Part 39

They saw the crazy height that other stocks rose to and they began to think in billions. Well, when Borneo Tin got up to 120 I let them have my ten thousand shares. It checked the rise and the pool managers let up on their jacking-up process. On the next general rally they again tried to make an active market for it and disposed of quite a little, but the merchandising proved to be rather expensive. Finally they marked it up to 150. But the bloom was off the bull market for keeps, so the pool was compelled to market what stock it could on the way down to those people who love to buy after a good reaction, on the fallacy that a stock that has once sold at 150 must be cheap at 130 and a great bargain at 120. Also, they passed the tip to the floor traders, who often are able to make a temporary market, and later to the commission houses. Every little helped and the pool was using every device known. The trouble was that the time for bulling stocks had passed. The suckers had swallowed other hooks. The Borneo bunch didn’t or wouldn’t see it.

I was down in Palm Beach with my wife. One day I made a little money at Gridley’s and when I got home I gave Mrs. Livingston a five-hundred-dollar bill out of it. It was a curious coincidence, but that same night she met at a dinner the president of the Borneo Tin Company, a Mr. Wisenstein, who had become the manager of the stock pool. We didn’t learn until some time afterward that this Wisenstein deliberately manœuvred so that he sat next to Mrs. Livingston at dinner.

He laid himself out to be particularly nice to her and talked most entertainingly. In the end he told her, very confidentially, “Mrs. Livingston, I’m going to do something I’ve never done before. I am very glad to do it because you know exactly what it means.” He stopped and looked at Mrs. Livingston anxiously, to make sure she was not only wise but discreet. She could read it on his face, plain as print. But all she said was, “Yes.”

“Yes, Mrs. Livingston. It has been a very great pleasure to meet you and your husband, and I want to prove that I am sincere in saying this because I hope to see a great deal of both of you. I am sure I don’t have to tell you that what I am going to say is strictly confidential!” Then he whispered, “If you will buy some Borneo Tin you will make a great deal of money.”

“Do you think so?” she asked.

“Just before I left the hotel,” he said, “I received some cables with news that won’t be known to the public for several days at least. I am going to gather in as much of the stock as I can. If you get some at the opening to-morrow you will be buying it at the same time and at the same price as I. I give you my word that Borneo Tin will surely advance. You are the only person that I have told this to. Absolutely the only one!”

She thanked him and then she told him that she didn’t know anything about speculating in stocks. But he assured her it wasn’t necessary for her to know any more than he had told her. To make sure she heard it correctly he repeated his advice to her:

“All you have to do is to buy as much Borneo Tin as you wish. I can give you my word that if you do you will not lose a cent. I’ve never before told a woman--or a man, for that matter--to buy anything in my life. But I am so sure the stock won’t stop this side of 200 that I’d like you to make some money. I can’t buy all the stock myself, you know, and if somebody besides myself is going to benefit by the rise I’d rather it was you than some stranger. Much rather! I’ve told you in confidence because I know you won’t talk about it. Take my word for it, Mrs. Livingston, and buy Borneo Tin!”

He was very earnest about it and succeeded in so impressing her that she began to think she had found an excellent use for the five hundred dollars I had given her that afternoon. That money hadn’t cost me anything and was outside of her allowance. In other words, it was easy money to lose if the luck went against her. But he had said she would surely win. It would be nice to make money on her own hook--and tell me all about it afterwards.

Well, sir, the very next morning before the market opened she went into Harding’s office and said to the manager:

“Mr. Haley, I want to buy some stock, but I don’t want it to go in my regular account because I don’t wish my husband to know anything about it until I’ve made some money. Can you fix it for me?”

Haley, the manager, said, “Oh, yes. We can make it a special account. What’s the stock and how much of it do you want to buy?”

She gave him the five hundred dollars and told him, “Listen, please. I do not wish to lose more than this money. If that goes I don’t want to owe you anything; and remember, I don’t want Mr. Livingston to know anything about this. Buy me as much Borneo Tin as you can for the money, at the opening.”

Haley took the money and told her he’d never say a word to a soul, and bought her a hundred shares at the opening. I think she got it at 108. The stock was very active that day and closed at an advance of three points. Mrs. Livingston was so delighted with her exploit that it was all she could do to keep from telling me all about it.

It so happened that I had been getting more and more bearish on the general market. The unusual activity in Borneo Tin drew my attention to it. I didn’t think the time was right for any stock to advance, much less one like that. I had decided to begin my bear operations that very day, and I started by selling about ten thousand shares of Borneo. If I had not I rather think the stock would have gone up five or six points instead of three.

On the very next day I sold two thousand shares at the opening and two thousand shares just before the close, and the stock broke to 102.

Haley, the manager of Harding Brothers’ Palm Beach Branch, was waiting for Mrs. Livingston to call there on the third morning. She usually strolled in about eleven to see how things were, if I was doing anything.

Haley took her aside and said, “Mrs. Livingston, if you want me to carry that hundred shares of Borneo Tin for you you will have to give me more margin.”

“But I haven’t any more,” she told him.

“I can transfer it to your regular account,” he said.

“No,” she objected, “because that way L.L. would learn about it.”

“But the account already shows a loss of--” he began.

“But I told you distinctly I didn’t want to lose more than the five hundred dollars. I didn’t even want to lose that,” she said.

“I know, Mrs. Livingston, but I didn’t want to sell it without consulting you, and now unless you authorise me to hold it I’ll have to let it go.”

“But it did so nicely the day I bought it,” she said, “that I didn’t believe it would act this way so soon. Did you?”

“No,” answered Haley, “I didn’t.” They have to be diplomatic in brokers’ offices.

“What’s gone wrong with it, Mr. Haley?”

Haley knew, but he could not tell her without giving me away, and a customer’s business is sacred. So he said, “I don’t hear anything special about it, one way or the other. There she goes! That’s low for the move!” and he pointed to the quotation board.