The Romance and Tragedy of a Widely Known Business Man of New York

by William Ingraham Russell

Business was fairly good on the average, though there were dull periods which made me restless. There was so much to be done I was eager to make money faster.

In July the balance of the amount due to Mrs. Slater under the contract with Mallison, which had expired, was paid over to me, and pending some permanent investment I loaned it out on call.

Through the formation of trusts the trade had entirely changed in its character. Many of our best customers had been absorbed by one gigantic combination, and the supplies of the commodity we dealt in, required by these consumers, were now furnished under a contract made with the leading firm in the trade, this firm having been one of the underwriters in the flotation of the securities and also was represented in the board of directors.

This one consolidation took out of the open market a demand equivalent to fully one-third of the entire consumption of the United States. Then there was another trust, a comparatively small affair, but this too absorbed a number of our customers. A third trust was in course of organization, and when completed would, with the others, leave for open competition less than half of the country's requirements.

Backed by a very wealthy concern we tried to get a chance to compete for the contract with the leading trust, but it was quite useless. We were told the business could not be given to us, no matter how advantageous our terms might be, and our inference was that the object of the trust was not to get the material at the lowest price, but to give the business to a favored firm without competition.

This large contract naturally excited much interest in the trade and great efforts were made to ascertain its terms. The generally accepted theory was that the firm supplied the material as wanted and the price for each month's deliveries was fixed by the average of the market for the last ten days of the month. As if bearing this out it was noted that during the last ten days of each month, the firm holding the contract did its utmost to manipulate a rise in price, which would, of course, inure greatly to its benefit.

These changes taking from us the legitimate demand from so many consumers, made our business far more speculative. Instead of buying to supply a regular trade, our purchases were made largely to be resold in wholesale lots to dealers or others, and the profit would depend on an advance in the market following the purchase. If the market favored us the business was profitable; if not, then losses must be met.

At this time we were doing considerable business on joint account with George Norman, our former clerk. In many of the purchases and sales we made he had half interest and in the same way we were interested in many of his operations. This business for many months proved profitable. Aside from these transactions we both were doing a good deal of business on individual account, we far more than was prudent considering our capital, though at that time, in my anxiety to make money, I did not realize it.

There came a time when, on a small scale, I repeated my error of 1895. The first time it was my misfortune, the second my fault.

For this fatal mistake I have no defense. I should have known better—but in explanation there is something to say, and while it is not a defense, it is in a measure some palliation.