CHAPTER XXXIII. A Retrospect and a Moral

A RETROSPECT AND A MORAL

The crime of Amalgamated and its immediate consequences are before my readers. I have fulfilled the promise made in my foreword to expose to the people of America the manner in which they have been plundered and the methods by which the "System" habitually cheats them out of their savings. Robbery conducted on so gigantic a scale as I have pictured must necessarily simulate the natural processes of finance, and to understand the deep devices of the schemers requires a knowledge of banking and commercial practices which the average man has no chance to attain. If I had begun my story by stating exactly what constituted the crime of Amalgamated, my readers would not have grasped its heinousness. In the chapters that I have devoted to leading up to it they have been educated in the piratical practices of finance and financiers, and have acquired familiarity with the jugglery of corporations and the multiplication and division of stock certificates through which most of the great American fortunes have been created.

Depending still on the ignorance of its blinded dupes, the "System" again raises its brazen face from among the poison rushes of Wall Street and hisses, "Listen to what he calls a great crime--a simple business transaction. It is no crime, but a common practice of modern finance and by no means unusual or extraordinary."

No crime to take by a trick from thousands of the people thirty-six millions of the results of our great country's prosperity? Think of what this vast sum represents--the revenues of a year's work of 36,000 men earning each $1,000. Think of it, ye millions who dig and delve and bear heavy burdens that your mothers, wives, and children may in exchange have a bite to eat and a couch to sleep upon!

The crime of Amalgamated, as I have explained it, constitutes a specific breach of the banking laws of the State and nation. But the legal aspects of the offence are trivial in comparison with the great moral crime which was consummated by Henry H. Rogers and James Stillman, in the National City Bank on that night in May, 1899. Through false representations and specious pledges and the credit of the names of "Standard Oil" and the National City Bank, thousands of people were beguiled into investing their savings in this Amalgamated Copper Company. Because of the promise of great gains other thousands mortgaged their homes, appropriated their wives' savings, even their employers' funds, and embarked in this fair-seeming enterprise. The greatest bank in America aided and abetted the conspiracy by the loan of its funds to lure the victims deeper into the toils. All in, the trap is sprung; the thousands are despoiled of their savings by familiar devices of finance, and throughout the land is spread a wave of misery, madness, and despair.

The crime of Amalgamated, a critical correspondent writes me, is purely a Wall Street offence, important to bankers and capitalists but of no consequence to the working men, the farmers, or the toiling millions who have no savings to invest in stocks. "Of what concern is it to us," says this writer, "how one section of the rich robs another of its hoardings?"

Poor fool! A few men cannot deprive even a few thousands of so great a sum as $36,000,000 without working untold injury upon the entire body of the people. Such a stupendous sum looted from the coffers of the many and piled in the vaults of three or four men unbalances the whole economic structure of the nation. The consequences of that act do not end in the series of defalcations and bankruptcies, imprisonments and suicides, in the ruined homes and wrecked careers that follow in its immediate wake. In the grip of these plunderers intrenched in the stronghold of finance each of these filched millions becomes a new weapon of oppression. Because of the crime of Amalgamated every pound of food that goes to sustain life in the American people, every shingle on every roof that shelters the American people, every mile of transportation for man or freight in America; in fact, every necessity and every luxury of the American people has had added to its cost some fractional increase, representing in the aggregate tens and tens of millions annually, which, flowing into the coffers of the "System," strengthen and extend its stupendous grip on the property of the nation.

Our country for a generation has been prosperous beyond the dreams of man, yet what have the masses of our people to show for it? A better, a higher, and a MORE EXPENSIVE standard of living--that is all. That this prosperity which is our national boast will last forever is incredible. Sooner or later will come one of the times when Nature frowns and sends her floods, her droughts, and her epidemics of disease. Is the American people prepared by its long-sustained prosperity to bridge over that period of want and suffering?

The truth is that the mass of our population has not sufficient surplus laid by to last over thirty days of such a calamitous interval. All the unearned increment of national prosperity the "System" has captured and capitalized. Not only have the people been deprived of the profits of their labor, but this capitalized prosperity is the stern instrument by which new burdens are laid on their shoulders and new tithes are exacted from their wages. But for the plundering "System" the great mass of our people would be able to sit in their tents in the shade of their husbanded harvests and laugh to scorn the frowns of fortune. Now, I say, God help the nation when Nature, tired from her great work, rests, and the people, too, are compelled to rest--for then will come an awful awakening. When the millions face famine and realize for the first time that their gigantic storehouses, filled to bursting with the surplus of the past, are the property of the few who cannot even count the contents, much less use them--when they realize that these hoarded treasures are as far beyond their starved reach as are the violets and daisies beyond the picking of the galley-slave, then they will appreciate how much deeper and more damnable are the crimes of the "System," such crimes as Amalgamated and its like, than even such national tragedies as the assassinations of Lincoln, Garfield, and McKinley, at each of which all the people held aloft their hands in horror.

Why is it that the millions of intelligent, able-bodied Americans, who could crush the tribe of Rockefeller as elephants crush snakes, rise with each sun and dig and delve and suffer that a Rogers may wallow in wealth and an Armour gain a greater income than the Rothschilds? Why are they so easily hoodwinked into imagining that the elaborate reports detailing the immense and growing wealth of the country represent their own well-being and affluence? Because the wise men of the "System" know human nature, know that most men and women accept unquestioningly the conditions they find surrounding them. Each day it is pounded into the heads of the people through a hundred agencies that it is the greatest and most flourishing of peoples and that the laws and customs which regulate its lives and rights are the best in all the world. How shall the people know that these glowing rumors, these propitious tidings, are but the siren songs of the "System" under the spell of which it is despoiled of its savings?

Ask yourselves, my friends, how much you know about those familiar things which are part of your lives as are the sunshine, the grass, and the flowers--your Bible, your money, your playing-cards. Each is an institution so consecrated by custom that you accept it exactly for what it meant to your father just as he took it from his own father a generation before. That the Holy Book is God's message to His children, the human race, we know because we have the words of our ancestors therefor; the stamped silver and gold we take for granted as we do shoes and clothes, because money is an essential factor in the social fabric and the form in which it comes to us seems as inevitable as the moon or our ten fingers; humanity has gone on for hundreds of years considering the knave of greater value than the ten-spot and the ace of higher worth than all the rest of the pack, because it is content to believe that the rules that have been handed down apportioning these values are the best that could be devised. With a hundred other elements and details of our daily life, it is the same--we accept unreasoningly what we are told or what is given us, with no look forward or back, and, engaged with the thousand new toys and problems which Fate, the conjurer, shakes out of his hat, we become bound by habit and blinded by precedent.

The love men have for the formulas and conventions of their daily lives is the "System's" opportunity for plunder, and it is this fundamental principle of humanity that makes my work so difficult. It would be as easy to convince the masses that their playing-cards are all wrong and that the ace is really of lower value than the two-spot as it is to awaken them to the terrors of the conditions that are confronting them; to compel them to realize that a despotism of dollars is being organized among them; that the cherished institutions of generations are the instruments by which a few daring schemers are concentrating into their own hands the money of the nation, and that this concentration can have no other result than the abject slavery of the American people.

END OF VOLUME

LAWSON AND HIS CRITICS

THE INSURANCE CONTROVERSY

In the July, 1904, number of Everybody's Magazine I announced that I proposed to give to the world a story concerned with events which had taken place in real life--a true story.

I outlined it, giving the names of the persons and events it would deal with.

These things happened:

The edition of the magazine was sold out in three days; my chapter was printed in part or in full in nearly all the papers and periodicals of the United States and Canada; many of the representative journals, even in England, published long editorials on the subject, and with but few exceptions, editorials and news comments were favorable.

I was urged to continue. My second chapter appeared.

The magazine, with an additional 100,000 copies, was sold out in two days. The press took hold of the matter with even greater interest than it had accorded my first chapter.

The third chapter met with a still more cordial reception. The edition of the magazine, although increased another 100,000, sold out as before, and my mail expanded to a degree that surprised me. In addition to thousands of press notices and criticisms, I received ever so many letters from all classes of Americans and Canadians--teachers of the Word of God, and members of the flocks who are taught, earnest statesmen and insincere politicians, millionnaires and paupers, anarchists, socialists, municipal-ownershipists, and the hundred and one travelers on the beaten highways and lowways of life, who, spurred by ambition or unrest, pantingly seek a chance to blaze a way for the trudging millions of the future to that goal of all ambitious and restless dreamers--a people's Utopia. Nearly all appealed to me to give them the word as to the ultimate intention of "Frenzied Finance"--"Is it only to point to the sores, or will it prick them with its long sharp point and will its double edge cut the flesh in which they are rooted?" Others required further information or explanation about the subjects I had treated; another section questioned my statements and found fault with my disclosures. The volume of these communications and criticisms finally became so large and they were so urgent in tone that I made up my mind it was necessary to devise some fair and intelligent way to remove the writers' difficulties and resolve their doubts. The modern surgeon finds the preparation of a patient who is to go under the knife as important as the operation itself. My readers, unacquainted with the intricate details of finance and confused by the angry outcries and denials of those I had attacked, required education en route to be able to absorb and digest the hard facts and strong statements I was dealing out to them in monthly instalments. My publishers agreed with me as to the necessity of dealing in some radical way with the emergency, and devoted to my service additional pages in the back of Everybody's Magazine. Here I decided to begin a department to be called "Lawson and His Critics" in which I would solve the knotty problems my correspondents presented to me, set right their misunderstandings, and reply fully to those critics who had aspersed my motives or were attempting to discredit my message.

I began the department in October, 1904, and though I have been most seriously pressed for time, and in many instances have dealt imperfectly with the problems treated, I must say that the task I set myself has proved interesting and agreeable, and the letters the department evoked have been a tremendous source of inspiration and encouragement to me along the hail-stony road I had set myself to travel.

The bulk of the department during the months of 1904 was devoted to the subject of insurance. In an early chapter of my story I said that the three great insurance corporations, the New York Life, the Equitable, and the Mutual Life of New York, were an integral part of the "System," and especially instanced the New York Life as one of the most pliable tools of the "Made Dollar" makers. This statement, so mild and so vague in view of subsequent developments, was the first move in the historic controversy that has resulted in the extraordinary exposures that are being made as this book goes to press. When that first pebble was thrown, the surface of the insurance pond was as placid as a mountain lake, unruffled by a ripple, and in it were reflected the benignant faces of the noble philanthropists who consented to spend their days conserving the interests of the widows and the orphans of America. The people had grown so accustomed to regarding the McCalls, the Perkinses, the Hydes, the McCurdys, and the Alexanders, whose eminent physiognomies looked out at them from their insurance policies, as lofty and generous souls far removed from thoughts of pelf or self-aggrandizement, that my assertion caused consternation such as would occur in a Chinese temple if some rough intruder struck the idol, before whom a congregation was worshipping, with a stone. At once an avalanche of letters--protests, demands for further facts, anxious appeals from policy-holders--poured in upon me, and frankly I took up the subject, giving my readers exactly what they desired.

NEW HAMPSHIRE TRACTION

In order that the controversy may be unfolded in the manner in which it was first given to the public, I give here the first letter of the series, and then follow directly along with those passages from succeeding numbers that are devoted to the subject:

BUFFALO, N. Y., August 25, 1904.

MR. THOMAS W. LAWSON, Boston, Mass.

Dear Sir: I have been astounded beyond measure at the revelations you make in your second article regarding the New York Life Insurance Company, because I have two policies in that concern which I am keeping up for the protection of my family. My confidence in the company has been shaken by your revelations, and I wonder if much more can be said. Perhaps it is best for clean life insurance to tell all now--the rest will be the better for it. Do you really believe the officers of the company personally profited from using the "cash on hand" of the company? Go on in your exposure; you are doing a meritorious work, and we poor devils, plodders, will never cease to thank you for your work. Should like to have you intimate if anything more about New York Life is coming.

Yours truly, ---- ----

To this I replied: I desire to emphasize that the New York Life Insurance Company, which I cited, is no different from the Equitable and the Mutual Life, or many of the other large companies. They are links in the chain of the "System"--necessary links in the device by which dollars are "made," by which the savings of the people are sucked from the people to the "System," the "Private Things."

I will, later in my story, dwell upon this tremendous phase of this stupendous question, and will only say at the present time, as an answer to such questions as "Buffalo's": The insurance companies use the billions the people have placed with them to buy or create banks and trust companies, the stocks of which are a large part of their assets. They then use these banks and trust companies, which exist because of the people's savings, in stock gambling enterprises, speculations as unsafe and as frenzied as those of the wildest plunger of Wall Street. I will give one illustration:

The New York Life Insurance Company's directors and managers created the New York Security and Trust Company. $1,000,000 capital; $500,000 surplus--in all, $1,500,000. $150 per share, of which the insurance company held about two-thirds. The Trust Company soon secured deposits to the extent of about $50,000,000, and these it loaned out by "financing" new and old enterprises. Among them was the New Hampshire Traction. The Trust Company flourished. Its stock advanced in price to over $1,300 per share, or over $13,000,000, and its different speculative ventures prospered exceedingly. New Hampshire Traction kept pace with the rest and simultaneously with them bounded upward in value until the amount of this stock owned by the Trust Company represented a value of between $5,000,000 and $6,000,000. There came a time when the directors of the New York Life Insurance Company decided to dispose of their stock in the Trust Company, and did so to a syndicate composed of their own members, headed by John D. Rockefeller, at $800 per share. Afterward the stock disposed of at $800 per share advanced to over $1,300, or, with the third which had not been owned by the insurance company but by the "insiders" and their friends, to a total of over $13,000,000. Then came the slump, and the price of the New Hampshire Traction fell to twenty-five cents on the dollar, and the Trust Company's stock to less than $600.

If in all the histories of the wildcats of the wild catteries of Wall Street a wilder case of "frenzied finance" can be discovered, I don't know it, and yet this is only one of many I could quote, selected at random. Boiled down, it means that what was bought at $150 went to $1,400 and back to $590, and that it changed hands at $800 before it got to $1,400, and that the plunger in this transaction, which made this plunging possible, was one of the most conservative life insurance companies in America.

I will answer "Buffalo's" question by asking another:

Suppose all the insurance companies have been doing business on the same scale, and have tied up billions of the people's money in such schemes as New Hampshire Traction, and the people, learning these facts, should demand their savings to the extent of the $9,000,000,000 which they have deposited in banks and trust companies, what would happen? What would happen to the undigested securities, the insurance companies, the people's savings, and the policies such as "Buffalo" says he has purchased for the benefit of his family?

* * * * *

This statement precipitated a perfect flood of letters and queries, growing more urgent as the month wore on. It was impossible to answer all of them. I contented myself with replying to the letter of a prominent Philadelphia church-man, a policy-holder in the New York Life, who wrote as follows:

PHILADELPHIA, September 23, 1904.

MR. THOMAS W. LAWSON, Boston, Mass.

My Dear Sir: I have just finished reading the current article on "Frenzied Finance," and like "Buffalo" I am astounded at your statements regarding the "New York Life." I, too, have a policy in that company and have been led to believe that I was not only insured in the best and most conservative company, but that I had a first-class and perfectly safe investment as well. This particular company claims that not a dollar of its assets is invested in stocks of any kind, and yet, to quote from your article:

"The insurance companies use the billions the people have placed with them to buy or create banks and trust companies, the stocks of which are a large part of their assets."

Either you are manifestly unfair or else the company is guilty of deliberate falsehood for the purpose of deceiving the public.

As a policy-holder and prospective sharer in the surplus of the "New York Life," I am much interested in knowing whether its statements in regard to its investments are to be relied upon.

Will you take just a moment to answer the following question? Is the "New York Life" telling a falsehood when it states that not a dollar of its assets is invested in stocks of any kind?

Very respectfully yours, ---- ----

I replied: The transaction in regard to the New York Security Company and the New Hampshire Traction stocks was exactly as I set it forth. I can imagine no one but an absolute idiot who would dare to set it forth unless he knew he was dealing with facts.

Your high position in the church should, in my opinion, peculiarly fit you to answer fairly your question, "Is the New York Life telling a falsehood when it states that not a dollar of its assets is in stocks of any kind?" when I unqualifiedly state the fact that the New York Life owned the millions of the New York Security Company's stock; that it paid $150 a share for them and sold them to a syndicate of its own directors at $800 per share, and that the stock afterward sold at over $1,300 per share, and still afterward dropped to less than $600 per share. I did not wish to be unfair to the New York Life, or I should have stated, what I shall endeavor to show before my story is ended, that at the time the New York Life parted with these shares to their own directors at $800 per share they were actually worth and could have been sold for hundreds of dollars per share more.

THE HONESTY OF THE ONE MAN

At this the big insurance companies uncovered their guns, and soon the air, the newspapers, and my mail were full of underwriting explosions. It was necessary then to line up my forces and to go at the attack seriously. So, having carefully thought out a campaign which my knowledge of the men whom I was antagonizing taught me would bring results, I began, in December, as follows:

When I began to write "Frenzied Finance" I specifically stated that I should not concern myself with men, but with principles. I held that to put an end to the plundering of the people required more than the denunciation of individual criminals; that the real peril lay in the financial device through which the plundering was done and the "machine" developed for their operation. The "machine" is the tremendous correlation of financial institutions and forces that I call the "System," and the most potent factor in the "System" is the life insurance combine--the three great insurance companies, the New York Life, Mutual Life, and Equitable, with their billion of assets and the brimming stream of gold flowing daily into their coffers. That I should have to discuss the relation between the "System" and these great institutions was inevitable; but, knowing how vitally interested the public is in the preservation of the gigantic structures its savings have erected, I had thought to treat this phase of my subject later on, when my readers should be absolutely convinced by what had preceded it of the honesty and fairness of my purpose. Moreover, it did not seem possible to touch on life insurance conditions without involving the men who direct the three great companies, and whom policy-holders and the people at large have been taught to regard as men of wellnigh miraculous sagacity, integrity, and beneficence. With these men I have had none but the pleasantest relations, and determined as I am on the performance of my task, I go about it with the reluctance a surgeon feels when, in order to save a friend's life, he must amputate his limb.

A contingency has now arisen which compels me to depart from my rule and to discuss much more frankly than I had purposed at this juncture, the New York Life Insurance Company, the system which controls it, and its president, John A. McCall, the "System's" representative.

In reply to the inquiries of an anxious policy-holder, who had taken alarm at my statement that the funds of these great corporations were under the control of the "System," I stated in the October issue of Everybody's Magazine that the New York Life was, as well as its so-called competitors, the Equitable and the Mutual, as much a participant in the frenzied speculation of the period as were the plunging Wall Street stock gamblers; but in giving an illustration of its methods (the New York Security and Trust Company and the New Hampshire Traction Company) I selected a case which would not unnecessarily alarm nervous people, for the transaction showed an enormous profit as the result of a wild stock plunge, instead of an enormous loss--some of the New York Life's other deals were much less fortunate. When I stated that the New York Life disposed of its interest in the Security Trust Company to its directors for four millions of dollars, which represented a gain of over $3,000,000 on its original investment, I was careful not to state that the shares for which they paid $800 each were worth at the time $1,300 each, or $7,000,000 for what was sold for $4,000,000--particularly careful to state that they were afterward worth this additional amount.

Policy-holders in the three great life-insurance companies may argue: "The man who is known to us policy-holders as the real head of the New York Life is John A. McCall, its president. All that you may say about the 'System's' votaries being in control may be so, but we depend on the integrity and the character of this one man to protect our interests. He is our representative, not the 'System's,' and our savings are surely safe in his strong hands."

There is the point. In the great insurance corporations that are "one-man run," the hundreds of thousands of policy-holders have but one protection. This, notwithstanding the protection of the State laws, the guardianship of the Insurance Department of the various States, and the provisions of the company's charter and by-laws.

However impregnable may seem the safeguards which the law has built round the administration of our great insurance companies, the fact absolutely is that the honesty of "the one man" is the one potent protection policy-holders may depend on. The others may be juggled with as are the rules of the Stock Exchange, which say in thunder tones, "All within our sacred walls is honest and honorable," when in reality if the microbes of dishonor and dishonesty generated within Stock-Exchange walls each busy week of every year should be collected and disseminated throughout the land, they would give typhoid of the soul to our eighty millions of Americans. So it becomes the duty of every policy-holder to find out by such tests as he can apply, "Is 'the one man' who runs our company an honest man or is he a dishonest man?" If "the one man" stands their tests, if he emerges from their ordeal clean, strong, honest, as they believed, then they may rest awhile in patience. But if he is revealed as dishonest, then it behooves the policy-holders of that company to take measures for the protection of their interests. The welfare and happiness, perhaps the very lives of their mothers, their wives, and their children depend on their action.

I was recently waited upon by an important man.

"Lawson, what are you doing in life insurance?" he asked.

"Giving facts about the life-insurance branch of a 'System' which is foully plundering the people," I answered.

"What are you trying to do?"

"Educate the millions of life-insurance policy-holders to their present peril; after they are educated, arouse them to quick, radical action."

"What are you going to do?" he asked.

"I am going to cause a life-insurance blaze that will make the life-insurance policy-holders' world so light that every scoundrel with a mask, dark-lantern, and suspicious-looking bag will stand out so clearly that he cannot escape the consequences of his past deeds, nor commit new ones."

"Have you figured the consequences to yourself?"

"Having no interest in what the consequences may be to myself in performing what I have decided is a sacred duty, I have not."

"Let me show them to you. First let me ask, do you intend to confine your criticisms to the New York Life Insurance Company?"

"I intend to bring out the facts, particularly as to the New York Life, the Mutual Life, and the Equitable Life; and, so far as in my power lies, as to every other life-insurance company in America that is connected with the 'System.'"

"Are you actuated by any selfish motives--gain, revenge, or friendly interest in certain life-insurance companies or banks or trust companies?"

"My only interest is to perform a duty in righting a startling wrong, and I would not undertake the terrible task if I could possibly avoid it."

"I am sent to ask you these questions, to find out whether, if you are only seeking to serve the policy-holders, and the insurance companies can absolutely prove to you that your making public your facts will cause terrible destruction to policy-holders' interests, you will consent to forego the life-insurance branch of your story?"

"I know the facts. I have calmly, and I believe intelligently, reviewed the effects of their being given to the world, and have concluded that the damage to policy-holders and the people would, in any circumstances or conditions, be greater because of my not doing what I have decided to do than by my doing it. Therefore I will not in any circumstances consent to stop until I have laid before the world those things I consider it should know."

"Well and good. Let me show you what you are up against. The Equitable, the New York Life, and Mutual Life Insurance Companies, and their affiliated institutions and individuals, are to-day by all odds the greatest power in the world, greater by all odds than any power that can possibly be gathered together from those outside themselves, a power so great that the effort of no man nor party of men outside themselves can possibly prevail against their wishes."

"Stop where you are for a minute," I answered, "and let me run over to you what I know I am up against, and then you can judge whether I appreciate the difficulties of my task:

"First, the three companies I have named have absolute possession of property and money in the form of assets of over $1,000,000,000--more than half the combined assets of all the insurance companies of America--and indirectly, through their affiliated institutions, of an additional sum, the aggregate of which is much greater than the assets of all the national banks of America and the great financial institutions of Europe, such as the Banks of England, France, and Germany. The three have a ready cash surplus of almost $200,000,000, which is greater than the combined capital of the four greatest institutions of Europe--the Banks of England, Russia, France, and Germany. The income of these three companies is, each year, $100,000,000 greater than the combined capitals of the Banks of England, Russia, France, and Germany--or about $250,000,000, $200,000,000 of which is taken each year from their policy-holders in the form of premiums. Yet from out of this income there is returned to their policy-holders each year in dividends less than $15,000,000, and in total payments of all kinds not over $100,000,000. And yet these three companies pay out each year in what they call expenses to keep the concerns running $50,000,000, paying to the officers of the companies $3,000,000 in salaries, almost $1,000,000 to their lawyers, and a number of millions in various forms of advertising.

"Second, the three companies are absolutely steered and controlled from a common centre, and the men who do the steering and controlling are the 'System's' foremost votaries, Henry H. Rogers, William Rockefeller, James Stillman, and J. Pierpont Morgan through George W. Perkins, a partner in J. Pierpont Morgan & Co. Mr. Rogers, vice-president of the Standard Oil Company, is a trustee of the Mutual Life and a director in one of the largest trust companies owned by the three great insurance companies, the Guaranty Trust Company of New York. William Rockefeller, vice-president of the Standard Oil Company, is a trustee of the Mutual Life and director in the National City--the 'Standard Oil'--Bank. James Stillman is a trustee of the New York Life, and president of the National City--the 'Standard Oil'--Bank of New York. George W. Perkins, partner of J. Pierpont Morgan & Co., is vice-president and trustee of the New York Life and a director in the National City--the 'Standard Oil'--Bank; while John A. McCall, the president of the New York Life, is a director in the National City--the 'Standard Oil'--Bank.

"These great institutions own a majority of the capital stock or have absolute control of a number of the leading banks and trust companies of New York and elsewhere; and such ownership shows conclusively the linking together of the three great insurance companies. For instance, the Equitable owns more than a majority of the stock of the Mercantile Trust Company of New York, of a book value of about $4,500,000 and a market value of almost $13,000,000; and of the Equitable Trust of New York, of a book value of $5,500,000 and a market value of $9,000,000; and of the Bank of Commerce of New York, of a book value of about $8,000,000 and a market value of over $9,000,000; and in the directory of the Mercantile Trust of New York and Equitable Trust is E. H. Harriman, one of the leading 'Standard Oil' men and one of the active votaries of the 'System,' while in the directory of the Bank of Commerce are the president of the Mutual Life and seven other trustees of the Mutual Life and three of the trustees of the New York Life.

"The Mutual Life owns stock of the Bank of Commerce, of a book value of $4,500,000 and a market value of $7,500,000; of the United States Mortgage & Trust Company, of a book value of $2,000,000 and a market value of $4,500,000; and of the Guaranty Trust Company of New York, of a book value of $1,250,000 and a market value of $5,500,000. The directors of the United States Mortgage & Trust Company consist of eight trustees of the Mutual Life, including its president, and two trustees of the Equitable Life, while in the Guaranty Trust directory is the president of the Mutual Life, Henry H. Rogers, and E. H. Harriman, 'Standard Oil' votary and director in the Equitable.

"In addition to these financial institutions, the Mutual Life has about $20,000,000 of its funds invested in the stock of twenty-five other trust companies and national banks, while the Equitable has about $10,000,000 invested in some fifteen other trust and banking institutions.

"Third, the absolute control of the three great companies, and through them of their subsidiary financial institutions, while supposed to be in the hands of the policy-holders, is entirely beyond their regulation, as all policy-holders of the three companies give over complete control of their companies to the 'System' through the following machinery: The control of the New York Life rests absolutely in President McCall, that of the Mutual Life with President McCurdy. Originally these men were elected to office by policy-holders' proxies, voted by the great general agents; but so immeasurable has been the growth of these corporations that only rebellion among policy-holders on an international scale could oust from power the McCalls and the McCurdys. The control of the Equitable Life rests in the $100,000 of capital stock which is almost entirely owned by the men who elect themselves to manage the company.

"Therefore you will see that I fully comprehend that this power, which you claim to be, and which undoubtedly is, the greatest on earth, is absolutely, for all practical purposes, in the hands of three men, and that any one who attempts to do anything contrary to what this power allows will find himself opposed by practically unlimited money, which can be used first to corrupt all sources of help, including State insurance-law enforcers, and then to keep such corruptions from the policy-holders by subsidizing the press. In other words, you see that I fully comprehend that I, or any man or any body of men, would be absolutely helpless in an attempt to correct present evils unless we could do two things: First, show to the policy-holders of the great insurance companies that they are absolutely in the hands and at the mercy of 'one man,' and next, that this 'one man' is unscrupulous."

In other and different ways I had it forcibly impressed upon me that I must go no further in connecting the life-insurance companies with "frenzied financiering"; that while the "Standard Oil"-Amalgamated-City Bank crowd might bide their time for reprisal and vengeance, the great insurance companies must at any cost instantly squelch those rash souls who dared to cross their paths. To all such warnings I replied that a life-insurance company, especially great institutions with hundreds of thousands of policy-holders, must be as far above suspicion as Cæsar's wife; that the security of the immense funds in their possession must be as unassailable as the United States Constitution; but that immunity from criticism could be secured only by honesty of purpose, honesty of method, and honesty of results; and that I would follow "frenzied finance" wherever it might lead, even if the exposure brought every life-insurance concern in the country down to the ring-bolt of making public confession of complicity. But with all my knowledge of the "System's" weakness, I never dreamed of the condition of fatuity into which the past few years of unbridled "frenzied finance" have plunged its votaries. If the correspondence that follows here correctly represents the purposes and the methods of great American life-insurance companies, I ask my readers what quick, sharp, effective means should be taken to call a halt and rescue the billions of the people's savings before it is too late. And I ask all policy-holders in the great insurance companies to weigh carefully what follows, that from it they may decide the question.

As soon as it became fixed in the minds of the different interested parties who had communicated with me that my purpose was unalterable, queer things happened:

First, there appeared in the press of the country, under large, black headlines, the startling confession of the editor of a New York financial paper, who, conscience-stricken, admitted that he had been engaged in the systematic blackmail of insurance companies and officials and Wall Street institutions such as banks and trust companies. It was a curious document, and even the casual reader must have wondered at the mysterious lack of detail. The paper, I found out later, was one of the innumerable swarm of journalistic insects generated, like mosquitoes, in the financial swamps of Wall Street, destined to live a day and die as they deliver their sting, and the attention given it was curiously out of proportion to its importance. Among other queer things, the editor announced that after printing his confession he would disappear; no names were mentioned nor a fact printed which identified any one or anything. All this could not happen without a motive, and I said to myself, "The 'System' is planting a mine for some one." Not another word appeared. I awaited developments. On October 8th I received the following letters, which tell their own story:

FREMONT, OHIO, October 6, 1904.

MR. THOMAS W. LAWSON, Boston, Mass.

My Dear Sir: I have followed with intensest interest your discussion of "Frenzied Finance." The exposé of the "System," and its Machiavellian performances, was highly interesting to me. I was associated with Attorney-General Monnett in his effort to get testimony and the inside facts concerning the trust and its operations in his prosecution against that corporation for violating the Ohio anti-trust law. At that time the books of the company were burned in Cleveland, and, as stated in your article, the company now relies upon the superior memory of Standard Oil.

I was well aware of the connection of certain life-insurance companies with Morgan and the Rockefellers, but until your public charge, was not familiar with the details. As I had considerable money invested myself in New York Life Insurance I wrote John A. McCall a bitter letter. In this age of commercialism sentimental benevolence gets little place. The common sentiments of humanity and appreciation of responsibility admonish one in moderate circumstances or even in affluence to invite the co-operation of others in providing for those dependent upon the individual hazard of life and fortune. Life insurance has come to be a sacred thing. It is the substantial token and expression of responsibility which a reasonable man dying leaves to those dependent upon him. I so wrote Mr. McCall, and told him that if the head of a great institution like the New York Life Insurance Company would be guilty of such perfidy as charged by you, the organization which would retain him in a position of responsibility was undeserving of confidence or patronage.

I enclose for your inspection Mr. McCall's reply. This is doubtless a sample of the sort of campaign waged throughout the country by the "System."

I enclose stamped envelope for the return of the McCall letter, as I purpose continuing the correspondence until I force him to an issue.

You will observe the very palpable evasion of the issue. I asked him if the details of the transaction described in Everybody's, in which the New York Life Insurance figured conspicuously, were true. He answered by saying that he made money out of the trust company venture and retired. The fact that New York Life money is so deposited as to suit the convenience of the "System" in its heads--I win, tails--you lose, operation, is a matter which has escaped the attention of the astute financier. I have written him further, calling his attention to the fact that his letter conveys no information not heretofore made public in circular but that my inquiry was directed to the particular transaction alluded to in Everybody's, and requesting a flat affirmation or denial.

Trusting that these facts may be of assistance to you, I am,

Yours very truly, (Signed) H. C. DERAN.

I shall spare my readers the enclosures. They were newspaper slips, printed on fairly thick paper, reproduced from unknown publications, and obviously put forth to discredit me by implication. One, headed "A Frenzied Financial Blackmailer," from the Vigilant, New York City, September 30, 1904, presented the confession, previously referred to, made by the editor of the United States Investors' Guardian, and an editorial denouncing the blackmail of financial corporations. Another slip was "Stamp out the Fake Financial Newspaper Publisher" from the Fourth Estate, New York City, October 1, 1904, in which the wickedness of the aforesaid editor came in for further moral castigation.

At once, as I read these letters and ran over the printed slips pinned to Mr. McCall's, I realized the purpose of the blackmail editor's confession and just how so much space came to be given it in the daily papers. Insurance corporations are large advertisers and enjoy great popularity in the business offices of great newspapers. It is not said in these clippings that either Mr. Lawson or Everybody's Magazine belongs to that lowest order of criminal, the self-confessed black-mailer, but the suggestion is obvious. Every policy-holder throughout the world who received these enclosures attached to letters from the greatest insurance president in America would instantly supply the connection--"'Frenzied finance black-mailer'--that's intended for Lawson, surely; 'Frenzied financial journal'--Everybody's Magazine, beyond question."

Will my readers weigh carefully this awful charge:

"Thomas W. Lawson, in addition to being a frenzied financial black-mailer, is attacking the New York Life Insurance Company because he tried to secure insurance from that company, and that company would not give it to him. His attack is made in the interest of some competing company."

Again, I ask that it be kept in mind that all this is not said by an insignificant and irresponsible trickster, but is deliberately put forth by the greatest insurance president in America, over his signature, to his policy-holder No. 826,152 and 957,006.

Soon afterward, in its issue of October 20th, a well-known organ of the insurance companies, The Spectator, published in New York, had a long article dealing with malicious attacks on our great insurance corporations, specifically mentioning my accusation against the New York Life. "Mr. Lawson was actuated by the meanest motives," says The Spectator.

Extract from The Spectator, October 20, 1904:

Mr. Lawson, in the hypocritical rôle of a would-be-reformed-speculator, is a figure calculated to stir the risibilities of all who have watched his antics and read his articles, especially when each one of the companies he mentions has repeatedly rejected him for insurance.

Letters to policy-holders from the New York Life Insurance officers poured in on me from different parts of the country, all containing the same defence and the same accusations as the one above, and signed by vice-presidents of the company as well as President McCall, showing conclusively that this great corporation as a corporation had deliberately adopted this method of meeting my serious yet conservatively put business accusations.

President McCall's defence of the New York Life Insurance Company and his reply to my accusations are now completely before my readers. Let us see if there is not a chance here to determine the grave question, "Is 'the one man' who runs each of our great insurance companies honest?"

The facts are: During the past twenty years I have been importuned, begged, and hounded by the several great insurance companies of the United States to take out policies with them almost upon any terms I might name. Of this statement I could present more photographic proof than would fit in any one issue of this magazine, but most of it would have no bearing on the point at issue.

In the present year (1904)--to go no further back--John A. McCall has repeatedly urged me to come into the New York Life Insurance Company. Absolute evidence of the truth of this assertion is presented below. Mr. McCall's letter reproduced here would be accepted as complete proof in any court of justice. In the correspondence that follows this first letter it will be seen that Mr. McCall left no stone unturned in his effort to get me into the New York Life Insurance Company. A duplicate of the communication sent to my residence went on the same date to my office. To quote his own words, "I hope you may" and "I may have the pleasure of welcoming you either to new or increased membership in this great mutual insurance investment." Then, his anxiety being so great, after waiting four days for a reply he sent his special agent to argue with me, and, on the following day, his Boston manager to urge me further.

Is it any wonder that I called the history I am writing "Frenzied Finance"? The man who wrote the letter practically saying that I was a black-mailer and that my reason for attacking the New York Life was my anger because he would not take me into his company, and the man who wrote the ones begging me to come in, are one and the same; and he absolutely controls directly $400,000,000 of the people's savings in the New York Life, and indirectly unnumbered millions in affiliated institutions!

I think the case is complete. The policy-holders of the New York Life have an opportunity to decide whether the "one man" who runs the great institution in which their savings are invested is honest. In making up their minds, I implore them not at the present time, or at least until the question has been more fully ventilated, to allow their policies to lapse. Under any and all circumstances they should keep up the payment of their premiums, for the one thing especially desired and schemed for by some of the "frenzied finance" insurance companies is a wholesale lapse of policies.

Some few years ago the financial world learned with great interest of a new and very useful invention in finance. A group of individuals who had been buying large quantities of a certain stock at a low price, found they could not, on account of the fact of its overcapitalization having become known to the public, resell it; and they were, to use the stock-gambling term, "hung up" with it because it was too water-logged to float. It became necessary to disguise its identity. Here's how they did it: They formed a "syndicate," to which they "turned over" their stock at a good profit; the "syndicate" in its turn put it "in trust" by simply depositing the stock certificate with a trust company, which in its turn issued against the stocks thus held a new security, which it called a "bond." For these a ready market was found, for the word "bond" is still a term to conjure with in the world of finance.

This seemed such a serviceable arrangement that the originators soon had many imitators. Many "syndicates" were formed, and many so-called "bonds" were put on the market. In most cases the stocks were purchased at a low price, turned into "trusts" at double their cost, and then paid for by means of these certificates, dubbed "bonds." As one stock after another was converted into syndicate certificates--"bonds"--the familiarity of the procedure robbed it of its novelty and these "bonds" were quoted and dealt in much as other and more tangible securities bearing the same name. Perhaps this is why the startling announcement of the New York Life Insurance Company made about this time, that it proposed to sell all its stocks and thereafter hold nothing but bonds, created so much less of a sensation than was anticipated. The term "bond" had become vulgarized.

This excellent example would undoubtedly have had many followers but for the humor of the Tobacco Trust. This robust institution, with an immense amount of watered stock, audaciously poured it all but a small amount into bonds, $157,000,000 of them, and with a fine trumpet-blast proclaimed these "bonds" safe investments for widows, orphans, and insurance companies. Even Wall Street, with its frenzied votaries and its frenzied environment, was staggered. The culmination of these conversion performances was the brilliant plan evolved by George W. Perkins, the junior partner in the firm of J. Pierpont Morgan & Co., vice-president of the New York Life Insurance Company and expert investor of its vast surplus, to have the United States Steel Trust purchase some $200,000,000 worth of its own water-logged stock and convert the same into more "absolutely safe bonds"; for its most valuable services in the turning-over process the Morgan firm was to have a commission of some forty millions of dollars. At this juncture "frenzied finance" became gagged with its own froth, and I have not space here to go further into the subject.

The New York Life Insurance Company declares to its agents, policy-holders, and prospective policy-holders that it no longer holds stock securities. In its last report to the Insurance Commissioners there are set forth stock securities of the kind I have described above, to the amount of fifty millions of dollars. I will give one illustration:

"Northern Pacific--Great Northern--C., B. & Q. collateral 4s, book value--$12,057,132.59, market value--$11,375,000."--(From the official report to Insurance Commissioners.)

Now, these bonds are nothing more nor less than Chicago, Burlington and Quincy stock of a par value of $100 per share, which shares were purchased by individuals, and had "bonds" issued against them at $200 per share. (Northern Pacific and Great Northern stock in about the same proportion.) In the sense in which the public look upon the old bonds of railroads this "bond" is no more a bond than it is a Government bond. It is nothing more nor less than a stock security, and yet President McCall says in his letter printed above and sent by him to policy-holder DeRan that the New York Life does not and cannot invest its surplus in stock securities.

THE TRUE STORY OF HOW I WAS "BLACK-LISTED"

The publication of President McCall's letter and the charges which accompanied it attracted so much attention that the "Big Three" were flooded with letters from policy-holders demanding information. In the January, 1904, issue of Everybody's Magazine, I continued the controversy. After reviewing the conditions of the previous month's argument, I went on:

In entering upon the exposure of the most powerful body of men in the world, I knew quite well what I was "up against," and deliberately decided that in the conduct of my fight I would use such strategy as I believed proper to outwit so strong and so unscrupulous an adversary. One can hang a dog as well with a cord as with a hawser, and in proving my assertions I am quite willing that the insurance companies should believe each play is my best card. I decline, however, to show my hand.

In reply to the charge that I was attacking the New York Life because I had been refused insurance by that company, as positively stated in Mr. McCall's letter, I reproduced a letter written and signed by President John A. McCall, dated 1904, soliciting me to take out insurance in his company. I printed parts of three other letters, one directed to my office, also signed by Mr. McCall, another from the special agent, and a third from the Boston agent of the New York Life, supplementing Mr. McCall's letter and requesting the privilege of an interview.

This correspondence was put forth with a thorough understanding of its nature. The publishers of Everybody's Magazine and my own lawyers, to whom I submitted it, both pointed out that the insurance companies would undoubtedly take the ground that the McCall letter was no more than a circular that had been sent out to a number of capitalists and had gone to me by mistake. I replied that such a rejoinder would practically amount to an admission that the statement and signature of the highest officials of the New York Life were valueless and without significance, which would place President McCall in an untenable position. If his signature were valueless and without significance when appended to a letter addressed to me, why not in other instances if the interests of his corporation seemed to require such a disclaimer? Considering my argument, would not such a confession have a pregnant bearing on the proposition--is the "one man" honest, especially as I was equipped with additional documents to offset further attempts on the part of the insurance companies to show me up as a disappointed seeker after their policies?

Here, specifically, are the details of my encounter with the life-insurance institutions, and I pledge my word to my readers that they constitute all the facts in this connection. They are well known to the prominent men associated with the great companies whose duty it is to keep track of just such transactions. Whoever knows by experience of the incessant pursuit of business by the important insurance corporations need not be told that a man in my position has had his share of importuning by agents great and small. I have never sought life insurance, for it has not appealed to me as an investment, but on three separate occasions I have yielded to the persuasions of a friend connected with one of the big institutions and have considered the subject. The first time was in 1887, following a breakdown from overwork. This illness my friend used as an argument to induce me to take out insurance, and I went so far as to agree to submit to a private medical examination by the leading physicians of his company for the purpose of ascertaining if my breakdown, which for a brief time had left a trace of paralysis in my left side, would bar me. This examination was at my own expense, and it was expressly understood that, being private, it should not constitute a record. The physician pronounced me a perfect risk, but advised against going further inasmuch as a rigid rule of the company precluded them from granting insurance to any one who had suffered from this form of illness until seven years after the attack. I was not disappointed except on account of my friend.

Five years later his solicitation was renewed and I was assured that the officials of his company were so eager to have me that they would waive the seven-year rule, which still had two years to run. This time I went up before another medical examiner, and after the usual tests, was asked the stereotyped question if I had ever previously been rejected for life insurance. My friend replied for me--no. I, however, in spite of his protests stated fully the conditions of my previous examination, which the doctor assured me did not constitute an official rejection, and the application was filled out. In the conversation that ensued, the doctor said that it was safer to await the expiration of the seven years, and I being still indifferent, except to my friend's interest, accepted the apologies of the several people concerned for the trouble I had taken and let it go at that.

Four years later, in 1896, after the attack of appendicitis which I described in the December, 1904, instalment of "Frenzied Finance," again my good friend the agent came to me and used the incident of my narrow escape from death to impress upon me once more the desirability of having a large policy of life insurance. Those who have read the "System's" disclaimer, will remember that I had been blacklisted since 1892. There were the usual consultations with high officials of the corporation, and when all preliminary bargains had been arranged, I underwent a thorough examination in New York. This time, the seven-year term having expired, I was pronounced a perfect risk. But my latest illness had brought me up against another waiting rule, and once more the subject was abandoned after the usual expressions of regret and good-will. Since 1896 my connection with life-insurance companies has been about the same as that of a molasses barrel with the industrious flies in summer.

The interviews of 1892 and 1896 are both matters of record. My position in each instance was well understood, and several insurance officials who know the facts as well as I do have, since the publication of the company's statement, come to me and offered to back up my assertions with their own. American manhood is certainly not extinct when men are willing to sacrifice their careers to set a wrong right.

The manner in which the great companies have met my rejoinder to President McCall will afford my readers an excellent illustration of how the "System" goes after a man who has excited its antagonism.

A few days after the publication of the December issue of Everybody's Magazine, containing my fac-simile of President McCall's letter to policy-holder DeRan and his two letters to me, the Life Insurance Underwriters met and "resoluted" that I had applied for insurance in the New York Life Insurance Company in 1892, and being asked if I had ever been refused insurance, had replied in the negative. Investigation showed that I had been refused four years before by two other companies, whereupon my application was rejected and I was practically black-listed, and so could not secure life insurance in any American company. By way of corroborating this plausible story two letters, purporting to have been written by agents of the two companies to their head officers without my knowledge, were incorporated in the resolution. The letters stated that the writers could secure me for a large amount of insurance if the companies would accept the risk. The virtuous corporations were alleged to have replied that Mr. Lawson had been refused life insurance before, and for good reasons was not desired as a risk. This resolution was then published throughout the press of America in the news columns, and to all but those initiated in the desperate practices of the "System" and its votaries, it was conclusive evidence that an unprincipled man had been convicted, red-handed, of fraud.

You who read this statement of mine doubtless found the resolutions in your own paper, and thought it ordinary news-matter printed because of its public interest. This notice was an advertisement disguised as news, and inserted through the "System's" professional character assassinator, whose head-quarters are in Boston, a person who will occupy a prominent part in the chapters of my story wherein I treat of the crimes of Amalgamated. The publication cost the insurance companies $2.50 per line of the policy-holders' money, while advertisements that I insert in the course of my private business cost me but 75 cents per line.

HOW THE "SYSTEM" MAKES ITS PROFITS

It appeared that I had sinned still further, for had I not questioned the virtue and integrity of the New York Life's securities? To policy-holder DeRan, Mr. McCall had stated, over his own signature, that the New York Life did not and could not own stock securities. (See the DeRan letter on page 428.) I proved from the regular insurance reports that millions of the New York Life's bonds were no more than disguised stock securities, created by the new device of depositing stocks with a trust company at an inflated price and issuing against them a receipt which is arbitrarily called a "bond." I mentioned, as an illustration, the Northern Pacific-Great Northern-C., B. & Q. Collateral 4s, created out of the stock of the Chicago, Burlington & Quincy and other railroads. I could have selected a much worse type of security, just as, instead of the typewritten letter of Mr. McCall, I might have published others of a more personal nature.

Against me out sallied 2d Vice-President Perkins, brother of George W. Perkins, 1st Vice-President of the New York Life (J. Pierpont Morgan's partner), and at a banquet in Philadelphia boldly answered my aspersions by declaring that the bonds I named "are printed in the list of holdings which the company publishes in detail, and has published for the last five years, in order that its policy-holders may be informed of its affairs in the minutest detail." The convincing logic of this rejoinder the dullest will appreciate, but for a moment I must stop to remind Mr. Perkins that the publicity on which he plumes himself is really not an expression of the New York Life's individual frankness, but merely an observance compelled by the law.

All this recapitulation has been for a purpose. My readers will bear in mind before taking hold of my next exhibit that the great insurance companies have published me as a falsifier, who since 1892 has been refused insurance and black-listed for good reasons, and have claimed that Mr. McCall's letters were circulars sent me by mistake. We are still considering the problem--are the men who run our great insurance companies honest? Well, look at the reproduction on page 442 of a document that is now in my possession and has always been since the date when it was delivered to me by one of the three great representatives of the "System," the Equitable Life Insurance Company.

This document speaks for itself. My readers are aware of the negotiations and investigations which precede the making of an insurance contract. To them and to the "System's" votaries I recommend the exhibit and the underwriters' resolutions as a simple lesson in frenzied finance.

My charge that the directors of the great life-insurance corporations of America use the funds of the companies they control in stock speculation for their personal benefit is but one contention in my argument against the character of their management. Here I formally add another charge: It is that in the placing of loans, in the purchase of properties and securities, and in the underwriting of enterprises, there are enormous profits made, directly and indirectly, which are pocketed by individuals and are never shown on the books of the corporation.

The basis of life insurance is security. A policy-holder pays his premium to enable the corporation accepting it to make good its contract with him when death or time matures it. The vast sums in the possession of the three great companies are accumulated to safeguard their policy-holders, and should be invested only in securities of tried and solid worth, which will bring in no more nor less than the going rate of interest. There must be no experiments and, above all, no speculation. But what do we find? The positions of managers and manipulators of these huge hoards of the people's money have become the greatest financial prizes of the day. New and ingenious methods of graft have been devised in connection with them. The vast revenues of the insurance companies have become the "System's" most potent instrument in working its will in the stock world.

Their investments, largely in the securities of properties or corporations in which the "System's" votaries have large interests, are fertile sources of profit to the "insiders." The groups of banks and trust companies affiliated with them are the medium through which access to the coveted insurance funds is obtained, for these institutions are allowed by law to use money for speculative purposes, which the insurance concerns are prohibited from doing.

The immense opportunities for profit afforded by the control of these great money hoards are taken advantage of in various ways. Let me illustrate one or two of them. Rogers, Rockefeller, Stillman, and Morgan buy the capital stock of three railways at a fair valuation, say, $20,000,000 apiece, $60,000,000 for the three. Owning all, or nearly all, the stock, they can put its price on the stock-exchanges to any figure they desire, say, $60,000,000 for each railway, or $180,000,000 in all. They proceed to deposit the stocks of the three roads in a trust company, issuing against them $180,000,000 of what they call "bonds." An "underwriting" syndicate is then organized. This is composed of certain individuals and corporations who agree that when these bonds are offered to the public at $180,000,000, the portion the public does not buy, they (the "underwriters") will purchase on the basis of $120,000,000; in other words, they guarantee the sale of the bonds at $180,000,000. In return they "make" on all the bonds sold the difference between the price to them, $120,000,000, and the price the public pays, $180,000,000. Let us assume that the public takes up the issue greedily and the full price, $180,000,000, has been secured. The original owners, Rogers, Rockefeller, etc., have made $60,000,000, the difference between the first cost and $120,000,000, the cost to the "underwriters," while the "underwriters" have made $60,000,000, the difference between $120,000,000 and the $180,000,000, the cost to the people. In looking over the list of subscribers to these bonds, you will note that the largest purchases have been made for the great insurance corporations and the banks and trust companies owned or controlled by them and "The System." If, in the instance I am using for illustration, a president or vice-president of one of the great insurance companies is known to be willing to subscribe for, say, $10,000,000 for his insurance company; $5,000,000 for his principal trust company, which is owned by the insurance company; $1,000,000 apiece for five other banks and trust companies, also owned or controlled by the insurance company; and can influence five other affiliated institutions to subscribe for $1,000,000 apiece, he controls, as will readily be seen, a purchasing power of $25,000,000, and is sought for as an underwriter, if he is not already an owner. For this $25,000,000 which his institutions buy he "draws down," as his personal profit, 33-1/3 per cent. "underwriters'" commission, or over eight millions of dollars.

In taking this amount, he is not robbing his insurance company, in the common acceptance of the term in this era of "frenzied finance," though he has absolutely appropriated to himself a profit which belongs to it and not to him.

It must not be supposed that such transactions as this I have outlined are conducted in the simple ABC fashion I have set down here for purpose of illustration. No "one man" appears through any deal. The purchases and sales are usually made through dummies, and the final recipient of the "made millions" carefully conceals all the phases of his participation.

Let us take another type of transaction. An insurance company owns two adjoining pieces of unimproved city real estate, for which it paid $250,000 apiece, but which are now worth $500,000 each. The directors of the corporation formally decide to dispose of these holdings, and sell the first piece to a trust company, which is owned or controlled by the insurance company. One of the "System's" dummies or an officer or director of the corporation agrees to take the other at the same price. This is a perfectly legitimate transaction, and the insurance company shows a half-million profit on its investment. The next step is this. On its piece the trust company erects a two-million-dollar building, procuring the money from the insurance company at a low rate of interest. Thereupon the value of the adjoining piece bought by the "System's" votary jumps fifty per cent., so he has made $250,000 without risking a dollar. At the same time there have been several other profitable transactions between institutions and individuals. The agent who disposed of the two pieces of real estate and who is "in" the transaction receives a generous commission for making the sales; the trust company's representative has his own "draw-down," and there are further commissions to the agents who borrow and loan the money and control the erection of the building.

My readers may well ask, Are these merely illustrations, or do such things really take place? I unqualifiedly reply that deals similar to these have occurred repeatedly and that the principle and procedure set forth are the rule and not exceptional. Here is a minor episode of which I have personal knowledge. A well-known man made direct application to the Mutual Life Insurance Company for a loan of $400,000 on a valuable city business block which he owned. He was told that the corporation had no funds available for that purpose. The refusal was authoritative and definite. A few days later a lawyer and real-estate agent came to his office and said to him: "I'm informed that you want $400,000 on your property. I can let you have it, or $500,000 if you need that much."

"Good," said the would-be borrower, "I will take it. Whose money is it?"

"The Mutual's."

"My dear fellow," said the would-be borrower, "how can that be? I was there at the office a few days ago and was assured I could not have the money."

"That's all right," was the answer. "Of course you could not get the money. The right party did not see the right party. D'ye understand?"

He understood.

A recent issue of the Insurance Register, of Philadelphia, in criticizing my comments on President McCall and life insurance, makes the following significant admissions in regard to the conduct of these great corporations:

While riding on the train on my way to my office this morning a lawyer told me the following story: A client of his, a real-estate agent, represented a corporation owning and wishing to sell a valuable Chestnut Street property. The price asked was $750,000. A representative of a New York corporation called upon him and agreed to take the property, but stipulated that the price named in the deed and receipted for should be $850,000, the difference covering his commission of $100,000. The Philadelphian, finding it impossible to induce his clients to make this concession, and the New York agent insisting upon it as indispensable to the purchase, made a trip to New York to see the principal, acquaint it with the facts, and find out whether or not some arrangement could be made by which the buyer could take care of its agent's commission. He was received by the manager of the New York corporation, but when he stated that he represented the owner of the Philadelphia property he was instantly bowed out of the office, with the assurance: "We never interfere with business in the hands of our agent." The outcome was that the sale was not consummated, because the officers of the Philadelphia corporation would not receipt for $850,000 when they were to receive only $750,000, for the reason that they could not square the transaction with their stockholders, and the buyer's agent would not consummate the deal without such a receipt, because he could not square with his client and its stockholders the payment of $850,000 with the consideration of $750,000 mentioned in the deed. This story was told to illustrate the proposition that every action has its prompting motive, and my fellow-passenger imparted to me his conclusion that the motive of the manager of the New York corporation for refusing to listen to his client was that "the scoundrel was in cohoots with the agents to share in the commission and cheat his own company." The public will in time come to look for motives, and we, fellow-editors, and the managers of mutual life-insurance companies, will be judged by what seems the most apparent motive for our actions....

Any alliance between life insurance and this modern speculative frenzy cannot be too deeply deprecated, nor too strongly reprobated. Every true friend of honest life insurance among insurance journals will demand that this great business, of all businesses, must be kept free from the contagion of corruption that has shamed finance, is covering commerce with a blighting mildew, and threatens our whole land with disaster as well as dishonor.

All this is preliminary to treating the case of the Prudential Insurance Company. I want to say here that I do not know the corporation, any of its officers, nor any one interested in the control or management of it, and personally have never had the slightest connection with its officers. I desire to prove through an outsider, some one of unquestioned authority, that the great insurance companies are part of the "System" and are engaged in manipulating the stock-market with the funds their policy-holders put in their hands as a sacred trust. In so far as the Prudential is concerned, rank and unsound as are the transactions I am about to speak of, my investigations have proved to me that this insurance corporation is only as a baby-carriage to a runaway automobile compared with the three great representatives of the "System," the New York Life, the Mutual, and the Equitable. Certain critics have accused me of being unduly emphatic in my strictures on the doings of the corporations of which I am treating. I will confess to a secret amusement at being able, in this instance, to quote the language of one of the most conservative insurance officials in America, Frederick L. Cutting, for many years Insurance Commissioner for the State of Massachusetts.

The Prudential Life Insurance Company has $2,000,000 capital stock. The stock is owned and the company absolutely controlled by a few men. This capital of $2,000,000 represents only $91,000 paid in in cash; the balance has been derived from stock dividends; that is, profits that have been made out of policy-holders. In addition to this enormous amount, there has been paid ten per cent. in cash dividends annually, so that for every thousand dollars paid in the stockholders hold $22,000 of stock, upon which they receive annually $2,200, or, as Commissioner Cutting puts it, "each year for ten years the stockholders have received in cash dividends more than twice the original investment." I commend to the policy-holders of the Prudential and other insurance corporations, and to other honest men, these tremendous figures: every $1,000 invested turned into $22,000, not in a gold or diamond mine, but in a life-insurance company where every dollar comes from the policy-holder who is supposed to pay in only enough to insure a promised payment plus provision for honest expense.

The Prudential Company owned the stock of the Fidelity Trust Company, the capital of which was $1,500,000, and the directors came before Commissioner Cutting and informed him that they proposed to double up the stock of the Fidelity Trust Company to $3,000,000; that the new $1,500,000 at a par value of $100 was to be sold for $750 per share; that the new stock was to be bought by the Prudential Company and the Equitable Company; and that with the proceeds of the sale, the Trust Company was to buy a control of the Prudential Company from its directors. The motive of this transaction was as follows: The set of men who absolutely controlled the Prudential, with its sixty millions of assets belonging to its policy-holders, proposed to control it for all time, but without tying up $7,000,000 of their own money in the business. In other words, they desired to eat their pudding and yet have it for continuous re-eating, and had found a way to accomplish this heretofore impossible feat.

By this plan the men who controlled the Prudential Company, and thereby the Trust Company, at the time the plan went into force, would forever continue to manage and control both institutions, although not one of them held a policy or any investment in the insurance company beyond the one share of stock required by law to qualify as director.

If this scheme had been consummated it would have borne to "frenzied finance" the same relationship that perpetual motion does to mechanics. By it a few men could gamble forever with the entire assets of the policy-holders of this corporation for their own personal benefit. If my readers will imagine the same scheme applied to several other great insurance companies and the men controlling them, the "System's" votaries, they will recognize the "System's" ideal world, with all the people in a condition of ideal servitude. However, this ingenious plan was forestalled because there happened to be in control of the life-insurance affairs of Massachusetts one of those old-fashioned relics of American honesty--a man who thought more of the interests of the people intrusted to his care than of the prospect of innumerable "made dollars" which might have been his had he proved more amenable. It is regrettable that he was not able to deprive the conspirators of their power to juggle with the property of the corporation, for only two weeks later they developed and executed an alternative device which practically accomplished the result which the Massachusetts authorities had declared illegal and the courts of New Jersey had enjoined.

There is food for thought here for the policy-holders of American insurance corporations who have intrusted to the "System" and its upholders the billions of their savings, to which they are adding every year hundreds of millions. To them I recommend a reading of the Forty-eighth Annual Report of the Massachusetts Insurance Commissioner, dated January 1, 1903, and the decision of the New Jersey judge who passed on the case. These men are surely not to be accused of exploiting my story. Under the head of "Control of Life Insurance Companies" in the Massachusetts Report will be found the following:

The Insurance Commissioner had the honor of addressing the insurance committee of the General Court relative to the control of life-insurance companies by other corporations or by syndicates. For some years it has seemed to impartial observers who are conversant with life-insurance matters, and have also seen the eager quest by promoters for funds to finance all kinds of enterprises, and the determined struggle to grasp every opportunity for speculation, that there would be no cause for wonder if covetous glances should be turned toward the massive accumulations of life-insurance companies. It is well, therefore, to pause and ask what would be the chances for obtaining control of them, and what might be the result of such control, and in general whether the funds of such companies are imperilled by modern methods.

Insurance corporations on a capital stock basis, on the other hand, give their policy-holders no voice in their management. To obtain control of such a company it is necessary only to control by purchase or otherwise a majority of its capital stock. If a "king of finance" should start out with the determination to secure a majority of the stock of such corporations, the chances are that in some cases at least he would be successful. He might, it is true, be obliged to pay more than the "book value" of the shares; but perhaps control of a company's assets would well be worth twice or thrice or even more than what could be figured out as the value of the stock on the books of the company. On no other theory can the figure offered for life-insurance company stock in some cases be accounted for, since these offers are not warranted by the surplus nor by the dividends paid, nor by both combined.

Is there aught to prevent a bold manipulator from entering this inviting field and purchasing a controlling interest in the stock of enough such life-insurance companies to make their combined assets aggregate one hundred million dollars of the more than six hundred millions of assets of stock life-insurance companies doing business in Massachusetts? This accomplished, he transfers his rights to a "trust," or an association, or trust company, which is not only a bank of deposit, but is also engaged in brokerage schemes, in financing large enterprises and promoting all kinds of corporate consolidations, and underwriting their stock for a consideration. The central controlling trust company, or whatever it may be, becomes a medium through which the investments of the controlled insurance companies are made; all sales of their securities pay tribute to its treasury; all funds awaiting investment are deposited in its keeping; the most valuable of their securities are turned into cash, and then used by the controlling power for such purpose as it sees fit. All these things are conceivable, and their accomplishment would be a no greater task, seemingly, than some of the gigantic "operations in finance" of the last few years.

Judged by what has happened in other fields, this trust would not only control these vast assets, if the plan should be executed, but would control them without individual liability on the part of its managers.

THE PRUDENTIAL MERGER CASE

Is there really any danger, it may be asked, that any trust or syndicate will attempt to control the stock and assets of life insurance in this way, or is this simply the presentation of possibilities? As an answer to that question here follows a plain, unvarnished story of what has been attempted and what has taken place within the past year between one of the life-insurance companies doing business in Massachusetts and a trust company with which it has close relations.

In October, 1902, the Insurance Commissioner received from the president of the Prudential Insurance Company of America a letter, transmitting a copy of a circular letter addressed "To the field and home office staff" of the company. That circular letter disclosed a plan of mutual control between the insurance company and the Fidelity Trust Company, a corporation organized under the laws of New Jersey. It stated that:

"The capital of the Fidelity Trust Company is about to be increased from $1,500,000 to $3,000,000, the new stock being sold at $750 per share. This will result in giving the Fidelity Trust Company a capital of $3,000,000, a surplus of $13,000,000, and a considerable amount of undivided profits, making this company, from the standpoint of capital and surplus, as large if not larger than any similar institution in the country. Sufficient of this stock will be taken by the Prudential Insurance Company to give it, together with its present very large holdings of Fidelity stock, absolute control of that company. A very large portion of the balance of said stock is to be taken by the Equitable Life Assurance Society of New York, which will give to that company a very substantial interest in the Fidelity Company, and therefore justify it in materially increasing its business with the Fidelity. The bulk of the new money thus to be received by the Fidelity Trust Company is to be used by it in the acquisition of a controlling interest in the entire capital stock of the Prudential Insurance Company.... A contract has been entered into between the Fidelity Trust Company and a large majority of stockholders in interest of the Prudential, in which the latter have contracted to sell their holdings of Prudential stock, or as much as may be necessary, to the Fidelity Trust Company on or before May 1st next, at $600 for every $100 of par value.... While by this arrangement the Prudential Company will control the Fidelity, and, on the other hand, the Fidelity will own a majority of the capital stock of the Prudential, the annual meetings of the two companies will be so arranged and other arrangements be so made that the Prudential will forever be the dominant factor, as of course it should be. The officers of the Prudential are united in their belief that this move is of the greatest possible interest to its stockholders, as well as to all of its policy-holders and its great army of employees. The consummation of this arrangement insures the continuance of the present management of the Prudential, both in its home office and in the field. The advantages of the plans of the trust company are too obvious to need comment. It is expected to consummate this entire transaction between the two companies on or about February 1, 1903."

The Insurance Commissioner of Massachusetts, on receipt of this circular, wrote United States Senator John H. Dryden, president of the Prudential Insurance Company of America, declining to approve of the proposed exchange of stock on the ground that the merger was antagonistic to the interests of policy-holders, inasmuch as it forever deprived them of the power to dislodge the management from the control of the institution. The minority stockholders petitioned the New Jersey courts for an injunction to restrain the Prudential and the Trust Company's directors from carrying out the proceeding for mutual control, and Vice-Chancellor Stevenson enjoined the corporation from executing its project. However, the reciprocal control was effected by the sale of enough Prudential stock to the Fidelity, whose capital was increased for the purpose of purchasing it, so that the Fidelity lacks but eight shares to control absolutely the Prudential. As the situation stands now, the Prudential directors control the Fidelity, and the Fidelity holdings, with eight shares more, control the Prudential. Practically the ring is about as hard to break into as the plan enjoined. Those who control the Fidelity can always "dominate" the insurance company. Minority stockholders and policy-holders alike are practically in the hands of the trust company for all time, and the insurance company's assets can be managed as the majority of the trust company's directors dictate.

The director goes on to explain the relations between a life-insurance company and a trust company, which, in the light of recent exposures, seems prophetic.

"The money value of intimate relations between a majority of the directors of a life-insurance company and a trust company may be easily comprehended. These relations are at the beginning based on the needs of the insurance company, which needs it is hard to define and limit, and accordingly hard to say just where the provision for them becomes more of an advantage to the trust company than to the insurance company. Standards will differ, and change, too. But here, let us say, is a great insurance company with over $50,000,000 of assets which it has collected from its policy-holders, and which are needed for carrying out their contracts, and which safety requires shall be held in sound investments. Such an insurance company has to have a large and active bank account. It must deposit checks and all forms of paper promises or orders for collection, and for the payment of expenses and claims must have a large sum of ready money. This is the absolute need; but the directors are not bound by any legal requirements to limit their deposits to just what will reasonably suffice as a margin to pay current claims and expenses, nor are they required to patronize any particular banks. They conclude, let us say, that 'it will be safer' to take some banking institution for such depository which they 'know about,' and of which, perchance, some of them are directors, or in which, at all events, they are stockholders. If no such trust company is at hand, it is very easy to start one, and easy for the directors of the insurance company to be in 'on the ground floor.' The insurance company then begins to bestow its patronage. The trust company, which is thus supplied with funds, begins to feel the effects of this attention; by the use of its big deposits large dividends are earned. A 'boom' begins, and the director who 'had the sagacity' to invest in the stock of the trust company when it was around about par, sees his holdings advance by rapid strides until he is offered perhaps ten times as much for his stock as its par value. He has seen this stock advance in value in proportion to the amount of funds of the insurance company which the trust company had at its command. It has been worth much to him 'to be on the inside,' and will be worth much in the future for him to be on the inside if any new trust company is to be a depository; the bigger the deposit, the more it will be worth to him."

All thinking people, after reading these extracts from Insurance Commissioner Cutting's report, will ask: "Why have we never heard of this before?" I can only answer that he found it impossible to get any part of the warning contained in it before the people. It should be remembered that the insurance companies annually spend millions of dollars with the daily, weekly, and monthly press--and it is unnecessary for me to say more. My own advertisement calling attention to the life-insurance chapters in the last issue of Everybody's Magazine was refused by some of the leading dailies of New York, Boston, Cleveland, and Pittsburg. When I called on the managing editor of one of Pittsburg's leading dailies for an explanation of the publication's declination, he said: "Don't mention me or you'll get me into trouble. Our copy for the advertisement was a day late and the insurance combine had time to get in its work. The local managers sent a representative to all the papers warning them not to run your stuff, under penalty of losing the big full-page annual from each of the three big companies, as well as the numerous fliers through the year." One hears of the sagacious ostrich which, when pursued by an enemy, hides its head in the sand. The ostrich is wise in comparison with the "System's" votaries in the year 1904.

THE VULTURES FEEDING

Owing to the claims of other subjects on my space, I left the subject of life insurance for a few months. In the meantime President Alexander began his grapple with President Jimmy Hyde for the control of the millions of the Equitable Life--the historic entanglement which has had such dire consequences for all concerned. In the April, 1905, issue of The Critics I wrote as follows:

When first I touched on the subject of life insurance and called attention to the manner in which the three great companies were juggling with the immense funds entrusted to them by their policy-holders, the "System" raised a great outcry, declaring that I was unsettling the confidence of the people in a sacred institution. At this moment we have the chief officials of one of these huge organizations engaged in a desperate and disgraceful struggle among themselves for its control. All thought of the widow and the orphan, against whom they declared my hand had been raised, has been forgotten in the mad fight for supremacy over the accumulated millions in stocks, bonds, and in trust companies, from the secret manipulation of which the great private fortunes of successful underwriters are derived.

Before definitely grappling with the evils of the insurance trust, I hesitated a long time. I realized my words would cause terror or distrust among policy-holders and perhaps induce some misguided ones to abandon their insurance. After long consideration, however, I became convinced that what I had to say would in the long run benefit all policy-holders, insure the greater safety of their funds, reduce their annual premium-payments, and perhaps bring about the restitution of the vast amounts which in the past had been diverted from them to private individuals. The response to my criticism was a flood of abuse. Instead of meeting my charges, the big companies denounced me for a liar and a misrepresenter, and the insurance journals and subsidized press declared that the things I had charged were impossible. Now, the president of the Equitable Life Insurance Company is openly accusing a leading member of his board of trustees, who is one of the foremost votaries of the "System," of loading the company with twenty-two millions of securities, which, as a member of the finance committee of the corporation, he had purchased for himself in his capacity as head of a great banking-house. On the other hand, the president and his associates, who have hitherto swayed the destinies of the institution, are accused by the other party of conspiring to mutualize the institution, not for the benefit of the policy-holders, but to conceal the traces of past misdeeds. Before this chapter is in the hands of my readers the officers and directors of this great insurance company may be before the courts and a condition of affairs spread out for the public's gaze such as will make my charges seem, in comparison with the actual truth, as chestnut-burrs to porcupines' quills.

One result achieved so far is an awakening of the people's attention to the evils of present conditions; but let them beware of the remedies suggested. The "System" is quick to adjust itself to storms it cannot control, and there are many signs abroad that it is trimming its sails to fly before the present blow, ready when it shall abate to switch back to its old course, and, under fresh canvas, make up for lost time. Already we have Senator Dryden, representing New Jersey and the Prudential Life Insurance Company in the United States Senate, introducing a bill for Federal supervision of life insurance, and the "System's" hirelings throughout the land are clamorously agitating the passage of some such measure. It behooves the public to scrutinize carefully the form of reform which these patriots approve. It may be taken for granted that they will initiate nothing that will interfere with their grip on the millions of the policy-holders or will divert fat pickings and commissions from their own pockets. Once I asked a leading votary of the "System":

"What would you do if by any chance the Government decided to get into the railway business, and took a railway or so to see how government control would work?"

"Oh," was the reply, "we'd manage that all right! As soon as we saw it coming, the stocks and bonds of the roads wanted would go up, so that by the time Uncle Sam got ready to buy, it would be the fattest sale we could possibly make. After that it would not be difficult to disgust the Government with its bargain, and before long the people would be glad to sell the property back to us, and we'd find a way to get it at slaughter prices."

The reformation of the big insurance companies is sadly needed, but reformation of a more drastic kind than they'll be willing to administer to themselves. To begin with, there should be a relentless probing of their stock transactions of the last fifteen years, followed by the passage of some simple laws regulating their investments. The relationship between these institutions and the "System" would then at once of necessity terminate, and we could say good-by to the régime under which the expenses of the Big Three have enormously increased and their dividends to policy-holders have steadily declined while during the same period the private fortunes of their officers and controllers have flourished amazingly.

I have been repeatedly asked to define the conditions that make it possible for these immense private fortunes to be gathered, within the law. An examination of the figures that follow will reveal the far-reaching possibilities that reside in the direction of the billion of assets of the great insurance companies.

The last issued New York report (1903) shows that the three leading companies had in uninvested funds, all told, $70,212,453. Of this sum total there was "deposited in trust companies and banks drawing interest"--at the close of the year:

Equitable $25,617,668 Mutual 22,439,396 New York 17,731,710 ----------- $65,788,774

the balance, $4,423,679, being on deposit without interest.

The above aggregate represents 71.7 per cent. of the uninvested interest-bearing funds of twenty-eight companies--leaving but 28.3 per cent. for the remaining twenty-five (in which, by the way, is included $6,801,789 of the Prudential, as large in proportion as the funds of the Big Three, with which it is associated).

This sum, at the two-per-cent. interest allowed by the trust companies, returned to the insurance companies $1,315,775, while it earned for the trust companies in the different speculations in which they were engaged, from five to twenty per cent., or an annual profit of $1,973,663 to $11,184,079, over and above the interest paid the insurance companies for its use.

But who owns the trust companies? you ask. Some are owned jointly by the three great insurance corporations and their directors, others by the directors alone. The men who control the Big Three organize these flexible depositary institutions, allotting half or more of their stocks to themselves, the balance to the insurance companies, or keeping all the stock themselves, for the purpose of manipulating the stupendous sums in the treasuries of the insurance companies. The trust company is the irrigating canal of Wall Street, the insurance company the reservoir. For the development of the various schemes of consolidation, trustification, and amalgamation in which Wall Street profits are made, money is required in large quantities. When the soil is ready for the seed, when negotiations have been sufficiently matured, the trust company's sluice is tapped and the gold flows out. And gold which makes a $225 crop sprout, where previously only a $100 crop grew, is a valuable commodity, for the use of which large compensation is given the engineers. Thus the men who hold the treasury-keys of the Big Three, and who decide how the accumulated premiums of the policy-holders shall be used and where deposited, are actually the owners of these trust companies and of other corporations and trusts which borrow the money the trust companies have on deposit from the insurance companies.

The hackneyed defence of the insurance companies to this accusation is that great corporations, such as they are, must keep on hand, ready for emergencies, enormous amounts of cash. This is a futile argument, for in the nature of things the daily receipts of each of the Big Three are larger than the expenditures. We are also told "We keep large amounts, ready to take advantage of a sudden smash in the market." This sounds well, but cloaks one of the most vicious practices of these great institutions, and another of the insider's opportunities for private graft. It means that the officers of the great insurance corporations are ever ready for a stock gamble with the sacred funds of their policy-holders; that is, they admit their willingness to use the people's savings to make sure-thing gambling-profits from those unfortunates who must throw over their stocks and bonds because of the "System's" manipulations.

Imagine, my honest, old-fashioned reader, the millions of insurance funds used in this way! Let me give you a picture of how it is done. I have seen it worked a score of times. The stock-market is crashing, dropping tens of millions a minute, and business men are saying: "Oh, if we only had cash to buy, but we can not get it! The banks will not loan at any price. Rates have gone up to 100 to 150 per cent. and no cash is in sight." No one has money but the big insurance companies and the "System's" votaries.

Suddenly mysterious buying appears--hundreds of thousands of shares of stock, and bonds in million blocks. The crash has been stayed; the panic is over; stocks are bounding upward again; millions are being made by the mysterious buyers with each tick of the clock, and presently it is common knowledge that all the insurance insiders have cleaned up millions, and--of course, the company has made something, but the biggest profits have been won by the men who, having previously personally loaded up, were able to throw the unlimited buying power of the policy-holders' millions into the gap. Talk of loaded dice, or any of the sure-thing gambling devices! They are lily-white business schemes compared with this method of plundering the people.

Again we are authoritatively informed that the great companies have so much cash on hand that it is impossible to find investments for it save at a low rate of interest. The fallacy here is obvious. If these institutions have grown so unwieldy that they cannot conduct their business as ably as the smaller companies, the latter are the ones to insure with, because, right along, they are deriving larger returns from their invested funds than the big companies. There are scores of ways, however, by which the sixty-five millions could be made to earn even larger dividends than do the funds in stocks and bonds. Let the Big Three offer the use of their big cash balances by public competition--under the most conservative conditions that can be prescribed. Instantly the net returns will double.

All insurance policy-holders are familiar with the specious circulars and letters presenting statements of business done and investments made, which are sent out from the head offices of the great companies at odd intervals on the plea: "We want our policy-holders to know everything we are doing at all times." The public is assured at other intervals that there can be no secret or inside deals in the affairs of insurance companies because of the close examinations they are subjected to by the Insurance Departments of the various States. The insurance officials say: "All our facts and figures are vouched for by so many different sets of auditors and State Departments that they must be exact truths." To what extent is the public actually safeguarded by these investigations?

Some months ago I called attention to the fact that the directors of the New York Life Insurance Company had sold to themselves the stock of the New York Security & Trust Company at from three to four millions less than the property would have commanded from outsiders. Here is another transaction which requires explanation:

In 1901, ostensibly in order to maintain its position in the German states--I will explain later on what I mean by "ostensibly"--the insurance company disposed of its remaining holdings of stocks, the same having a book value of $2,965,000 and a market value of $5,471,000, as per report of 1900. These stocks, with possibly sales of some other securities, realized an actual profit of $5,839,087 instead of $3,075,392 as per the company's sworn report to the several State Insurance Departments.

Rather a queer proceeding, you say. Why should it do such a thing? Had some one stolen the extra profit? Or what? This is what was done: The company had simply availed itself of the opportunity to conceal an actual cash profit of $2,763,715 in order that it might sequestrate assets to that amount unnoticed by its policy-holders or the departments. The sum so sequestrated was made up of balances due from agents--presumed, as in all such cases, to be amply secured by pledge of renewal contracts--to the amount of $1,919,734, and $843,891 charged off depreciation of real estate. (See Massachusetts Report, 1902, pages 158-159.)

This illegal suppression of most important transactions, directly affecting, as will be seen later, the interests of policy-holders, would have remained a sealed book but for the careful audit of the Massachusetts Department, which revealed the fact, unnoticed by that of any other State (note in this one instance the boasted careful supervision and boasted double and triple auditing of all accounts before publication!), that the item "Agents' Balances," amounting in the preceding year to $1,527,123, had disappeared altogether from assets. This led to a prompt request from the Massachusetts Department for explanation.

The honorable business men of the New York Life, who pay out so many hundreds of thousands of dollars each year advertising the fact that they are sitting up o' nights to find new ways to acquaint the policy-holders with the innermost secrets of the company, finding there was no avenue of escape from their dilemma, quickly realized that the Massachusetts Department meant to have the facts, and publish them, too. Their own "faked" report was already before the public in the published reports of two departments, those of Connecticut and New York.

There was but one course open to avert the terrific scandal that was inevitable upon publication of the Massachusetts Report, and that was to head off and forestall adverse comment and criticism, as far as possible, by making a clean breast of it. No time was lost in preparing a letter of explanation to the Department. This answered the purpose of the Department, which did not care to press the matter, having accomplished its main object.

Now for the moral, or the iniquity, rather, of the preceding, the wrong to policy-holders, which has been so completely ignored and passed over by the insurance press and all hands: Either the company had, as at least supposedly it has in all such cases, ample security for its advances to agents in the pledges of their renewal contracts, or it had not. On the former hypothesis, that $1,900,000-odd was a sound and valid asset, earning a good rate of interest. On the latter, the company simply squandered this amount of trust funds belonging to its trusting policy-holders in its mad rush for business at whatever cost; or--In either case the money has gone from sight so far as any sign or indication appears to the contrary since.

And before leaving this point, it may be well to ask, "Has the New York Life Insurance Company altogether discontinued these advances to agents?" If not, how and where are they accounted for? An answer may be found, possibly, in the comparatively meagre underwriting profits of the company, growing relatively smaller and beautifully less with each succeeding year. I say it may possibly be found here, because this is the only place the item could be buried; but I am reasonably sure that it is not buried here, and that these advances to agents are being continued on a scale as large as, or larger than ever, for the agents could not have been shut off and the business increased at one and the same time.

Again, during the last two months of 1904, or at a time when my story, "Frenzied Finance," began to get in its work all over the world, I received from many quarters information that the Big Three had instructed their leading agents to get in a great lot of new risks "at any cost," so that the total business for the year would show such increase as to discredit my claim that the policy-holders were getting "scared." I watched the game with much interest, knowing that bunco would out in time, by whomever worked. During these months I read from week to week of this great policy, or that record-breaking risk just landed by this or that agent. One in particular made me chuckle at its transparency. A certain friend of the New York Life, a Wall Street man, "has just taken out a $2,000,000 policy." About the same time I began to receive information of the remarkable offers that were being made to prospective customers, offers which probably meant an indirect rebate of perhaps the full first year's premium; and I got to thinking and reaching back into my memory-box, and I raked out a number of instances of the same kind of offers which had been made to me in the past, and I ruminated to myself how all this was possible; for even if the Big Three were bold enough to get around the law against such practices, it puzzled me how they could pay to their agent the big cash commissions that new business called for. Presently as I waited I read, as did the rest of the world, the big January full-page advertisements of the New York Life to its policy-holders, calling their attention to the increase of $15,000,000 new business over the year before. Then I took another think and did a little work, with the following result:

A JOLT FOR THE NEW YORK LIFE

The "Brown Book of Life Insurance Economics" shows that the sum laid by annually for future tontine or other dividends ranged in the ten years ending with 1903 from $2,936,026 to a minimum of $956,597, these amounts being savings after payment of dividends. In 1904, however, for the first time in the tontine history of the company--also the first year of maturity of non-forfeitable tontine contracts with their largely reduced dividends--the dividends paid and credited, $6,018,202, actually exceeded the year's earnings, as shown by the company's sworn statement, by $76,595.

I want to call policy-holders' attention right here to what this means to those who are now being beguiled into taking policies on the strength of "adjusted" estimates placed by the company in its agents' hands, showing dividend results ranging from fifteen to fifty per cent. higher than those of 1904, with, however, the saving (?) clause that, depending upon future unforeseeable conditions, the same "may be higher or may be lower." It may be added that, but for a profit realized from sale of securities, the company's gross surplus would have shown shrinkage.

In order to realize what such a showing means, let us make a comparison, using the figures of a well-known Western company (partly tontine, but operated on diametrically opposite lines from the New York Life), for the three years 1901-03, this company being barely four-tenths the size of the New York Life as regards outstanding business:

COMPARISON OF TOTALS, THREE YEARS, 1901-03

Dividend Laid by for future earnings. Dividends. dividends.

New York Life $16,826,289 $13,189,278 $3,636,091 Western Company 17,788,820 12,284,255 5,504,565 ----------- ----------- ---------- -$962,531 +$905,023 -$1,867,574

After mulling these over, I dug further in regard to the "prosperity" as shown by the business of 1904. The company boasts of its enormous volume of new business, $345,722,000, which is $15,000,000 in excess of the 1903 business. Here is the story: While this new business was being secured, the

Total terminations were $162,326,114 Less those inevitable terminations by death or maturity of endowments 26,767,873 ------------ Waste by lapse, surrender, etc. $135,558,241 And when we add the lapsed policies which continued in force, under the "extended-insurance" provision 89,938,500 ------------ We have the total waste of $225,496,741

and this, reduced to its actual significance, means that of the total actual terminations, 83.6 per cent. was actual waste and only 16.4 per cent. legitimate terminations, while the great bulk of the last item of $89,938,500, upon which premium payments have ceased, must run off the books in the near future; and this is what goes on from year to year, more than keeping pace with the boasted increase in volume of new business. The public never sees this side of the question.

When I got to this point in my deductions, I was brought face to face with the tremendous expense of acquiring new business. Then I saw the light--why it was necessary to wipe off the books nearly two millions of what were considered good assets, that is, pledges from agents of their renewal commissions against which advances had been made, and where the new business came from, and how it was possible to make rebates when the law says they shall not be made. An agent induces a friend to have a policy written, for which the agent practically pays the premium out of his commission, and thereupon has advanced to him large sums against the future premiums which are to be paid by the policy-holder, who has no intention of paying them, and allows his policy to lapse. Heavens! What a vista of plundering opportunities the bare thought opens up! Somebody has to pay.

THE MILLION-DOLLAR POLICY

In the May number I inserted the following letter:

FORT WORTH, TEXAS, February 16, 1905.

THOMAS W. LAWSON, ESQ., Boston, Mass.

Dear Sir: I have read and will continue to read your articles on "Frenzied Finance," published in Everybody's Magazine, with a great deal of interest. I have noted especially your statements in reference to the big life-insurance companies, as I am a policy-holder in both the New York Life and the Equitable.

Under the heading of "Lawson and His Critics," in Everybody's for January, you give your side as to the assertion on the part of the insurance companies that you have been refused life insurance, among other things publishing a fac-simile of a contract of life insurance between yourself and the Equitable Life Assurance Society for $1,000,000. On my first reading of your article, I was certainly impressed with the fact that you had $1,000,000 of insurance with this company. On a second reading, I note that you do not say in so many words that this is a policy in force, but you say: "Well, look at this reproduction of the document that is now in my possession and always has been since the date when it was delivered to me by one of the great representatives of the 'System,' The Equitable Life Assurance Society." This statement taken in connection with others, conveys the idea that you are insured in the company named.

In conversation with a gentleman a few days since, who claims to know whereof he speaks, having gotten his information direct from New York, he stated that you had no policy in the Equitable Life Assurance Society for $1,000,000, or any other amount, and that the reproduction referred to above, was of a sample copy of a policy, and not a real contract.

As your editor states that you will answer any pertinent question, I will ask the following, trusting that you may consider it pertinent: Have you a valid subsisting policy in the Equitable Life Assurance Society for $1,000,000, the fac-simile of which appears in Everybody's Magazine for January, 1905?

Trusting you will favor me with a reply, I am,

Very truly, ----

I answered:

Since the chapter which contained the fac-simile of the million-dollar policy was published I have received many letters similar to the above, but have not answered any because I wished to see how far the insurance people would go in this matter. Finding I did not reply to the different attempts they made in their subsidized journals to draw me out, they grew bolder, until the use of this million-dollar policy has become the chief defence of the Big Three companies. I want my readers to think this point over and weigh its significance carefully. In a previous chapter I called attention to the fact that there is nothing to protect the policy-holder from being robbed of the amounts he has invested to insure his family from poverty after his death but the honesty of the men who really control the big insurance companies as absolutely as any of their policy-holders do their personal affairs. If these men are honest, policy-holders in their companies may rest easy for the time being; but if they are dishonest, the policy-holders should call them to account, for these men have it absolutely in their power to make way with the funds of the companies they manage until there will not be a dollar left for policy-holders.

Therefore the one thing for policy-holders to settle, the one vital thing is, Are these men honest, or are they tricksters and liars?

To settle this point they must be weighed in the same way that all other men and women in this world are weighed--by the simple, ordinary standards: Do they lie? Do they trick? Do they cheat?

When I made my charges in my first chapters against the votaries of the "System" who controlled the insurance companies, they met my specific charges as dishonest men would meet them, not as honest men would. They impugned my motives, and specifically charged that my reason for attacking them was that I had been blacklisted by all insurance companies and could not get insurance from any of them.

While it was immaterial so far as my specific charges went whether this was so or not, it had a most decided bearing upon the question whether the officers and controllers of the Big Three insurance companies were honest or dishonest men. Therefore I picked up their accusation and began a line of argument to prove they were tricksters and absolutely devoid of honor.

I showed, by reproducing the personal letters of President McCall, of the New York Life, to my office and to my house, reënforced by his special agent's letter, and these reënforced by his Boston agent's letter, that I had been continuously and urgently importuned to take insurance during the time he said I was blacklisted. The insurance people met this by the excuse that these were not personal letters, but mere advertisements.

I then reproduced the million-dollar policy, hoping to drag from the Big Three a specific charge that this, too, was an advertisement.

Of course, I did not pretend that the policy in question was in force, that is, that I was insured in the Equitable Life Assurance Society for one million dollars. This would have been too childish; first, because every insurance policy, particularly the very large ones, is as much a matter of record, to be got at by any one in the insurance business, as are real-estate records; and, next, because that which I printed had the signature punched out, which made it obvious that it was not in force. My object was to lead the Equitable into the positive statement that it was an ordinary advertisement, when I would have reproduced the proposition that accompanied it and which the Equitable made in probably the most elaborate set of documents ever assembled by an insurance company for the purpose of inducing one of the "best risks" in America to take out a "great big policy." These constitute the complete argument which was made by the Equitable Life Assurance Society to persuade me to take a million dollars' worth of insurance. They are engrossed upon parchment and bound in a specially gotten-up morocco cover, and, I was told, cost the insurance company between four and five hundred dollars. They were presented to me as the result of my demanding that all the inducements they offered to come into their company should be put down on paper, so that there could be no mistaking them. The documents as engrossed and the terms of the contract were carefully copyrighted by the Equitable, and are now on my table before me as I write.

The question which the publication of the million-dollar policy was to settle was whether or not I had been importuned to take out great sums of insurance in the leading insurance company of America, and it proved exactly what I had contended--that I had been so importuned.

Up to and including my April, 1905, instalment I have made specific charges against the great insurance companies, the Mutual, the New York Life, and the Equitable:

1st. That the control of the officers of these great corporations over the billion dollars of their policy-holders' funds is as absolute and unrestricted for all practical purposes, as is their control of their own personal affairs, and is largely exercised for their personal enrichment.

2d. That the policy-holders have absolutely no voice in the management of these companies or the control of their funds, because of the manipulation of proxies in the New York Life and the Mutual and the control of the stock of the Equitable.

3d. That those who do control the big companies are votaries of the "System," and as such are subject to the "System's" orders as absolutely as is James Stillman, president of the "Standard Oil" National City Bank.

4th. That the insiders of these insurance companies, not one but several of them, have accumulated fortunes in the past few years, of from one to twenty millions, while at the same time premium-rates have advanced and dividends decreased.

5th. That under the present methods of conducting these great companies it is as inevitable as it was in the case of 520-per-cent. Miller or Mrs. Howe's Woman's Bank, that as soon as they can get no more insurance, the funds behind the old insurance will be dissipated and a crash take place such as the world has never known before.

6th. That the companies are "milked" in every direction, through the purchase and sale of real estate, through the loaning of their millions, and through the manipulation and investment of their funds.

7th. That they acquire new business at an expense and by methods which alone will in time wreck the companies.

8th. That in a single instance the New York Life sold securities for $5,839,087, but its statement under oath to the State Insurance Departments showed receipts of only $3,075,392.

9th. That the New York Life sold the stock of the New York Security & Trust Company, which it held, to its insiders for over $4,000,000 less then they could have secured for it from others.

I have specifically charged other things, and will, as my story proceeds, make many more specific charges of as serious a nature; but the above suffice for my present argument, which is, that up to and including the April number I have made these accusations and that the only way they have been met is by underhand mud-slinging and by alleging that the incentive for my attack was that I could not secure insurance from any of the American companies; and I have met this with absolute proof, which must stand until it is disproved, that I have been during the past ten years importuned and urged by the large insurance companies of America to take out insurance.

Therefore I will leave the question of this million-dollar policy and other forms of importuning until the insurance companies offer something in rebuttal.

THE WAY OUT

The overhauling of the Equitable Life exposed conditions far worse than I had indicated to the public, and it seemed probable that the usual whitewashing process would be utilized to conceal the guilt of the rapacious criminals who had been untrue to the most sacred trust that can be imposed on man. Since that time, however, the Governor of the State of New York has appointed a committee to investigate the affairs of the Big Three corporations, and the resulting disclosures are the sensation of the hour as this book goes to press. In order to protect the interests of policy-holders, in case the authorities declined to act, I issued the following address in the July, 1905, number of Everybody's:

TO THE POLICY-HOLDERS OF THE NEW YORK LIFE, MUTUAL, AND EQUITABLE INSURANCE COMPANIES

The time has come for you to act. When, less than a year ago, I began my story, "Frenzied Finance," I exposed the function of the three great life-insurance companies in the structure of the "System." I explained that they were controlled in the interests of great financiers and that their funds were juggled with to compass the huge plundering operations of Wall Street. At that time the New York Life, the Equitable, and the Mutual Life loomed before the American people as the greatest, most respected, and most venerable institutions in our broad land. To-day they stand for all that is tricky, fraudulent, and oppressive.

A great change to have been accomplished in less than twelve months!

My readers are by this time familiar with the condition of affairs in the Equitable. The greed, juggling, and grafting practised by its officers and controllers have been fully exposed through the press. I hope none of those who have followed the terrific arraignment of rottenness and rascality made through the Frick report are so foolish as to imagine that the evils described are confined to the Equitable. In my own opinion the Equitable is much less reprehensible than the New York Life, and when that institution and the Mutual are thoroughly shaken up, as they will be in the future, indubitable evidence of the same fashion of extravagance, trickery, and fraud will be found in plenty. Conditions in the three institutions are the same; though of late the New York Life has altered the character of most of its securities. Each has piled up an immense surplus which has been used through allied trust companies for stock juggling; each has paid extravagant commissions to agents; the funds of each have been managed to afford to high officials plentiful opportunities of graft; each has its real estate, fire insurance, low rent and loan favor graft; in each will be found the same type of syndicates as President Alexander and Vice-President Hyde used for their personal enrichment in the Equitable. To-day President John A. McCall of the New York Life is credited with possessing a fortune of between ten and fifteen millions--a few brief years ago he was State Superintendent of Insurance in Albany. The chief associate in the management of the same corporation, George W. Perkins, J. Pierpont Morgan's partner, is another very rich man, whose wealth has been accumulated in a few short years. Do you imagine for a moment that such transactions as I set forth last year in connection with the New York Security and Trust Company, in which the interest of the New York Life was sold to a syndicate of its own directors for a sum far below the market value of the shares, were put through without the connivance of President McCall and Vice-President Perkins? Even if the New York Life, as its president explains, did make a large profit on the sale of the trust company's stock, he cannot deny that the syndicate paid far less than the then market value of the shares for the insurance company's holdings.

There is something particularly vile about the crimes of these high officials and distinguished gentlemen who have been waxing fat and luxurious on life-insurance graft. In a recent number of this magazine I drew a parallel between the confidence operator and the burglar to show that the latter despises the former for a sneak thief who takes no chances in his thieving operations. Infinitely more depraved than the sneak thief is the high-placed functionary, presiding over a great institution built up out of the savings of millions of people, paid an immense salary for his important services, trusted with vast funds because of his reputation for integrity and business sagacity--who yet uses his splendid place to line his own pocket. Of all fiduciary institutions, life insurance should be the most sacred. Its chief function is to care for the widow, the orphan, and the helpless. The millions of revenue paid annually into the life-insurance companies of this country represent the blood and tears and sweat of millions of Americans who thus provide for the care of their dear ones for the time when death shall have put an end to their own income-earning abilities. The administrator of a trust so solemn and exalted should devote himself to its safeguarding as a priest dedicates himself to the service of his Maker. The responsibility conferred on him is the highest and holiest man can repose in his fellow-man. Remembering all this, consider again the revelations of greed and plunder in the Equitable; consider that millions upon millions of dollars have been filched and wasted; analyze the Frick report and the letter of President Alexander to the directors of the society, calling for Vice-President Hyde's removal from office. Think, ye farmers and laborers, of personal traveling expenses of $75,000 in a brief period, of salaries of $100,000 annually paid for a few hours of work per day; think of vast sums of your money used to provide expensive safe-deposit institutions with low-priced quarters so that the personal income of men already multimillionaires may wax still greater. Think of the great institution to whose hundreds of millions' income you contribute your hard-earned dollars, being farmed, milked, and squeezed by a pack of dissolute and greedy schemers and robbers more conscienceless and oppressive than any band of thugs in the country.

When I began to discuss in Everybody's Magazine the subject of the three great life-insurance companies, I stated that there is actually nothing between the two million-odd policy-holders and the possibility of their being robbed of the billions of dollars of their accumulated savings but the devotion and the honesty of the men who are in control of these institutions.

You know what happened when I said this to you the first time--less than a year ago. The officers, trustees, and hirelings of these great companies laughed to scorn my statements and called me a liar and a scoundrel. They drew the attention of the whole world to the standing and wealth and honesty of the men who managed these great corporations, and proved by the most positive asseverations that nothing could be more preposterous than that any one of them could do wrong. But the great God, who seldom allows His children to remain long deceived to their undoing, heard these loud-mouthed protestations, and to-day the world is listening to exposures of low, mean thefts and contemptible crimes far worse than any to which I had pointed.

And from whom comes the proof of the treacheries and rascalities perpetrated within the Equitable? From the men who control and manage this great institution and its hundreds of millions of accumulations. When my accusations first appeared, these men saw the handwriting on the wall and some of them, bolder than others, determined to seize these vast hoards of the public's money and at the same time get possession of all evidence of past crimes so that they might be immune forever after from punishment and the necessity of making restitution. In the act of grabbing, however, the robbers fell out with one another, and, presto! they are in the public square where all men, women, and children, cats, dogs, and asses may see and hear as they gouge, bite, and accuse each other of the vilest crimes.

These are the men in whose custody even now are the accumulations on which you, Mr. Policy-holder, are depending to take care of your wife and little ones, should you die. On the honor and responsibility of men who in the past five years have "saved" out of salaries of $20,000 to $100,000, private fortunes of millions, you must absolutely rely for the safety of the billions of dollars of your savings. The future of the helpless beings whom your hard daily labors provide with a livelihood is in the hands of men who admit having expended $100,000 of your money to provide a lordly and regal entertainment for a set of extravagantly paid agents and solicitors who, spurred on by prodigal inducements, have piled up huge amounts of new business on the company's books. I have explained to you before what such business is worth, that the agent gets so large a commission that he is practically in a position to accept risks at far below their cost to the company, and that such business as this is seldom renewed. The same men have been paying personal secretaries, gardeners, and flunkies out of your earnings; they have been feasting and traveling in private cars with large parties of the New York flubstocracy at your expense; every possible extravagance they have been guilty of by means of the revenues some of you have worked fourteen to eighteen hours a day to gather in. Shame, I say, on such contemptible thievery.

I cannot resist the temptation to pull back the slide from one episode of the past. When my strictures on the three great life-insurance companies first appeared, one of the vice-presidents of the Equitable, Gage E. Tarbell, in writing to an inquiring policy-holder, said: "Pay no attention to Lawson; he is only a reckless stock gambler, and every sensible person knows that any man, no matter what his position might be, who would do anything to cause loss to the class of people we insure, must be a rascal." And this is the same man Tarbell, it is now admitted by all the Equitable officers and investigating committees, who, as soon as he saw the crisis coming in the affairs of the Equitable, had his pal, President Alexander, pay to him $135,000, which he claimed was due him for commission renewals, even though he was then in receipt of a salary of $60,000 per annum for his services. It is through the operations of this same Tarbell that the vast system of rebates, one of the chief evils of the present system of life insurance, came into being, and through his prodigality that the immense sum of $2,000,000 stands on the books of the company, representing advance commissions to the pampered agents.

The time has come for all you policy-holders to act, and there is but one way to act.

A thousand and one schemes are afloat to confuse and trick you at this period. The cry is--anything to hush things, to confine the fire to the Equitable, at any cost, even though it totally consumes the $400,000,000 of the people's savings in that institution. I told you at the beginning that the New York Life was worse, if anything, than the Equitable, and the Mutual Life just as bad. Therefore I unqualifiedly advise policy-holders to:

1. Pay up this year's premium--it will be the last to these plunderers.

2. Have nothing to do with any committee or scheme.

3. Write me, at once, your name, address, and the amount and character of your policy. I want nothing more from you, and under no consideration will I divulge your name without your further consent in writing.

I already have the names of thousands of policy-holders, but to make my plan instantly effective I must have scores of thousands.

My plan has for its aim and end, this and only this:

The absolute preservation of the face value of your policy.

The reduction of future premium payments to forty cents on the dollar on what you now pay.

The restitution of millions upon millions looted from the three great companies, or as much as can be collected after a careful examination of the books--and the punishment of the thieves.

Bear in mind that I will not have any money connection with you in the working out of my plan. I pay my own expenses. I will not ask any reward or profit, money, office, or otherwise, nor will I under any circumstances accept any.

In response to this appeal I received over sixteen thousand proxies, representing over fifty-four millions of insurance. The investigations made by the legislative committee of the State of New York are unearthing in a most thorough manner the iniquities of the directors and managers of the Big Three, and before proceeding further I shall await the results of its work. If there is any way short of criminal proceedings to compel the restitution of the millions diverted or stolen from policy-holders, I shall begin suits which I am satisfied can be fought to a successful conclusion.

THE CALL TO ARMS

The extraordinary disclosures made before the investigating committee of the New York Legislature, which is now conducting inquiries into the methods of the great insurance companies, led me finally to issue the following open letter to John A. McCall, in which I review the controversy between us and contrast his disclosures of corruption and mismanagement with his brazen professions of virtue and probity made last year. In order to wrest the two great mutual companies from the control of men who are obviously unworthy to direct them and with whom the policy-holders' funds are plainly unsafe, I asked for proxies which would make it possible for me to bring about a change in the control of these two great corporations.

This letter and call appeared in the November, 1905, issue of Everybody's Magazine.

AN OPEN LETTER TO JOHN A. McCALL, PRESIDENT NEW YORK LIFE INSURANCE COMPANY

Sir: It is time your attention was called to the moral sense of the American people. It is time some one dragged you out of the Wall Street conservatory and set you in the plain white light of daily life. It is time you were shown yourself as you are to-day seen by the millions of your countrymen who, a month ago, believed you to be a great and honorable man.

In spite of the terrible exposures of the past few weeks, in spite of the pitiless revealment of yourself and your directors as tricksters, in spite of the unveiling of the jugglery, grafting, and corruption of your administration of the most sacred trust that can be confided to man, you remain unconvinced of your fall and unpenetrated by your shame. Fortified by the sympathy of your fellow-sinners, you imagine your audacious bluster and your sly evasions before the Investigating Committee of the State of New York represented shrewd generalship and able strategy, forgetting that the enemy against whom your manoeuvres were directed was the American people and that, in this inquisition, your character and reputation were as absolutely before the bar as though you had been indicted for sequestration of the funds of some dead friend's wife.

Throughout this broad country of ours are good Americans who have slaved and toiled to gather up the hundreds of dollars which you have exacted from them yearly as the price of the future livelihood of their wives and children, or as the provision for their own old age. You have made yourself the custodian of these funds under sacred pledge of square dealing and safe and honest administration. You have made yourself the national executor, the great depositary of the moneys of the widow and the orphan. You have cried your virtue and honorableness from the housetops, and, under the stress of your pleadings, hundreds of millions of dollars have been confided to you annually--half the savings of the nation have been turned into your coffers, all because you insisted that you were honest beyond all other men, and that the dear ones left behind might rely on your generosity and integrity for their support.

And it is with the moneys that might at any time have been claimed by these widows and orphans that you have been rigging syndicates, debauching legislatures, juggling judges, manipulating stock-markets, and doing other things which will be proven later. Instead of employing the vast power and the immense wealth intrusted to you to conserve the interests of your policy-holders, you have made yourself a part of the cruel robbing machine which the "System" has created to deprive the American people of their savings. Under the pretence of seeking profitable investment, your corporation has been perverted into a vast stock-gambling agency. You have filled the high places in your corporation with your own children and relatives and their relatives, and conferred on them great salaries out of which they have grown rich. You have paid out to friends and associates, on various pleas, millions that rightly belonged to your policy-holders. You have done all these things habitually, yet to-day you describe the investigation being conducted into your operations as an impertinence, and secretly you regard this inquisition and all that pertains to it as a waste of time and energy. You are unrepentant, unashamed, and defiant.

I shall take this opportunity, sir, of reviewing our own relations during the past year and contrasting your position to-day with that you boasted twelve months ago.

One year ago, in Everybody's Magazine, I said:

"The officers, trustees, and officials of the 'Big Three' life-insurance companies have been and are systematically robbing their policy-holders. They are grafters--mean, contemptible grafters."

I gave specific instances of their thieveries.

You replied, not by haling me to court, but by:

Circulating throughout the world documents by the millions, disparaging my reputation by advertisements and "news" and "editorial" statements from your subsidized insurance press, denying my charges and attacking my character, all at the expense of your policy-holders.

You libelled me in thousands of private letters to policy-holders, many of which came back to me.

You employed James M. Beck, ex-Assistant Attorney-General of the United States, then and now chief attorney for Henry H. Rogers, the Standard Oil Company, the "System," and the Mutual Life Insurance Company, to ridicule my utterances and asperse my honor in addresses in the cities of Philadelphia and Boston.

You employed James H. Eckels, ex-Comptroller of the Currency of the United States, now president of the Commercial Bank and representative of the "System" in the West, to attack my arguments and distort my motives in Chicago.

You ordered Vice-President Perkins, of the New York Life Insurance Company, to perform similar service in Philadelphia; and

The burden of all these documents, advertisements, and disguised advertisements and addresses was: "Lawson is an unmitigated liar and scoundrel, whose sole reason for attacking the insurance companies is that we refused him insurance."

I replied by printing your personal letter to me, wherein you importuned me to accept insurance in your company.

Again you gave me the lie, and pronounced your letter spurious.

I replied to you and your followers by instancing cases of perjury, bribery, and false statements.

I stated that your claim that your company did not own, nor loan upon, stocks was false, and that it was made for the purpose of misleading and imposing upon your policy-holders, banks, trust companies, Government officials, and investors.

You answered this by writing a letter to one of the great churchmen of America, and in it you said: "I pledge you my word of honor this company has never, since 1899, had a dollar's interest, directly or indirectly, in any stock. Lawson knows this, and deliberately, for his own base purposes, makes charges to the contrary which he knows to be false."

To-day you and your fellow-plunderers stand convicted in the eyes of the whole world not only of juggling the moneys of the widow and the orphan in the stock-market, but of manipulating these trust funds for the benefit of your own pockets. To-day the world is aghast at your perfidy and amazed at your temerity.

Notwithstanding the turpitude already exposed to the people, you still imagine you can so conduct yourself as to prevent the investigators from fastening on you and your associates the more desperate crimes that have been committed in the past--the 150 to 200 millions stolen and diverted or used in corruption. You know as I do that only the very edges of this national cesspool have yet been uncovered. You know that not only have the ballot-box and the Legislature at Albany been tampered with, but the law-making and administering machinery of other States corrupted, the Federal Government surrounded, and certain of the judiciary of America "educated."

You believe you can keep the evidence of these crimes from the American people by the same kind of bluff and effrontery with which you met my first charges. But you have mistaken the tempers of your countrymen.

I have been authorized in writing by over 16,000 policy-holders, carrying over fifty-four millions of insurance, to act for them.

I had intended to await the finish of the New York investigation before proceeding, but as I have had placed in my hands during the past few days evidences of the determination of yourself and your accomplices and fellow-conspirators to face it out regardless of consequences, and as I believe men capable of committing the acts that have been proved during the past few days are fully capable of taking the transportable part of the billion and a quarter funds to foreign countries, and of using them to keep themselves from their justly deserved punishments, I have decided to act now.

In sending you this open letter, I am actuated only by a desire to bring you and your associates to such a sense of the seriousness of your position that you will see it is useless longer to attempt to defy the American people.

Yours, for the Exposure of Corporation Sneak Thieves, THOMAS W. LAWSON.

TO LIFE-INSURANCE POLICY-HOLDERS

At the beginning of my story, in 1904, I made certain accusations against the management of the three big life-insurance companies.

I knew, when I began my story, that the big life-insurance companies were in the hands of grafters and thieves, just as are the great banks, trust companies, railroad companies, and big corporations and trusts.

This I knew and, in plain language, said it.

The big insurance companies, through their officers and trustees, replied by declaring: "He's an unmitigated liar."

I kept at my knitting, for I knew the crimes of these insurance grafters were such that, sooner or later, the world would have an opportunity to judge fairly who were the unmitigated liars and thieves.

The opportunity is at hand.

To-day the press of the world is devoting its space, news and editorial, to a recital of the contemptible and heinous crimes of the New York Life and the Mutual Life Insurance companies--not as I relate them, but as their own officers and trustees publicly confess them.

In the July instalment of my story I called upon policy-holders to sign a coupon blank inserted in Everybody's Magazine, and send same to me that I might speak for them in a plan to further their interests.

In response to my call I have received up to October 4, 1905, 16,307 answers, representing $55,165,916.

I think my readers, when they analyze the following list and take into consideration the character of the senders, many of whom are men of the highest standing--bishops, ministers, governors, mayors, judges, senators, members of Congress, railroad, bank, and trust company presidents--will agree with me that it is the most remarkable collection ever made by one interest since life insurance began.

INSURANCE COUPONS

Received from June 20th to October 4, 1905

New York Life $18,845,410 Equitable 17,317,956 Mutual 14,550,240 Miscellaneous 4,452,310 ----------- $55,165,916

Alabama 22 Montana 130 Arizona 127 Nebraska 236 Arkansas 124 Nevada 28 California 842 New Hampshire 73 Colorado 211 New Jersey 282 Connecticut 177 New Mexico 40 Delaware 43 New York 1,780 District of Columbia 152 North Carolina 466 Florida 230 North Dakota 143 Georgia 169 Ohio 985 Idaho 150 Oklahoma 154 Illinois 1,012 Oregon 93 Indiana 415 Pennsylvania 1,133 Indian Territory 130 Rhode Island 67 Iowa 560 South Carolina 81 Kansas 316 South Dakota 104 Kentucky 153 Tennessee 157 Louisiana 197 Texas 580 Maine 144 Utah 68 Maryland 126 Vermont 57 Massachusetts 843 Virginia 242 Michigan 406 Washington 417 Minnesota 574 West Virginia 205 Mississippi 173 Wisconsin 318 Missouri 499 Wyoming 36

Alaska 27 Corea 1 Argentina 1 Mexico 71 Bermuda 1 Newfoundland 4 Canada 344 New Zealand 1 Chili 1 Panama 2 China 1 Philippines 16 Colombia 1 Porto Rico 5 Costa Rica 1 Santo Domingo 7 Cuba 4 Straits Settlements 1 England 9 Sweden 1 France 4 Trinidad 2 Hawaii 35 Uruguay 2 Honduras 2 Yukon Territory 4 Japan 4 ------ Grand total 16,307

As soon as I received a number of signatures sufficiently large to warrant it, I quietly began operations.

The first direct result is the investigation now being held. This investigation has proceeded far enough to put before the public absolute proof of all the crimes I have charged, and three to thirty times as many more.

It is now evident to all that:

1st. The policy-holders in the great companies have yearly paid into their company scores of millions more than necessary.

2d. The policy-holders have been robbed of scores of millions.

3d. The vast funds now on hand have been habitually used by the grafters now in control of them in the rankest kind of stock-gambling.

4th. These funds have been used to corrupt the ballot-box and the law-makers of the country.

I repeat, absolute proof of all this has been made public.

It should now be evident to all that:

1st. The funds now on hand are in actual jeopardy, because they are in the absolute control of unprincipled scoundrels.

2d. Unless something is done, and done at once, by the policy-holders, each and every one of the largest companies may become insolvent; that is, they may not be able to meet the engagements of their policies, because of waste of funds, tremendous falling off of new business, tremendous cost of new business, and the nature of the new business--so-called "graveyard business"; for I am credibly informed that they are now seeking to insure those who formerly have been refused insurance because of physical infirmities.

It should also be plainly evident that, if the policy-holders move, and move quickly, they can be absolutely assured that:

1st. The funds as they are to-day will remain intact.

2d. They will be added to by the restitution of from $75,000,000 to $150,000,000.

3d. A score of the thieves who have plundered policy-holders in the past will be sent to prison.

4th. The future payments of policy-holders will be largely cut down.

5th. The present swollen surpluses will be returned in large part to policy-holders.

6th. In the future policy-holders will actually run the company.

7th. All policy-holders can be assured that in the future they will receive the actual worth of their policy at surrender.

All this being so, it is most eminently desirable for policy-holders to act, and at once.

The time will never again be so opportune, for if nothing definite is done now, policy-holders will be discouraged for all time.

I have given the subject the closest and most earnest study, assisted by the best insurance experts and lawyers procurable, and guided by the suggestions of over 100,000 policy-holders, for in addition to the 16,000 mentioned, I have received over 90,000 letters. I have come to the conclusion that the one thing for policy-holders to do now is:

To authorize some one in whom they have confidence to select a committee to take their proxies and at once seize possession of the two great mutual companies, the New York Life and the Mutual.

I omit the Equitable at this stage, because litigation may be necessary before the Equitable, being a stock company, can come into the policy-holders' hands. But in the other two, no obstacles can be placed in the way of the policy-holders' taking control.

To empower this committee to bring action at once to compel full restitution and enforce full punishment, and then to change the present method of conducting the insurance business.

The vital question is: Whom can the policy-holders trust to do this?

The "Big Three" are at present spending vast sums of the policy-holders' money to prevent some such action as this, in the following ways:

First, by moulding public opinion through paid news and editorial items; next, by the collection of proxies; and third, by the inauguration of different moves and dummy suits and investigations.

There are already three of these affairs under way. Almost any way the policy-holders turn for relief they are confronted with traps which, if they fall into them, will make relief and rescue impossible.

Any man or body of men who go to the great expense necessary to collect proxies must have some hidden scheme for reimbursing themselves, or they must be working in the interests of the thieves now in control.

I therefore make bold to say: I am the natural one to make this move.

Just a minute before you pass judgment. Let us see if I am:

1st. I have already spent in my work over a million dollars of my own money.

2d. I am willing to spend, if necessary, two millions more.

3d. I will absolutely prove I want nothing in return.

4th. I will absolutely prove on the face of my plans that I cannot in any way benefit beyond the satisfaction I shall derive from putting another spike in the "System's" coffin.

I ask of the policy-holders simply this:

Fill out the following form of proxy; sign and seal it, and send it to me. Quick action is most desirable in view of contingencies.

FOOTNOTES:

In the course of the legislative investigation of the great insurance companies in New York, it developed that the Mutual Life Insurance Company conducts a publicity bureau, organized to discredit any one who dares criticise its methods. This bureau is conducted by one Charles J. Smith, on a salary of $8,000 per annum, and he works through Allan Forman, editor of the Journalist. Forman maintains a "telegraphic news bureau" and secures publication in various newspapers or periodicals of matter sent him for dissemination by the Mutual Life, and he is paid $1.00 per line of the policy-holders' money on all matter for which he obtains publicity. The whitewash paragraphs recently published throughout the country in regard to President McCurdy and the Mutual Life were all paid for on this basis.

THE ENEMIES I HAVE MADE

When a man discovers that a public building full of men, women, and children is infested with rats and that these vicious rodents have undermined its foundations and honeycombed its structure, it becomes his duty, first, to warn the occupants of the presence of the rats, next, to show them the damage that has been wrought and how the rats can be trapped and killed--and then he may take a hand in the rat-hunt himself.

That is about what I have been doing, and if proof were needed that the "System" suffered under my exposure of its villainies, I should have it in plenty in the showers of mud bullets it has fired at me. From scores of quarters these volleys came. A regular army of the "System's" votaries must have been out working like Trojans to stop my work, to discredit me, to bespatter me with its dirt.

The manner in which the "System" writhed under my attacks showed how seriously it was hurt. What surprises me was that so little intelligence was exhibited in defaming me. Such wanton, foolish attacks those that were made on me personally! As though it mattered who or what I am in comparison with the accusations I have made. Americans are not fools. To say that Lawson is this or that does not minimize or detract from his charge of robbery and conspiracy.

Every morning after I began to write "Frenzied Finance" I found a new budget of personalities in my mail, in the newspapers, in pamphlets. Learned lawyers traveled about the country slinging mud at me at banquets and society gatherings; scores of hireling weekly and monthly papers devoted pages to vilifying me; the insurance press was laden with assaults, and for fear the public should miss the brickbats, the insurance companies carefully mailed them to their policy-holders. All these tirades were in one key--that of crude abuse. The statements about myself and my career were nothing but lies. They were not even cleverly imagined.

Upon entering on this crusade against "Frenzied Finance" I expected attack. Reforms are not matured to accompaniments of incense and rose-water, and I had made up my mind to disregard the mud and its slingers. Afterward, if there were any "System" left, I rather looked forward to smothering it beneath the foulness of its own generating. There came a time during the year, however, when I deemed it proper to depart from this resolution and nail some of the lies my enemies were circulating about me. I debated the subject thoroughly, for the rancor of these assaults was evident and I could not help feeling that the general run of my readers would be impatient of the space given these gutter rakers. The determination to go at them was clinched by a letter which came to me, with a number of others from clergymen of various denominations, from a learned Catholic priest, who put the case for a reply most earnestly. He said:

You owe it, my son, to yourself to clear away, for once and all, the charges your enemies have made against you. I have faith you mean all that you say, but there are many, many sons and daughters who are troubled in heart and harassed in mind with doubt whether your motives be pure, and if your deeds in the past have been along the ways of the good. It is my advice, if you will accept it, that you put aside your pride and your dignity and frankly and openly tell us whether these charges that we read are true or false.

BECK VS. LAWSON

I shall deal with the subject as fairly as possible, reminding my readers, however, that I am at a disadvantage in having to use pen and ink instead of the implement appropriate for the purpose, a hose connected with a disinfectant barrel. To begin with, I reproduce the following from the Toledo Blade, December 26, 1904. (I have similar paragraphs clipped from one hundred other papers.)

JAMES M. BECK FLAYS LAWSON

Calls Boston Author-Broker a Frenzied Fakir.

DEFINES MONEYPHOBIA

Declares He is Victim of New Disease--Compares His Actions to "Crazed Malay Running Amuck."

PHILADELPHIA, December 26th.--Ex-Assistant Attorney-General James M. Beck talked on "Moneyphobia" at the thirty-ninth annual commencement exercises of the Peirce Business College. He paid his respects to Thomas W. Lawson in such terms as "frenzied fakir" and "crazed Malay running amuck." ... "There are abundant indications that this epidemic is now rife in the community. The extraordinary vote polled by a Socialistic candidate for President, in a time of general prosperity, seems to evidence this, as does the avidity with which many intelligent people read in a cheap 'penny dreadful' magazine the incoherent, self-contradictory, and self-incriminating articles of a notorious frenzied fakir, who, like a crazed Malay, is wildly running amuck, and, without rhyme or reason, slashing at the reputations of judges, senators, and financiers."

The following is from a Chicago insurance paper, and comes to me with the marginal inscription, "Puncture this bladder when convenient." I may say that I receive hundreds of clippings every day from various parts of the country, sent me by correspondents who are determined I shall be apprised of what my antagonists are trying to do against me.

BANKER ECKELS AND BROKER LAWSON

The splendid tribute to our country's greatness, resources, and possibilities given by President James H. Eckels, of the Commercial National Bank, of Chicago, and ex-Comptroller of Currency of the United States, before the Chicago Life Underwriters' Association, was listened to with earnest attention.

The brilliant young financier ... believes in life insurance for the people. It creates the valuable habit of saving. He deprecates the malicious attacks on companies by men of mysterious motives, and feels it will be a sorry day if they ever become objects of prey for political thieves.

The banker paid his respects to Thomas W. Lawson, of Boston, whom he characterized as a notoriety seeker and branded as a "discredited, disreputable, despised stock-jobber who glories in his infamy." Mr. Eckels lashed Lawson with caustic language, and stated the American people of judgment are not misled by his diatribes.

Mr. Eckels believes that life-insurance presidents reach their high stations by their own ability and grasping of opportunities. Because a man is elevated to a position of eminence and responsibility does not mean he is dishonest. He arrives there because he cannot be held down and remains as long as he proves his worth. The banker declared that life companies, with their vast funds, were being safely guided by men of superior mental mould.

Mr. Eckels referred to President McCall, of the New York Life, as being a clerk in a State bureau office when he first made his acquaintance. He said President McCall had advanced, like other company executives, owing to his own ability and genius for management.

In an early article in this series I stated that one of the favorite operations of the "System" is to pick off those officials who have exhibited unusual talent or energy in protecting the interests of the National Government. In this way they secure the services of men who know the secret workings of the people's institutions and how best to guard the corporations against the consequences of their misdeeds. During the Cleveland administration there developed a "financial phenomenon," James H. Eckels, Comptroller of the Currency. It did not take long for the astute Rogers-Morgan-McCall clique to see that this young man's knowledge of finance in connection with his governmental position might prove a dangerous obstacle to their machine if he were not captured. It was not long before he was captured.

I met Mr. Eckels during the Cleveland bond performance. I need not enter into the details of that extraordinary affair here, for it is one of the sore spots in recent American history. Briefly, the Administration at Washington attempted to issue $100,000,000 government bonds and deliver them in a snap sale to the "System." The New York World began a crusade against the transaction, and was so successful that the Administration was compelled to offer the issue to the public through competitive bids. The result--the bonds fetched many more millions for the Government than if the deal had been allowed to slip along the ways the "System" had greased for it. I remember well the scene at the opening of the bids. It was in the United States Treasury at Washington. With many others who desired an allotment of the bonds, I was present. We were crowded into a small room, and following the direction of young Mr. Eckels, who handled the transaction, we gave him our bids, which, according to the advertised programme, were in sealed envelopes. After all the bids were submitted--mine was for a number of millions--the envelopes were taken by Mr. Eckels into a rear room. Then a few of the leading financiers present, among them John A. McCall, of the New York Life, J. Pierpont Morgan, and one or two others of the "System's" foremost representatives, got their heads together and began an earnest conference. Certain of them went out of the room and after awhile returned for a further conference. There were several such confabulations and comings and goings, until finally, after a monotonous delay, the bids were opened and the bonds awarded. Morgan, McCall, et al., had secured the bulk of the issue at a price many points above what any one had been led to believe the bonds would sell for, and many points higher than the "System" and the Government had proclaimed to the people they could possibly sell for, yet at a price which showed millions of profit a few hours after the bids were opened. I do not charge that the public's envelopes were opened and "peeked" into before the "System's" bids were sealed. Such a charge is not necessary. It has been made many times by the press. Mr. Eckels, to the minds of such of us as could see through cracks in a floor wide enough to drive a four-in-hand coach into without unhooking the leaders, had lived up to his rôle as a financial phenomenon, and when some time afterward it was bruited abroad that this able young man was to have the presidency of the City Bank, or any other large bank belonging to the "System" that he might select, there was no surprise, although much comment, in Wall Street. Mr. Eckels finally accepted the presidency of the Commercial Bank of Chicago, where he now is one of the important cogs in the "System's" machine.

The case of James M. Beck has points of similarity. Mr. Beck, a young Philadelphia lawyer, obtained a valuable knowledge of the secrets of the Department of Justice in Washington as Assistant United States Attorney-General, and in the prosecution of the Northern Securities suit got an insight into the "System's" methods. It will be remembered that at the trial of the suit he made a great appearance and became famous as the young champion of the people who had succeeded in "busting" this notorious trust. The victory was hardly announced before it became known that the brilliant Assistant Attorney-General had renounced the cause of the public and had been engaged at a large salary as chief counsel for Henry H. Rogers, of Standard Oil.

Mr. Beck has proved a most available and flexible servant in the cause of his master. He has done Mr. Rogers's bidding in a manner befitting the best traditions of "Standard Oil." Almost his first work was the trial of the famous Boston Gas suit, in which for weeks he "steered" Henry H. Rogers while on the witness-stand in the Massachusetts Supreme Court. The very night before this case was to be called for trial, the eminent young "trust buster" and people's champion called on my attorney and made him a proposition. It was that I should meet Mr. Beck and agree upon the details of certain testimony that Mr. Rogers and Kidder, Peabody & Co. (the "System's" Boston representatives), and myself would be called upon to give upon the witness-stand next day. My attorney brought the proposition to me.

"Great heavens!" I said, "is it possible that this man has the audacity to come to Boston and ask me to commit perjury?"

"He does not put it in just those words," my attorney answered.

"No, but he says he wishes to match up testimony with me so that we may all testify alike."

"That is it," my attorney answered.

"But," said I, "I have got to state the facts, and the facts are diametrically opposed to the testimony Mr. Rogers and the others are to give. This looks to me like subornation of perjury."

My lawyer would not have it that way, and I instructed him to secure from Mr. Beck a writing as to just what he wished me to do, and that writing I have at the present time. In it he states that if I do not see him and agree upon the testimony to be submitted in the Supreme Court of Massachusetts the following day, there may be developments which will be decidedly uncomfortable for Mr. Rogers and perhaps for the rest of us.

I did not meet Mr. Beck, and Henry H. Rogers and Kidder, Peabody & Co. told one story and I another. Bald perjury was committed by some one. However, I will give all the facts, including the "match up" letter, when I come to them in my story.

Mr. Beck and Mr. Eckels are the two men designated by the "System" to attend public gatherings and vilify Thomas W. Lawson. They are at it, industriously.

THE DONOHOE EPISODE

As soon as the first chapter of "Frenzied Finance" appeared, Henry H. Rogers turned loose on me one Denis Donohoe, a character thug whom he had imported from California for just such emergencies. Donohoe's first service for Mr. Rogers was a vicious onslaught on Heinze, of Montana, in the New York Commercial. This was an attack of such unusual vulgarity and malignity that it won Donohoe his spurs, for soon afterward, when by a characteristic trick Mr. Rogers obtained possession of the New York Commercial, he made Donohoe its editor. I may mention that Heinze sued the Commercial for $300,000 damages, and apropos of the suit an interesting complication occurred which seriously interfered with Mr. Rogers's plans. The night before the old owners, from whom Mr. Rogers had grabbed the Commercial, were to be thrown into the street, they threatened, by way of reprisal for the mean trick that had been served on them, to confess judgment to Heinze. One was president and the other secretary of the company, and this action would have settled the proposition. Rogers, treated to a dose of his own medicine, had to make a compromise, and the men are still on the paper. The details of this good story are to be found in the Detroit Journal. It was fitting that when I began my exposures of the "System" this thug should be ordered to do his worst by me, and he began the series of virulent assaults that the Commercial published and advertised all over the country. The first of these was devoted to proving me crazy, and it was carefully circulated by my friends the insurance companies by way of offsetting the effects of my revelations of their jugglery of the people's funds. Later I showed up the fellow so vigorously that John D. Rockefeller ordered Mr. Rogers to muzzle him in his own paper, whereupon arrangements were made with a New York weekly to act as the sewer-conduit for the lies and abuse this thug was warranted to turn out.

I should not dream of dealing with this man or his fatuous attacks in a respectable publication save that he has been appointed the "System's" chief defender. It really seems as though the game were too small to take time for its killing, but as these weak and febrile maunderings really represent the "System's" reply to my charges, it may be worth while to show, once and for all, what idiotic lies they put forth and what a silly and ineffective falsifier it is that they have made their champion. I shall take the second article of the series and contrast Donohoe's statements with the actual facts.

Incidents in Mr. Lawson's versatile career which even those who are not censorious might well deem shameful.

If in my career I have done anything of which I or any honorable man should be ashamed, then I am willing to stand convicted of all that this character thug charges against me--of being a stock-jobber, fakir, liar.

He claims, if the writer understands him aright, that he is animated solely by a keen regard for the public weal in performing what he describes as a public duty.

I stated positively in the Foreword of my story, and have reiterated many times since, that in making these revelations I am actuated first and mainly by a desire to benefit the people of this country, not only by informing them how they are being plundered, but how they can in the future guard themselves, and that if it were necessary to accomplish my purpose I would spend every dollar I possess; but mixed with this desire is a hatred of the "System" as deadly as a man can have for anything human. I have also reiterated that at such stage of this revelation as is possible I shall secure from the "System" every dollar I can wring from it to be used in my fight against it, provided always I can get its dollars in legal, fair, and above-board fighting ways--I mean, in the open market.

Mr. Lawson appears before the bar of public opinion as a volunteer witness for the commonwealth--"state's evidence"--as the lawyers phrase it--and hence his reputation, his motives, his character, his every act, become at once fit subjects for the closest scrutiny and examination.

Whoever says that in telling my story I am revealing anything which it is not fair or just to tell, or that I have not a perfect right to state, says that which is false. I am confining myself to explaining how the "System" gets its money. I do not touch upon how it spends it. If in an honorable way I could write the things that have come to me confidentially, the "System" might well tremble. I confess that at times I have been tempted to depart from my code--when, for instance, soon after the first Donohoe chapter, a man came to me and showed that he had been offered $5,000 to vouch for the statement--which Denis Donohoe, H. H. Rogers's right-hand man, had printed, and the insurance companies had spread broadcast--that the first ten years of Thomas W. Lawson's business life were spent as an employee of Richard Canfield, the Providence and New York gambler, and afterward as his partner. "Give us an affidavit to that effect and we will pay you $5,000." To this man I said: "I have never in my life been connected with any gambling-place in any way, nor had to do with gambling in any form, and only once in my life have I set eyes on Richard Canfield. He was in the Waldorf Café one day when I was passing through. However, if I did know him I should not be ashamed to admit it, for I consider Canfield, from what I have read of him, an angel of purity compared with any one of a score of the 'System's' votaries I could name." The man left me, but soon after returned. He said: "It makes no difference whether what you say is true or not, I can now secure $10,000 for the affidavit." When this kind of fighting is brought to my attention, I am strongly tempted to let down the bars.

He relates, with all the graphic art of a novelist, a wellnigh incredible story. Chicanery, fraud, blackmail, bribery of a legislature and of a judge, systematic pillage of investors and of the American public.

The details I have narrated are facts, and I will prove them to be facts so all may know them.

In delving into Lawson's career--a most unwelcome task--the writer has detected a continuity of purpose, a fixity of design, a uniformity of method pervading his every public act. What he is doing now, i.e., exposing somebody or something, he has repeatedly done on a lesser scale in the past; not from worthy motives, but for the sole purpose of illegitimate pecuniary gain.

Yes, throughout my entire life I have pursued with a continuity of purpose that class I am pursuing to-day--the class that has taken from the people their earnings by fraud or trick. If other proof were needed that the men I am after have lost the discretion which made them great in the world, these foolish yarns supply it. It is well known that no man ever gets near to "Standard Oil" in business or socially until their detectives have dissected his career from the cradle up. I spent years in close business relations with these men, so close that, as I will show later, I acted as the agent not only of Rogers and Rockefeller, but of the Amalgamated Company and the City Bank.

He is at present engaged in attacking the "System," as he calls it, and the banks and the insurance companies and Wall Street and American finance, by circulars, by advertisements, and through the stock-market, as in the past he has repeatedly attacked other corporations and individuals until he obtained what he was seeking, and in every recorded instance that thing was unearned dollars.

In the past I have repeatedly attacked individuals and corporations until I obtained what I sought in every case--justice for the defrauded and punishment for those who had cheated them, and in no case dollars or their equivalent.

In the gilded biographies of himself which, from time to time, Mr. Lawson has caused to be written and published in newspapers and magazines.

My history is well enough known. I have always lived in the open. It has not been necessary to press-agent myself. A good deal has been printed about me in the newspapers during the last twenty-five years, but if I have ever sought to exploit myself before the public by means of autobiographies or journalistic puffs, and it is so proved by any reputable newspaper, may I be shown up to public scorn.

It was Mr. Stevens who defrayed the expense of a six months' course at a Boston business college for his protégé.

I have never had such a course of six months, nor of any length, nor have I ever been inside a business college.

Mr. Stevens, who was a kindly, philanthropic man, known and beloved by all his fellow-citizens, died years ago, therefore he cannot dispute what Lawson tells.

The late Horace H. Stevens died not years ago, but on March 8, 1904.

Old residents of New York will recall that long before the days of Canfield's gilded palace, and long before the era of the present district attorney, Mr. Jerome, there was a gambling-house known to the commercial traveller and man-about-town as "818 Broadway," and that one of the backers of the game was William F. Waldron, or "Billy Waldron," as he was usually called. Waldron retired nearly thirty years ago from the syndicate that controlled this house and moved to Providence, where he interested himself in gambling and what, for lack of a better term, may be called the cognate industries. One of these latter was a bucket-shop of the ordinary country town type.

This bucket-shop was confined to the tender mercies of one "Jo" Lumpkin as manager. Lumpkin failed to make the business profitable, and Waldron, after attaching $500.00 that Lumpkin had on deposit in a bank in New York, turned him out. In his place he installed the present loquacious reformer of American finance, Thomas W. Lawson, or "Billy" Lawson as he was then known to the gamblers, race-track touts, and confidence men who made Providence their head-quarters.

My readers will agree with me that such weak and feeble rot is beneath any man's attention, for even if what is here charged were true, namely, that a young man of twenty-one had been so employed, it would have no bearing on his work twenty-six years afterward; but as I have decided to take cognizance of this stuff, here are the facts:

What to-day is known as the bucket-shop evil--that is, the speculation in stocks over the counter at offices conducted by brokers outside the pale of the law or the Stock Exchange--did not exist at the period mentioned. This method of conducting speculation, however, had just been invented, and many of the legitimate brokers, Stock-Exchange members, utilized the new form in their ventures. Indeed, the number of brokers and brokerage shops outside the Stock Exchange was as large, if not larger, than that of the regular houses. At the time Donohoe treats of I was doing considerable business for a young man, as will be evidenced by my business card of that period:

+----------------------------------------------------------------+ | THOMAS W. LAWSON & CO., | | | | BANKERS AND BROKERS. | | | | Dealers in First-class Investment Bonds and Stocks. | | Offices: Boston, Providence, New York, and Chicago. | | | | President of the Lawson Manufacturing Company. | | President of the McDonald-Lawson Manufacturing Company. | | Vice-President of the Briggs Printing Machine Company. | +----------------------------------------------------------------+

I regularly visited every week my offices in Boston, Providence, and New York. At one time I had a Providence office in the building marked in the cut in the Donohoe story, and the sign over the door was "Thomas W. Lawson & Co."

It was in Providence, during the heyday of the Waldron-Lawson enterprise, that Lawson ... first met "Jack" Roach, whose apparent employment now is selling diamonds on commission to the so-called "sporting element" of New York, but who is acknowledged to be Lawson's personal representative in this city. It was there, too, that he made the acquaintance of Herbert Gray, who subsequently conducted a gambling-house in Boston, and who recently served as one of Lawson's captains and managed his trotting stable. Ben Palmer, a well-known character in State Street, who is one of the main cog-wheels of Lawson's machine, first made Lawson's acquaintance during this period of his career.

I do know the Waldron Brothers, of Providence, who are among the oldest residents of Rhode Island, and who, with the present United States Senator Nelson A. Aldrich, composed the great wholesale grocery house of Waldron, Wightman & Co. They did not graduate from a gambling-house on Broadway. I knew the brother referred to familiarly throughout Rhode Island as "Honest Bill," and a royal old fellow he was. I did business with him in those days, and to any connection I ever had with him I look back with pleasure. He was then conducting a farm in the suburbs of Providence, and in a straightforward, old-fashioned way supplying that city with produce and poultry, and had, to the best of my knowledge, the respect and confidence of all who knew him. I never knew of his having been a gambler, and had no means of knowing, as such matters were then an unknown world to me.

I never, up to reading it in Donohoe's story the other day, heard of 818 Broadway, curious as it may seem for a man of my experience. My knowledge of gambling has always been confined to that kind which comes under the head of stock gambling. I had not met my present friend, John J. Roche, of New York, at the time mentioned. I never heard of Herbert Gray, of Boston, until I employed him to manage my stable in 1899. I have known J. Benjamin Palmer all my life. We were boys together on State Street. Afterward he was the Stock-Exchange member of one of the oldest banking-houses in Boston. He is still a broker on State Street.

Nothing of certainty can be learned of his career during this period. That he sold "base-ball" cards (a unique kind of playing-cards) at the Providence railroad station is stated on credible authority; that he "worked the trains" between New York and Providence; that he sold books; that he was a hanger-on at race-tracks, has been alleged. Any or all of these rumors may be true--or false--for whatever may be said of Lawson, his career has undoubtedly been one of marvellous activity in many diversified lines.

I have never sold baseball playing-cards at the Providence station, nor anywhere, at this time nor any time, but I did invent the Lawson Baseball Playing-Cards, and was president of the Lawson Playing-Card Company. I never sold books at this time nor any time, and never "worked trains" at this time nor any time, although I fail to see any disgrace in such honest employment; nor had anything to do with trains in any way whatever at this time nor any time except to ride in them. I have never been a hanger-on at race-tracks, and have never had anything to do with a race-track of any kind other than visiting one for the first time in 1899 to see my own horse, Boralma, race, and four or five times since to see my own horses run. I desire to dwell on this especial accusation because these character thugs have caused it to be published throughout the country that I am and have always been a habitué of race-tracks and a plunging bettor upon races. I regret that it is my misfortune never to have seen a horse-race until 1899, but if it can be shown that I was ever upon a race-track before that time, I will agree to stop writing this story of "Frenzied Finance."

In 1882, a concern known as the Briggs Printing Machine Company was incorporated in Rhode Island ... to manufacture a machine that was advertised to "print, cut, pack, and fasten with twine 100,000 tags per hour." Thomas W. Lawson secured the job of selling agent of this company, and he proved so successful and the advertising matter which he wrote brought such handsome returns, that we find him in 1884 promoted to the position of manager and enjoying a salary of $150 per month. Later he became the secretary of the company, and very shortly thereafter, in 1887, the enterprise collapsed, was sold out by the sheriff, and realized little or nothing for the numerous creditors....

It is true that I was the vice-president of the Briggs Printing Machine Company, which was organized and owned by others before I had aught to do with it. I was induced to invest considerable money in it and to take charge of its affairs. The Briggs Company was a close corporation. Its stock was never sold to the public, and after I left it it met with failure.

In December, 1888, the Lamson Consolidated Store-Service Company was incorporated at Boston. Its purpose was to exploit an invention of W. S. Lamson ... the overhead trolley system used in department-stores for carrying cash and parcels.... The capital stock at the beginning was $250,000--par value of shares, $50. The company was doing business and declaring two and a half per cent. dividends quarterly, when Mr. Lawson stepped in and began to manipulate the stock. The price of shares rose steadily to 122. Under the influence of speculative excitement the directors increased the capital stock to $1,000,000, then to $4,000,000. Mr. Lawson boomed the stock on the basis of a report, totally destitute of truth, that an English syndicate was about to purchase a controlling interest in the company. Having unloaded all the shares at his disposal on the uproad to 122, Mr. Lawson suddenly one morning awoke to a realization of the fact that Lamson Store-Service shares possessed absolutely no value, and he at once took the public, as is his custom, into his confidence. In circulars, by advertisements, and by cunningly contrived "news" items he insistently dinned into the public ear that Lamson shares were valueless. The result was as well might be imagined. The stock declined to 30, whereupon Lawson bought it back and then and there made his first grand coup. It is said that first and last he realized $250,000 from the Lamson shareholders.

I did "Lawsonize" the Lamson Store-Service Company, just as I am at the present time "Lawsonizing" the "Standard-Oil"-Amalgamated-City-Bank crowd. The Lamson Store-Service Company, with $4,000,000 capital, was blunderbussing all who dared oppose it--all who refused to be bulldozed into consolidating with it. It was the most vicious exponent of the "Trust" methods I had ever met up to that time. Its arrogance, audacity, and crimes were the themes of the newspapers and courts of the day. A most casual investigation of the newspaper files, particularly in Osgood vs. Lamson, and The New York Store-Service Company vs. Lamson, will show a state of corporation assassination equal to that of the "Standard Oil," only on a smaller scale, of course. Perjury, bribery, and even murder will be found openly charged and in some cases proved. At the height of the sensational career of the Lamson Company it ran into one of my corporations, The Lawson Manufacturing Company, and started in to "do me up" or compel a consolidation, and--well, I gave it battle. The following circular to the stockholders will show how the battle started:

Dear Sir: I deem it my duty to say to you, as a shareholder of the Lamson Store-Service Company, that your Mr. Lamson and his agents have opened up on my company, and with their usual criminal methods are endeavoring to ruin us. This circular is to inform you that I have this day given notice to each of your officers and directors that, in three days from to-day, if they have not stopped their dirty work and taken their hands off my company, they will take the consequences. I do not pretend to be able to meet them on the fighting grounds of the courts, for I know too well their power of corruption and jury-buying, but I assure you I have other ways by which I can stop them, etc., etc.

If Donohoe had desired to deal with facts, he could not have missed the details of this story, of which the papers at the time were full. It was a fight which would have warmed the heart-cockles of an embalmed warrior of the catacombs. Lamson stock was selling at 62, the highest price it ever attained, not 122, as this numskull states. When I began operations I slaughtered it and the reputation of Lamson and his associates; and in the midst of the fight, when the shares were down to 18, or perhaps 14, a great public meeting of stockholders--there were a whole lot of them--was called in the city of Lowell, and, amid fiery speeches, Lamson was told to choose between refuting my charges of fraud and being deposed from the presidency of the institution. Lamson attempted explanations, but the hard-headed stockholders did what the Amalgamated stockholders will some time do, passed resolutions that Lamson must punish me for libel or that they would punish him. The gathering then adjourned to a future date, at which Lamson was to report what action he had taken to punish me for my crimes. The next step was interesting, and bears on an accusation I have seen mentioned frequently of late. I had, when I began my fight, laid before Mr. Joseph Pulitzer, of the New York World, the dastardly crimes of which the company had been guilty, and was even then engaged in committing, and he had said: "Damnable! I will aid you in exposing them." And he did. Day after day there were broadsides in the World relentlessly denouncing the rascalities of the Lamson outfit. These finally stirred them to action. One day I received word that some trickery was being put up in the district attorney's office in New York. A few days later there appeared at my office in Boston a police officer from New York and three of our head Boston police officers. They said to me: "We regret, Mr. Lawson, but we must take your secretary, Mr. William L. Vinal, back to New York, as he has been indicted for spreading false reports."

"Has any one else been indicted?" I asked.

"Oh, yes," they replied, "you and some of the World people."

"Mr. Vinal has done nothing but obey my orders," I said. "Why don't you take me?"

"We have no orders to," was the reply.

I saw the game and sent word to the Governor of Massachusetts, who promptly told the combination: "Go slow, gentlemen. Remember you are not in New York now, but in Massachusetts." He ordered a public trial. Within two hours from the time they laid hands on my secretary I brought suit in his name for false arrest against the officers who were trying to arrest him, and grabbed the New York official before he could skip out of town. Then I went to see the Lamson crowd and we had it out. They begged that I allow Vinal to go to New York, just to vindicate them, in which circumstances he would be allowed to return on the next train, and the case would never be heard of again. If I would consent, they would agree to a reorganization of the company and the dropping out of Lamson. I showed them that they had gone too far, that I had damaging information as to how they had secured the indictment, and that now they must take the consequences.

I took the "midnight" for New York, and in the morning was at District-Attorney Fellows's office. I dared him to arrest me or the officers of the World. He replied: "I don't want you, Lawson. I cannot and won't help you advertise your fight." It proving impossible to get up any excitement in New York, I returned to Boston, and the extradition proceedings furnished a most sensational trial. The cause was bitterly fought. The lawyers even came to blows in the governor's chamber. Finally, when Governor Brackett had all the facts before him, he said: "You cannot work your dirty tricks on me," and he entered a vigorous refusal of the application for Mr. Vinal's extradition. This case established precedents for all such proceedings since.

The fight won, pressure was brought to bear on me to let up on the Lamson outfit and call off further proceedings. For some time I persistently refused to do so, as I was determined to contest the constitutionality of the law. Finally, however, on condition that Lamson should be thrown out, the management of the company reorganized, its criminal methods abandoned, and all records and trace of the indictment against myself and the others removed from the district attorney's books, I consented.

This is the history of how I "Lawsonized" the Lamson Store-Service Company, and if there is anything I have ever done that was good to do and well worth doing, this was it. I am just as proud of my work here as of what I did in the General Electric fight upon which I have already touched. In the Lamson reorganization I was offered all sorts of good things, but I refused, as I always have in such affairs, to benefit in any way but the open and fair one where I go into the open market and stake my money against that of my opponents on my ability to prove I am right. The facts here are of legal record. Following is the Donohoe-Rogers version. The mendacity is obvious:

Among the unfortunate Lamson-Service stockholders were numbered several aggressive people of the old-fashioned kind, who resented Mr. Lawson's peculiar way of doing things. These submitted, in 1892, to the grand jury of the city of New York a sheaf of Lawsonian literature, comprising his scandalous attacks on the company's securities. The grand jury indicted Thomas W. Lawson, and Colonel John R. Fellows, the district attorney, and his assistants, Francis L. Wellman and Mr. Lindsay, went to Boston to try to have Lawson extradited. The Governor of Massachusetts came to Lawson's rescue in the nick of time and declined to honor the request of the Governor of New York for his extradition; but for years thereafter the future author of "Frenzied Finance" made his trips to this money-centre incognito.

THE GRAND RIVERS ENTERPRISE

In 1890 the entire country rang with the fame of Grand Rivers, and it was Thomas W. Lawson, of Boston, who pulled the bell-rope.... The scheme, as may be deduced herefrom, was a most comprehensive one. The development of the "marvellous deposit of coal and iron," which had been discovered upon the property by Mr. Lawson, one day while seated in his revolving chair in his State Street office, furnished the basis for the incorporation of the Furnaces Company. After $2,000,000 had been "expended," the clamor of the stockholders caused the company actually to build several furnaces. They were erected and stood idle, with nothing to feed them. The whole scheme collapsed in 1892. The stockholders lost every dollar of their investment....

In this, his fourth financial venture, Mr. Lawson did but repeat his former experiences--except, in this case, the loss sustained by those who reposed confidence in his promises was heavier than in any of his prior undertakings.

The Kentucky experience is one of the pleasantest memories of my life. Measured by dollars and cents it was expensive but was well worth it, as the young man remarked who broke his arm by being thrown from his horse into the lap of his future wife. It makes a long story, and I shall only touch on the leading facts concerning it by way of showing the desperate straits my enemies are put to in their efforts to discredit my career.

My present brokers, Messrs. Brown, Riley & Co., one of the oldest and largest Boston and New York Stock Exchange houses, had floated the Grand Rivers enterprise for some of their wealthy clients. It was an iron, coal, and furnace proposition, and before I ever heard of it, it had been bought and paid for, and enormous furnaces were under way. It was a close corporation. After a very large amount of money--in the millions--had gone into the property, I was induced to take the executive management, and also I put in a very large amount of my own money. My work was to be that of business director, for I did not know an iron or a coal mine from an alabaster ledge in the lunar spheres, and not half as much about an iron smelter as I did about converting whiskers into mermaid's tresses. However, one of the greatest iron men in New England, Aretas Blood, president of the Manchester Locomotive Works, and of the Nashua Steel and Iron Company, was at the head of the enterprise, which apparently safeguarded it. Well, it turned out that there was no iron in the mines--at least not enough to pay for extraction, and the investment simply disappeared. I lost a very large amount--at least, a very large amount for me--but I had to show for it the love and friendship and respect of the inhabitants of one of the fairest places on the earth--a place where brave men and lovely women live in peace and comfort in the knowledge of their own fearless, simple honesty, and their hatred of shams and trickery--in absolute ignorance of frenzied financiers and the "System's" votaries.

The history of Grand Rivers is an open book. There is no secret about my connection with the enterprise. It was a straight and proper venture. The men who are my brokers of to-day fathered it, and they are men of honor, probity, and responsibility, who since my first year in business in 1870 have been my close business associates and personal friends. Why do not Donohoe and his breed of gutter-rooters, when seeking information about me, ask such men as these for facts about my life?--they know what every hour of it has been. Strange as it may seem to such vampires, the men I began to do business with when I was a boy I am doing business with to-day, and they are my associates and friends.

I postponed until the last moment writing this article in order that I might be able to diagnose the "System's" attack on me. The first of the widely advertised series was such a foolish and asinine thing as to be unworthy of notice, and I desired to see how much further the second would go. In the former it was charged that I was writing my articles solely for the purpose of securing stock-market profits and compelling the "System" to settle; in other words, that I was attempting to blackmail them; that I had no honorable motives in writing my story, and had no remedy of any kind in mind; that in the recent panic I had made a million and a quarter of dollars; that I had secured President Roosevelt's message eight days before it was published; that I had advertised on November 29th, unqualifiedly advising all to purchase Amalgamated, and that on December 6th I had advertised advising all to sell. It is true that I did advise the public to sell, but that in my advertisement of November 29th I advised the people to buy Amalgamated I positively deny. I carefully avoided doing so. The other statements are equally false, and were made with a full knowledge of their falsity.

The incidents in my career about which I have here set forth the facts are not secret. All the things I have stated are fully susceptible of proof. For another instant let me take the assertion that my motive in this crusade is personal gain through stock-jobbery, and that I have no aim or end in view other than that. Well, I can to-day show the Remedy to which I have alluded so often, and which when I worked it out in 1893 I had printed with full detail. It is in my vault now under lock and key. In the year 1894, in London, I laid a copy of this document before Joseph Pulitzer of the New York World. Remember, this was a year before I met H. H. Rogers or any of the "Standard Oil" party.

Since Donohoe began his latest series of attacks I have had scores of letters commenting on them. A significant verdict on what the man is accomplishing is the following:

BUFFALO, N. Y., January 23, 1905.

Dear Sir: I herewith enclose you copy of a letter just sent to Mr. Donohoe, also to the editor of ----

Yours respectfully, ----

(COPY)

January 23, 1905.

MR. DENIS DONOHOE,

Financial Editor, New York Commercial, New York City.

Dear Sir: With considerable pleasure, satisfaction, and conviction, I have carefully read all the articles on "Frenzied Finance," by Mr. Lawson, and from my limited knowledge of affairs, gained by fifteen years of active life, am of the opinion that he has been telling facts, although at times they are clothed in the language of a writer of fiction.

I have been waiting and confidently expecting, during the past six months, that some able, honest, unbiassed, and free-handed man would take up the discussion against Mr. Lawson, and in this way aid the people in viewing the entire subject with all possible side-lights, so that when public opinion shall be finally formed, as surely it will be in the future, it may be as nearly right as possible and only the guilty suffer. It was, therefore, with a high degree of exultation that I purchased ---- of January 19th, upon the first page of which in bold type appears: "Lawson Answered--the Truth About Frenzied Finance." At the sight of these words I said in almost audible tones: "Now we shall hear the other side, or at least learn what Mr. Lawson has omitted, if anything."

I have just finished reading your article in said issue of ----, and as you now pose as a public writer and benefactor, you of course will welcome frank, honest criticism. After reading and rereading your said article, I am, against my desire, forced to the following conclusions:

1. You are either one of the "System" or are hired by it.

2. This article of yours was prepared for the purposes of making two points: (a) Working on the sentiment and passions of the weak, and the women; and (b) diverting public attention and opinion from the real facts at issue, by attacking Mr. Lawson's personal character, which is not up for discussion.

3. Your article is full of high-sounding declarations, and void of either logic or common sense.

4. In your endeavor to express the wishes of the prejudiced and biassed, you are undoubtedly dishonest with yourself without deceiving the public.

5. Your article lacks the ring that carries conviction, either as to your sincerity or the truthfulness of the statements you make.

6. The article indicates that you are vainly trying to ape Mr. Lawson's style.

Yours respectfully, E. G. MANSFIELD, Attorney-at-law.

Following the Donohoe outburst there came innumerable letters, of which this is a good sample:

TACOMA, WASH., February 14, 1905.

Dear Sir: It would be greatly appreciated by at least one of your readers if you would furnish the great and only Donohoe the details of some really scandalous epoch of your past. It has been stated many times that one man cannot make a million dollars and do it honestly, so we must assume you have done some "things" in your past. We have a very high regard out West for the works of Mr. Dooley and Mark Twain, and also are regular subscribers of Puck and Judge, and we don't want to see these noted writers and periodicals unseated, even for the time being, by Mr. Donohoe.

Therefore we ask you to give him some tip from which he can work out something serious, so he can make a statement that is not "reported," or the deduction of which does not require Sherlock Holmes.

His work of "dissecting" so far reminds us of the work of a six months' student of a medical college on a Tom cat (no pun meant).

Yours very truly, L. H. M.

I answered as follows:

My Dear Sir: Your request is similar to that of a hundred other correspondents. I regret I can do nothing to help out. Donohoe's trouble is, he is short of facts, so "short" that he seems to me completely "cornered." I am "long of" them, as you and all my other readers will admit before I am through my story, but my facts are not the kind Donohoe can use, or I would willingly let him have a few to assist him out of his present predicament.

Donohoe's employers, Rogers and the "Standard Oil," knew before they put him on to his present "job" that my life was a peculiarly and unusually open one--one that had absolutely no dark or covered corner in it; they knew it not only because all men in my walks of life know it, but because they had investigated it with their unerring search-light. Most men who have ever been on the inside of "Standard Oil" know that no man with a bad record could do business, much less have an intimate relation, with Rogers and Rockefeller for nine seconds; and my connection extended over nine years.

The tone of my correspondence during the year was not by any means altogether friendly. The writer of the following letter presented his conclusions straight from the shoulder and I was equally direct in my reply:

Personal.

GAINESVILLE, FLA., February 21, 1905.

MR. THOMAS W. LAWSON, Boston, Mass.

Dear Sir: Pardon my "buttin' in"--seems I must say something.

If what Donohoe says about your Trinity Copper Company is true, it would seem you ought to stop throwing mud at the Standard Oil crowd, for you are no better than are they, and they are known thieves and robbers. While you may be telling the truth about the other fellow, yet the fact of your telling it does not set well on the stomach of those who read both sides of the story. Seems to me it's "dog eat dog" until every one is disgusted.

Why don't you come down to business and give the readers of Everybody's something wholesome to digest and plenty of it? The way it comes now, we are over our hunger before the next issue shows up, and, in the meantime, your friend has converted many to the thought that you are worse than the Standard Oil crowd.

Won't you please answer, in the next issue of Everybody's, if you made your money--your fortune, HONESTLY, or did you "do others" for fear they would "do you"? I am inclined to think you are as big a "grafter" as ever came down the pike, even though you may be telling on the other fellow--turning State's evidence.

Yours truly, ----

You ask why I do not get down to business. You won't mind my telling you the principal reason is that it is I who am writing "Frenzied Finance," not you nor any of your kind, and that I propose to decide when it is time to get down to business. If in the meantime there is any one else who can do the job I have cut out better than I, why, none will be better pleased than myself. Indeed, I will gladly contribute as a reward to my successor double the many thousands of dollars I am paying each month to get this work of mine properly before the people.

What Donohoe says of my Trinity Copper is not only absolutely false, but has over and over again been demonstrated to be so. The actual facts regarding that property have been printed time and again in reputable Boston newspapers, and casual inquiry will obtain you the full details. In addition, practically everything which Donohoe, the hired mouthpiece of "Standard Oil" and the "System," has said is absolutely untrue and made from whole cloth. When I say this I cover all criticism which has been made upon me or my work by "Standard Oil" or the "System," for this character thug has utilized every dirty slander which my enemies ever invented and put into circulation.

Did I make my fortune honestly, you ask? and I answer: In thirty-six years of active business life, very active, embracing transactions through which I have passed from poverty to wealth and back again from riches to poverty, and in which I might easily have retained the riches by sacrificing a principle, I have never once in all these years and in all these transactions done a wrong to man, woman, or child, nor taken from man, woman, or child a dollar unfairly, much less dishonestly. Rather a remarkable record, you will say, for one who has made millions in the stock business. But I should not be broadly honest if I did not add the modification that these millions of dollars were made in the open stock-market, by methods which in the open stock-market are called fair and honest; that is, I have played the game according to the rules, and the "other fellow" has had equal chance with me and might have done anything I ever did. If, however, business were conducted as it should be and as it will be after my "Remedy" has reformed present conditions, such methods will net those using them only thousands where I have gained millions.

You add that you are inclined to think I am a "grafter." In reply I can only say you would not dare--and I don't know your size, color, or length of trigger-finger--to say it in my presence, though of course, it is absolutely immaterial what you or your kind think of me or my work.

THE LAWSON PANIC

During the eighteen months in which "Frenzied Finance" has been before the public, history has been made at a stiff pace. Next to the insurance revelations which are still in process of deliverance, the most striking demonstration of the period has been the flurry in stocks which was spoken of as the Lawson panic. In the February, 1905, issue of Everybody's Magazine I dealt with the performance and its attendant phenomena.

Without undue vaunting, I may say that my explanation of the mysteries of modern finance has not been without immediate profit to the public. The people, accustomed to invest their money in the legitimate securities of the country, had time and again lost hundreds of millions without dreaming that they had been as ruthlessly robbed as though held up at a pistol-point by a highwayman. They imagined that the great capitalists whose names were emblazoned in the press throughout the land, and who managed the banks and trust companies and insurance corporations to which their savings were intrusted, were noble and public-spirited gentlemen of the highest moral principles and of absolute integrity. They know to-day that many of them are reckless and greedy stock gamblers, incessantly dickering with the machinery of finance for their own private enrichment.

I have stripped the veil from these hypocrites and exposed to all the world their soulless rapacity. I have let the light of heaven into the dim recesses of Wall Street in which these buccaneers of commerce concocted their plots. I have done more than this: I have nipped in the bud the newest conspiracy for the entanglement of the public--the great "bull" market which was organized late in 1904 by the chief votaries of the "System," to harvest a new crop of profits on the securities they had laid in during their last raid. In other words, I have treated Wall Street to a dose of its own medicine.

During the month of December the newspapers devoted considerable space to the doings of the stock-market in connection with the episode to which I refer. I use the word "episode" purposely, for I warn my readers that it was but one of a series of disturbances which must occur before the grasp of the pirates on the great financial interests of this country can be shaken off. David slew Goliath with one pebble from his sling, but the giant "System," intrenched in the stoutest citadel ever constructed, and armored in gold and riven steel, will yield to no mere call for surrender. My own part I have cheerfully taken with no delusions as to the difficulties of the contest. He who interferes between the lamb and the wolf is likely to provoke the wrath of the wolf, and I have done worse, for have I not come between the lions of finance and their willing prey?

It is worth while here to rehearse the steps of this first disturbance, because it constitutes part of a movement destined to wield a tremendous influence in this country's history. While my revelations of the methods of the "System" were circulating throughout these United States, the "System" was engaged at its old trick of inflating the prices of its favorite stocks and bonds and spreading its nets for another gigantic plundering of the people. In the stock-market and in the highways and by-ways and resting-places of finance nothing was heard for months but fairy tales of great earnings of railroads and industrials, fairy tales of new ore in old mines, fairy tales of great financial forces converging toward colossal combinations.

These are the lures of the "System's" hirelings, the decoy calls of the market tout and the financial tipster whose part it is to mould opinion and urge the people to the shambles. Before my eyes, with a blind and audacious defiance of my warnings, the old, old game was rigged in full view of the audience and the old players began their venerable antics. In the meantime the "System" attended to its own rôle in the conspiracy--supplying out of its banks and trust companies the public's money for the gamblers to make the game with. Then began the artful process of working up the market; stocks gradually climbed higher and higher. Amalgamated ascended from the forties into the fifties and the sixties and even into the eighties; steel assumed the appearance of life and grew from ten slowly upward into the twenties and thirties. Every day in the Stock Exchange hundreds of thousands of shares changed hands back and forth among the professionals who lustily played their parts in this financial melodrama. The good old myths of great fortunes made by lucky investors began to reappear in the papers. Sales increased; values jumped rather than climbed. The trap was set; the market made. The wily manipulators rubbed their hands gleefully. The public began to bite, to buy. It was then only a matter of sizing up the wool crop before beginning the shearing.

Before I detail the steps I took to spring its own trap on the "System," I should explain that this market was purely an artificial one. The immense advance of prices was not brought about by any honest methods or legitimate causes. The "System's" votaries had enormous quantities of stocks--millions upon millions of shares, bought when the people during the past two years were compelled to throw them overboard at slaughter prices. By employing one of the oldest swindling devices known to finance, they could bid prices to any figure they desired. Honest financial writers called attention each week to the tactics of the manipulators and declared the high quotations unjustifiable and unreasonable.

At the stage of the game that I felt sure immediately preceded the unloading signal, I determined to test whether the people had really digested as well as absorbed the cold facts I had been ladling out to them in my story of "Frenzied Finance"--whether they had grown wise enough to heed a warning. So on Monday, December 5th, I carefully prepared the following advertisement, which was published Tuesday morning in the great papers of the great cities of this country and later in Europe.

AMALGAMATED STOCKHOLDERS--WARNING

From the creation of Amalgamated I have continuously believed in its worth and constantly advocated the purchase of its stock.

Henry H. Rogers personally negotiated with Marcus Daly for the properties which went to make up the Amalgamated Company.

Henry H. Rogers alone knew absolutely their values.

Henry H. Rogers's associates took his word for them.

While they cost Messrs. Rogers, Rockefeller, and associates only $39,000,000, we all believed they were worth more than the $75,000,000 at which they were sold to the public.

Shortly after the public flotation at $100 per share, the stock dropped to 75. I did all in my power to prevent the decline, losing millions in the effort, but I retained my faith in the real worth of the property.

Some of the insiders made millions; the public was fleeced of millions.

I still refused to be discouraged. I urged Messrs. Rogers and Rockefeller to make good their promises made through me to the public. Finally they consented. The stock advanced until it sold at 130.

At the highest price I was still buying and advising its purchase. Then there came the awful slump which slid the stock down to 33. I lost enormously; insiders made vast profits. The public was again fleeced.

At 33 I began a new campaign to induce my followers and the public to buy. As a result there were purchased by hundreds of people all over the country directly and indirectly through me, rising 260,000 shares, at an average of 40 to 42, and probably hundreds of thousands more which I could not trace.

This campaign I have prosecuted incessantly up to the present time, until now I estimate the public holds 1,000,000 shares, 700,000 of which show at to-day's price, 82, a profit of $28,000,000.

When my story, "Frenzied Finance," began, I advertised that it could do no damage to Amalgamated stock, but would help it.

Hoping to divert the dangerous disclosures I threatened, the leading attorney of Messrs. Rogers and Rockefeller asked for a conference. At it he demanded of me what I expected to accomplish. I replied: "One thing, at least--to put the price of Amalgamated back to 100, that those unfortunates who still retain their stock may recover their money."

Then the secret was revealed to me that Amalgamated was not worth anything like the price at which it had been sold to the public. I said: "How can this be?"

He answered: "Mr. Rogers knows for a certainty that Marcus Daly deceived him about the worth of the properties."

I had great faith in this attorney. He was sincere in what he said; his knowledge and relations were such he could not have been deceived, and his special information about this property was such that he could speak in the first person. I believed him. Soon afterward another official of Amalgamated confirmed his statements.

When I received this information my dilemma was a terrible one. If I gave it to my following they would at once throw over their stock, probably at a great loss. I waited. Sooner or later I knew these men would get behind the market, push up the prices of the stocks they had gathered in at bottom figures, and, when the moment was ripe, again unload on the public.

The market "came in." I did all in my power to assist in raising the price of Amalgamated.

To-day's situation is the same as that of 1901.

"Frenzied finance" stock gamblers have accumulated immense lines of Amalgamated. The same sensational rumors of a great rise to come flood Wall and State streets as in 1901. They have asked me to join in creating a wild market upon which all the Amalgamated taken in at lower prices may be turned out upon the public.

It would be millions in my pocket to assist, but----

I see the handwriting on the wall which the "frenzied financiers" of Wall Street do not yet see. It reads:

"The people will not stand plundering any longer."

And I have decided.

I advise every stockholder of Amalgamated stock to sell his holdings at once before another crash comes. Another slump may carry it to 33 again, or lower.

It may go higher, but this is no affair of mine. From the moment of the publication of this notice all those who have looked to me for advice must relieve me of further responsibility.

As the people who look to me for advice are scattered all over this country, I know of no other way than this to simultaneously notify them of what I have learned.

If the powerful people who manage and control Amalgamated, and who, after selling it to the public at $100 a share, allowed it to sink to $75, and after it had advanced to 130, smashed it to 33, regardless of their sacred promise to me and the public through me, now reveal to me that it is not worth over 45, it is inevitable that if they are honest in what they say, the stock must go there of its own weight. If they are not honest, they will put it there anyway, and lower still.

I would have waited until the reckless speculators who are now manipulating the market had put the stock higher, but I did not dare. During the past two days I have detected unmistakable signs that the vultures are gathering for the feast.

In the past I have told what I thought I knew about Amalgamated; from to-day I shall tell what the men who control and manage Amalgamated say they have found out about it. No stockholder should, after this fair notice, object or accuse me of trying to injure the property, even though I be compelled to begin court proceedings based on this information so lately revealed to me.

This advertisement and my mailed notices will appear in New York and Boston, Tuesday, December 6th; in the Eastern and middle portions of the United States Wednesday, and the balance of the country, Canada and Europe Thursday, and I shall wait until Friday, that all may have ample time to dispose of their stock, if they care to, before making my next move.

Every holder of Amalgamated must keep before his eyes this one tremendous fact: His property is now absolutely at the mercy of men who have the market in the hollow of their hands, and who in the past have raised this stock to the highest and then dropped it to the lowest without heed or concern but for their own pockets.

COPPER RANGE

Since Copper Range Consolidated sold at 12 I have advised its purchase. To-day it sells at 70. All who have followed my advice have made immense profits.

Copper Range has 385,000 shares; Amalgamated 1,550,000.

Copper Range is a new property at Lake Superior, consisting of three immense mines and a railroad, with the latest and most complete plant in the world, including its own smelters. It is the largest and richest copper mine discovered and developed in the past twenty years. It is producing now 40,000,000 pounds of copper annually, and will in the near future become the largest producer in the world.

Amalgamated pays 2 per cent. in dividends. Copper Range will pay 6 per cent. in the coming year, and continue to increase, to what limit no man can tell. If the present market for copper, the metal, holds at 15 cents, and the best judges think it will probably go higher, Amalgamated should increase its dividends to 4 or 6, but with 15-cent metal Copper Range will earn and pay 8, 10, and 12 per cent., and upward.

The curse of Amalgamated has been "Standard Oil" management. Copper Range has been, and is, directed and controlled by representative Boston copper men, who seek their profits in the mine and not in the stock-market.

THOMAS W. LAWSON. BOSTON, December 6, 1904.

The result of this announcement proved that my message had not fallen on stony places, but had been accepted by the public in the spirit of its giving. All Tuesday, Wednesday, and Thursday the people sold their stocks to the "System's" votaries at the falsely inflated prices these gentry had forced for their own plundering purposes. Instead of gathering in the savings of the toilers, the "System" had to part with some of its wad. For once the people got the money and the "System" had the stocks. Under the stress of tremendous selling the price of "Amalgamated" was shattered. Other frenzied finance stocks declined in sympathy. The power of publicity had been triumphantly vindicated and the cries of frenzied financiers, their mouths full of their own fish-hooks, resounded through the land.

That this condition would be allowed to prevail long, I knew was improbable. The "System's" leading votaries got together and organized to stop the frightful decline in prices. The old cuttle-fish methods were at once resorted to--a campaign of falsehood, deception, and trickery began. Lest the people should realize that it was their power which had wrought such havoc, the touts and tipsters shouted in chorus that the slaughter of prices was the work of the "System" itself, and that I was secretly in league with the "System" against the public; that, the public having been robbed of its stocks, prices would advance with an extra bound. Scores of millions were drawn from the banks and trust companies to stay the slump. Under the influence of all this industry and clamor the market began to boil again; prices recovered, and the people, confused and bewildered, were once more about to be entrapped. A sharp advance was followed by a cry from the votaries that I was a trickster and that what had been in reality the most notable demonstration of "the people's strength" ever given was only another evidence of the "System's" infallibility. If this deceit had prevailed, the task I have undertaken of enlightening the public would have had a setback. Relying on my previous work, I put forth the following announcement Monday morning, December 12th, and confidently awaited results:

INVESTORS AND SPECULATORS--WARNING!

For six months through my story, "Frenzied Finance," in Everybody's Magazine, I have been educating the people to the terrible condition existing to-day in America--the people are plundered of their savings by a few men through the working of the "System."

After a close study for six months I concluded that the people were awakening to the truth.

I decided to make a test.

I advertised certain truths. That was all.

For three days Wall Street and the "System" were panic-stricken--paper values melted to the extent of hundreds of millions.

The laws of the land are strict about panic-breeding by public statements.

If any of the terrible statements I have made had been false, I should to-day be in prison or my body suspended from a lamp-post. I could not possibly have escaped.

What I have stated is truth. No one dares gainsay it.

Wall Street and the "System" for the first time were compelled to come to the rescue and put in jeopardy their own money by buying stocks from the people at inflated prices.

For the first time a break came while the manufacturers of stock still held them.

The people sold them.

To-day every scheme known to frenzied financiering is being worked to make the world believe last week's panic was the result of stock speculators, bears, "Standard Oil," and the "System."

Throughout this country and Europe is being spread the story that I was in league with "Standard Oil" and the "System," that they had sold out their stocks and got me to raid the market to shake out the public.

That another great rise is coming.

* * * * *

This is clever, smart, the only thing possible under the circumstances.

But it is a lie.

I ask the people to watch the desperate efforts that are being made to get this lie to pass for a truth.

The "System" must unload on the public, but above all else the "System" must convince the people that the awful destruction of last week could not have been brought about merely by the people's own doings.

If the people are not so convinced they will know their power, and that they have in their own hands, to use at any time, a weapon which can stand the "System" on its head.

There is no reason why the people cannot reverse the old process and always sell at the top to the frenzied financiers and buy from them at the bottom.

* * * * *

This is my warning:

I ask the people and Wall Street and the "System" to give it weight or their loss will be on their own heads.

I am going to strike again, suddenly, sharply, sensationally, and in a way that will produce effects upon prices and upon markets, so much more destructive, that the effects and the destruction of last week will appear by comparison as milk to vitriol.

Every owner of an active stock in which the "System" has any interest owes it to himself to weigh my warning.

The result must be terrible for Wall Street and the "System," and nothing can avert it.

It matters not how much preparation is made, as it will come in a way not possible to guard against.

I want all to know now, so they will not blame me when the slaughter is on.

My first and only warning will come in the form of a public notice that certain named stocks should be sold the day my advertisement appears.

Three days afterward I will publish why, but with the why it will be too late for holders of stock to save themselves.

I now say to all, if you decide after reading this that I am only talking, well and good, but when it is too late, remember what I did say.

While waiting for me to speak, again think it over.

* * * * *

When "Frenzied Finance" first appeared, only six months ago, the wise heads of the "System" said:

"The public will tire of it in sixty days."

At the end of six months the people, the press, and the pulpit are lashing themselves into a fury over its revelations, and it is impossible to print magazines enough to meet the demand.

When I first touched on the life-insurance companies they laughed.

To-day policy-holders are panic-stricken, and the big companies are falling behind millions a week.

When I said my story would affect Wall Street, Wall Street laughed; last week it yelled, cursed, and begged.

And I am only in the mild, preliminary stages yet.

While waiting for the next move, make no mistake.

When real work begins Wall Street and the "System" will look like a last year's straw hat in the swirls of Niagara.

AMALGAMATED

Last Tuesday morning I publicly said:

"The men who control Amalgamated told me it is not worth half the price it was floated at. If they told the truth it will go back to 33. If they have lied they will smash it back to 33 as they did before. Sell it."

All that day (Tuesday) holders could have sold at an average of 79.

Holders of over 200,000 shares did.

The following day all holders could have sold at an average of 74--300,000 did.

The third day all holders could have sold at an average of 66--200,000 did.

Then the Wall Street powers got desperate and stopped the decline.

During these days I did not sell a share nor do anything in the market to assist the decline, but did buy enormous amounts to prevent it from breaking below 60.

Every scheme known to frenzied financiers is being worked to make it appear now that this stock is going to sell much higher.

It is advertised broadcast that I was working with the bear raiders and "Standard Oil."

This is a lie.

My brokers were requested by another client to publish a statement that a prominent copper company president stated there was $33 in the Amalgamated treasury.

Instantly the rumors were sent broadcast that I had settled with "Standard Oil" and was bulling the stock.

This, too.

I know the man who made the statement and the high officer of the Amalgamated who got him to make it.

And it shows the desperate position of the Amalgamated "Insiders."

They are loaded with the stock.

I dare any officer of the Amalgamated Company to publish the above statement over his signature.

If he does court proceedings will be begun at once.

I also dare Mr. Rogers or Mr. Rockefeller to deny the statement made by me that they have said the stock is not worth 50, and that Marcus Daly deceived them. I dare them.

I repeat what I have said to holders of Amalgamated:

Sell your stock now, before it is too late.

Bear in mind when Amalgamated sells at 33 that I have warned you.

And in the meantime watch for sharp breaks in Amalgamated. I will give no further warning on this stock, and under no circumstances will change my now advertised position on it.

Thomas W. Lawson.</sc> BOSTON, December 12, 1904.

The second test brought a stronger demonstration than the first. This time the "System's" votaries were drawn up in solid phalanx; behind them uncounted millions and unmeasured power braced to meet attack. All day Monday the people hurled their securities at the gamesters, and with every onslaught prices crumbled until, when the Stock Exchange closed, the "System's" losses were represented by hundreds of millions of dollars. The people had learned a lesson, and a hundred years more of the "System's" trickery and falsehood will not efface its impression.

VILIFICATION NO REPLY TO FACTS

The attacks I made on the "System" were frank and direct statements of facts. The destruction they wrought upon the cherished plans of the gamesters was due to their truth. If the things I stated about Amalgamated were not true, how easy to prove them false, and how completely then should I have been discredited. But what has the "System" in its blind rage done? Well may the American people who read what is printed below say to themselves, "'Whom the gods would slay, they first make mad.' What is Thomas W. Lawson in this transaction that his personality need enter into a controversy wherein the issue is of facts alone?" Suppose I were all that my enemies say of me, the question is not of my guilt, but of the truth of my charges. I was not surprised to read on the morning of Tuesday, the 13th of December, the diatribe printed below. It was published in the leading papers of the country in the form of an advertisement, in great type covering half a page.

THOMAS W. LAWSON--READ THIS PICTURE

NEW YORK, December 12, 1904.

THOMAS W. LAWSON, Boston, Mass.

For six months I have read with close attention your story of "Frenzied Finance," in Everybody's Magazine, and have paid close attention to the manner in which, by pandering to the worst prejudices of the American people, you have endeavored by misstatement of facts to distort the conditions actually existing through what you call the workings of the "System."

What is the conclusion to be deducted from your own statements? What is the "System" to which you have so often referred?

From the standpoint of honest, unprejudiced men no other conclusion can be derived but from your own statements you have endeavored personally and through subornation of others to debauch legislation, to distort facts, to create in the minds of investors a lack of confidence in men whom the public for many years have looked up to as the leaders in the industrial world.

By every foul vilification and every statement which distorted imagination is capable of producing, you have endeavored to show that the so-called leaders of finance of the United States are in league to rob and defraud the investing public.

Taking all your statements and analyzing them, what do they amount to? That certain men, amongst whom you yourself was one of the leaders, have bought out certain corporations which were capitalized at a price which you state was far above their cost.

Not one single new fact has been brought to the attention of the public. If men, by their brains, their capital, and their energy, acquire properties that have not been appreciated by the public, put them forth under whatsoever name, so that the statements made in connection with those properties are true, and capable of verification, what is it but a business proposition that cannot be criticised?

What is the "System" which you denounce as the very personification of evil? Is it not the "System" of which you have been the leading advocate, votary, and exponent for many years? Is not the "System," when analyzed and reduced to its root, a stock-brokerage of which you are and have been for many years one of the shining lights; not the system of honest, legitimate brokerage, but the system of endeavoring by false statements and by exciting the fears of the multitude to depress and destroy values in order that its votaries may reap their ill-gotten gains?

Is there one thing in connection with all that you have written in your articles on "Frenzied Finance" in which you have not been from start to finish one of the prime movers? Who is the man that, from the inception of the enterprise which you most severely criticise, has been most prominently before the public? Who is the man that, from your own words, originated the idea and carried it to its completion? Is it not Thomas W. Lawson? Who is the man that, in the various schemes which you hold up to the condemnation of the public, has taken from start to finish the leading part? Is it not Thomas W. Lawson?

Is there one honest man in the United States who to-night believes that, in spending the thousands and thousands of dollars that you have spent in advocating your views and in posing as the friend of the people, that you have not acted for your own selfish ends? Do you believe that there is one man in all this wide world to-day who honestly believes one single statement that you have made, or who believes that you have ever turned your hand to, or aided in the slightest degree in, any honest enterprise? You criticise the copper corporations who have placed their stock before the public as a legitimate investment. Can you point to one single instance in which a misrepresentation of fact or figure has ever been made in anything connected with the Amalgamated Company?

Who are you, who should say in relation to a copper mine whether it is good or bad? Did you ever see a copper mine? Did you ever put a pick into ore? Did you ever reduce one ton of metal so that it would yield up its wealth for the benefit of mankind. Have you ever done anything excepting to act as a parasite upon honest labor and, by chicanery and by misrepresentation, endeavor to rob the people of their hard earnings? I speak to you plainly, knowing you yourself for what you are. Can you show one man that can point to any honest industry in which you ever took part; to one single act of yourself that ever contributed to the welfare or the advancement of the working people? Can you point to one single act in your career that was ever based on any other motive than absolute egotism and selfishness; to one single utterance, act, word, or deed of yourself that was not based on selfishness and a desire to rob or misrepresent or, in some other manner, attach the earnings of the people to your coffers without effort on your part?

I address this communication to you knowing you for what you are; as a man who, throughout his many years of active life on the Stock Exchange, came to be generally considered as the synonym of chicanery and of misrepresentation. To-day, through your perversion of truth and partial misstatement of fact, which, through many years in pursuance of your calling, you have become an adept in, you can destroy the confidence of the people who make the money and the wealth of the country. Do you for one moment suppose that there is one honest person in this country to-day who believes that you are actuated by a sincere desire to aid them?

Do you not know that your only motive is, by destroying confidence, to endeavor to make a large profit for yourself, by the methods which you have pursued of advertising to the public? The men who do things, the men who created wealth, the men who are known throughout the world for integrity and for their business qualifications, will unanimously say that your motive is selfish from start to finish.

Do you remember the dealings that you had with me, how they were based on falsehood and misrepresentation from start to finish? How, by the use of names that are well known in the financial and business world, you endeavored to rob and convert to your own use what you thought was one of the greatest properties in the world? What has been the result of your advertisements of the last few days? Has it not been to destroy confidence, to create a panic among people who had invested their earnings in what they have considered as legitimate propositions? Have you ever paused and thought for one moment about what the results of your selfish and distorted statements might be?

In your articles you have spoken of the loss that has been entailed upon widows and orphans, of disgrace and suicide and other ills that have come through what you are pleased to call the workings of the "System," the "System" of which you have been and are to-day the exponent, the system of misrepresentation and of spreading false statements; in other words, of stealing Heaven's livery to serve the devil in. Millions of dollars of legitimate investments have been lost to the people who have made them. Why? Because you, in your selfish egotism, have looked to nothing but your personal gain, thinking nothing, caring less for the woe that you might work to thousands, pandering to the worst prejudices, and by means of such words as "Standard Oil," "Amalgamated," "Frenzied Finance," etc., and making statements which investors have not the means or the time to dispute, you have endeavored to destroy values that have been created by the works of a lifetime.

To-morrow, in Boston, I shall call upon you. I for many years have stood as a worker, as a man who has built up and who has created, and I know that the savings of a lifetime of many honest investors have been swept away by the falsehoods that you have spread abroad through the public press.

To-morrow, at your office, I shall denounce you for what you are. The Master long ago said: "By your works ye shall be judged."

Personally I shall call upon you for your answer to-morrow.

W. C. GREENE.

This is the rejoinder of the "System." No denial of my facts. No defence against my charges, but a volley of mud and a threat of assassination. I had dared tell the people how they had been robbed.

All remember the panic of 1901, the famous Northern Pacific corner, in which values shrank hundreds of millions in a few hours and tens of thousands of the people lost their entire savings. Who precipitated that terrific slaughter? Certain great railroad magnates and bankers were at each other's throats; two greedy corporations had quarrelled ferociously over the control of a railway line. No man in all our broad land dared to hint at the assassination of a Morgan or a Perkins or a Harriman or any of the "Standard Oil" votaries who were parties to the bitter contest that left Wall Street strewn with the mangled and bleeding carcasses of the ruined and bankrupt. That time, however, the "System" had both money and stocks--the people had lost both.

I am not going to enter into a defence of myself against Colonel Greene's charges. In the newspapers of the country that matter was fully ventilated at the time. I simply republish his vituperation to show how the "System" sets about silencing those who dare protest against its villainous methods. In the first six months of the publication of my story the sole defence the "System" entered against my specific and terrible charges of plunder and debauching of the people was to attack me personally. It inaugurated a war of mud-slinging and vilification directed by the New York Commercial, Henry H. Rogers's own paper, which printed the ridiculous statement that I was crazy. This editorial made splendid ammunition for the big insurance corporations, which caused it to be distributed among their policy-holders, and for the yelping pack of insurance papers which may be depended on to bark, and bite the legs of any one who dares attack their master, the "System's," most profitable institutions. I find I have not space here to reproduce these several mud broadsides, which really are more valuable as evidence of the doddering imbecility and fatuous weakness of the so-called great men of finance than interesting or informative. Since my personality is the issue, I propose to give my readers some testimony of a different character, gathered by experts in the heat of battle.

THOMAS W. LAWSON AT CLOSE RANGE

AN INTIMATE TALK WITH THE FINANCIER AND FIGHTER

BY ARTHUR McEWEN

From the New York American, November 27, 1904.

Thomas W. Lawson of Boston, who is making it so interesting for Standard Oil financiers and other able gentlemen that add your money to their corpulent millions while you wait, is himself an interesting man and a very puzzling one to a great many people.

One day last week I spent several hours with him at his rooms in Young's Hotel, and it surely was a stimulating and enjoyable time. Everybody now knows how exceedingly well Mr. Lawson can write, and he talks as he writes--boldly, vividly, audaciously. He thinks out loud, pouring forth a flood of speech, breaking off in the middle of sentences, going into long parentheses, touching on a dozen incidental things by way of illustration as he goes, but always coming back to the main point. He may confuse you, but he does not confuse himself. And notwithstanding the rapidity of his utterance and his copiousness he is not carried away into saying what he would rather not have said.

He is handsome--tall, broad-shouldered, strong, well-knit, and graceful--still almost youthful physically, despite his forty-five years and the beginning of grayness in the dark, wavy hair which covers his large, finely arched, and well-proportioned head. His forehead is high and broad, his gray eyes deep set under brows that come together and give intentness and fierceness to his gaze when he is aroused.

And when Lawson is aroused you see a fighter with all his wits about him and of utter fearlessness. He would have made a first-class soldier, with his quickness and dash and the pluck that was born in him, and has not to be summoned by thinking and resolving.

THE BOSTON VIEW OF LAWSON

The Boston view of Lawson is illuminating. They are afraid of him on State Street. He thinks so rapidly and does things with such instant decision that he bewilders the conventional plodders. They admit that he is brilliant, that he has a genius for gathering in the dollars, but he shocks the financial Mrs. Grundy. They tell you that he is "irregular," "sensational," "bizarre," and the rest of it--all of which means simply that he is a man of original mind, who follows his own methods, succeeds with them, and doesn't care a snap of his fingers about being out of the fashion.

He has a hundred ideas and impulses where the "safe and steady-going" business man has one--and as the safe and steady-going State-Streeter doesn't understand the ninety-nine Lawson ideas and impulses which do not come to him, he charges them up to "eccentricity" and "charlatanism."

Boston says Lawson is vain. He certainly does hold a good opinion of himself, and he has a right to. A boy who goes into a bank at twelve as he did and before he is seventeen cleans up $60,000 is hardly to be rebuked for considering that he is better fitted for the financial game than most. He knows life, he knows men. He has made and lost fortunes and is not afraid of being "broke."

That experience has been his repeatedly, but always he rose again. His brains, energy, and daring would cause him to rise anywhere. Had he been given birth in a South American republic, the dictatorship would have been his inevitably.

Lawson was born a money-maker, but he is a great deal more than that. He is a many-sided man, interested ardently in lots of things to which the ordinary money-maker is oblivious. He is very, very human. He has a soul.

Although he is raining blows on important men, who are not accustomed to being treated with disrespect--although he is charging them with crimes, and hopes, I should say, to drive them out of the country or into the penitentiary, he speaks of some of them with the greatest kindness, thoroughly understanding their good personal qualities.

THE WONDERFUL ROGERS

He denounces H. H. Rogers, for example, as a robber, a criminal, and he said to me:

"Rogers is a marvellously able man and one of the best fellows living. If you knew him only on the social side, and knew him for years, you couldn't help loving him. He is considerate, kindly, generous, helpful, and everything a man should be to his friends. But when it comes to business--his kind of business--when he turns away from his better self and goes aboard his pirate brig and hoists the Jolly Rover, God help you! And, then, as a buccaneer you have to admire him, for he is a master among pirates, and you have to salute him, even when he has the point of his cutlass at the small of your back and you're walking the plank at his order. Rogers is wonderful. He is one of the most prolific human creatures I have ever met; prolific in thought, in devices--and I've been at the game a long time now and ought to know.

"Don't think me egotistical, but I can't help looking under the surface and going to the bottom of things. So I learn more about men in Wall Street and what they are at than most. This is my thirty-fourth year of sixteen and seventeen hours a day and three hundred and sixty-five days in the year, and I have seen them all come and go. I am with the third generation of my time now. In such matters I feel somehow that I'm about three hundred years old.

"Men like Rogers are all very good fellows. They are genial and tolerant in their judgment of others. Yes, they are mighty good fellows, until you turn them around and look at their other side. Rogers is lovable enough until he touches the other button. Then he goes with perfect ruthlessness for what he wants. And yet, though you are his victim, you can't bring yourself to hate him. After he has thrown you down and taken all you have and you turn yourself over and find the dark lantern has disappeared, and you hear him going up the lane, you pick yourself out of the gutter and admire the skill with which he did the job. If you could stand it, you would almost whistle to have him come back and do it over."

"It is easy to see," I said, "by what you write of Mr. Rogers in your magazine story, that you were fond of him and gave him the highest rank for ability, but just the same you said you had to go on the stand in the gas suit and swear exactly opposite to his testimony. Do you charge him flatly with perjury?"

"I have put it fifty times in black and white," answered Mr. Lawson, "that he committed perjury. There isn't any question about it. I produced my secretary's minutes, delivered over the telephone, received by his secretary and afterward confirmed. He confirmed the message to me, called me up and talked it over and did business on that agreement. Two men, Rogers and myself, followed each other on the stand and made diametrically opposite statements; and neither one of them reserved himself in stating that it was knowledge at first hand. Therefore there was perjury."

LEGISLATIVE CORRUPTION

"Mr. Lawson, the whole country is familiar enough with legislative corruption, so there's nothing new in your charge that the Legislature of Massachusetts was bought up. But what will attract national notice is the definiteness of your accusation. You charge H.M. Whitney, brother of the late W. C. Whitney, and one of the foremost business men of your State, with having done the corrupting in order to get through a complete charter for a gas company. Now, when you pillory a person of Whitney's standing and prominence, as you have done, he has got to do one of two things--either force you to come to the front and compel you to prove the truth of what you say or stand before the public morally convicted."

"That's right," agreed Lawson heartily.

"Do you stand ready to prove your charge if he challenges you to do it?"

"What else can I do? Of course I can prove it. I'm sorry for Whitney. He is a good fellow on his personal side, like Rogers, but truth is truth."

"However used we may have become to buying Legislatures, however commonplace it may be, still, when a financially responsible man like yourself gives concrete instance, and is prepared with proofs, the fact is horribly startling to everybody that cares for his country. What is to be the end of this sort of thing--the purchase of the people's representatives by the criminal rich?"

"Well, you can ask me a question even broader than that. What is going to be the end, not only of such things as I have stated in regard to the corruption of the Legislature of Massachusetts--and we all admit that the same thing is being done in other States--what is going to be the outcome of this rottenness in connection with the practices in Wall Street that I am telling about in my magazine narrative in 'Frenzied Finance'? To answer would be to disclose my remedy--the climax to my whole story. At present I can only say that I make no charges loosely, on insufficient evidence. I state only what I know. I have seen the iniquities worked out. I know that these crimes are being committed every day; that these great financial schemes are carried through, not only by the commission of moral crimes, but legal crimes--crimes for which those participating in them can be held responsible if they are gone after in the right way, and I am going to show the right way.

THE REMEDY

"I believe that I have a remedy. That, of course, is a tremendous thing to say. I have spent my life on it. I have been waiting for the opportunity."

"I may not ask you what your remedy is?"

"No, I shall propose that myself when I have laid all my facts about these crimes before the people. I am going to tell them about some startling crimes. All that I have told so far, including the systematic corruption of the Massachusetts Legislature, relates to the past. That is, the deeds are dead, so to speak. But the crimes of Amalgamated, though in one sense they are now past, are yet connected with the present, because Amalgamated is alive. The man who was robbed in 1899, in 1900, and 1901 has his claim unsettled. That man is alive and Amalgamated is a big, living corporation. When I get to that I shall be talking in the present and something is going to be done.

"I have the remedy for the whole thing. You will appreciate the largeness of that statement, but I have thought and advised and worked it out. My remedy is based on common sense."

"Does it aim at any real change in our political system? Is it socialistic?"

"Oh, no; it doesn't mean a turning over in politics. You and I know that the dollar is what is running things in this country to-day, and if you come along with an ideal proposition--a proposition that carries with it a change in our laws or a proposition to have some new laws passed--you might as well say good-by to it, because the fellow whose hundred millions you want to take away is going to say: 'How many dollars does it need to turn that upside down?' and he is going to supply the dollars."

LAWSON'S VERSATILITY

Mr. Lawson gave me nearly three hours of his time, and during those three hours he was interrupted every five minutes or so by telephone calls. He conducted his business right along, ordering the selling and buying of stocks, making or declining appointments, talking with his publishers, his lawyers, his family, his friends. It would have goaded almost any man into excitement and irritability, but it was all in a day's work with Lawson. Yet he is not phlegmatic; indeed, he is extraordinarily animated. But it is animation with composure. In a business way there is not a busier man in the country, but he finds leisure for other interests--books, pictures, bronzes, horses. He has a beautiful country home, where he goes daily by special train, and then puts up the bars against business, bores, and all intruders.

In his talk with me he ran a remarkable gamut. He spoke of business like the shrewdest and readiest of practical men. Then in the midst of some story of stock-market guile, such as he is exposing in Everybody's Magazine, his face, voice, and hands conveyed amusement, anger, disgust. With his good looks and gift of expression he would have made his way to the top of the stage. I do not know if he has done any public speaking. But when he got into the full tide of denunciation of the crimes of Amalgamated I regretted that he was not addressing a great audience, for it was real oratory--strong talk, ardent, electric, manly. His eyes flashed, his teeth came together with a snap and he shook both fists under my nose. He has enthusiasm, capacity for righteous wrath, and the spirit of battle. But he doesn't lose poise for a moment.

HIS CONFIDENCE IN HIMSELF

Cheerfulness, gay confidence in his own powers, is his predominant trait.

"You are firing hot shot into these people," I said. "They have endless money, and you are in the stock-market, taking chances every day. Aren't you afraid they will dig pits for you?"

"Well, what can they do to any of us in this world except to send us to the poor-house or the grave? I don't fear them. I know them and all about them. You must remember this is not a new occupation with me. For twenty-five years or more I have been in the habit of picking up a brick without looking to see how many corners it had or whether it was round or square and hitting the first head I thought I had a good reason to hit. I have been doing these things regardless of how they liked it. It's upward of a quarter of a century since I had my first wrestle with a corporation in the newspapers. I have tried not to be a common scold and avoided being vicious when I could. I have only attacked when I thought some fellow had done me a deliberate wrong. And when I have felt that way I have started after him. Then it has been vicious, hard fighting, you know; vicious, but not malicious.

"With the 'Standard Oil' crowd I have this big advantage--I am only one man, a small target, and it needs a mighty good aim to hit me, whereas they present a large surface and I have only to heave a brick in any direction to break a window. The contest is unequal. Everything favors me. My ammunition is the truth."

There is cheerful courage for you--more particularly in the case of a man who proclaims from the housetop that there is no limit to the villainy of his adversaries.

"Mr. Lawson," I said, "there are few who would care to be in your shoes--a rich man waging a war of this sort. The chances are altogether in favor of their smashing you financially."

"Let them, if they can. There are worse things in this life than being smashed financially."

Mr. Lawson's smile was sunny and confident. He is fearless.

* * * * *

LAWSON, THE MAN

BY JAMES CREELMAN

From the New York World, December 12, 1904.

BOSTON, December 10th.

All through the critical business hours of Friday, when Thomas W. Lawson, master spirit in the present extraordinary war against Standard Oil finance in Wall Street, was reported to be locked up with H. H. Rogers, generalissimo of Standard Oil, perfecting the details of a settlement for $6,000,000--all through that anxious time, when the stock-tickers and newspapers of the country were trying to guess the meaning of Mr. Lawson's sudden silence and inaccessibility, he was standing in his quiet room in Young's Hotel, explaining the situation to the public through the World.

Although I sat in the room with him almost from the time that the stock-market opened until long after it closed, not once did Mr. Lawson show the slightest sign of excitement over market affairs. Strong as an ox, clear-eyed, tranquil, smiling, the man who had moved the financial market downward against the will of the greatest combination of capital the world has ever seen, bore himself like one absolutely confident of success. The bunch of blue corn-flowers in his button-hole was not fresher than he, although on the previous day he had fought through one of the greatest battles in the history of speculation, had made an hour-and-a-half speech at a night banquet, had gone to bed after midnight, and risen before five in the morning.

In that one day he had forced nearly 3,000,000 shares of stock into the market in New York.

"My one instrument is publicity," he said. "It is the most powerful weapon in the world. With it I have been able to strike with some of the power which eighty millions of Americans possess when they are wide-awake and in earnest.

"This week's work is only the beginning of a demonstration that the secrecy of the frenzied finance system--under the cover of which the savings of the people gathered into banks, trust institutions, and insurance companies, have been used by the Standard Oil crowd to rob the people through the stock-market--cannot succeed against publicity. The people only need light to save themselves.

"At the beginning of the week I advised the people of the United States to sell Amalgamated Copper and the other pool stocks. It was the first step in the final realization of plans I had been maturing for ten years. Since then, against the whole force of the billions and billions commanded by the Standard Oil system, Amalgamated has dropped from 82 into the 60's. I give the people my word, which I have never yet broken, that not once in that time have I sold a share of Amalgamated stock. Not only that, but I have actually bought large blocks of Amalgamated in order to steady the market and prevent too great and too sudden a panic, so that my friends everywhere might be able to get out without complete ruin. But for that I believe we would have had a panic greater than the Northern Pacific crash.

"I simply went out into the public square and told the people the truth. I was in a position to tell the truth. I knew the methods by which they had been robbed. I knew that ruin was staring them in the face unless they acted quickly.

SPENT $92,000 ADVERTISING

"I advertised the fact over my signature in the newspapers of New York, Boston, Chicago, Los Angeles. I cabled the advertisement to London. All this cost, with incidental expenses, something like $92,000.

"The frightened leaders and agents of the 'System' spread reports that I was in league with the leading plungers and manipulators of Wall Street, that I was making a mere stock raid, that I was trying to 'shake down' Mr. Rogers. The truth is that I have no partners. Not a soul knew my plans until my first advertisement appeared. I have no price, for there can be no peace now until the whole rotten scheme of frenzied finance is smashed and things are brought back to their natural honest level. I am in deadly earnest. No man knows better than I do how great a service I am rendering to the American people."

Mr. Lawson stood squarely upon his heels, the incarnation of strength and courage. The square head, high and wide at the top, the long line of the jaw and broad, fighting chin, big, blue-gray eyes, the big, flat teeth, the strong nose, large firm mouth, sinewy neck, hairy hands, broad, deep chest, powerfully curved thighs, and the steady voice--these were eloquent of strength, determination, and concentration.

There was a black pearl in his cravat and an almost priceless canary-colored diamond sparkling on his little finger. He wore gray, striped trousers and a black coat and vest, across which was a beaded gold watch-chain. Everywhere in his room were flowers, roses, lilies, and bunches of the famous Lawson Pink, the flower for which he once paid $30,000.

The man whom I had expected to find haggard, pale, wild-eyed, and excited, in the centre of a nervous hurricane, was rosy-cheeked, cheerful, and apparently as free from care as though he had never heard of Wall Street. He spoke rapidly but in an even voice, occasionally pacing the floor and sometimes gesturing or setting his hands firmly on his hips. He answered questions promptly and with an almost boyish appearance of frankness. It would be hard to imagine a more masculine, compact, and concentrated personality.

This is the man who left school in Cambridge at the age of twelve, walked into Boston with his books under his arm, and secured a three-dollar-a-week position as an office-boy almost on the very spot where, after thirty-six years, he has worked himself up into a position from which he feels able to captain the fight against Standard Oil and its allies. He owns a palace in Boston filled with works of art; he has a six-hundred acre farm on Cape Cod, with seven miles of fences, three hundred horses, each one of whom he can call by name; a hundred and fifty dogs, and a building for training his animals larger than Madison Square Garden. Some of his horses are worth many thousands of dollars apiece. Even the experts of the German Government who examined Dreamwold the other day were amazed at its costliness and perfection. Within forty-eight hours Mr. Lawson wrote and published a large illustrated book analyzing his farm and gave it to his German visitors as a souvenir, after organizing for them a horse show that overwhelmed them with surprise.

He built the yacht Independence at a cost of $200,000, and when it was shut out from the America's Cup race smilingly threw it on the scrap heap. He established a great racing stable, and when tired of playing with it, broke it up. He went to Kentucky, and the day before a great trotting race bought Boralma for $17,000. His pride was aroused by the fact that the betting was against his trotter. He gave $104,000 to a friend to sustain Boralma's reputation in the betting and won $92,000. And yet he claims that he has never been seriously interested in betting, and that his winnings on Boralma were simply an accident.

THAT $30,000 PINK

But it was the purchase of a pink carnation, wonderful in color and vigor, which had been named by a Boston experimental florist after Mrs. Lawson, that made Mr. Lawson's name known all over the world. Thirty thousand dollars for a pink! The news was spread broadcast, and printed in the newspapers of all countries as an illustration of the vulgar extravagance and folly of an American millionaire.

Mr. Lawson explained that incident while I was with him, and his explanation threw a new light upon his character. He bought the flower originally as a matter of sentiment, but the sum he offered was comparatively small. Mr. Higginbotham, of Chicago, bid $25,000 for the Lawson Pink. When he heard this news, Mr. Lawson sat down with a florist friend and figured out the possibility of the new flower as a business investment. He closed the matter in a few minutes by paying $30,000. Some time later on the florist bought back the right to the Lawson pink for $30,000, and gave Mr. Lawson, in addition, $15,000 profit, according to agreement.

A curious evidence of this man's astonishing coolness is the fact that, at the very time when the market was closing on Friday, when it was whispered all over the country that he was arranging terms of peace for the Standard Oil with Mr. Rogers, Mr. Lawson was actually explaining the peculiar and beautiful qualities of his favorite flower.

A REASON FOR HIS LAST ATTACK

"But if Amalgamated Copper shares were worth $100 when you were market manager for Mr. Rogers and his friends, how is it that they are not worth that price now?" I asked.

Mr. Lawson leaned against the edge of an open door and thrust his hands deeply into his pockets.

"I have tried to make that plain to the public," he said quietly.

"The other day Mr. Rogers's lawyer was trying to get me to stop. I told him that I intended to force the Standard Oil crowd to put the price of Amalgamated Copper back to $100, at which I advised my friends to buy it. He said that the stock was not worth $100. I asked him how he knew. He answered that Mr. Rogers, Mr. Stillman, Mr. Rockefeller, and the other fellows in control had discovered that they had been deceived when the property was bought. They did not consider it worth more than $45 a share.

"That settled it in my mind. I appealed to the public to test the situation. I advised them to sell Amalgamated at once and keep on selling. If it was worth $100, the men in the 'System,' having billions of dollars behind them, would buy it. If it was worth only $45 a share, then the price must fall to that point in the end. It was simply a question whether the public could unload on the Standard Oil crowd before the 'System' could unload on the public."

"Then you caught the leaders of Standard Oil at the psychological moment."

Mr. Lawson's smile was beyond words to describe.

"That partly explains the crash," he said. "They were ready to unload on the public, but the public moved too quickly. Publicity destroyed the one great weapon of the Standard Oil men, which is secrecy. I had been tricked and deceived, and those who were responsible had used my name to deceive and trick the public. I got out into the open and laid the plot bare. I had been working up to that point for many years, always waiting, waiting, waiting for the day when I could begin a work of reformation in behalf of 80,000,000 of people.

"I know my game. I have stood here in Boston for thirty-six years studying man and his ways. I have no false conceptions of my own strength. I know, and I have known all along, that to win against a system backed by billions of dollars working in the dark and controlling largely the law-making powers of the nation, I must have the people with me. My articles in Everybody's Magazine were simply in preparation of the public mind for the practical demonstration which I have made this week, that the whispering manipulators of Wall Street will not buy at $68 a share stock which they were selling to the public at $100 a share.

"The Standard Oil interests came into my world simply because they entered Boston to control gas affairs. They wanted to run their automobile down a particular road, but they found a fellow standing in the middle of the road. They did not dare to run over that fellow, as little as he was, because he warned them that he had in his pocket a stick of dynamite that would blow the machine up if it passed over him. Mr. Rogers is a really big and brainy man. He saw and understood the situation. He offered to take me inside of his secret lines.

HIS INDEPENDENCE

"It is said by my enemies, and they are many--and some of them are crackajacks, I admit--that I am a squealer, that I have peached on my pals. That is absolutely untrue. From my boyhood up I have always insisted on being free and independent. I have punched a head when I thought it needed punching, without asking whose it was or what the consequences would be. But I have never consciously told a lie or violated a confidence. The newspaper files will show that when I made my deal with the Standard Oil people, I publicly announced that I had entered into a secret agreement with them. That brought a hurried call from Mr. Rogers, who wanted to know what I meant. I told him, as I had told him before, that I had to work in my own way, that my methods were open and above board, and that I could not work successfully unless I was free to do things as I thought they should be done.

"That was my arrangement with Standard Oil. They had a great chest, and the whole method of the 'System' was to prevent any one from getting a peep at that chest save as one of them and on their own terms. I refused to be bound by their code. I told Mr. Rogers again and again that everything I learned as the market manager of the Standard Oil interests I felt free to use publicly at any time. Mr. Rogers again and again assured me that this was fully understood.

THE REMEDY

"All through that time I had, deep down in my heart, the plan which I am carrying out now. Each day brought me nearer to the day when I would expose the whole system of fraud to the public. Having that idea always present with me, I was careful to avoid deals or partnerships which involved any loss of independence to act when the day for action came. I have been worth as much as $28,000,000, and I have lost as much as $14,000,000. But never have I altered my purpose to awaken the public to a realization of the great crimes committed against them in the name of finance.

"If the people will stand by me, and I have always been open and honest with them, America will witness a great transformation. With an honest and courageous President in the White House we shall see whether the 'System' will be able to use the fiduciary institutions of the country for piratical purposes. The fall in the price of Amalgamated and other pool stocks is only a bubble on the surface. The final revelation, and the final solution, are yet to come into sight."

Just then the telephone bell rang and Mr. Lawson put the receiver to his ear and laughed as he listened. "No," he answered softly, through the instrument, "I am not locked up with Mr. Rogers, but with a man who has more power."

Then he turned to me, rocking back strongly on his heels and clasping his hands behind his square head.

"I meant that," he said; "there is more power in the pen of one honest writer in the service of an honest, fearless newspaper than in all the wealth and cunning of the 'System.'"

THE MUNROE & MUNROE EPISODE

There came a time in the first twelve months of my "Frenzied Finance" crusade when people rather took the attitude that I was exaggerating conditions and that neither Wall Street nor the "System" was so bad as I had depicted them. About this time, following the so-called Lawson panic, occurred the Munroe & Munroe esclandre, the details of which plainly showed eminent financiers in the vulgar business of stock-washing. I frankly treated the subject in Everybody's, and as it is part of the history of the movement, I reproduce the passage:

The average man is prone to lose sight of perfidy in magnitude and to say, when he hears all the facts: "At least these rascals hunt big game." I wish to say here that such distinction is undeserved. The "System" is omnivorous. Its insatiable maw yawns as greedily for the ten-cent pieces of the people as for the thousands of the larger investor. It is as avid and relentless in devising ant-traps as elephant-snares. There fell into my hands recently certain valuable documents in the meanest of contemporary swindles, which reveal the connection of the National City Bank, certain of its officers and other important financial interests, with a plot to fleece the fag ends of the public. The details of the Munroe & Munroe-Montreal & Boston conspiracy have been widely published, and the world is well acquainted now with the two Munroes, graduates of a "gents' furnishing-goods" shop in Montreal, introduced into high finance in New York, organizing with the assistance of the great Rockefeller-Stillman-Rogers bank a copper corporation with shares at a par value of five dollars. There never was such barefaced exploitation as was used on behalf of this proposition. It was advertised as a bonanza; investors were guaranteed against loss by an assurance that their stock would double and treble in price, and that the company would stand ready at all times to buy back shares at cost. The intention was plainly to entice into the Montreal & Boston people of very limited means, who could ill afford to lose their savings.

The sudden panic, brought about by the warning to the people of the traps that were being set for them, caught napping many of the "System's" votaries, large and small, and before they could get their different devices even-keeled from the shock caused by that single blast of truth, the public got a peep 'tween decks into the machinery. Among those whose port-holes were blown wide open was the Munroe & Munroe-City Bank-Montreal & Boston outfit, whose scheme went down like a card-house in the blow. A receiver was at once appointed to take care of the débris. This mishap revealed an amazing condition of affairs. With only $2,000 capital, Munroe & Munroe had arranged with the great National City Bank to honor their checks for immense sums every day, the proceeds being used to carry on a series of fictitious transactions in Montreal & Boston stock for the purpose of beguiling the public into purchasing it. The affair was a ten-days' wonder, and was finally squelched by the great bank's throwing over its vice-president, Archibald G. Loomis, who had bravely shouldered the responsibility for the transaction. At writing, two professional gamblers, who seem to have been the principal victims of the underwriting end of the swindle, are being settled with, and the whole affair will soon be buried from public gaze.

The episode was, on the whole, so foul in its revelation of greed that even Wall Street was horrified--not at the arrant double-dealing exposed, but that the "System" should descend to such vulgar malpractice. The documents now in my possession, which I shall publish later in my story, include the original underwriters' agreement, which, at great cost of time and money, has so far been kept from the public, and they show some of the greatest bankers in the land deliberately planning, by the use of fraudulent papers and bogus agreements, to beguile investors to adventure their money in a scheme the sole purpose of which was the enrichment of its organizers. The whole performance reveals a depravity so profound and a greed so heartless that the people may well tremble for the safety of their savings intrusted to the custody of men of this type. It also proves my contention that the "System," while depending on burglary for its largest returns, does not despise the small profits of the pick-pocket.

FOOTNOTES:

Groups of Stock-Exchange members each day appear to buy from other groups great quantities of shares of different stocks at advancing prices. In reality all the brokers--the ones appearing to buy and those who sell to them--are in league with each other, and none of the transactions is actual. The performance bears the same relation to legitimate Stock-Exchange trading that the purchase and sale of a gold brick among confederates at a circus do to the genuine work of the gamblers and pick-pockets who are really attending to business around them. On certain days in the months I refer to, when the official records of the Stock Exchange told that one and a half million shares had been bought and sold, and prices had advanced until the aggregate increase in the worth of the stocks dealt in amounted to hundreds of millions of dollars, not more than a few thousand shares of real stock changed hands. The rest was barefaced fraud for the purpose of deceiving the millions of investors and speculators throughout the country who are dependent upon the daily press and "market letters" for information in regard to investments for their savings.

Arthur McEwen and James Creelman are among the strongest and ablest of American newspaper writers. Their names are not as familiar to the readers of magazines as some others, but they are, perhaps, the most highly paid men in journalism to-day, and they have a well-earned reputation for independence and personal integrity. Mr. McEwen, who is now one of the editors of the New York American, is known throughout the country as a fearless exponent of corporate villainies. Mr. Creelman is a distinguished member of the New York World's editorial staff, and has interviewed more of the world's great men than any other journalist living. From their standing in their profession, their well-known hatred of hypocrisies and shams, their wide experience in estimating men of all degrees--the verdict of Mr. Creelman and Mr. McEwen, as set forth in their papers, should be conclusive.

III

EXPLANATIONS

The revelations I delivered to the public in my story of "Frenzied Finance," together with the accompanying expositions of insurance and other rottenness in the "Critics" department, were not accepted without protest from my correspondents. Though the majority of the letters that came to me in shoals from all parts of the country have been generous in their appreciation of my work, many have seriously taken my methods to task and dubiously questioned my motives. The most salient and satisfactory expression of these doubters was a letter that came to me from a New York banker, to which I replied at length, for it afforded me the opportunity to get before my readers in general many matters about which explanations seemed due them. The letter was as follows:

NEW YORK.

Dear Sir: I have read all that you have written in Everybody's Magazine, and have been unusually interested. If you will consult the Amalgamated subscription list you will see my house is down for quite a large amount. For this reason and others, and as an old member of our Stock Exchange, I naturally follow such writings as yours. At the beginning I agreed with most bankers in believing that you were actuated by a desire to get even with Mr. Rogers, Mr. Rockefeller, or Mr. Addicks; but as your tale progressed I thought I perceived a sincere desire to carry out some genuine work of reform in the system of conducting the stock business; then when you began your advertising work last December, I shifted again and felt that your efforts were probably for personal gain.

Since then I have noted your every move with an acute interest, for I became convinced that you were going to work considerable mischief before you got through. Of late you have been so bold--and I believe I voice the opinions of the large majority of men connected with financial affairs when I say dangerous--that I cannot resist writing you as I do herewith.

You advertise through the daily press and in your "Critics" pages that you are doing all in your power to create unrest and fear among the people for the purpose of frightening them into selling their stocks and bonds, and you go further and openly make the most astounding of statements, the most dangerous and vicious--that you will endeavor to have all the people owning deposits in banks, trusts, and insurance companies withdraw them in concert.

I will be frank and state that if I did not know your business career, and had not read your writings, I should dismiss this latter statement of yours by calling on the proper authorities to take cognizance of you as a most dangerous lunatic, but as your business career and your writings show you to be an able financier, a successful business man, an advanced thinker and brilliant writer, I feel that mental derangement cannot be the cause of this remarkable proceeding.

Therefore I challenge you, as one who professes to be an honest man, to answer at once the inclosed list of questions fully and unqualifiedly in your magazine before you make any more extraordinary and, I believe, perilous public requests; and I warn you that if you do not do so, I shall consider it my duty to make public through the press of this country, and in other places where you have been advertising your vicious theories, that you have not dared to make answer. In other words, I shall, after the next issue of Everybody's Magazine, if it does not contain your answers, publish broadcast a copy of this letter, and in all fairness and sincerity, I warn you I shall not be deterred from doing this by any excuse you may make that my letter was received too late for the July number of the magazine, or that more important matters take up your space. I have, by diligent research, ascertained that you will have at least forty-eight hours from the time this letter is placed in your hands before the section containing your "Lawson and His Critics" pages is sent to press; or, to be plainer, I can have advertisements inserted in the same section as that containing your "Critics" pages if I hand in my copy forty-eight hours after you will have received my letter.

Therefore you have sufficient time to formulate your answer, and you know as well as I that, in the present excited condition of the public mind, which has been created largely by your public statements, there can be nothing more deserving of space in Everybody's Magazine than the answers to my questions. You must realize, sir, that in all sections of the country small holders of stocks are not only selling their holdings, but that small depositors in banks and trust companies are already beginning to withdraw their deposits, that already many small banks have failed because of this feeling of apprehension. So far as Wall Street is concerned, legitimate business is practically dead, and you have, for the time being at least, killed it. I will not add what ill your attacks have worked in the large insurance companies, for it is, I am sorry to say, patent to all that there is but little life-insurance business being done at present by the very large companies, and at best it will require years to live down the unsettlement you have wrought in the people's confidence in this worthy and time-proven institution.

These are the questions I want answers to, and answers in keeping with those broad professions of honesty and keen regard for the best interests of the people which you have been making.

Earnestly and respectfully yours, ----

1. Do you know economics and finance, money, banking, credits, corporations, and business in their broad relations to the people, the American Government, and natural law, and the relation each holds to the other, or is your knowledge confined to the skimming and smattering such as any alert and bright stock speculator would naturally pick up in years of experience as a broker and manipulator?

2. Do you not know that in all times there have been, and must naturally be, very rich men, and that necessarily there can be but very few of these, and that where they are there must be very many times as many poorer ones, very poor ones?

3. Do you not know that there must be billions of dollars' worth of stocks and bonds in America, and that they must not only increase but increase very rapidly, and that their existence instead of being evidence of great evil is proof positive of the great prosperity of the whole country and the whole people, and that it is the sacred duty of all the people down to the very poorest, who own none of these, to guard, protect, and maintain their price, and not the duty of any honest man to destroy or shrink the value of this evidence of real wealth?

4. Do you not know that a large portion of all these stocks and bonds is owned by the masses of the people; that if they should be frightened into selling them there would be no place to put the vast sums they would receive for them, as the banks could not profitably use this cash if it were added to what is deposited now, and that the only sufferers by this frightened and forced selling would be the people whom you profess to be working for?

5. Do you not know that if the people should start on a given day to withdraw their money from the banks and trust companies throughout this country, there would be the worst calamity in this country that the world has ever witnessed; that all lines of business would be disorganized; that the country would be set back a very long time, and that the principal sufferers would be the working people and the farmers, and, in fact, all those classes you profess to be working for; and do you not know that in the middle of this calamity you would probably be lynched and perhaps torn limb from limb by the crazed and deluded people, who would then see the danger of your teachings?

6. Do you not know that the result of the people's selling their stocks and bonds in concert would be a great drop in their price, and that the people's raiding the banks and trust companies of their deposits would also bring about a tremendous drop in the price of stocks and bonds; that the only ones who can possibly benefit are the bears who sell short; that these bears have no legitimate standing in the business world, and should have none, and that in the broadest sense of the term they are not honest men?

7. Do you not know that the greatest institution in this country to-day is life insurance, and that if you disturb the confidence of the people in life insurance their families will be deprived of the greatest source of income at a time when most in need of it?

8. Do you not know that there can be no new remedy for the present condition of affairs, even if it is really as bad as you picture it, and that the only remedy or cure possible is a more honest enforcement of our present laws, a more honest conduct of our present enormous business, and a more intelligent recognition by the working people and farmers of the inevitable natural laws? Also that there can be nothing more pernicious than this constant teaching them that their interests are opposed to the interests of the very rich class?

9. Did you not write your story to advertise yourself for the purpose of making money out of the following your disclosures would bring you and for the purpose of making money for Everybody's Magazine?

10. Do you not own the largest part of Everybody's Magazine, and has not your part of the profits received from that source since you began your story been very large?

11. Do you not sell stocks short before each of your advertisements, and are not the press stories and the one now current in Wall Street that you made over a million dollars in the decline which preceded the appearance of the June Everybody's, true?

12. Are you going to commit the crime of calling out bank and trust company deposits?

13. If you make such a call, and it is answered, and there is a destructive panic and a number of the big New York banks and trust companies fail, what will you do?

14. If the masses should sell their stocks and bonds and get their money, what would then happen?

15. Do you dare say to your readers now and unqualifiedly, that you have a real remedy for the present financial evils, and that it will show when it is given that it is anything more than some new scheme by which you personally are to get the people's money?

16. Do you dare to say now to your readers unqualifiedly that this remedy will show conclusively that it has not been invented since you began your story of "Frenzied Finance"?

17. Do you dare tell your readers now and unqualifiedly that you personally did not make money out of what you call the "Amalgamated swindle"?

18. Do you dare tell your readers now and unqualifiedly that you have not made money, and an enormous amount of it--very much more than all you have spent in connection with your work of "Frenzied Finance"--out of the people since your story began?

I will state in fairness to you before you make answer to the above questions that it is now my intention to take your answers into court in a suit which will be brought, and that if you have made answers different from those you make under oath you will be held up to the scorn of the whole American people.

I replied:

I admire your smartness. Of the thousands of letters I have recently received yours is the cunningest. If I do not answer your shrewd and adroitly put questions in the brief space at my disposal, you will discredit my work. If I take offence at your way of putting your questions, you will have the pretext you are evidently looking for. Then, your closing warning is so manly and generous! I must not lie, because, if I do, you will expose me in court! You thought that would make good reading after I had refused to make reply in this issue, and you had advertised your letter. Again, you probably figured that as my June chapter was all taken up with my story and there was no room for the insurance article I had promised, I should need all my "Critics" space this month for it; so, all in all, I guess you were pretty sure I could not answer your apparently fair and honest questions.

I'll disappoint you. If my "Critics" pages had actually been on the press at the moment your questions came in, I should have telegraphed the publishers to yank off the plates and hold up the edition at my own expense until I should have had time to polish off your interrogations. Before starting in let me say to you that if you will find a way of getting my answers out into the open under oath, I shall consider that you have done me and my work a good turn.

QUESTION 1. I know economics and finance, money, banking, credits, corporations, and business in their broad relations to the people, the American Government, and natural laws, and the relation each holds to the other--not so well as I should like to know them, but as well as any member of the "Standard Oil," of the "System," or any one of their hirelings knows them. You have been brutally blunt in putting your questions, so don't accuse me of egotism if I bluntly answer: I know them all, top, sides, and bottom, from thirty-six years' book study of them and thirty-six years' actual experience in the nine-pin alleys where they are daily and nightly set up for the express purpose of being knocked down. I know the relation of each of these important life factors to each of the now-you-see-it-and-now-you-don't jokers of the "System." Make no mistake, Mr. Banker, my knowledge is not "a skimming and smattering such as any alert and bright stock speculator would naturally pick up in years of experience as a broker and manipulator," but the straight brand which the "Standard Oil" and the "System" so like to impress into their service when they run up against it in their continuous robbing excursions. You may judge that my knowledge is not of the smattering kind when I say that for years, in spite of my refusal to join the band and wear the collar, whenever Rogers and Rockefeller had a particularly hard nut to crack they called me in to try it on my "knows."

2. Yes, I am aware that there have always been, and that there will always continue to be, very rich men, and that there cannot be many of them, and that where they are there must be very poor ones. And I also know that no honest man, rich or poor, objects to the necessarily few very rich ones who have honestly acquired great fortunes as the reward of their own or their ancestors' labors of body or brain in the interest of all the people. Don't misunderstand me--no honest man or woman can object to the necessary great fortunes, but all honest American men and women do object, and are getting ready to make their objection heard, to all unnecessary great fortunes, "made dollar" fortunes gained by trick of finance or evasion of law, or the brutal and ruthless stock manipulation of recent years. The sooner the "System" and the other possessors of these "unnecessaries" realize that their doom is sealed and dig for the cyclone cellars, the quicker the American people will get through with the strenuous house-cleaning job for which they are just rolling up their sleeves.

3. I do know there must be billions of dollars' worth of stocks and bonds in America. I also know that among these legitimate billions of dollars are now mixed other billions of dollars that have no proper title to being, save the greed of the "System." That while the existence of certain billions of dollars' worth of stocks and bonds is proof positive of the great prosperity of the whole country and the whole people, it does not follow that their existence is proof that the hands they are found in are the hands they should rest in. Further, I assert that the existence of other billions of dollars' worth of stocks and bonds is proof positive that the laws have been violated and that the great prosperity of the whole country has been used as the excuse and motive of this violation, and declare that, in my opinion, it is the duty of honest men and women to do all in their power to shrink fictitious securities and to destroy them; and, further, that it is the duty of all honest men to lend a hand so that the legitimate billions of dollars of stocks and bonds may be returned to the hands of those who are legally entitled to them.

4. I am aware that the people owned billions of these stocks and bonds three years ago, and also that if they had then sold them back to the "System," even at the price they had paid for them, and had kept their money in the banks without interest, or had even buried it in the ground or kept it in their stockings for a year, they would have been able to buy back for fifty cents on the dollar what they had sold the "System," thereby making for themselves billions of dollars and impoverishing the "System" by just as many billions as they had made. You know that the "System," after it had loaded up the people with its stocks, "shook them out," and thereby gathered in half the billions of money the people had paid for what they bought.

Let me illustrate. The people bought of the "System" for 760 millions of dollars the Steel Trust stocks and bonds, and after the people had the "System's" chromos and the "System" had the people's 760 millions of savings, the "System" caused the price to be cut in two. Then it bought back the Steel Trust's chromos for 380 millions, thereby transferring from the people to the "System," in this one instance alone, 380 millions. And, further, after the people had been shaken out of their stocks and bonds and the millions of their savings--in the Steel Trust alone 380 millions--the "System," having these securities in its possession, began to inflate prices for the purpose of again selling to the people; in December last they had inflated the prices of billions of stocks and bonds to their old false figures, and were then preparing to unload them on to the people; in the case of the Steel Trust stocks and bonds the price had again mounted to 760 millions. In compliance with my warnings the people began in December last to unload upon the "System" the billions they then held at these inflated prices, and they have continued to do so ever since, and have suffered no hardship by the forced selling into which I have frightened them. I further know that they will find good use for this money at a later period in buying back from the "System" these same securities at their true worth; in other words, that before I am through with my work they will be able to repurchase from the "System" for 380 millions or less the Steel stocks and bonds now selling for 760 millions.

5. I do know that one of the most colossal impositions ever perpetrated on the whole people of any nation is that formula which the "System" has so insidiously instilled into the minds of the American people during the last century, to wit: that they must do nothing which might disturb the "System" in its use at two to four per cent. per annum of all the people's savings, deposited in banks and trust companies throughout the country; that if they do, there will be a Wall Street panic, and thereby all the people will be made to suffer great hardships. On the contrary, I know that if the people do what is necessary to shake off the "System's" strangling grip upon their savings, the "System" will suffer death, and everlasting profit and advantage will accrue to the nation. Though it be necessary for the people to withdraw from the banks and trust and insurance companies their billions of savings, and even though such withdrawal must cause a temporary business crash and the failure of many of the financial institutions of the country, the sacrifice would be many thousand times compensated for by the benefits that would follow in its train. I will go further and state that if such radical action should become necessary, the people should willingly face the failure and destruction of one-half the banking institutions of New York if by doing so they could absolutely destroy the "System." But do not misunderstand me--the simultaneous withdrawal of the people's savings from the banks and trust companies throughout the United States would be such a terrible temporary hardship that nothing could justify it but the absolute necessity for uprooting and eradicating the "System"; I should not hesitate, however, to face the full responsibility for such a move if the "System" cannot be destroyed in any other way, even though I were sure I should be lynched or torn limb from limb by those people who have been crazed and deluded, not by my teachings, but by the damnable doctrines and acts of the "System" and its votaries.

6. I am well aware that the result of the people's selling their stocks and bonds in concert and the withdrawal of their savings would bring a tremendous drop in the price of stocks and bonds. This is what I am working for, but I am proceeding in such a way that I believe when the crash comes the people will be free from their stocks and bonds. Your proposition that the bears will be the only beneficiaries I regard as rot; on the contrary, I know that the people will benefit a dollar where the combined bears will benefit a cent. Pardon my giving you here an A B C lesson in finance--I know a bear is no more dishonest than a bull. When a man tries to put up the price of stocks and bonds, he is a bull. When he tries to put them down, he is a bear. If a bull tries to put prices to a point of fair worth, he is an honest bull. When he tries to put them any higher than fair worth, he is a dishonest bull, for he does so for the purpose of obtaining from the one to whom the stocks are sold a greater gain than he is entitled to, and always by false pretences. When a bear tries to put stocks from an artificially high price to their fair worth, he is an honest bear. When he tries to put them any lower, he is a dishonest bear, because he does so for the purpose of purchasing from their owners stocks or bonds at less than their fair price, that he may pocket the difference between the artificially low price he makes and the higher price at which he has sold, and this profit is procured by false pretence. You, and thousands like you, should get out of your heads the false notion that a bear is necessarily less honest than a bull.

7. Life insurance is a great institution, and should be a sacred institution--provided it is honest life insurance. He who would, for any dishonest reason, disturb the people's confidence in honest life insurance I consider a criminal; but I am sure that one who, having the power to awaken the people to their peril, yet stands silently by and suffers them to be bled and plundered in the name of life insurance is even a greater scoundrel.

What is life insurance--honest life insurance? A contract between two parties by which the first agrees, in return for a certain fixed charge per year, to pay to the family or other beneficiary of the second party a stipulated sum in case of said second party's death; but it is plainly understood between them that the annual charge exacted by the first party shall be only such an amount as will insure the carrying out of the contract, plus whatever is the legitimate expense of conducting the business connected therewith. Under no circumstances would I say aught in disparagement of such a contract, but if I did not lift my voice against such life insurance as is carried on by the Mutual, New York Life, and Equitable companies, knowing what I do know, I should be a deep-dyed scoundrel.

Life insurance as it has been conducted in the past and as it is being conducted at present by these three companies, I regard as the most damnable imposition ever practised upon the people of any nation. Under the pretence that it is necessary to enable life-insurance companies to carry out their contracts, two million policy-holders are annually tricked into contributing from their savings sums which not only insure the performance of these contracts but enable the officers and trustees--mere servants of the policy-holders--to maintain the most gigantic stock-gambling machine the world has ever known. Through its operation the companies themselves not only make and lose millions at single throws of the dice, but the bands of schemers whose services it is pretended are essential for the transaction of the life-insurance business filch for themselves huge individual fortunes. Piled on to these excessive charges are additional amounts which enable these tricksters to maintain palaces, hotels, bars, and every conceivable kind of business, to pay for armies of lackeys and employees and private servants of officers and trustees, and for debauches and banquets which vie with any given by the kings and queens of the most extravagant and profligate nations on earth; in addition, enough more to accumulate huge and unnecessary funds--which are juggled with for the enrichment of individuals. Such wicked exactions and shameful extravagances constitute an imposition of the most wanton and criminal character, and those responsible should be sent to State prison for life, as too vicious and dangerous to be allowed freedom among an honest people.

I would say further that the trickery and frauds that have been practised by the New York Life and the Mutual companies are fully as bad as, if not worse than, those of the Equitable, now publicly confessed.

8. It is difficult for me to answer such a question--just as difficult as it is for the mature man to answer the question of the child, "If the moon is made of green cheese, what kind of rat-traps do they use in heaven?" The "System" for forty years has taught the people that it is impossible for them to improve upon the conditions which the "System" has moulded for its own plundering purposes, yet I have a simple Remedy, readily understood, which I believe the people will eagerly embrace as soon as it is given them. This Remedy is adjusted to laws now in force; and when it is put into operation those who have acquired enormous fortunes by trickery and fraud will find themselves deprived of their ill-gotten gains by the simple application of natural laws to which the said Remedy affords leverage and action. All honest people, the richest as well as the poorest, will be benefited in fair and just proportion. Once the Remedy is in force, it will be out of the power of the trickster and the thief to accumulate overnight scores of millions, although the Edisons, the Stephensons, the Morses, or any man who by brain or body does those things for his fellows which they cannot do for themselves, will continue to receive that great reward which the whole people in their wisdom and generosity decide is fair for exceptional services; the common miner, too, when he discovers the hidden gold, silver, or copper in the earth will obtain the same return that he is entitled to under to-day's laws, or even better.

9. This story is written, as I have explained so many times before, simply and solely in performance of my duty toward my country and its people and without hope or desire for reward of any kind.

10. I do not own any part of Everybody's Magazine, nor have I any money interest in it, directly or indirectly. I have not made a dollar from Everybody's Magazine directly or indirectly, but, on the contrary, have spent hundreds of thousands of dollars to assist in getting my story into the hands of the people.

11. Before my first advertisement in December, at a time when I did not know how the people would take it, and when I did not know whether stocks would go up or down, I took my chance in the open of making loss or profit and did sell large amounts of stock short, making some hundreds of thousands of dollars profit; but when in the middle of the disturbance I saw how seriously the people took my message and that there might be a great panic, I began to buy, and thereby sacrificed a million of profits. And, since then, that is, after I realized that the people would respond to my warnings, I have refrained from going short in advance of these advertisements, because I desire to keep strictly apart transactions conducted for my own personal account and operations I am directing for the benefit and safeguarding of the public. I am determined to use every means in my power to keep the people out of a dangerous market and to concentrate the billions of stocks in the hands of the "System," and am not actuated by any desire or necessity for gain. Already the "System's" votaries are tottering under their load and it is certain that in the coming months they will employ every possible means to persuade the public back into their trap. More than ever, then, is it necessary to be firm against their blandishments, for when the crash comes it will be a terrific one, and those who have great holdings of speculative securities will surely find their values cut in half. Since my first public announcement I have not made enough out of market operations to pay even the expenses of any particular advertisement.

12. I shall not commit any crime; I have too much veneration for the laws of our country; although let it be understood that I may, at any time, commit what some hireling judge of the "System" may call a crime, for I am going to call upon the American people to withdraw their deposited savings at the proper time; and the proper time will be that time when I am absolutely sure they will withdraw them. But I shall not resort to this last move unless it is certain that the "System" cannot be crushed in any other way.

13. I will first thank God and then proceed to assist in burying the corpse of the "System."

14. The "System" will be brought to its knees; stocks will fall to figures representing their legitimate values and the public will reinvest its money therein, and thus regain control of the great transportation and industrial interests of the country which the "System" has filched from them.

15. I say unqualifiedly to the American people that this Remedy of mine will, when adopted, correct the greatest evil in the financial system of this country. That while it is simple it is absolutely new, and that neither I nor any one else can possibly benefit moneywise from it except in the some proportion as all other people in the country benefit.

16. My Remedy was worked out before 1894, and in that year, one year before I had met any of the "Standard Oil" people, it was so far perfected that in London I laid before Joseph Pulitzer, then and now owner of the New York World, the identical first printed plan that I will print in Everybody's Magazine when I judge the people are ready to receive it.

17. I unqualifiedly say to you and to the American people that I lost millions of dollars more in what you call the Amalgamated swindle than I made, and that I lost trying to make good my word to the Amalgamated subscribers.

18. I have spent much more money, hundreds of thousands of dollars more, in getting this work, "Frenzied Finance," into the hands of the people than I have made through anything in any way connected with it.

THE CRIME OF AMALGAMATED

Many of my readers had difficulty in following the intricacies of the great crime of Amalgamated and I had many letters desiring further explanation of that act.

PEAKE'S ISLAND, ME., May 31, 1905.

T. W. LAWSON, ESQ.

Dear Sir: Have just finished June number of "Frenzied Finance."

You are running a "primary class" of High Finance for millions; have been able to follow you up to this number, and my apology in writing to you is to state that I don't understand this lesson and I believe I am of the average intelligence of your readers.

I am not clear on the following points, and if you can take the time and have the desire to do so, I should be glad to have you set my gray matter moving in the right direction.

1. Why should subscribers think that a company, who had as good a thing as advertised, would sell the entire stock, thus giving an opportunity to any financier to gather in fifty-one per cent. and practically take away its good thing?

2. How would it have been possible for you with the $5,000,000 from the shares it was originally the plan to sell to protect those 50,000 shares on a bear market with 700,000 shares in Messrs. Rogers and Rockefeller's possession?

3. Why would it not have been a crime to dispose of only 50,000 shares when the whole 750,000 were advertised?

4. Messrs. Rogers and Rockefeller were the Amalgamated Company after purchasing the capital stock from the office-boys, were they not?

5. If Rogers and Rockefeller paid for their shares, what became of the Amalgamated Company's $75,000,000 secured by sale of stock?

These may sound foolish to you, but I'm interested and should like to understand.

Permit me to state that I admire your pluck and ability and wish you success in your remedy, whatever it may be.

Respectfully yours, (Signed) ----

I replied:

Your first question is a hard one to answer, as it goes to the very foundation of "the stock-market." In the ideal operation of stock-markets, owners of valuable properties should always allow the public to join in their "good things" at fair prices, because all who thus participated would make money and would be ready for the next "good thing," and so on to the end. On the other hand, if the public were only invited into the "bad things," in time they would not come in on anything, good or bad, and there would be no stock-market. The foundation of stock-markets, like all other kinds of markets, is the public interest therein--for it is the people who own the great bulk of the money in the country, and its aggregate is far beyond the amount that the very few rich men possess. Stock-markets are no different, at least should be no different, from horse-markets, boot and shoe markets, or mowing-machine markets. The horse-markets whose dealers sell to their patrons good horses at fair prices, succeed; those whose dealers offer only the "culls" and "no goods," fail.

2. Had I been able to keep 700,000 shares in the hands of Rogers and Rockefeller with but 50,000 in the hands of the public, Rogers and Rockefeller would never have permitted the stock to go down, because they would have lost $700,000 at every point drop and by "bearing" they could make only $50,000 a point drop. Stock schemers never "bear" a stock of which they own a large majority and the public a small minority.

3. It would have been no crime if Rogers and Rockefeller had subscribed honestly--that is, according to the advertised terms--for enough to secure the stipulated 700,000 shares, because there was nothing in the conditions which excluded them or any one from subscribing. The crime was in the way they obtained the amount thus retained and in their "intentions" subsequently executed, also in the selling of $27,000,000 worth of the stock when they had pledged their word solemnly to me in my capacity as protector of the people that they would sell but $5,000,000.

4. Yes.

5. The office-boys, equipped with the check of $75,000,000 provided by the National City Bank, were organized into a corporation and turned over to the treasurer of the new corporation the $75,000,000 check in payment for the capital stock of the company. The company then turned this same check over to Rogers and Rockefeller for the mining properties comprising the consolidation, for which Rogers and Rockefeller had paid thirty-nine millions of dollars; then Rogers and Rockefeller paid back to the office-boys the seventy-five-million check and received from them the seventy-five-million stock. The check was returned to the bank by the office-boys, who stood where they stood at the beginning of the transaction, and canceled. Thus Rogers and Rockefeller at the close of the transaction had in their possession the entire capital stock of the Amalgamated Company.

* * * * *

Another correspondent had even greater difficulties with the problem:

May 29, 1905.

MR. THOMAS W. LAWSON, Boston, Mass.

Dear Sir: The writer of this letter has had much experience in literary matters, but does not remember ever reading after any one who could hold his interest as you can. He is an author himself (though not so well known as you), and feels some little ability to measure and appreciate not only literary worth, but the intentions of the author in hand. From the "internal evidences" alone he has a settled conviction that you are perfectly honest in this crusade, and from the bottom of his heart wishes you Godspeed.

A few points are certainly not clear to the ordinary reader. Closely as I have followed you I cannot see some things as you think they should be seen. For instance:

1. Just why were you so fearfully wrought up at the thought of the public's getting ten millions instead of five? If you had such confidence in the gigantic possibilities of Amalgamated, why should you not have been glad to let the poor suffering public have ten millions, or twenty millions, instead of a paltry five millions? Was this hydrophobia of yours at the mere suggestion prompted by a perfectly pure or by a selfish motive? At the first did you not plan to let the public have very much more than this? Was it not your thought, I mean, that the public should be in the thing about equally with you promoters? Then why not welcome the suggestion of Rogers? I do not understand this at all.

2. About that "bogus subscription." Did you not all plan to do about the same thing? Did you not intend to have Rogers put in a towering subscription, large enough to cover the situation, and to permit the bank to reject all above the five millions to be allowed the public? I believe you expected Rogers to make it "genuine" by really putting it in in time, and by laying down his check for the five per cent.; but, as you fully expected to realize on the thing so quickly, did you not understand that the whole of this "subscription" would not have to be paid at all, and that your "check" was after all only technical? If I am right, how did this differ so greatly from what Rogers did? Was not your avowed object to cheat the public into thinking they were to be allowed to subscribe to seventy-five millions, when actually you were only going to let them subscribe to five? And if, on that last day, you knew the subscriptions were pouring in in such a flood, and knew that offers of a big premium were then being made, how in the world did the idea of letting the outside public have twenty millions or so (on which to immediately realize this premium) seem so abhorrent to you, when you professed to be looking after their interests?

The more I think of these points, the more mixed I become, and I think many, very many of your readers are in the same boat. Your illustration of the horse-race does not clear the matter a particle. It certainly does appear on the face of the facts you present that the people who did not get any stock were the lucky ones, whether Rogers's precise action was criminal or not. You say yourself that it would have been good all round if you had pricked the bubble that night--that is, if you had then and there prevented anybody from getting any premiums, from buying or selling a share. Then in the name of reason, why was it not really good for those who were rejected, that they were left out?

3. Now, in plain language, brief and straight, what would you have deemed the right thing, that night at the bank? With hundreds of millions subscribed, how many shares would you have thought the public should have? How many do you think now? And how should the balance have been kept for you promoters? Perhaps in answering this you will make it plain.

Sincerely yours, (Signed) ----

In answer to Question 1, I said: All my dealings had been conducted on the basis of selling to the public a fair amount of the first section of the consolidation and I had no tremors as to consequences. I knew that whatever allotment was made them would be worth all they were to pay for it, for I was personally familiar with the value of the properties of which the section was to be composed. When Mr. Rogers, as I have explained in my story, substituted, under circumstances that rendered me defenceless, an entirely new set of mines for those programmed for the first section--properties about which I knew only what he told me--from that time on my only guarantee against the jugglery and fraud I feared was to keep in the hands of Rogers and Rockefeller so large a part of this stock that they could play no tricks on the public without themselves suffering much more severely. If they regarded the stock as so valuable a possession that it was a security to be held as "Standard Oil," then their attitude to it guaranteed its value, and no harm could come to any one. When, however, they showed a readiness to part with more shares than the number they had promised me they would not go beyond, my fears were aroused, for all the contingencies I dreaded at once became imminent. Besides, such action was proof positive that in their opinion the mines were not worth the price at which they were selling them. Later on, when I had practical evidence that they were unloading and proof positive that they were juggling the stock, I felt certain that these facts constituted proof positive that they had lied to me about the cost and worth of the Amalgamated mines.

My answer to Question 1 practically disposes of part of Question 2, and my replies to the other inquiries above take care of another part.

I did expect Mr. Rogers to make an honest subscription for that part of the stock which we were to retain and which I was doing all in my power to have him retain, not because I desired to hold all of the good thing and so cheat the public, but because I did not think it safe for the public to hold so many shares that it would be to Rogers's and Rockefeller's interest to "bear" prices later and take shares away from the holders at slaughter prices. In one sense it was not fair to lead people to imagine that they were being offered $75,000,000 of an issue when as a matter of fact they were really offered only $5,000,000, but if only $5,000,000 were offered no harm could come to them, because every one who got some of it would make a profit, and those who received none would not suffer.

STEEL COMMON AND PREFERRED

A definite accusation of misrepresentation was presented in a letter that came to me early in the year in criticism of Steel facts and figures I had used in illustrating the artificial advance and depression of stocks:

CINCINNATI, O., January 24, 1905.

THOMAS W. LAWSON.

Sir: Lawson, you are both a fakir and a fool. A fakir because you misrepresent, and a fool because you do not begin to understand the people.

When you said the stockholders of the Steel Corporation lost $500,000,000, you knew that you lied. Because the difference in price of the stock to-day and when it was quoted on the New York Stock Exchange for the first time in 1901 does not approach that amount. I say that you knew this when you made that statement, but you thought and hoped that the general public would not be posted in the matter.

The whole substance of your magazine articles has been nothing but half-truths, and a half-truth is worse than a lie. You know that it is to gratify your personal spite, and not to help the general public, that you have engaged in your frenzied writings. The public is wiser than you think, although your conceit has blinded you to that fact.

Respectfully, F. F. METHVEN.

This frenzied nincompoop is evidently ignorant of the fact that 360,281,000 shares of Steel Preferred were sold to the public at over $100 per share, and that 5,500,000 shares of Steel Common were sold at over $50 per share, or nearly $300,000,000, and that months later, when the people were compelled to resell to the "System," they could get only $50 for this preferred stock and $10 for the common, while the $551,000,000 of bonds depreciated in value over $100,000,000 more. What this critic desired to say was that, at the present price of Steel stocks, no such loss as $500,000,000 is shown, which proves my oft-repeated contention--the "System," having "shaken out" the public and acquired their holdings at fifty and ten respectively, is now engaged in putting the price back to the old figure, intending to repeat the robbery process later. A votary of the "System," whom I know quite well, said to me a few weeks ago:

"Lawson, you keep chasing 'Frenzied Finance' will-o'-the-wisps while the rest of us are pulling in the dollars, and see where you will come out in the end. Look what I've done: I sold 200,000 shares of Steel Common for $8,000,000. It cost me $3,000,000. I made $5,000,000. I then 'shorted' 100,000 at $50 and bought it back at $12. I made $3,800,000. I then bought 300,000 at 10. It's now 30. When I sell out at 40, I shall have $9,000,000 more, making $18,000,000, without turning a hair or risking a dollar. With prizes such as these a man can stand a lot of frenzied hard names, can't he?"

THE REMEDY

As I have explained on another page of the "Critics," my Remedy cannot be dealt with save at considerable length and with living, tangible illustrations. I have purposely abstained from starting it until I have the American public educated to the point of comprehending its value and appreciating its practicability so far as to be ready to put it into operation. During the year I have had thousands of letters in regard to it, the following being a fair example:

TOPEKA, KAN., January 5, 1905.

Dear Sirs: I have followed Mr. Lawson's article very closely and, as I understand it, he intimates that he has a remedy for the rotten condition of affairs now prevailing. What I, and many more of your readers, would like to know is, whether Mr. Lawson, in offering a remedy, is taking into consideration the 22,000,000 people of the country who neither invest in stocks nor hold any amount of insurance, or is his remedy meant merely to protect the four million small capitalists from being eaten up by what he terms the "System."

It is very evident to some of us that if he cannot show us how to protect the great majority of the people who, although they are not even small capitalists, are the ones who are really footing the bills, his remedy will not be the grand success he anticipates.

J. P. FERRITER.

My Remedy will benefit the whole American people. It will help most the man who nowadays in America deserves most to be helped--the producer, who to-day is exchanging the efforts of all his working hours for the bare necessities of himself and family; not those bare necessities which the white slaves of Europe are ground down to believe are their only requirements, but those which the free and enlightened American believes, and has taught his family to believe, should be his necessities.

It is intended to benefit most the man who has nothing left over after paying his bills Saturday night but the terrors of not being able to meet them the coming week. It would indeed be a parody on a Remedy if it did not bring relief to this class.

Next, my Remedy will benefit that great middle class whose savings go to make up the billions in the savings-banks, national banks, trust and insurance companies, which are used by the "System" to secure for themselves a hundred, a thousand, and ten thousand per cent. interest on their capital, while the owners of these billions must be content with two and a half to four per cent. per annum; and

Next, it will benefit that class which possesses large fortunes honestly acquired, inasmuch as it will enable them to know what there is behind their investments. None but those who have plundered the people--acquired overnight fortunes many times larger than any honest lifetime efforts could possibly bring--can possibly be hurt by the application of my Remedy.

You are right--any remedy which would do other than what mine proposes to do would be a farce.

+--------------------------------------------------------------+ | Transcriber's Notes: | | | | Page vi: Scheheherezade sic | | Page 40: Missing "l" added to "loser" in Footnote 2 | | Page 59: guerilla sic | | Page 62: dumfounded sic | | Page 64: villany sic | | Page 99: gayly sic | | Page 107: Machiavelian sic | | Page 134: Machiavelian sic | | Page 154: "slighest" amended to "slightest" | | Page 175: Comma added after "perjury" in Footnote 12 | | Page 193: "metres" amended to "meters" | | Page 277: dumfounded sic | | Page 289: Opening quotes added to "Every one of us...." | | Page 348: millionnaire sic | | Page 352: Comma added after "defalcation" | | Page 388: milllionnaire's sic | | Page 447: cohoots sic | | Page 471: "very rich men" amended to "very rich man" | | Page 478: haling sic | | Page 482: Corea and Porto Rico sic | | Page 490: "managment" amended to "management" | | Page 548: "insuarnce" amended to "insurance" | | | | Hyphenation has generally been standardized. However, when | | hyphenated and unhyphenated versions of a word each occur | | an equal number of times, both versions have been retained | | (baseball/base-ball; blackjack/black-jack; blacklisted/ | | black-listed; chessboard/chess-board; cooperation/ | | co-operation; downtown/down-town; handshake/hand-shake; | | headlight/head-light; headlines/head-lines; setback/ | | set-back; typewritten/type-written; uptown/up-town; | | viewpoint/view-point). | +--------------------------------------------------------------+