My Adventures With Your Money

CHAPTER I. The Rise and Fall of Maxim & Gay

THE RISE AND FALL OF MAXIM & GAY

The place was New York. The time, March, 1901. My age was thirty. My cash capital, tightly placed in my pocket, was $7.30, and I had no other external resources. I was a rover and out of a job.

Since August of the year before I had been loafing. My last position, seven months before, was that of a reporter for the New Orleans Times-Democrat. My last newspaper assignment was the great Galveston cyclonic hurricane in which 15,000 lives were lost and $100,000,000 in property was destroyed. I covered that catastrophe for the New York Herald and other journals as well as for the New Orleans newspaper. It was a "beat" and I netted a big sum for a few days' hard work, but the money had all been spent for subsistence.

At the corner of Fortieth Street and Broadway I met an old-time racetrack friend, Dave Campbell. His face wore a hardy, healthful hue, but he bore unmistakable evidence of being down on his luck.

"Buy me a drink," he said.

"I've got thirty cents in change and I must have a cigar," I answered, "and you know I like good ones."

"Well, I'll take a beer," he said, "and you can buy yourself a perfecto."

No sooner said than done. The cigar and the drink were forthcoming. We sat down. It was a café with the regulation news-ticker near the lunch counter.

"Do you still bet on the horses?" asked Campbell.

"No, I haven't had a bet down in more than a year," I answered.

"Well, here's a letter I just received from Frank Mead at New Orleans, and it ought to make you some money," he said.

"There's a 'pig' down here named Silver Coin," the letter said, "that has been raced for work recently. I think he's fit and ready and that within the next few days they will place him in a race that he can win, and he will bring home the coonskins at odds of 10 to 1."

I had seen letters like that before, but my interest was aroused. I picked up a copy of the New York Morning Telegraph from the table. Turning the pages, I noticed a number of tipsters' advertisements, all claiming they were continually giving the public winners on the races.

THE BIRTH OF AN IDEA TO COIN MONEY

"Do these people make money?" I asked Campbell.

"Yes, they must," he answered, "because the ads have been running every day for months and months."

"Well, if poorly written ads like these can make money, what would well-written ads accomplish, and particularly from an information bureau which might give real information?" I queried. A moment later the ticker began its click, click, click.

"Here come the entries," said Campbell.

He went to the tape and ejaculated, "By Jiminy! Here's Silver Coin entered for to-morrow."

The coincidence stirred me.

"I've got an idea for an advertisement," I said. "Get me a sheet of paper."

It was supplied. I wrote:

+---------------------------+ | Bet Your Last Dollar On | | SILVER COIN | | To-day | | At New Orleans | | He Will Win At 10 to 1 | +---------------------------+

And then I faltered. "I must have a name for the signature," I said.

I picked up the newspaper again and turned to the page containing the entries for that day at the New Orleans races. A sire's name was given as St. Maxim.

"Maxim!" I said. "That's a good name. I'll use it. Now for one that will make euphony."

"Gay!" said Campbell. "How's that? It's sporty."

Thereupon I created the trade-mark of Maxim & Gay.

In a postscript to this advertisement I stated that the usual terms for this information were $5 per day and $25 per week, and that the day after next Maxim & Gay would have another selection, which would not be given away free.

"Maxim & Gay" were without an address. Half a block away on Broadway, at a real estate office, we were informed that upstairs they had some rooms to let. I engaged one of these for $15 a month--no pay for a week. Two tin signs were ordered painted, bearing the inscription, "Maxim & Gay." One was placed at the entrance of the building and the other on the door upstairs. The sign-painter extended credit.

Before bidding me adieu, Campbell exclaimed of a sudden:

"By golly! I can't understand that scheme. How can you make any money giving out that Silver Coin tip for nothing?"

"Watch and see!" I said.

Around to the Morning Telegraph office, then on Forty-second Street, I went.

"Insert this ad and give me $7 worth of space," I said, as I shelled out my last cent.

When the advertisement appeared the next morning, its aspect was disappointing. The space occupied was only fifty-six agate lines, or four inches, single-column measure. It looked puny. Would people notice it?

That afternoon Campbell and I took possession of the new office of Maxim & Gay. Luckily, a former tenant had left a desk and a chair behind, in lieu of a settlement for rent. In walked a tall Texan.

"Hey there!" he cried. "Here's $5. It's yours. Keep it. Answer my question, and no matter what way you answer it, it don't make any difference. The $5 is yours."

I looked up in amazement.

"Give me the source of your information on Silver Coin," he said. "I bet big money. If your dope is on the level, I'll bet a 'gob.' If it ain't, your confession will be cheap at $5, which will be all the money I'll lose."

I showed him the letter from Frank Mead.

"That's good enough for me," he said, turning on his heel.

Silver Coin won easily at 10 to 1.

The betting was so heavy in the New York pool-rooms that, at post time, when 10 to 1 was readily obtainable at the race-track, 6 to 1 was the best price that could be obtained in New York. It is history that the New York City pool-rooms at that time controlled by "Jimmy" Mahoney were literally "burned up" with winning wagers. Pool-room habitués argued it thus: "If the tip is not 'a good thing,' what object in the world would these people have for publishing the ad? If the horse loses, the cost of the advertisement is certainly lost. The only way they can win is for the horse to win." It was good logic--as far as it went.

THE HIGHER MATHEMATICS OF THE OPERATION

But it was really sophistry. If the horse lost, the inserter of the Maxim & Gay advertisement would be out exactly $7. If the $7 was used to bet on the horse, the most that Maxim & Gay could win would be $70. I was taking the same losing risk as the bettor, with a greater chance for gain. By investing $7 in the advertisement, it was possible for me to win much more money from the public by obtaining their patronage for the projected tipping bureau.

I recall that the experimental features of the advertisement appealed to me strongly and struck me as being a splendid test of the possibilities of the business. If the horse won and there were few responses to the advertisement it would be convincing on the point that there was no money in the tipster branch of the horse-racing game. I argued that if the racing public would not believe that an Information Bureau was what it cracked itself up to be, in the face of a positive demonstration, how could it be expected to believe the lurid claims of the fakers whose advertisements crowded the sporting papers daily and in which they claimed after the races were run that they named in advance the winners at all sorts of big odds?

The next morning about ten o'clock, Campbell called at my home and said that he had received another "good thing" by telegraph from Mead and that the name of the horse was Annie Lauretta, with probable odds of 40 to 1.

"Jiminy!" he exclaimed. "If we only get a few customers to-day and this one wins, what will happen?"

Leisurely we walked to the office. "If we get ten subscribers to-day to start with, we'll make a fine beginning," I said.

As we approached the Hotel Marlborough, which is opposite the building on Broadway in which the Maxim & Gay Company had its modest little office, our attention turned abruptly to a crowd of people who were being lined up by half a dozen policemen.

"What theater has a sale of seats to-day?" Campbell asked.

"Don't know," I answered.

As we approached the office, we found that the line extended into our own office building. As we ambled up the rickety stairs, we passed the crowd in line, one by one, until we discovered, to our great astonishment, that the line ended at our door.

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