“I saw a lot of people, and they interested me.”
“Don’t you want some lunch?”
“I ate in a cafeteria. I wanted to see what it was like.”
“What funny things you do think of!” exclaimed the wife; and then: “Oh, Lanny, Mother and I saw the loveliest diamond brooch!”
“Are you hinting for your husband to buy it?”
“I know you don’t like diamonds, but I’ve never understood why.”
“It’s an out-of-date way of showing one’s wealth,” explained the bridegroom. “One has so much nowadays that one couldn’t put it on, so it’s more chic to look down upon the practice. Don’t you think so, Mother?”
Mother was wearing a small diamond brooch and a large solitaire ring. She wasn’t sure whether this strange new son-in-law was spoofing or scolding her, so she changed the subject. She had been looking at the market figures, and said that the break had become serious. She hoped Horace wasn’t in the market too deeply. Was Lanny’s father in?
Lanny said he was afraid so. He added that a break was to be expected, because stocks were selling at from thirty to fifty times their normal earnings, and that was twice too high.
“My brother has a different opinion,” remarked Mrs. Barnes.
“Has he considered the effect of installment buying on our business situation?” inquired the son-in-law. “We have seven billion dollars of such obligations outstanding, and that is bound to cut down consumer power in the near future.”
“Where on earth do you find out about such things, Lanny?” said his wife, with admiration in her tone.
38
Humpty Dumpty Sat on a Wall
I
The day after Lanny’s slumming expedition was Saturday, the nineteenth of October. The Detaze exhibition had been running for ten days, and was such a success that they were continuing it for another full week. Saturday being an important day, Lanny had promised to come over early; but first he stopped to look at the Translux—a habit more easy to acquire than to drop. It was not quite eleven o’clock, and he saw that the slump of the previous afternoon was continuing. He became worried about his father, and went to a telephone booth and called his office in Newcastle. “Robbie, have you seen the ticker?”
“Oh, sure,” replied the father. There was one in the Budd office, and Lanny had observed that the carpet in front of it was well worn.
“Aren’t you worried about it?”
“Not a bit, Son.”
“Are you long or short?”
“I’m long on everything in the good old U.S.A. Believe me, I know what I’m doing. We had several bear markets like this last year; we had them this spring, and they were fine times to pick up bargains. The market drops ten points, and then it goes up twenty.”
“Yes, Robbie, but suppose it changes about, and goes up ten and down twenty?”
“It can’t, because of the underlying business conditions. Look at the orders piling up!”
“But orders can stop coming, Robbie; they can even be canceled. Do you realize that the American people owe seven billion dollars on installment-buying contracts? How can they go on ordering more things?”
Robbie wasn’t so easily impressed as Irma. “Have you been talking to some of your Reds again?” He proceeded to turn the conversation around, urging his son against getting mixed up with such people in New York. Lanny was married now, and had responsibilities; he couldn’t afford to make any more scandals!
“The Reds have got nothing to do with the question,” insisted the younger man. “Anybody can look at prices and see they are too high—thirty to fifty times normal earnings of the stocks! How can that go on?”
“Because everybody knows that their normal earnings are bound to increase. Because we’ve got an administration that has sense enough to let businessmen alone and give them a chance to increase production, employment, and wages, all at one lick. Because nobody is listening to the croakers and soreheads—the people who tell us to sell America short!”
Lanny saw that he was wasting his time. He said: “Well, I wish you luck. If you run short of cash let me know, for we’re banking some every day.”
“Take my advice and buy Telephone this morning,” chuckled Robbie. “My brokers have an office in your hotel.”
II
Lanny and Irma went over to the show rooms. Phyllis Gracyn was coming; she was about to open a new show—it had just come in from a “tryout” in Atlantic City, and they had run into her at a night club. Lanny had told Irma about this adventure, now so far in the past, and Irma, who had curiosity about love affairs past or present, had been interested to meet the actress. Gracyn came, splendid in new silver-fox furs and the certainty of having another “hit” in the offing. But it turned out that she wasn’t interested in Detaze that morning—she spoke of the market, and when she heard that Lanny had just been telephoning to his father, she wanted to know what that solid man of affairs thought about the situation. She had let a friend talk her into buying a thousand shares of Radio, and it was a lot of money for a poor working girl!
So it went, one person after another. Zoltan and Lanny were the only two of their acquaintance who were content to buy good stocks and put them away, and so didn’t have to worry about the fluctuations of the market. Lanny was having to do a lot of arguing to keep his mother from being drawn into the whirlpool of speculation; everywhere she turned, people were telling her such marvelous stories—and offering her tips free of charge! One gentleman’s butler had made three hundred and fifty thousand dollars by playing the information he had picked up at his master’s dinner table; another’s office boy had retired, having cleared forty thousand by following his own hunches. How could you lose, when everything was on the up and up?
Irma and Mrs. Fanny were going to a musical comedy matinee, so Lanny had a “bite” with his mother and Mr. Dingle, who dropped in now and then at the show, but carefully kept out of everybody’s way. If the man of God knew that a stock market existed, he never let on; he told them that he had found what he believed was an extraordinary medium: another of the poor and lowly, a Polish woman who sat in a dingy little parlor upstairs over a Sixth Avenue delicatessen shop, and charged you only two dollars for a seance, no matter how long it lasted. She wore a dingy Mother Hubbard wrapper, and her voice was frequently made inaudible by elevated trains roaring madly past the window; but her “control,” an Iroquois Indian speaking with a powerful man’s voice, declared that all the spirits of Parsifal Dingle’s deceased relatives and friends were standing by, and Parsifal declared that they told him things which he himself had forgotten. If spirits were really there, it was important; possibly even more so than the question of whether the agent representing the Taft family would purchase two of the highest-priced Detaze seascapes.
The exchange closed at noon on Saturday, and after luncheon Lanny got an afternoon paper and read that the closing prices had “revealed great weakness.” He went back to the show room and made himself agreeable to visitors, and later met his ladies at the hotel. Irma was giving a dinner party, and he had to advise her whether to wear the old Antoinette, which had made such a sensation, or the new Cerulean, which had been delivered that morning. Already there were imitations of Antoinette in the night clubs, but still it was lovely.
At the dinner party all the young people talked about the sensational market. Apparently there wasn’t a single man or woman who wasn’t “in”; some told what they had lost and some what they had gained, and all said what they thought was coming. It seemed to Lanny that they didn’t really know anything, but were repeating what they had picked up here and there. The same thing was true of himself—the only difference was that they got their ideas from the New York Herald Tribune, while he got his from the Rand School of Social Science. To believe that prices were going up was patriotic, while to believe that they were coming down appeared slightly disreputable; so for the most part Lanny permitted his wife’s guests to express themselves, which they gladl
y did, especially after the champagne had started flowing into the teacups.
III
Sunday was bright and warm, so they motored out to Shore Acres to play golf on their private course with friends who came in. At luncheon there was more discussion of the everlasting “market.” Uncle Horace was there, bursting with energy and talking exactly like Robbie Budd; when stocks went down was the time to buy; don’t lose your nerve, don’t sell America short. Mr. Vandringham named the best of the “blue chips,” from American Telephone and Telegraph down to Western Union and Westinghouse. There were more than twelve hundred stock issues listed on the Exchange, and as many more on the Curb, and no matter which one you mentioned, this vigorous operator knew all about it, the number of shares, common and preferred, the various classes of issues, A and B and so on, the number of shares outstanding, the prices and fluctuations as far back as had any meaning. Really, he was a walking Moody’s Manual; he would say: “General Lawnmowers? Oh, yes, that’s old Peter Proud-purse’s merger, but the Fourth National crowd have got hold of it now, they’ve put Smith and Jones and Brown on the board, and they’re taking in Amalgamated Carpettacks.”
Lanny had spent his life learning the names of music composers and their opera, of authors and their books, of painters and their pictures. In the course of seven or eight years he had acquired a truly extensive knowledge of paintings and what they were worth. But now he saw that, if he was going to live with his wife’s relatives and friends, he would have to learn about American corporations and their securities; if you had ears and a memory you just couldn’t help it; and certainly you didn’t want to be a dub, and cause chuckles as Lanny did when he assumed that Seaboard Air Line was an aviation concern, instead of a railroad to Florida. After all, there was a snobbery of the intellect as well as one of the purse, and it was no use overlooking the fact that these giant corporations were remarkable creations, dominating the age in which Lanny had to live.
So he questioned this large and voluble gentleman about what was going on, and received copious replies. He decided that his new relative wasn’t such a bad fellow, in spite of being a “shark.” Uncle Horace reported that three and a half million shares had been sold on the exchange in the two hours of Saturday, which was very nearly an all-time record. He said it was the result of the activities of a group of bear operators who had been pounding the market for weeks. As a result of such treatment it had revealed itself to be “spongy”; when the specialist at a certain trading-booth offered, say, one thousand Allied Chemical, he discovered that there was nobody wanting to buy Allied Chemical, there was just a blank space where there ought to have been customers. The order might be to sell “at the market,” but there wasn’t any market, and the broker had to go on offering at lower and lower prices, which was very bad indeed for morale.
Among those at the luncheon were two very wealthy ladies who had been invited to discuss possible operations for the morrow. Uncle Horace was proposing to form a “pool”; he explained that if stocks continued to decline, the bear interests would start to realize on their victory, and a shrewd operator, watching the signs and possibly having inside information, would step in and pick up some bargains. The market would undoubtedly rally, and he would make a “cleanup,” all in a few hours.
Lanny learned from this conversation that his mother-in-law invited people to her daughter’s home in order that her brother might get their money for his gambling operations. But that was all right, it was the way the game was played; they were all friends—at any rate so long as they made money. Lanny had been brought up in a home to which generals and cabinet ministers were invited so that they might order machine guns for their countries; in which a countess or other great lady would accept presents for acting as a “puller-in” for the munitions industry. For that matter, wasn’t he using his wife’s prestige to help sell his former stepfather’s paintings? Perhaps when the Great Bull Market started its next upswing, he might be selling paintings to the ladies who had dipped some money out of Uncle Horace’s pool.
It was a system of “you scratch my back and I’ll scratch yours.” Mr. Vandringham suggested that Lanny might put a little money into the pool; the prospects looked exactly right for a “killing.” Perhaps it would have been good business for Lanny to do so, for his new relative might have been of use to him in various ways. But he excused himself by saying that he knew only one thing, pictures, and thought it wiser to stick to that. Uncle Horace said he respected Lanny’s caution; certainly there was nobody more foolish than the untaught amateur trying to outguess the big fellows who devoted their lives to the Wall Street game. Having spoken, this particular big fellow bade farewell and hustled his bulky but vigorous self out to his car, to see some other persons who were going to fish in his pool next morning.
IV
Lanny and Irma drove back to the city. Lanny had got interested now, and watched the market from time to time on Monday. The same brokers who had a branch office in Newcastle had one in the Ritzy-Waldorf, and here on a translucent screen figures were continually appearing, from which you would learn what had happened on the trading-floor of the New York Stock Exchange a few seconds earlier: one thousand shares of Telephone stock had been sold at 276 and a quarter per share, then two hundred shares of General Motors had brought 67 and five eighths. On one side of the offices was a large blackboard with many small squares, and boys hung up cards having figures on them, while well-dressed ladies and gentlemen sitting in rows of chairs studied them attentively. Many customers remained through the five hours that the Stock Exchange was open; they had nothing to do but study these figures, and then go off and talk about them, and try to guess how they would move on the morrow.
The figures behaved exactly as Mr. Vandringham and Robbie had foretold. There was heavy selling early in the day, and prices dropped several more points; but after lunch there was what was called “strong support,” and the market rallied. Lanny took this to mean that the shorts were covering, as Uncle Horace had said they would; Lanny assumed that Uncle Horace would be among the buyers, and later on he learned that it was so. The shrewd operator had bought at the moment when his chosen stocks were lowest. His pool representing a million dollars in cash, had helped to check the drop; others had rushed in, sensing the turn of the market, and had forced the price up in the closing hour. In the last few minutes Uncle Horace had sold out, and had the pleasure of reporting gains of more than four hundred thousand dollars. Good news indeed for ladies who had come to Sunday luncheon at Shore Acres, and they hoped that Fanny Barnes would invite them soon again.
Profits in this nationwide gambling game were made several times as fast for the reason that you didn’t have to put up the whole price of the stock; the buying was done “on margin.” You put up twenty percent, and your broker deposited the stock at a bank which lent the rest of the money. The colossal scale on which these operations were being carried on was indicated by the fact that brokers’ loans for that day were well over six billions of dollars. The thing called “Wall Street” was a machine of marvelous intricacy through which many millions of shares could be bought and sold between ten o’clock in the morning and three in the afternoon; the machine would arrange for the recording of all these transactions, the transfer of shares, the payment of the money, the deduction of commissions. Memberships in the New York Stock Exchange, which carried the right to operate on that trading-floor, represented a cash value of more than half a billion dollars. Lanny, introduced suddenly into the midst of this cosmic machinery, was quite awe-stricken by the spectacle. Events had happened so precisely according to the prediction of his relatives that he conceived a new respect for their judgment. The stocks of the Rand School of Social Science went down many points, and Lanny was sorry that he hadn’t put a few thousand dollars into his new uncle’s pool. Perhaps he’d come into the next one!
After his fashion, he tried to understand the meaning of the events he was watching. Uncle Horace and his friends had gained a lot of m
oney which they hadn’t earned. Who had lost that money? Lanny took it for granted that what one person gained another must lose; but the operator insisted that this wasn’t so; the long-range trend of the market was upward, and thus millions were enriched without anyone’s losing. Lanny wished he had had Stef here, so that he might ask him about that. After a while he decided that it was stupid not to think things out for himself, and so we went about with brow furrowed, resolutely trying to penetrate the mysteries of his country’s financial system.
The greater part of the country’s business was carried on by means of credit. People trusted you because they believed you had the money. So long as they believed, you could spend, and in this way a huge structure of speculation was built up; everybody counted upon having more, and so everybody spent more, and in such a world it was no longer possible to tell the difference between what was imaginary and what was real. But suddenly one man began to doubt, and he asked for a dollar; the other fellow didn’t have the dollar, so he rushed off to get it, but he couldn’t find anybody who had one; the demand for the dollar spread through the community, and was called a “panic.” Thinking thoughts such as these was like walking on what you took for dry land, but suddenly you began to feel it heaving and shuddering, and you realized that it was a field of ice, and the hot sun was shining on it, and it was growing “spongy.”
V
Parsifal Dingle had his own ideas of the difference between what was imaginary and what was real in this world. Mr. Dingle had made up his mind that his spirit was eternal, and on that basis the importance of what happened to it here and now could be mathematically determined. What was the relation of twenty-four hours to eternity? Or of threescore years and ten to eternity? This arithmetical problem has haunted the souls of mystics since the dawn of thought; for what shall it profit a man, if he shall gain the whole world, and lose his own soul?