He was only seventeen, fair-haired and rosy-cheeked, with girlish blue eyes, when he applied for the vacancy in the office of Tracy & Middleton, Bankers and Brokers. His name was Willis N. Hayward, and he was a proud boy, indeed, when he was selected out of twenty “applicants” to be telephone-clerk for the firm.
From 10 A.M. until 3 P.M. he stood by Tracy & Middleton’s private telephone on the floor of the Stock Exchange—the Board Room—receiving messages from the office—chiefly orders to buy or sell stocks for customers—and transmitting the same messages to the “Board member” of the firm, Mr. Middleton; also telephoning Mr. Middleton’s reports to the office. He spoke with a soft, refined voice, and his blue eyes beamed so ingenuously upon the other telephone-boys in the same row of booths, that they said they had a Sally in their alley, and they immediately nicknamed him Sally.
It was all very wonderful to young Hayward, who had been out of boarding-school but a few months—the excited rushing hither and thither 178of worried-looking men, the frantic waving of hands, the maniacal yelling of the brokers executing their orders about the various “posts,” and their sudden relapse into semi-sanity as they jotted down the price at which they had sold or bought stocks. It was not surprising that he should fail to understand just how they did business; but what most impressed him was the fact, vouched for by his colleagues, that these same clamoring, gesticulating brokers were actually supposed to make a great deal of money. He heard of “Sam” Sharpe’s $100,000 winnings in Suburban Trolley, and of “Parson” Black’s famous million-dollar coup in Western Delaware—the little gray man even being pointed out to him in corroboration. But, then, he had also heard of Aladdin and the Wonderful Lamp, and Jack the Giant Killer.
He learned the business, as nearly all boys must do in Wall Street, by absorption. If he asked questions he received replies, but no one volunteered any information for his guidance, and in self-defence he was forced to observe closely, to see how others did, and to remark what came of it. He heard nothing but speculate! speculate! in one guise or another, many words for the same meaning. It was all buying or selling of stocks—a 179concentrated and almost visible hope of making much money in the twinkling of an eye. Nobody talked of anything else on the Exchange. Bosom friends met at the opening of business and did not say “Good-morning,” but plunged without preamble into the only subject on earth—speculation. And if one of them arrived late he inevitably inquired forthwith, “How’s the market?”—asked it eagerly, anxiously, as if fearful that the market had taken advantage of his absence to misconduct itself. The air was almost unbreathable for the innumerable “tips” to buy or sell securities and insecurities of all kinds. The brokers, the customers, the clerks, the Exchange door-keepers, all Wall Street read the morning papers, not to ascertain the news, but to pick such items as would, should, or might, have some effect on stock values. There was no god but the ticker, and the brokers were its prophets!
All about Sally were hundreds of men who looked as if they took their thoughts home with them and dined with them and slept with them and dreamed of them—the look had become settled, immutable. And it was not a pleasant look, about the eyes and lips. He saw everywhere the feverishness of the “game.” Insensibly the atmosphere of the place affected him, colored his thoughts, induced 180certain fancies. As he became more familiar with the technique of the business he grew to believe, like thousands of youthful or superficial observers, that stock-market movements were comparable only to the gyrations of the little ivory ball about the roulette-wheel. The innumerable tricks of the trade, the uses of inside misinformation, the rationale of stock-market manipulation, were a sealed book to him. He heard only that his eighteen-year-old neighbor made $60 buying twenty shares of Blue Belt Line on Thursday and selling them on Saturday, 3? points higher; or that Micky Welch, Stuart & Stern’s telephone-boy, had a “tip” from one of the big room traders which he bravely “played”—as you “play” horse or “play” the red or the black—and cleared $125 in less than a week; or that Watson, a “two-dollar” broker, made a “nice turn” selling Southern Shore. Or else he heard, punctuated with poignant oaths, how Charlie Miller, one of the New Street door-keepers, lost $230 buying Pennsylvania Central, after he accidentally overheard Archie Chase, who was “Sam” Sharpe’s principal broker, tell a friend that the “Old Man” said “Pa. Cent.” was due for a ten-point rise; instead of which there had been a seven-point decline. Always the boy heard about the apparently irresponsible 181“bulges” and “drops,” of the winnings of the men who happened to guess correctly, or of the losses of those who had failed to “call the turn.” Even the vernacular of the place savored of the technicalities of a gambling-house.
As time wore on the glamour of the game wore off; likewise his scruples. His employers and their customers—all gentlemanly, agreeable people—speculated every day, and nobody found fault with them. It was not a sin; it was a regular business. And so, whenever there was a “good thing,” he “chipped in” one dollar to a telephone-boys’ “pool” that later operated in a New Street bucket shop to the extent of ten shares. His means were small, his salary being only $8 a week; and very often he thought that if he only had a little more money he would speculate on a larger scale and profit proportionately. If each time he had bought one share he had held twenty instead, he figured that he would have made no less than $400 in three months.
The time is ripe for other things when a boy begins to reason that way. Having no scruples against speculating, the problem with him became not, “Is it wrong to speculate?” but rather, “What shall I do to raise money for margin purposes?” It took nearly four months for him to 182arrive at this stage of mind. With many boys the question is asked and satisfactorily solved within three weeks. But Hayward was an exceptionally nice chap.
Now, the position of telephone-boy is really important in that it requires not only a quick-witted but a trustworthy person to fill it. In the first place, the boy knows whether his firm is buying or selling certain stocks; he must exercise discrimination in the matter of awarding the orders, should the Board member of the firm happen to be unavailable when the boy receives the order. For example: International Pipe may be selling at 108. A man in Tracy & Middleton’s office, who has bought 500 shares of it at 104, wishes to “corral” his profits. He gives an order to the firm to sell the stock, let us say, “at the market,” that is, at the ruling market price. Tracy & Middleton immediately telephone over their private line to the Stock Exchange to their Board member to “sell 500 shares of International Pipe at the market.” The telephone-boy receives the message and “puts up” Mr. Middleton’s number, which means that on the multicolored, checkered strip on the frieze of the New Street wall, Mr. Middleton’s number, 611, appears by means of an electrical device. The moment 183Mr. Middleton sees that his number is “up,” he hastens to the telephone-booth to ascertain what is wanted. Now, if Mr. Middleton delays in answering his number the telephone-boy knows he is absent, and gives the order to a “two-dollar” broker, like Mr. Browning or Mr. Watson, who always hover about the booths looking for orders. He does the same if he knows that Mr. Middleton is very busy executing some other order, or if, in his judgment, the order calls for immediate execution. The two-dollar broker sells the 500 shares of International Pipe to Allen & Smith, and “gives up” Tracy & Middleton on the transaction, that is, he notifies the purchaser that he is acting for T. & M., and Allen & Smith must look to the latter firm—the real sellers—for the stock bought. For this service the broker employed by Tracy & Middleton receives the sum of $2 for each 100 shares, while Tracy & Middleton, of course, charge their customers the regular commission of one eighth of one per cent., or $12.50 per each hundred shares.
Young Hayward attended to his business closely, and when Mr. Middleton was absent from the floor, or busy, he impartially distributed the firm’s telephoned buying or selling orders among the two-dollar brokers, for Tracy & Middleton did a 184very good commission business indeed. He was a nice-looking and nice-acting little chap, was Hayward—clean-faced, polite, and amiable. The brokers liked him, and they “remembered” him at Christmas. The best memory was possessed by “Joe” Jacobs, who gave him $25, and insinuated that he would like to do more of Tracy & Middleton’s business than he had been getting.
“But,” said Sally, “the firm said I was to give the order to whichever broker I found first.”
“Well,” said Jacobs, oleaginously, “I am never too busy to take orders from such a nice young fellow as yourself, if you take the trouble to find me; and I’ll do something nice for you. Look here,” in a whisper, “if you give me plenty of business, I’ll give you $5 a week.” And he dived into the mob that was yelling itself hoarse about the Gotham Gas post.
Hayward’s first impulse was to tell his firm about it, because he felt vaguely that Jacobs would not have offered him $5 a week if he had not expected something dishonorable in return. Before the market closed, however, he spoke to Willie Simpson, MacDuff & Wilkinson’s boy, whose telephone was next to Tracy & Middleton’s. Sure enough, Willie expressed great indignation at Jacobs’s action.
185“It’s just like that old skunk,” said Willie. “Five dollars a week, when he can make $100 out of the firm. Don’t you do it, Sally. Why, Jim Burr, who had the place before you, used to get $20 a week from old man Grant and $50 a month from Wolff. You’ve got a cinch, if you only know how to work it. Why, they are supposed to give you fifty cents a hundred.” Willie had been in the business for two years, and he was a very well-dressed youth, indeed. Sally now understood how he managed it on a salary of $12 a week.
He did not say anything to the firm that day, nor any other day. And he didn’t say anything to Jacobs in return, but, by Willie’s sage advice, contented himself with merely withholding all orders from that oleaginous personage, until Mr. Jacobs was moved to remonstrate. And Sally, who had learned a great deal in a week under Willie’s tuition, answered curtly: “Business is very bad; the firm is doing hardly anything.”
“But Watson told me,” said Jacobs, angrily, “that he was doing a great deal of business for Tracy & Middleton. I want you to see that I get my share, or I’ll speak to Middleton and find out what the trouble is.”
“Is that so?” said Sally, calmly. “You might 186also tell Mr. Middleton that you offered me $5 a week to give you the bulk of our business.”
One of the most stringent laws of the Stock Exchange treats of “splitting” commissions. Any member who, in order to increase his business, charges an outsider or another member less than exactly the prescribed amount for buying or selling stocks, is liable to severe penalties. The offer of a two-dollar broker to give a telephone-boy fifty cents for each order of 100 shares secured was obviously a violation of the rule.
Jacobs came down to business at once. “I’ll make it $8,” he said, conciliatingly.
“Jim Burr, who had the position before me,” expostulated Sally, indignantly, “told me he received $25 a week from Mr. Grant, with an extra $10 thrown in from time to time, when Mr. Grant made some lucky turn, to say nothing of what the other men did for him.”
Three months before he could not have made this speech had his life depended on it. The rapid development of his character was due exclusively to the “forcing” power of the atmosphere which surrounded him.
“You must be crazy,” said Jacobs, angrily. “Why, I never get much more than a thousand shares a week from Tracy & Middleton, and usually 187less. Say, you ought to be on the floor. You are wasting your talent in the telephone business, you are. Let’s swap places, you and I.”
“According to our books,” said Sally to the irate broker, having been duly coached by Mr. William Simpson, “the last week you did business for us you did 3,800 shares, and received $76.”
“That was an exceptional week. I’ll make it $10,” said Jacobs.
“Twenty-five,” whispered Sally, determinedly.
“Let’s split the difference,” murmured Jacobs, wrathfully. “I’ll give you $15 a week, but you must see that I get at least 2,500 shares a week.”
“All right. I’ll do the best I can for you, Mr. Jacobs.”
And he did, for the other brokers gave him only twenty-five cents, or at the most fifty cents per hundred shares. In the course of a month or two Sally was in possession of an income of $40 a week. And he was only eighteen.
II.
Time-passed. As it had happened with his predecessor, so did it happen now with Sally. He began by speculating, wildly at first, more carefully later on. He met with sundry reverses, but he also made some very lucky turns indeed, and 188he was “ahead of the game” by a very fair amount—certainly a sum far greater than any plodding clerk could save in five years, greater than many an industrious mechanic saves in his entire life. From the bucket-shops he went to the Consolidated Exchange. Then he asked Jacobs and the other two-dollar brokers to let him deal in a small way with them, which they did out of personal liking for him, until he had three separate accounts and could “swing a line” of several hundred shares. He became neither more nor less than 10,000 other human beings in Wall Street—moved by the same impulses, actuated by the same feelings, experiencing the same emotions, having the same thoughts and the same views of what they are pleased to call their “business.”
At last the blow fell which Sally had so long dreaded—he was “promoted” to a clerkship in Tracy & Middleton’s office. The firm meant to reward him for his devotion to his work, for his brightness and quickness. From $15 a week they raised his salary to $25, which they considered quite generous, especially in view of his youth, and that he had started three years before with $8. He was only twenty now. But Sally, knowing it meant the abandonment of his lucrative 189perquisites as telephone “boy,” bemoaned his undeserved fate.
He took the money he had made to Mr. Tracy and told him an interesting story of a rich aunt and a legacy, and asked him to let him open an account in the office. Tracy congratulated his young clerk, took the $6,500, and thereafter Sally was both an employee and a customer of Tracy & Middleton.
Addicted to sharp practices though Mr. Tracy was and loving commissions as he did, he nevertheless sought to curb Sally’s youthful propensity for “plunging,” which was as near being kind as it was possible for a stock-broker to be. But the money had “come easy.” That is why fortunes won by stock gamblers are lost with apparent recklessness or stupidity. Sally speculated with varying success, running up his winnings to $10,000, and seeing them dwindle later to $6,000. But in addition to becoming an inveterate speculator, he gained much valuable experience. And when he had learned the tricks of the trade he was taken from the ledgers and turned loose in the customers’ room, to take the latter’s orders and keep them in good humor and tell them the current stories, and give them impressively whispered “tips,” and “put them into” various “deals” of 190the firm, and see that they traded as often as possible, which meant commissions for the firm. He became friendly and even familiar with Tracy & Middleton’s clients, among whom were some very wealthy men, for a stock-broker’s office is a democratic place. Men who would not have dreamed of taking their Wall Street acquaintances to their homes or to their clubs for a million reasons, all but called each other by their first names there.
He really was a bright, amiable fellow, very obliging—he was paid for it by the firm—and he made the most of his opportunities. The customers grew to like him exceedingly well, and to think with respect of his judgment, market-wise. One day W. Basil Thornton, one of the wealthiest and boldest customers of the firm, complained of the difficulty of “beating the game” with the heavy handicap of the large brokerage commission.
Jestingly, yet hoping to be taken seriously, Sally said: “Join the New York Stock Exchange or buy me a seat, and form the firm of Thornton & Hayward. Just think, Colonel, we would have your trade, and you could bring some friends, and I could bring mine, and I think many of these”—pointing to Tracy & Middleton’s customers—“would 191come over to us. They all think a lot,” diplomatically, “of your opinions on the market.”
Thornton was favorably impressed with the idea, and Sally saw it. From that moment on he worked hard to gain the Colonel’s confidence. It was he who gave Thornton the first hint of Tracy & Middleton’s condition, which led to the withdrawal of Thornton’s account—and his own—from the office. It was a violation of confidence and of business ethics, but Thornton was very grateful when, two months later, Tracy & Middleton failed, under circumstances which were far from creditable, and which were discussed at great length by the Street. He showed his gratitude by adding a round sum to Sally’s $11,500, and Willis N. Hayward became a member of the New York Stock Exchange. Shortly afterward the firm of Thornton & Hayward, Bankers and Brokers, was formed. Sally, then in his twenty-fifth year, had become a seasoned Wall Street man.
III.
From the start the new firm did well. Colonel Thornton and two or three friends who followed him from Tracy & Middleton’s office, all of them “plungers,” were almost enough to keep Hayward busy on the Exchange executing orders, and, 192moreover, new customers were coming in. Had he been satisfied with this start, and with letting time do the rest, he would have fared very well. But he began to speculate for himself, and all reputable commission men will tell you, with varying degrees of emphasis, that this not only “ties up” the firm’s money, but that no man can “trade”—specu............