The Romance and Tragedy of a Widely Known Business Man of New York Part 13

I had taken no further steps toward seeking speculative clients, as the trade speculators who had come in were sufficient in number to absorb all that cla.s.s of business I cared for in the market conditions then existing.

Some of the incidents in that business are well worth relating.

We had one case where the president of one of the largest manufacturing concerns in Connecticut was the client. His concern was a regular customer of ours and we were carrying for him some speculative contracts not yet matured. The market was against him a few thousand dollars, and when he called one day I suggested his buying an additional quant.i.ty at the lower price to average his holdings.

"Average nothing," said he, "if when that stuff comes in there is any loss on it, I bought it for the company."

There was a loss and under his instructions we made delivery to the company. This looked like a "heads I win, tails you lose" sort of game for him, but as he owned most of the stock in the company it was very like taking money out of one pocket and putting it in the other.

Another episode, still more peculiar, was in the case of the firm of A & B.

The firm had placed in our hands for discretionary sale a parcel of fifty tons due to arrive in November.

Shortly after, A called at the office and gave us an order to sell for his individual account fifty tons November delivery. He was a bear and it was a short sale.

The same day and before the sale had been made B called and gave us an order to buy him fifty tons November delivery. He was a bull.

Both requested that his partner should not be informed of the transaction. We matched the orders, selling for A to B. A closed his transaction first, and to cover his sale we sold him the lot belonging to his own firm. This was to be delivered to B and we then sold it for him.

Thus we had made commissions on sales of one hundred and fifty tons where there was only fifty tons of actual stuff, the rest all book-keeping.

In all the years in which we handled this business we had but one unpleasant experience in connection with it.

The treasurer of a manufacturing concern had been dealing with us on his own account for some months, always with profit to himself.

The day came when he was not so fortunate. The market was against him and we called on him for additional margin. He asked for a few days' time, and as we had every reason to suppose he was responsible we granted it. Meantime, the market further declined, and when he put in an appearance at our office his account was about three thousand dollars short.

To our surprise he said he could not pay a dollar.

When asked where all the profits we had paid him had gone he replied:

"Wall Street."

The man died shortly after, and although he left an estate of fifty thousand dollars, he also left a large family and we waived our claim.

CHAPTER XIX

THE STREAM BROADENS

At the beginning of 1884 our business was increasing so rapidly it became necessary to have a larger office force to handle it.

Orders poured in day after day and it was evident we were getting the preference from all the large and most of the small buyers throughout the country.

It had been our policy to give just as careful attention to the small business as to that of more importance, but we now began to consider the wisdom of letting the former go. In the aggregate it was a handsome business of itself, but in detail it required so much time and attention, it was a question in my mind whether it paid us to longer cater to it.

That the future had a much larger business in store for us we felt a.s.sured and we wanted to get ready for it in advance of its coming.

Gradually we commenced to weed out the little fellows.

Some of these small concerns had become so accustomed to sending us their orders and were so well satisfied with the way we had treated them that they objected strongly to being turned down.

Still, we were in the line of progress and had outgrown that cla.s.s.

The argument we gave them was, that as we were selling the large dealers so extensively, it was unfair for us to take this small business, which ought to go to the dealers without the interposition of a broker. Ultimately we succeeded in getting most of them off our books without any hard feeling.

That we were wise in ridding ourselves of this small trade was soon evident. It strengthened us greatly with the large dealers, who now secured most of it direct, and that we could afford to part with so many customers, small though they were, added much to our prestige.

With more time now at my disposal I mapped out a campaign having for its objective the gathering of a speculative clientele.

The first step was the sending of a carefully prepared letter to a dozen or so of the wealthiest men in New York. No replies were received. Probably their secretaries tossed them in the waste-basket with many others. I know now better than I did then that the mail of even moderately rich men is crowded with schemes.

A second lot of letters was mailed to men a grade lower in wealth.

Some of these brought replies but no business. We tried a third lot, this time to men estimated at half million to a million; same result.

That settled it as far as New York was concerned. Evidently the rich men of New York did not want to speculate in our commodity.

Well, fortunately we could get on without them.

Now for the broader field. We had one thousand letters prepared and mailed at one time. These were addressed to a list of alleged wealthy out-of-town investors, which we had purchased from an addressing agency. Not one single reply did we receive.

Then we took our "Bradstreet's" and at random selected the names of five hundred firms, scattered over the United States, rating not less than five hundred thousand dollars. The letters were addressed to the senior partner of each firm. Before the end of the year nearly two hundred of those men were on our books. Every one of them made money.

This const.i.tuency was sufficient for the time being. I had in mind something on a much larger scale, the forming of a syndicate; but that is another story and belongs to a later period.

Toward the later part of the year there was a falling off in our trade with the customers, owing to a period of dullness in the manufacturing industries; but what we lost in this way was more than offset by the gain accruing from the business with speculative clients.

On December 3lst, I had the satisfaction of knowing that for the first time my profits for a single year exceeded thirty thousand dollars.

In my home life there had been nothing to mar in the slightest degree its serenity and delight; indeed, our happiness had been increased on the ninth of June by the arrival of our third daughter.

CHAPTER XX

RETROGRESSION

Although the conditions of general business were unsatisfactory at the beginning of 1885 and I had much doubt of the year proving as profitable as the one previous, I never dreamed of such a falling off as actually occurred.

Our legitimate trade, that carried on with dealers and consumers, we thought would be poor for some months, as it had been over-done, and all our customers were well supplied with spot stock, as also contracts for future delivery; but the speculative element we relied on to compensate us for this.

Our clients had done well and we expected they would continue their operations. We did not in our calculations make allowance for the fact that these men were all in active business. As a rule, such men do not go into outside matters when their own business is dull or unprofitable. It is in good times, when they are making money, that they enter the speculative field.

Before the winter was over our books were entirely cleared of speculative contracts.

We thought of making efforts to secure new customers but decided it would at that time be useless, for if men who knew the business and had made money at it were unwilling to go on, it was hardly possible to enlist the interest of people who knew nothing about it.