I went to him and said, “I’ve come to pay you back that twenty-five thousand dollars.”
“No, no!” he said and waved me away exactly as if I had offered him a castor-oil cocktail. “No, no, my boy. Wait until your account amounts to something. Don’t think about it yet. You’ve only got chicken feed there.”
There is where I made the mistake that I have regretted more than any other I ever made in my Wall Street career. It was responsible for long and dreary years of suffering. I should have insisted on his taking the money. I was on my way to a bigger fortune than I had lost and walking pretty fast. For three weeks my average profit was 150 per cent per week. From then on my trading would be on a steadily increasing scale. But instead of freeing myself from all obligation I let him have his way and did not compel him to accept the twenty-five thousand dollars. Of course, since he didn’t draw out the twenty-five thousand dollars he had advanced me I felt I could not very well draw out my profit. I was very grateful to him, but I am so constituted that I don’t like to owe money or favours. I can pay the money back with money, but the favours and kindnesses I must pay back in kind--and you are apt to find these moral obligations mighty high priced at times. Moreover there is no statute of limitations.
I left the money undisturbed and resumed my trading. I was getting on very nicely. I was recovering my poise and I was sure it would not be very long before I should get back into my 1907 stride. Once I did that, all I’d ask for would be for the market to hold out a little while and I’d more than make up my losses. But making or not making the money was not bothering me much. What made me happy was that I was losing the habit of being wrong, of not being myself. It had played havoc with me for months but I had learned my lesson.
Just about that time I turned bear and I began to sell short several railroad stocks. Among them was Chesapeake & Atlantic. I think I put out a short line in it; about eight thousand shares.
One morning when I got downtown Dan Williamson called me into his private office before the market opened and said to me: “Larry, don’t do anything in Chesapeake & Atlantic just now. That was a bad play of yours, selling eight thousand short. I covered it for you this morning in London and went long.”
I was sure Chesapeake & Atlantic was going down. The tape told it to me quite plainly; and besides I was bearish on the whole market, not violently or insanely bearish, but enough to feel comfortable with a moderate short line out. I said to Williamson, “What did you do that for? I am bearish on the whole market and they are all going lower.”
But he just shook his head and said, “I did it because I happen to know something about Chesapeake & Atlantic that you couldn’t know. My advice to you is not to sell that stock short until I tell you it is safe to do so.”
What could I do? That wasn’t an asinine tip. It was advice that came from the brother-in-law of the chairman of the board of directors. Dan was not only Alvin Marquand’s closest friend but he had been kind and generous to me. He had shown his faith in me and confidence in my word. I couldn’t do less than to thank him. And so my feelings again won over my judgment and I gave in. To subordinate my judgment to his desires was the undoing of me. Gratitude is something a decent man can’t help feeling, but it is for a fellow to keep it from completely tying him up. The first thing I knew I not only had lost all my profit but I owed the firm one hundred and fifty thousand dollars besides. I felt pretty badly about it, but Dan told me not to worry.
“I’ll get you out of this hole,” he promised. “I know I will. But I can only do it if you let me. You will have to stop doing business on your own hook. I can’t be working for you and then have you completely undo all my work in your behalf. Just lay off the market and give me a chance to make some money for you. Won’t you, Larry?”
Again I ask you: What could I do? I thought of his kindliness and I could not do anything that might be construed as lacking in appreciation. I had grown to like him. He was very pleasant and friendly. I remember that all I got from him was encouragement. He kept on assuring me that everything would come out O.K. One day, perhaps six months later, he came to me with a pleased smile and gave me some credit slips.
“I told you I would pull you out of that hole,” he said, “and I have.” And then I discovered that not only had he wiped out the debt entirely but I had a small credit balance besides.
I think I could have run that up without much trouble, for the market was right, but he said to me, “I have bought you ten thousand shares of Southern Atlantic.” That was another road controlled by his brother-in-law, Alvin Marquand, who also ruled the market destinies of the stock.
When a man does for you what Dan Williamson did for me you can’t say anything but “Thank you”--no matter what your market views may be. You may be sure you’re right, but as Pat Hearne used to say: “You can’t tell till you bet!” and Dan Williamson had bet for me--with his money.
Well, Southern Atlantic went down and stayed down and I lost, I forget how much, on my ten thousand shares before Dan sold me out. I owed him more than ever. But you never saw a nicer or less importunate creditor in your life. Never a whimper from him. Instead, encouraging words and admonitions not to worry about it. In the end the loss was made up for me in the same generous but mysterious way.
He gave no details whatever. They were all numbered accounts. Dan Williamson would just say to me, “We made up your Southern Atlantic loss with profits on this other deal,” and he’d tell me how he had sold seventy-five hundred shares of some other stock and made a nice thing out of it. I can truthfully say that I never knew a blessed thing about those trades of mine until I was told that the indebtedness was wiped out.
After that happened several times I began to think, and I got to look at my case from a different angle. Finally I tumbled. It was plain that I had been used by Dan Williamson. It made me angry to think it, but still angrier that I had not tumbled to it quicker. As soon as I had gone over the whole thing in my mind I went to Dan Williamson, told him I was through with the firm, and I quit the office of Williamson & Brown. I had no words with him or any of his partners. What good would that have done me? But I will admit that I was sore--at myself quite as much as at Williamson & Brown.
The loss of the money didn’t bother me. Whenever I have lost money in the stock market I have always considered that I have learned something; that if I have lost money I have gained experience, so that the money really went for a tuition fee. A man has to have experience and he has to pay for it. But there was something that hurt a whole lot in that experience of mine in Dan Williamson’s office, and that was the loss of a great opportunity. The money a man loses is nothing; he can make it up. But opportunities such as I had then do not come every day.
The market, you see, had been a fine trading market. I was right; I mean, I was reading it accurately. The opportunity to make millions was there. But I allowed my gratitude to interfere with my play. I tied my own hands. I had to do what Dan Williamson in his kindness wished done. Altogether it was more unsatisfactory than doing business with a relative. Bad business!
And that wasn’t the worst thing about it. It was that after that there was practically no opportunity for me to make big money. The market flattened out. Things drifted from bad to worse. I not only lost all I had but got into debt again--more heavily than ever. Those were long lean years, 1911, 1912, 1913 and 1914. There was no money to be made. The opportunity simply wasn’t there and so I was worse off than ever.
It isn’t uncomfortable to lose when the loss is not accompanied by a poignant vision of what might have been. That was precisely what I could not keep my mind from dwelling on, and of course it unsettled me further. I learned that the weaknesses to which a speculator is prone are almost numberless. It was proper for me as a man to act the way I did in Dan Williamson’s office, but it was improper and unwise for me as a speculator to allow myself to be influenced by any consideration to act against my own judgment. _Noblesse oblige_--but not in the stock market, because the tape is not chivalrous and moreover does not reward loyalty. I realise that I couldn’t have acted differently. I couldn’t make myself over just because I wished to trade in the stock market. But business is business always, and my business as a speculator is to back my own judgment always.
It was a very curious experience. I’ll tell you what I think happened. Dan Williamson was perfectly sincere in what he told me when he first saw me. Every time his firm did a few thousand shares in any one stock the Street jumped at the conclusion that Alvin Marquand was buying or selling. He was the big trader of the office, to be sure, and he gave this firm all his business; and he was one of the best and biggest traders they have ever had in Wall Street. Well, I was to be used as a smoke screen, particularly for Marquand’s selling.