once be released and turned over to him. Then he should resell them to us together with the Brookline Gas Company for six millions of dollars. There would be a formal turning over of the management of his properties so the public should be convinced that we really were the victors in the strife. Mr. Rogers saw my point, quickly ran over the details in his comprehensive way, and closed the trade without further bargaining. That time, thank Heaven, it was not within Addicks' power to thwart me.
On May 1st we made our settlement in compliance with the terms I had arranged. The six millions of dollars were to be paid November 1st. As the necessary options and sales could not legally run to our company, they were made to Henry M. Whitney, and he simultaneously transferred them to us, and we elected him a director of our different corporations. Rogers publicly resigned and turned over to us the control of the Brookline Company, and we elected our own management. To all intents and purposes we had won.
The settlement was the sensation of the day in financial circles, and I was the recipient of many generous congratulations. I had neither time nor inclination to take care of bouquets at that moment, however. I was too keenly aware of the difficulty of raising six millions of dollars in the limited period at our disposal. Times have changed since 1896. Then six millions was quite a large sum, larger than sixty millions now. That was before the halcyon period of "Frenzied Finance."