CHAPTER XXI
THE BATTLE OF THE DOLLARS
ALMOST at the minute of eight o’clock next morning the “Rocket” wasmade fast in berth at an East River pier.
Just about three minutes later a closed automobile rolled out on thewharf. Tom Halstead and Joe Dawson had been invited to go on shore andsee the finish of this notable battle of the dollars. Hank, of his ownchoice, remained behind as watchman over the boat.
The two motor boat boys had changed their uniforms for ordinary streetdress, straw hats included. It would have taken a very close friend,indeed, to have recognized Francis Delavan as that gentleman steppedashore from his boat. Over his natty suit he wore an enveloping linenduster. His eyes and much of his face were obscured behind a pair ofautomobile goggles. A cap, the peak pulled well down over his eyes,completed the concealment. Few of Mr. Delavan’s most intimate friendswould have known him at first or second glance.
The employer and his two young men entered the closed car, which, firstof all, rolled away to the bank of which Mr. Oliver was president. Herethere were some papers that required the signature of the “Rocket’s”owner.
From the bank the automobile went straight down to the big,grim-looking building in which the New York Stock Exchange is located.Here they arrived five minutes before the opening hour, nine o’clock.Mr. Delavan was already provided with three tickets admitting strangersto the visitors’ gallery.
As they entered the trio found that, at this hour, they had the galleryto themselves. Down on the floor, however, some two or three hundredmembers of ’Change were already present, gathered in little groups.Though these men talked mostly in undertones, it was evident that therewas much excitement.
P. & Y. had not alone suffered. Many other stocks had gone down, “insympathy.” The outlook was for a gloomy week in financial circles.Many of the more cautious investors of the country at large werewatching Wall Street and dreading a panic.
Clang! As a sonorous stroke of a gong opened the morning session thescene became instantly one of turmoil. Bellowing voices broke loose. Atthat instant Broker Coggswell slipped into the gallery, taking a seatbehind Mr. Delavan. The entire little party was well out of range ofvision from most of the floor.
“Watch the board,” whispered the broker. “There’s the first quotation—athousand shares of P. & Y. at 67—and, by Jove, no taker!”
A few moments later information was posted that ten thousand shares ofP. & Y. had been offered and sold at 66.
“That’s the work of Dimitri & Clark, and Weeks & Bond,” whisperedCoggswell. “My partner has sent me word that those two firms are doingthe selling for Justin Bolton. He’ll sell, through his brokers, ahundred thousand shares short in the next hour, if need be, to keep thedownward course of the stock in motion. Ah, what did I tell you?”
Ten thousand more shares of P. & Y. had gone at 65½.
“He’s a reckless bear, that fellow, Bolton!” ground out Coggswell,between his teeth. “He’s selling short at a furious rate. Mr. Delavan,your enemy, Bolton, expects to close your interests out this forenoon.If he can bear the stock low enough he’ll begin to buy in for his ownaccount, as well as to cover his sales. If he can only keep this goingfor a while he’ll control the P. & Y. through his bona-fide buyings ofthe stock.”
Francis Delavan merely smiled, and Tom Halstead, looking covertly athim, admired the difference between his employer and Eben Moddridge.
A “bear” is one who is trying to lower the selling price of a stock.Often, in order to accomplish this, the “bear” “sells short.” That is,he offers to sell large blocks of the stock in question, at a lowerfigure than the market price. This “short operator,” as he is called,does not actually own the stock that he sells, but he hopes to drivethe price of the stock still lower, and thus be able to buy and fillhis sale at a lower price than he has made the sale for.
When a stock is headed downward in price, the offer of another largeblock at a lower price than yet offered has a strong tendency to forcethe price still lower, for scared investors who really own large blocksof the stock may become panic-stricken and close out their holdings ofthat particular stock at any price they can obtain.
Thus, a “short operator” may offer, in a falling market, ten thousandshares of a certain stock at 67. If he makes a sale at that price thefact may induce some real owner of stock to offer his holding of tenthousand shares to be sold at the best price offered, say 65. The“short operator,” who has just disposed of ten thousand shares at 67,but does not possess those shares, may be able to buy back again enoughshares at 65, which under the terms of his sale, he has disposed of at67. Thus, he has cleared two dollars a share, or $20,000 in all, by theoperation. If the “short operator” who sells at 67 is able to cover hissales by buying at the still lower price of 63, his profits would be$40,000. But if our “short operator” buys at 67, and then the marketrallies, it may be that the “short” cannot buy lower than 71. Havingmade his sale, he must fill the order, anyway, and thus he would lose$40,000.
If a “short” sells stock he does not own, and a sudden rally in thatstock carries the stock up so high that he has not money enough to makegood his sales, then he is ruined and becomes a bankrupt.
If a “bear” sells short, and then the stock continues to drop and dropin price, it is a happy day for that “bear.” On this Monday morningJustin Bolton, though not yet actually present, but operating throughbrokers whom he instructed by telephone, was prepared to sell short ata furious rate. First of all, Bolton’s purpose was to “bear” down P. &Y. to a point where he could buy all the stock he wanted for himself,and enough more to cover his “short orders” at a profit.
As the four watchers in the gallery looked on, a howl suddenly went upfrom the floor:
“P. & Y. at 65!”
“No takers at that price!”
“Bring it on at a lower price!”
“It’s going to smash!”
In lower tones men on the floor of the Exchange below were talking overthe latest information supplied by the newspapers. It was believedby many that Francis Delavan had looted the railroad of which he waspresident, and that a vast sum of the stealings was hidden securelyabroad.
“It’s a bad stock to deal in anyway, at present,” muttered one of thebrokers below. “I have advised all of my clients to keep away from it.”
“If the run is based on false information, someone is going to reap aheavy profit when the stock begins to soar again,” remarked anotherbroker.
“It won’t soar in a year. There’s something peculiar and rotten behindthe whole business. The road won’t amount to anything until it has beenreorganized by another crowd.”
Just then an agile young man hurried out on the floor, holding in hishand the earliest edition of an evening paper. He called out somethingto those nearest him. Instantly there was a rush, others crowding aboutthe bearer of the newspaper.
“Accountants have just finished going over the statements of the P. &Y. There’s not a dollar short anywhere. The road is as sound as a goodnut.”
That information, backed by the reputation of the accountants, sent asmall squad scurrying off to buy if more P. & Y. were offered at lowprices.
“A thousand shares at 67!” shouted one of those who offered to buy.
“Wanted, two thousand, at 67½!” called another.
“Bosh! That’s only a trick played by those who are ‘long’ to get alittle more for their paper!”
Thus belief and disbelief eddied and surged backward and forward.
Some small sales were made at a fraction above 68. Then, like athunderclap came the offer:
“Ten thousand P. & Y. at 66!”
Five minutes later the stock was being offered at 65½ with few takers.
A man entered the visitors’ gallery, taking a swift, careless look atthe others. It was Justin Bolton, but, as he had reason to be sure thatFrancis Delavan was hundreds of miles out to sea, Bolton nodded coldlyto Coggswell, merely glanced at t
he boys, and turned to a seat at somedistance.
Now the Bolton brokers were hurling short stock in, in thousand,two-thousand and five-thousand lots, trying to break the price below65. There were takers, for the newspaper report made many buyers lookupon P. & Y. as a fair bargain at 65.
Coggswell took a sidelong look at Justin Bolton, whose gaze was turnedunceasingly upon the floor below.
“Your enemy is smashing things the best he knows how,” whispered thebroker to the “Rocket’s” owner.
“It’ll be rough on him if anything happens to prevent his covering hissales, won’t it?” smiled back Mr. Delavan.
Another evening newspaper reached the floor below, then half a dozenappeared, each being glanced over by excited groups of men.
Johnson, the managing vice-president of the P. & Y., had beenfound and interviewed. He had confirmed the news given out by theaccountants. P. & Y. went up two points. A messenger entered thegallery, handing a note to Mr. Coggswell.
“Oliver sends word he likes the looks of things better, and that hewon’t desert you just yet in the battle of the dollars, Mr. Delavan,”whispered the broker. “Oliver has a million of his own money placed inthis game. He’s buying on the ‘bull’ side of the market.”
“Oliver may be a much richer man, then, by the time night comes,”smiled the “Rocket’s” owner. This seasoned financier had not, duringall the storm below, shown the faintest trace of excitement. His facewas calm, his voice even. One would have thought him almost bored withdulness.
“Justin Bolton must be wondering hard why your holdings of P. & Y.haven’t been dumped into the market,” suggested Coggswell.
“That’s what he’s here for, sitting over yonder,” replied Mr. Delavan.“As soon as the dealings denote that my holdings are being dumpedBolton will know that the day and the game are his.”
Some other stocks were being traded in briefly, now. Steel, amongthem, was going up a couple of points. Bolton found time to look overcuriously at Coggswell, whom he knew to be directing the fight forthe Delavan-Moddridge combine. Bolton also studied the man behindthe goggles rather attentively, though not once did it occur to thearch-plotter to connect that half-hidden face with the countenance ofthe man he was moving heaven and earth to ruin.
“Twenty thousand P. & Y. offered at 65½!”
That was the next challenge hurled on the floor below. There were notakers at the moment.
“Twenty thousand at 65!”
Within the next few minutes this offering was traded off in smallerlots.
“Watch Bolton fidget,” whispered Mr Coggswell. “There’s a biggerhammering coming, and of course Bolton knows it’s near. We’ll see hisbiggest plunge within the next few minutes.”
Within two minutes by the big clock the pounding came.
“Forty thousand P. & Y. offered at 62!”
There was instant pandemonium. While there were those on the floor whorushed forward to get in on some of the buying at this price, therewere many more who believed that P. & Y. would quickly slump far worsethan it had yet done.
Justin Bolton’s eyes were gleaming. Most of the color had left hischeeks. His breath was coming in quick, short gasps. It was near themoment when he hoped to reap millions from his operations, and alsoto become the largest owner of P. & Y. Yet this schemer, knowing fullwell that the sales below were being made mainly on his own account,realized also that the Delavan-Moddridge stock had not been sprung.
“Does Delavan think he’s at a moving-picture show?” whispered JoeDawson, in Tom Halstead’s ear. “Is he going to do nothing but sit hereand smile?”
“Perhaps there’s nothing he can do here yet,” was Halstead’s answer. “Iam wondering whether he’s going down to ruin, or whether he hopes tofind the way out yet.”
A messenger from one of the brokers on the floor now darted through thegallery, handing a sheet of paper to Justin Bolton.
That worthy, after glancing over the sheet, penciled a few words uponit. The messenger hastened back to one of the brokers below.
Bolton’s own face, after the messenger had gone, was of a ghastlypallor. He looked unsteady, worried—or else as though he were about totake the most daring plunge of all.
“Watch out for what’s going to happen,” nudged Mr. Coggswell. Thatbroker had now a pad on his own knee, a fountain pen in hand, asthough prepared to dash off written orders in a hurry.
“Look out for a thunderclap,” whispered Coggswell, as one of the Boltonbrokers on the floor hurried forward.
Then it came:
“Forty thousand P. & Y. at 60!”