Part 3

Greenbaum was promptly admitted to Sharpe’s private office. It was a half-darkened room, the windows having wire-screens, summer and winter, in order that prying eyes across the street might not see his visitors or his confidential brokers, whose identity it was advisable should remain unknown to the Street. He was walking up and down the room, pausing from time to time to look at the tape. The ticker is the only telescope the stock-market general has; it tells him what his forces are doing and how the enemy is meeting his attacks. Every inch of the tape is so much ground; every quotation represents so many shots.

There was something feline in Sharpe’s stealthy, soundless steps, in his mustaches, in the conformation of his face—broad of forehead and triangulating chin-ward. In his eyes, too, there was something tigerish—unmelodramatically cold hearted and coldly curious as they looked upon Mr. Jacob Greenbaum. Unconsciously the unfanciful Trust-maker asked himself whether Sharpe’s heart-beats were not ticker ticks, impassively indicating the pulse of the stock-market.

“Hallo, Greenbaum.”

“How do you do, Mr. Sharpe?” quoth the millionaire senior partner of the firm of Greenbaum, Lazarus & Co. “I hope you are well?” He bent his head to one side, his eyes full of a caressing scrutiny, as though to ascertain the exact condition of Sharpe’s health. “Yes, you must be. I haven’t seen you look so fine in a long time.”

“You didn’t come up here just to tell me this, Greenbaum, did you? How’s your Turpentine? Oh!”—with a long whistle—“I see. You want me to go into it, hey?” And he laughed—a sort of half-chuckle, half-snarl.

Greenbaum looked at him admiringly; then, with a tentative smile, he said: “I am discovered!”

Nearly every American may be met as an equal on the field of Humor. To jest in business matters of the greatest importance bespoke the national trait. Moreover, if Sharpe declined, Greenbaum could treat the entire affair—the proposal and the rejection—as parts of a joke.

“Well?” said Sharpe, unhumorously.

“What’s the matter with a pool?”

“How big?” coldly.

“Up to the limit.” Again the Trust-maker smiled, uncertainly.

“You haven’t all the capital stock, I hope.”

“Well, call it 100,000 shares,” said Greenbaum, more uncertainly and less jovially.

“Who is to be in it besides you?”

“Oh, you know; the same old crowd.”

“Oh, I know,” mimicked Mr. Sharpe, scornfully, “the same old crowd. You ought to have come to me before; it will take something to overcome your own reputations. How much will each take?”

“We’ll fix that O. K. if you take hold,” answered Greenbaum, laughingly. “We’ve got over 100,000 shares and we’d rather some one else held some of it. We ain’t hogs. Ha! Ha!”

“But, the distillers?”

“They are in the pool. I’ve got most of their stock in my office. I’ll see that it does not come out until I say so.”

There was a pause. Between Sharpe’s eyebrows were two deep lines. At length, he said:

“Bring your friends here, this afternoon. Good-by, Greenbaum. And, I say, Greenbaum.”

“Yes?”

“No funny tricks at any stage of the game.”

“What’s the use of saying such things, Mr. Sharpe?” with an experimental frown.

“The use is so you won’t try any. Come at four,” and Mr. Sharpe began to pace up and down the room. Greenbaum hesitated, still frowning tentatively; but he said nothing and at length went out.

Sharpe looked at the tape. “Turp” was 29¼.

He resumed his restless march back and forth. It was only when the market “went against him” that Mr. Sharpe did not pace about the room in the mechanical way of a menagerie animal, glancing everywhere but seeing nothing. When something unexpected happened in the market Sharpe stood immobile beside the ticker, because his overworked nerves were tense—like a tiger into whose cage there enters a strange and eatable animal.

On the minute of four there called on Mr. Sharpe the senior partners of the firms of Greenbaum, Lazarus & Co., I. & S. Wechsler, Morris Steinfelder’s Sons, Reis & Stern, Kohn, Fischel & Co., Silberman & Lindheim, Rosenthal, Shaffran & Co., and Zeman Bros.

They were ushered not into the private office, but into a sumptuously furnished room, the walls of which were covered with dashing oil paintings of horses and horse-races. The visitors seated themselves about a long oaken table.

Mr. Sharpe appeared at the threshold.

“How do you do, gentlemen? Don’t move, please; don’t move.” He made no motion to shake hands with any of them, but Greenbaum came to him and held out his fat dexter resolutely and Sharpe took it. Then Greenbaum sat down and said, “We’re here,” and smiled, blandly.

Sharpe stood at the head of the polished, shining table, and glanced slowly down the double row of alert faces. His look rested a fraction of a minute on each man’s eyes—a sharp, half-contemptuous, almost menacing look that made the older men uncomfortable and the younger resentful.

“Greenbaum tells me you wish to pool your Turpentine stock and have me market it for you.”

All nodded; a few said “yes”; one—Lindheim, _aetat 27_—said, flippantly, “That’s what.”

“Very well. What will each man’s proportion be?”

“I have a list here, Sharpe,” put in Greenbaum. He intentionally omitted the “Mr.” for effect upon his colleagues. Sharpe noted it, but did not mind it.

Sharpe read aloud:

Greenbaum, Lazarus & Co 38,000 shares. I. & S. Wechsler 14,000 shares. Morris Steinfelder’s Sons 14,000 shares. Reis & Stern 11,000 shares. Kohn, Fischel & Co 10,000 shares. Silberman & Lindheim 9,000 shares. Rosenthal, Shaffran & Co 9,800 shares. Zeman Bros 8,600 shares. ______________

Total 114,400 shares.

“Is that correct, gentlemen?” asked Sharpe.

Greenbaum nodded his head and smiled affably as befitted the holder of the biggest block. Some said “Yes”; others, “That is correct.” Young Lindheim said, “That’s what.” The founders of the firm—his uncle and his father—were dead, and he had inherited the entire business from the two. His flippancy was not inherited from either.

“It is understood,” said Sharpe, slowly, “that I am to have complete charge of the pool, and conduct operations as I see fit. I want no advice and no questions. If there is any asking to be done, I’ll do it. If my way does not suit you we’ll call the deal off right here, because it’s the only way I have. I know my business, and if you know yours you’ll keep your mouths shut in this office and out of it.”

No one said a word, not even Lindheim.

“Each of you will continue to carry the stock for which he has agreed to stand in the pool. You’ve had it a year and couldn’t sell it, and you might keep it a few weeks more, until I sell it for you. It must be subject to my call at one minute’s notice. I’ve looked into the company’s business, and I think the stock can easily sell at 75 or 80.”

Something like a gasp of astonishment came from those eight hardened speculators. Then Greenbaum smiled, knowingly, as if that were his programme, memorized and spoken by Sharpe.

“It is also understood,” went on Sharpe, very calmly, “that none of you has any other stock for sale at any price, excepting his proportion in this pool, and that proportion, of course, is not to be sold excepting by me.” No one said a word, and he continued:

“My profit will be 25 per cent of the pool’s winnings, figuring on the stock having been put in at 29. The remaining profits will be divided pro rata among you; the necessary expenses will be shared similarly. I think that’s all. And, gentlemen, no unloading on the sly—not one share.”

“I want you to understand, Mr. Sharpe, that we are not in the habit of—” began Greenbaum with perfunctory dignity. He felt it was his duty to remonstrate before his colleagues.

“Oh, that’s all right, Greenbaum. I know you. That’s why I’m particular. We’ve all been in Wall Street more than a month or two. I simply said, ‘No shenanigan.’ And, Greenbaum,” he added, very distinctly, while his eyes took on that curious, cold, menacing look, “I mean it, every d——d word of it. I want the numbers of all your stock-certificates. Excuse me, gentlemen. I am very busy. Good-afternoon.”

And that is how the famous bull pool in Turpentine came to be formed. They thought he might have been nicer, more diplomatic; but as they had sought him, not he them, they bore with his eccentricities. Each pool manager had his way, just as there are various kinds of pools.

“Sam is not half a bad fellow,” Greenbaum told them, as if apologizing for a dear friend’s weaknesses. “He wants to make out he is a devil of a cynic, but he’s all right. If you humor him you can make him do anything. _I_ always let him have his way.”

On the very next day began the historical advance in Turpentine. It opened up at 30. The specialists—brokers who made a specialty of dealing in it—took 16,000 shares, causing an advance to 32⅛. Everybody who had been “landed” with the shares at higher figures, and had bitterly regretted it ever since, now began to feel hopeful. As never before a stock had been manipulated, with intent to deceive and malice prepense, so did Sharpe manipulate Turpentine stock. The tape told the most wonderful stories in the world, not the less wonderful because utterly untrue. Thus, one day the leading commission houses in the Street were the buyers, which inevitably led to talk of “important developments”; and the next day brokers identified with certain prominent financiers took calmly, deliberately, nonchalantly, all the offerings; which clearly indicated that the aforementioned financiers had acquired a “controlling interest”—the majority of the stock—of the American Turpentine Company. And on another day there was a long string of purchases of “odd” lots—amounts less than 100 shares—by brokers that usually did business for the Greenbaum syndicate, meaning that friends of the syndicate had received a “tip” straight from “the inside” and were buying for investment.

Then, one fine, sunshiny day, when everybody felt very well and the general market was particularly firm, the loquacious tape told the watchful professional gamblers of Wall Street—oh, so plainly!—that there was “inside realizing”; said, almost articulately to them, that the people most familiar with the property were unloading. Sharpe was selling, with intentional clumsiness, stock he had been forced to accumulate during his bull manipulation—for in order to advance the price he had to buy much—and he was not averse to conveying such impressions as would lead to the creation of a short interest, large enough to make it profitable to “squeeze.” He had too much company on the bull side. And sure enough the professional gamblers said: “Aha! They are through with it. The movement is over!” and sold “Turp” short confidently, for a worthless stock had no business to be selling at $46 a share. The price yielded and they sold more the next day. But lo, on the day following, the Board member of a very conservative house went into the “Turp” crowd and bought it—he did not “bid up” the price at all, but bought and bought until he had accumulated 20,000 shares, and the bears became panic-stricken, and rumors of a nearby dividend began to circulate, and the bears covered their shorts at a loss and “went long”—bought in the hope of a further rise—and the stock closed at 52.

And Sharpe reduced very greatly the amount of “Turp” stock he had been obliged to take for manipulative purposes. So far he was buying more than he sold. Later he would sell more than he bought. When the demand exceeds the vendible supply, obviously the price rises; when the supply for sale exceeds the demand, a fall results. But the average selling price of a big line may be high enough to make the operation profitable, even though a decline occurs during the course of the selling.

For a week “Turp” rested; then it began to rise once more. At 56 and 58 it became the most active stock of the entire list. Everybody talked about it. The newspapers began to publish statements of the company’s wonderful earnings, and the Street began to think that, in common with other “trusts,” the American Turpentine Company must be a very prosperous concern. The company at this time developed a habit of advancing prices a fraction of a cent per gallon every week, so that the papers could talk of the boom in the turpentine trade.

At 60 the Street thought there really must be something behind the movement, for no mere manipulation could put up the price thirty points in a month’s time, which shows what a wonderful artist Sharpe was. And people began to look curiously and admiringly and enviously and in many other ways at “Jakey” Greenbaum and his accomplices, and to accuse them of having intentionally kept down the price of the stock for a year in order to “freeze out” the poor, unsophisticated stockholders, and to “tire out” some of the early buyers, because “Turp,” being “a good thing,” Greenbaum _et al._ wanted it all for themselves. And Greenbaum _et al._ smiled guiltily and said nothing, though Jakey winked from time to time when they spoke to him about it; and old Isidore Wechsler cultivated a Napoleon III. look of devilish astuteness; and “Bob” Lindheim became almost dignified; and myopic little Morris Steinfelder gained 15 pounds and Rosenthal stopped patting everybody on the back, and mutely invited everybody to pat him on the back.

Then Sharpe sent for “Jakey,” and on the next day young “Eddie” Lazarus swaggeringly offered to wager $10,000 against $5,000 that a dividend on “Turp” stock would be declared during the year. Whereupon the newspapers of their own accord began to guess how great a dividend would be paid, and when; and various figures were mentioned in the Board room by brokers who confided to their hearers that they “got it on the dead q. t., _straight from the inside_.” And two days later Sharpe’s unsuspected brokers offered to pay 1¾ per cent for the dividend on 100,000 shares, said dividend to be declared within sixty days or the money forfeited. And the stock sold up to 66¾, and the public wanted it. A big, broad market had been established, in which one could buy or sell the stock with ease by the tens of thousands of shares. The 114,400 shares, which at the inception of the movement at the unsalable price of $30 a share represented a theoretical $3,432,000, now readily vendible at $65 a share, meant $7,422,000; not half bad for a few weeks’ work.

And still Sharpe, wonderful man that he was, gave no sign that he was about to begin unloading. Whereupon the other members of the pool began to wish he were not quite so greedy. They were satisfied to quit, they said. The presence of the pool’s stock in their offices began to irritate them. They knew the vicissitudes of life, the uncertainties of politics, and of the stock market. Supposing some crazy anarchist blew up the President of the United States, or the Emperor of Germany were to insult his grandmother, the market would “break” to pieces, and their $4,000,000 of paper profits would disappear. They implored, individually and collectively, Mr. Jacob Greenbaum to call on Sharpe; and Greenbaum, disregarding a still, small voice that warned him against it, went to Sharpe’s office, and came out of it, two minutes later, somewhat flushed, and assured his colleagues one by one that Sharpe was all right, and that he seemed to know his business. Also, that he was cranky that day. He always was, added Greenbaum forgivingly, when one of his horses lost a race.

The stock fluctuated between 60 and 65. It seemed to be having a resting spell. But as it had enjoyed these periods of repose on three several occasions during the rise—at 40 and 48 and 56–-the public became all the more eager to buy it whenever it fell to 60 or 59, for the Street was now full of tips that “Turp” would go to par. And such was the public’s speculative temper and Mr. Sharpe’s good work that disinterested observers were convinced the stock would surely sell above 90 at the very least. Mr. Sharpe still bought and sold, but he sold twice as much as he bought, and the big block he had been obliged to take in the course of his manipulation diminished. On the next day he hoped to begin selling the pool stock.

That very day Mr. Greenbaum, as he returned to his office from his luncheon, felt well pleased with the meal and therefore with himself and therefore with everything. He scanned a yard or two of the tape and smiled. “Turp” was certainly very active and very strong.

“In such a market,” thought Mr. Greenbaum, “Sharpe can’t possibly tell he’s getting stock from me. In order to be on the safe side I’m going to let him have a couple of thousand. Then, should anything happen, I’d be that much ahead. Ike!” he called to a clerk.

“Yes, sir.”

“Sell two—wait; make it 3,000–-no, never mind. Send for Mr. Ed Lazarus.” And he muttered to himself, with a sub-thrill of pleasure: “I can just as well as not make it 5,000 shares.”

“Eddie,” he said to his partner’s son, “give an order to some of the room traders, say to Willie Schiff, to sell five—er—six—tell him to sell 7,000 shares of Turpentine and to borrow the stock. I am not selling a share, see?” with a wink. “It’s short selling by him, do you understand?”

“Do I? Well, I guess. I’ll fix that part O.K.,” said young Lazarus, complacently. He thought he would cover Greenbaum’s tracks so well as to deceive everybody, including that highly disagreeable man, Samuel Wimbleton Sharpe. He felt so confident, so elated, did the young man, that when he gave the order to his friend and club-mate, Willie Schiff, he raised it to 10,000 shares. Greenbaum’s breach of faith had grown from the relatively small lot of 2,000 shares to five times that amount. It was to all appearances short stock, and it was duly “borrowed” by young Schiff. It was advisable that it should so appear. In the first place no member of the pool could supply the stock which he held, because Sharpe could trace the selling to the office, as he had the numbers of the stock certificates. And, again, short selling does not have the weakening effect that long selling has. When stock is sold short it is evident that sooner or later the seller will have to buy it back; that is, a future demand for the stock is assured from this source, if from no other. Whereas, long stock is that actually held by some one.

Isidore Wechsler, who held 14,000 shares, was suffering from a bad liver the same day that Greenbaum was suffering from nothing at all, not even a conscience. A famous art collection would be sold at auction that week, and he felt sure his vulgar friend, “Abe” Wolff, would buy a couple of exceptionally fine Troyons and a world-famous Corot, merely to get his name in the papers.

“‘Turp,’ 62⅞,” said his nephew, who was standing by the ticker.

Then old Wechsler had an idea. If he sold 2,000 shares of Turpentine at 62 or 63, he would have enough to buy the best ten canvases of the collection. His name—and the amounts paid—would grace the columns of the papers. What was 3,000 shares, or even 4,000, when Sharpe had made such a big, broad market for the stock?

“Why, I might as well make it 5,000 shares while I’m about it, for there’s no telling what may happen if Sharpe should overstay his market. I’ll build a new stable at Westhurst”—his country place—“and call it,” said old Wechsler to himself, in his peculiar, facetious way so renowned in Wall Street, “the Turpentine Horse Hotel, in honor of Sharpe.” And so his 5,000 shares were sold by E. Halford, who had the order from Herzog, Wertheim & Co., who received it from Wechsler. It was short selling, of course.

Total breach of faith, 15,000 shares.

Now that very evening Bob Lindheim’s extremely handsome wife wanted a necklace, and wanted it at once; also she wanted it of filbert-sized diamonds. She had heard her husband speak highly of Sam Sharpe’s masterly manipulation of Turpentine, and she knew he was “in on the ground floor.” She read the newspapers, and she always followed the stock market diligently, for Bob, being young and loving, used to give her a share in his stock deals from time to time, and she learned to figure for herself her “paper” or theoretical profits, when there were any, so that Bob couldn’t have “welched” if he had wished. On this particular evening she had statistics ready for him, showing how much money he had made; and she wanted that necklace. She had longed for it for months. It cost only $17,000. But there was also a lovely bracelet, diamonds and rubies, and——

Lindheim, to his everlasting credit, remonstrated and told her: “Wait until the pool realizes, sweetheart. I don’t know at what price that will be, for Sharpe says nothing. But I know we’ll all make something handsome, and so will you. I’ll give you 500 shares at 30. There!”

“But I want it now!” she protested, pouting. She was certainly beautiful, and when she pouted, with her rich, red lips——

“Wait a week, dear,” he urged nevertheless.

“Lend me the money now, and I’ll pay it back to you when you give me what I make on the deal,” she said, with fine finality. And seeing hesitation in Bob’s face, she added, solemnly: “Honest, I will, Bob. I’ll pay you back every cent, this time.”

“I’ll think about it,” said Bob. He always said it when he had capitulated, and she knew it, and so she said, magnanimously: “Very well, dear.”

Lindheim thought 1,000 shares would do it, so he decided to sell a thousand the next day, for you can never tell what may happen, and accidents seldom help the bulls. But as he thought of it in his office more calmly, more deliberately, away from his wife and from the influence she exercised over him, it struck him forcibly that it was wrong to sell 1,000 shares of Turpentine stock. He might as well as not make it 2,500; and he did. He was really a modest fellow, and very young. His wife’s cousin sold the stock for him, apparently short.

Total breach of faith, 17,500 shares. The market stood it well. Sharpe was certainly a wonderful chap.

Unfortunately, Morris Steinfelder, Jr., decided to sell 1,500 “Turp,” and did so. The stock actually rose a half point on his sales. So he sold another 1,500, and, as a sort of parting shot, 500 shares more. All this through an unsuspected broker.

Total breach of faith, 21,000 shares. The market was but slightly affected.

Then Louis Reis of Reis & Stern, “Andy” Fischel of Kohn, Fischel & Co., Hugo Zeman of Zeman Bros., and “Joe” Shaffran of Rosenthal, Shaffran & Co., all thought they could break their pledges to Sharpe with impunity, and each sold, to be on the safe side. This last lump figured up as follows:

─────────────┬─────────────┬─────────────┬───────────── │ Sales First │ Period of │Actual Sales. │Contemplated.│ Hesitancy. │ ─────────────┼─────────────┼─────────────┼───────────── │ Shares. │ Minutes. │ Shares. Louis Reis │ 1,500│ 3 │ 2,600 Andy Fischel │ 2,000│ 15 │ 5,000 Hugo Zeman │ 1,000│ 0 │ 1,000 Joe Shaffran │ 500│ 1¾ │ 1,800 ─────────────┴─────────────┴─────────────┴─────────────

Total breach of faith, 31,400 shares.

The market did not take it well. Sharpe, endeavoring to realize on the remainder of his manipulative purchases, found that “some one had been there before him.”