Landon was exactly what he cynically set himself forth to be to the few who ever penetrated so far into his confidence as to be favored with his cynicism—a Master Mariner of the Troubled Seas of Finance. When he undertook to secure control of the Eagle Bank for Mr. Pitkins, a retired woolen merchant, he determined to make all he could out of the deal. The story of how he manipulated the stock is diverting.
IN the Street, where men are judged by results, Landon’s success in carrying through the many and difficult deals put in his hands had earned for him a unique reputation as a manipulator. Particularly had his skill in floating the Amalgamated Nickel Company, with whose promoters he afterwards fell out, exposing them ruthlessly in the public prints, insisting that he had been misled, although there were whispers of deep plays in all this, fixed his fame, and thereafter his services were in demand for the furthering of all sorts of possible and impossible financial transactions.
It was, therefore, perfectly natural that, when a group of capitalists headed by Jarvis Pitkins, a retired woolen merchant, decided that they wanted control of the Eagle Bank, they should turn to Landon to get it for them.
Mr. Pitkins, a man of sixty years and of insatiable vanity, and perhaps some real genius in the woolen line, was not as widely known in the Street as he thought comported with his abilities and wealth, and he had become convinced that all this would be different were he identified with the control of one of the Street’s many banks. A live banker, he thought, undoubtedly was worth many retired woolen merchants.
He had no difficulty in persuading several of his former business friends and one, or two brokers and minor private bankers of the Street, who were counting on favors to come, to share a portion of the expense entailed in securing the bank.
The Eagle Bank was selected because it had a valuable clearing house membership ; because it was one of the oldest banks in the city, and yet again because it had been run with extreme conservatism, a word which often is synonymous with dryrot, that its business was small and its control, presumably, correspondingly within reach. But as Pitkins put it to Landon it was, after all, a bank, and a bank was what he wanted.
With their first interview on the matter Landon conceived an amazing dislike for the retired woolen merchant, whose retail way of dealing with big questions quite put him out of patience. The climax came when Pitkins, after some hemming and hawing, came to the matter of the remuneration Landon should receive for his services.
Landon rolled away from his desk in his big chair, got out of it stormily and came around to the stammering Mr. Pitkins.
“Mr. Pitkins,” he said, with much finality, “I must tell you frankly that you don’t understand me and my methods—or those of the Street for that matter. You want me to get at least 5,100 of these 10,000 shares of the Eagle Bank’s stock so that you may control it, and you don’t want me to pay more than $250 a share on the average. To-day those shares, for all we know, are scattered from here to Podunk, and in the hands of people perfectly willing to keep them.
“I may have to put the institution into bankruptcy, or dynamite it, or carry off the vaults between two days, and yet you want me to tell you beforehand just how much I’ll charge you to perform any or all these contemplated crimes—as if they were woolen goods and could be measured off with a yardstick.
“Now, keep calm, Mr. Pitkins. I meant no offence, really. I only made use of that familiar simile to convince you of the impossibility of fixing a price at this time. I like the looks of this job—it looks real hard —and I usually allow a discount on that kind. What I propose is just this :
“I’ll get those 5,100 shares of stock for you somehow, and at the figure you name as your maximum. And when I put them in your hands I’ll tell you frankly just how much it is worth to me. Then if you don’t like the price we won’t haggle a minute— we’ll just call it nothing—wipe it off the books or charge it up to profit and loss. How’s that ?”
“I don’t like it, Mr. Landon. It’s not a business-like way.”
“Granted, granted freely, Mr. Pitkins ; but it’s my way and it’s the only way I’ll go into this thing with you.”
Mr. Pitkins hesitated. “I’ll have to talk it over with my associates before I can definitely accept such terms,” he said at last.
“All right, do so,” said Landon genially. “And now, Mr. Pitkins, there’s a seething roomful in there waiting to get at me. Good-day.”
A formal note accepting his terms came to Landon from Pitkins on the following day. Landon filed the note with some care.
The stock of the Eagle Bank was not dealt in on the Stock Exchange —where few bank stocks are listed— but in the outside market it was traded in from time to time, and Landon learned the last sale had been made at $185 a share. Through a bond house which he often employed in similar cases, Landon picked up here and there odd lots of the stock until the total ran up to 1,100 shares and through private negotiations with the estate of a former director he secured another block of some 1,200 shares, so that at the end of a month he had in his possession just about half of the 5,100 shares needed to control the Eagle Bank. The floating supply was cleaned up, and the time had come for aggressive tactics which should dislodge the big holdings.
In his secret and thorough investigation of the bank’s affairs Landon had discovered three things : The bank had made a number of bad loans and was carrying these along from day to day, menacing its resources ; again, most of these loans had been made to one of its own directors, Wallace R. A. Jones. The third discovery Landon looked on as personal, and he reserved it until the time which he had foreseen from his first interview with Pitkins, when it might be used vigorously and effectively in his own interests.
The second discovery interested him most now, however, for, with his knowledge of the intimate and somewhat embarrassing relations existing between Wallace R. A. Jones and the Eagle Bank, he felt that it was only a question of weeks before the bank fell into his hands. He knew something of Wallace R. A. Jones.
Mr. Jones was a type equally familiar in Wall street, the uptown clubs and Newport. He had all the ear-marks of wealth : a town house, a sumptuous yacht, on which he entertained royally during international races, and a place at Newport. He was a director in a dozen corporations, three of them, perhaps, sound, the rest of a fugitive character to which he had loaned his name for a large stock bonus.
As a matter of pure fact, Mr. Jones was on a par with the humblest flat dweller in that each month he was compelled to hustle, in all the distasteful meaning of that humble word, to meet the rent and other bills run up in sustaining a well-nigh untenable position. Mostly, as Landon’s investigation disclosed, Mr. Jones had hastened to the Eagle Bank and there induced its misguided, or worse, president to accept the stock of the nine wayward companies to which he had added the lustre of his name, as collateral for loans of real money.
Landon had had inklings of the utter hollowness of Mr. Jones, it being a part of his day’s work to keep the run of frauds ; but the depths revealed in the story of the bank’s assistant note teller, from whom he gleaned all this, surprised even him, which didn’t prevent him from handsomely subsidizing the worthy assistant note teller, who had the usual large family and sick wife.
The following afternoon there was closeted with Landon the senior partner of one of the biggest note brokerage houses in the Street, a house which sold to banks and bankers millions of dollars worth of firm and individual notes each year. From him Landon learned, as he had anticipated, that Wallace R. A. Jones often brought his personal notes to the house to dispose of—a rather difficult task—and that at the moment even, which Landon had hoped, they had a Jones note for $25,000 which they were trying to negotiate for him.
“How much did Mr. Jones tell you to take for it ?” asked Landon of Millard, the broker.
“Oh, he’ll take $20,000,” said Millard. “But what on earth do you want of it ?” he added, struck by the oddity of any one wanting Jones’ precarious paper.
“I’m making a collection of the autographs of great humbugs,” said Landon soberly. “Here’s a check. I’ll take the note, and any others he gives you to sell, only mum’s the word. I’ll put this in the name of a dummy to cover it up.”
“Well, you’re doing it with your eyes open,” said Millard, “and I can’t refuse to make commissions ; but I don’t think they’re good for much.”
“I’ll use ’em some way, Millard,”
Landon reassured him, “so send ’em along. The more, the merrier.”
And Millard sent ’em along, $25,000, $15,000, $12,000, $5,000, then $25,000 again, until the note broker looked on Landon as a sort of good natured waste-paper basket for Jones notes.
After a month and a half of this false heaven for Jones, the first note, for $25,000, fell due. Landon informed Millard that Jones must meet it or be at once exposed in his true colors to an unsuspecting world. “Tell him I’ll grab his Newport place if he don’t pay,” was Landon’s threat.
And then, at last, the wheels of this complicated machine were set in motion by the master manipulator. The little assistant note teller stole into Landon’s office at the luncheon hour to say that Jones had just borrowed $25,000 more from the Eagle Bank, on the same old wayward collateral, and two hours later Landon had received the full value of his $25,000 Jones note and had credited the “Poor Pitkins Syndicate,” as he dubbed it, prophetically, with the $5,000 “velvet.”
The note for $15,000 fell due and Landon repeated these tactics, threatening this time to seize the Jones yacht, and again the little note teller stole in with his tale of Jones’ loan from the Eagle, and again the note Landon held was paid.
And thus steadily, pitilessly, Landon sapped the bank of its little, remaining strength until it, too, was in much the same shape as the hollow Wallace R. A. Jones. And then Landon dropped out of sight.
Two days later he turned up at the Fort Orange Club in Albany lunching, quite at ease, with an acquaintance—for he had no friends. By what may have been pure chance, Wellman, the state superintendent of banking, came into the club for luncheon while Landon and his acquaintance were still over their coffee, and the acquaintance introduced him to Landon.
“What’s the news in Wall street, Mr. Landon ?” asked Wellman. “You know we’re provincial up here.”
“I don’t dare say I know it, either,” laughed Landon ; “I’ve been away from it for two days, out in Buffalo, and you know how fast they make news in the Street. The market is rather strong, according to the papers.”
“Yes, it is. It looks bullish,” Wellman agreed. “That increases the margins on collateral loans held by the banks and makes my days more restful,” he added laughingly. “Anything new in the banking situation?”
“Usual grist of rumors,” answered Landon easily. “I heard something about the Eagle—that’s a state institution, isn’t it ?”
“Yes, that comes under my jurisdiction,” said Wellman, interested. “What about it ?”
“Oh, something about one of the directors getting into it on some shaky loans, but I daresay you know more about it than I do. I hear only the rumors.”
“I hadn’t heard a thing,” said Wellman, frankly. “I rather wondered, though, why the Eagle’s stock dropped so sharply in the outside market yesterday. It went down 30 points in the bid price.”
“Did it though ?” said Landon, politely curious, and rather pleased that his manoeuvre had told. “That seems to bear out the rumors. I heard the bank had loaned one director almost one hundred and fifty thousand dollars and had $50,000 more in bad loans. But I’m rather ashamed to repeat this stuff to you, Mr. Wellman. Often it’s only distilled malice.”
“No, no !” urged Wellman. “I’m glad you’ve told me what you heard. I am going down to-morrow, anyway, and I’ll drop in to see that everything is all right. You would be surprised, Mr. Landon, to know how many times the banking department has been enabled to save stockholders and depositors big losses through just such chance information as I have only now received from you. In fact, our first intimation of trouble usually comes in just that way.”
“Indeed !” said Landon, politely skeptical. “I hope this time, for the Eagle’s sake, that I am not the forerunner of such disaster.”
At three o’clock the following afternoon, State Banking Superintendent Wellman faced the directors of the Eagle Bank, summoned hurriedly to a meeting in the banking parlors behind locked doors, and told them vigorously of their peril. Mr. Jones, for reasons no better known to himself than to his fellow directors, was not present.
“You have allowed loans of over two hundred thousand dollars to be made, $150,000 of these to one of your own directors, Mr. Jones—a plain and flagrant violation of the law—which I find are absolutely worthless. They are impossible of collection, and as a result you have so impaired your resources that your surplus is wiped out and your capital encroached upon.
“There are only two steps open to me in the circumstances : one to close the bank at once and secure a receivership to wind up its affairs, and the other to allow you to make good these losses out of your own pockets. I am disposed to give you an opportunity to follow this latter course, simply because it will save money to both depositors and innocent stockholders by avoiding the expense of a receivership.
“I want you fully to understand the gravity of the situation, gentlemen, and also your responsibilities. This is Friday — I give you until Monday morning to make good this loss of $200,000.”
Two hours later Mr. Pitkins rushed breathlessly into Landon’s office in answer to an urgent summons.
“Have you got the stock,” he panted, “all of the 5,100 shares we needed for control ?”
“Yes, Mr. Pitkins,” Landon answered, coolly, “all the 5,100 shares and a bit more, for I’ve just had to take over whole blocks from frightened directors—three of them frightened because they have been called on by the Banking Department to make good a big loss, and one of them, named Jones by the way — unusual name — because he engineered the loss.”
“What do you mean, Mr. Landon ? You speak of losses. Is the bank in trouble? What is it, please?”
“Yes, it’s in trouble ; but since we made the trouble I guess we can unmake it, Mr. Pitkins,” replied Landon, and then, grudgingly, for he loved to torture the retired woolen merchant, he laid bare to the latter the details of his three months campaign for the control of the bank.
“Now that $200,000 deficit must, of course, be made good on Monday, Mr. Pitkins,” Landon concluded, “but, as you can see from this statement, and as I have explained, I secured your stock so cheap and made such usurious profits out of Jones’ notes that you can pay it and still be way inside your estimate of $250 a share for the stock. That called for $1,275,000, and, thanks to the directors’ panic I conjured up, your stock has cost you only $205 a share, or $1,045,000 in all.
“If you add to that the $200,000 you will have to pay on Monday, and some of that may be recovered in time, you are still ahead $30,000, or $38,000, including the profit on the Jones notes I bought.
“Really a pretty deal, Mr. Pitkins. And quite inside the law, since it was Wallace R. A. Jones who broke the bank.”
“Yes,” assented Mr. Pitkins, and then thoughtfully, “but I don’t see why we should have to, make up that $200,000 loss. It was the old directors’ fault.”
“Whose fault ?” asked Landon sarcastically. “You don’t see why you should make good the loss ? Perhaps the Banking Department can show you on Monday, Mr. Pitkins. You know it is your bank now. '
“But seriously, Mr. Pitkins, if you are disposed to cavil over that point, what are you going to do when I name the value I put on my services in this matter ?” And Landon gazed innocently on the writhing Mr. Pitkins, who finally, after much maundering, found courage to ask :
“What do you value them at, Mr. Landon ?”
“Thirty-eight thousand dollars,” said Landon ; and then, smilingly, “exactly what I saved you, Mr. Pitkins.”
“Thirty—eight—thousand !” gasped Mr. Pitkins. “Thirty—eight—”
“Just so,” interrupted Landon brusquely. “No more—just now ; no less—any time.”
“Preposterous, Mr. Landon, preposterous ! We will never pay it—”
Again Landon interrupted the stammering Mr. Pitkins :
“Under our agreement, as you will recall, Mr. Pitkins, your refusal to pay the amount I asked was to result in my giving you my services outright, wiping the whole matter off the books. That clause is therefore now operative, and you are released.”
“But this is ridiculous, absurd, unheard of !” said Mr. Pitkins. “We must reach some agreement, Mr. Landon.”
But Landon made no answer. Silently he passed across the desk to the still pleading Pitkins the stock certificates and vouchers for the 5,100 shares of Eagle Bank stock. He thrust a receipt into Mr. Pitkins’ trembling hands :
“Sign that, please, Mr. Pitkins. Thanks. Now we’re square so far as my services go, and I’ll ask you to pardon me for hurrying you away, but it’s late and I’m only a poor commuter, you know. Good-day.”
On the threshold Mr. Pitkins lingered—said with mingled hope and despair—
“I’ll see you again to-morrow about this, Mr. Landon,” and fled.
“I think you will,” mused Landon grimly.
He laughed softly to himself as he stepped back to his desk and picked up the ’phone.
“Ninety-eight hundred, John, Central.”
And then, as the connection was made,
“Hello, Wall street office of the Union ? Is this you, Cogswell ? Good, I thought perhaps you’d got away for the day. Come up a minute. It’s Landon.”
And Landon put the ’phone down and picked up the smile again. He was still at it when Cogswell, the Wall street reporter of the Union, one of the greatest of the metropolitan dailies, came in.
“Something good, Mr. Landon, when you smile like that,” was Cogswell’s laughing greeting. He was Landon’s favorite among the newspaper men of the Street.
“Oh, fair,” laughed Landon, “it’s a bank story this time. I hear that Jarvis Pitkins—you may have heard of him, retired from wool or calico— and a syndicate have bought control of the Eagle Bank.”
“Good,” said Cogswell, who was not a model reporter, for he never took elaborate notes.
“But the best is yet to come,” Landon went on. “They got, so I’m told, about 5,100 of the 10,000 shares which gives them control all right ; but as the bank’s charter expires within three months and it takes a vote of two-thirds of the stock, or 6,667 shares, to renew at, the control is worthless. They’ve bought a pig in a poke.”
“Can they get the other 1,567 shares, Mr. Landon ?” asked Cogswell.
“Well—there is just a chance, a very slim chance. I’m told they will need an extension ladder to reach them.”
“Pretty mess,” commented Cogswell. , “A woolen merchant—I should think so. That’s a rattling good story, Mr. Landon.”
“And straight as a string, Cogswell. You don’t need to verify it. I’ll give you the details, as they came to me.” And he did.
“Mind, now,” he cautioned the newspaperman at the end. “Not a word as to where you learned this. You know our agreement.”
“I do,” answered Cogswell. “You may depend on me.”
“So long,” said Landon.
Nine o’clock the following morning found Mr. Pitkins pacing up and down Landon’s outer office, stopping now and then to read a line or more of a front page, column-long story in the copy of the Union he grasped, or to importune the small and hugely delighted office boy, to “see if Mr. Landon isn’t disengaged now.” He had been diverting himself thus for twenty minutes, and still another twenty minutes passed before the small boy regretfully ended Mr. Pitkins’ wanderings by ushering him into the inner office. Landon was sitting quietly at his desk. He nodded curtly to Mr. Pitkins.
“I am very busy, as you see, Mr. Pitkins, but I have, granted you a minute, and you must admit this is pure generosity on my part. Now, what can I do for you ?”
Mr. Pitkins waved the Union at Landon.
“My lawyer tells me this is true— that we do need 1,567 shares more to extend the charter, and that as things stand the bank is worth less than nothing to us.”
“I must congratulate you on your lawyer, Mr. Pitkins. He has found out in one day what it took me, I confess, a month to discover.”
“A month ?” said Mr. Pitkins in astonishment—then, rather incoherently, “which month ?”
“The first I spent looking into the bank’s affairs.”
“Then you’ve known it all along!”
“Yes, all along,” said Landon. “You didn’t tell me !”
“You didn’t ask me to investigate the legal status of the bank, that’s a lawyer’s work. Then I rather suspected this information was worth more to me than to you. I seem to have been right—so far. But really, Mr. Pitkins, I can’t take time to discuss all this. What do you want ?” “One thousand five hundred and sixty-seven shares of Eagle Bank stock, evidently,” said Mr. Pitkins, bitterly.
“How much will you pay for it ?”
“Can you get it, Landon ?” asked Mr. Pitkins feverishly, his face, radiant with hope.
“I have it already, Mr. Pitkins,” and there was something in Landon’s voice which quite dispelled the other’s hopes.
“I’ll pay you $205 a share for it, Landon.” Mr. Pitkins spoke eagerly. “And give you the $38,000 besides,” he added, touched at his own generosity.
“Thanks,” said Landon, “but let’s not talk of that $38,000. I told you I had given you my services, according to agreement. Now, I’m only a stockholder of the Eagle Bank, and you are bidding for my stock.”
“I’ll give you $220 a share for your stock,” cried Mr. Pitkins.
Landon took his watch from his pocket.
“It is now nine o’clock, thirty minutes and ten seconds, Mr. Pitkins,” he said quietly. “The price of my stock is $260 a share, and it is going up $1 a share each second—in fact it is now $265 a share, Mr. Pitkins, $266 a share, two hundred and—”
“Now ! Now !” yelled Mr. Pitkins, “Now ! I take it now !”
“Thanks, Mr. Pitkins. You get it at two hundred and sixty-six dollars and fifty cents a share.”
The frivolous, purposeless lives of this world are like ships at the mercy of wind and tide. Hail one of them and ask, “Whither are you bound ?’ and the answer will be, “I don’t know.” “What cargo do you carry ?” “Nothing.” “Well, what are you doing out here on the ocean of life ?” “Only drifting.” Ah ! but you don’t know what a sorry spectacle you make—only drifting when there is so much to be done.”—Samuel V. Cole.