Chapter 11

19 min

And now I’ll get back to October, 1907. I bought a yacht and made all preparations to leave New York for a cruise in Southern waters. I am really daffy about fishing and this was the time when I was going to fish to my heart’s content from my own yacht, going wherever I wished whenever I felt like it. Everything was ready. I had made a killing in stocks, but at the last moment corn held me back.

Now I’ll return to October 1907. I bought a yacht and made all the preparations to leave New York for a cruise in southern waters. I love fishing, and I planned to fish to my heart’s content from my own yacht. I could go wherever I wanted, whenever I felt like it. Everything was ready. I had made a fortune in stocks, but at the last moment, corn held me back.

I must explain that before the money panic which gave me my first million I had been trading in grain at Chicago. I was short ten million bushels of wheat and ten million bushels of corn. I had studied the grain markets for a long time and was as bearish on corn and wheat as I had been on stocks.

Before the money panic that made me my first million, I had been trading grain in Chicago. I was short ten million bushels of wheat and ten million bushels of corn. I had studied the grain markets for a long time. I was as bearish on corn and wheat as I had been on stocks.

Well, they both started down, but while wheat kept on declining the biggest of all the Chicago operators—I’ll call him Stratton—took it into his head to run a corner in corn. After I cleaned up in stocks and was ready to go South on my yacht I found that wheat showed me a handsome profit, but in corn Stratton had run up the price and I had quite a loss.

Well, both wheat and corn started to fall. But while wheat kept falling, the biggest Chicago operator of them all decided to corner the corn market. I’ll call him Stratton. After I made my profits in stocks, I was ready to head South on my yacht. I found that I had made a handsome profit on wheat. But Stratton had driven up the price of corn, and I had quite a loss there.

I knew there was much more corn in the country than the price indicated. The law of demand and supply worked as always. But the demand came chiefly from Stratton and the supply was not coming at all, because there was an acute congestion in the movement of corn. I remember that I used to pray for a cold spell that would freeze the impassable roads and enable the farmers to bring their corn into the market. But no such luck.

I knew there was much more corn in the country than the price suggested. The law of supply and demand worked as it always did. But most of the demand came from Stratton, and no corn was coming to market because transportation was severely disrupted. I remember praying for a cold spell to freeze the impassable roads so farmers could bring their corn to market. But no such luck.

There I was, waiting to go on my joyously planned fishing trip and that loss in corn holding me back. I couldn’t go away with the market as it was. Of course Stratton kept pretty close tabs on the short interest. He knew he had me, and I knew it quite as well as he did. But, as I said, I was hoping I might convince the weather that it ought to get busy and help me. Perceiving that neither the weather nor any other kindly wonder-worker was paying any attention to my needs I studied how I might work out of my difficulty by my own efforts.

There I was, waiting to take the fishing trip I had so happily planned. But my loss in corn was holding me back. I couldn’t leave with the market as it was. Of course, Stratton kept a close eye on the short interest. He knew he had me, and I knew it just as well as he did. But, as I said, I hoped I could convince the weather to get busy and help me. When I saw that neither the weather nor any other kindly miracle worker was paying attention to my needs, I considered how to get myself out of trouble.

I closed out my line of wheat at a good profit. But the problem in corn was infinitely more difficult. If I could have covered my ten million bushels at the prevailing prices I instantly and gladly would have done so, large though the loss would have been. But, of course, the moment I started to buy in my corn Stratton would be on the job as squeezer in chief, and I no more relished running up the price on myself by reason of my own purchases than cutting my own throat with my own knife.

I closed out my wheat position at a good profit. But the problem with corn was infinitely more difficult. If I could have bought back my ten million bushels at current prices, I would have done so immediately and gladly. I would have done it even though the loss was large. But of course, the moment I started buying back my corn, Stratton would take charge of the squeeze. I liked the idea of driving up the price through my own purchases no more than cutting my own throat with my own knife.

Strong though corn was, my desire to go fishing was even stronger, so it was up to me to find a way out at once. I must conduct a strategic retreat. I must buy back the ten million bushels I was short of and in so doing keep down my loss as much as I possibly could.

Although corn was strong, my desire to go fishing was even stronger. So I had to find a way out immediately. I had to make a strategic retreat. I had to buy back the ten million bushels I had sold short and keep my loss as small as possible.

It so happened that Stratton at that time was also running a deal in oats and had the market pretty well sewed up. I had kept track of all the grain markets in the way of crop news and pit gossip, and I heard that the powerful Armour interests were not friendly, marketwise, to Stratton. Of course I knew that Stratton would not let me have the corn I needed except at his own price, but the moment I heard the rumors about Armour being against Stratton it occurred to me that I might look to the Chicago traders for aid. The only way in which they could possibly help me was for them to sell me the corn that Stratton wouldn’t. The rest was easy.

At the time, Stratton was also trading in oats and had the market pretty much under his control. I followed all the grain markets through crop reports and trading floor gossip. I heard that the powerful Armour interests were opposed to Stratton in the market. Of course, I knew Stratton would sell me the corn I needed only at his own price. But as soon as I heard the rumors about Armour opposing Stratton, I thought the Chicago traders might help me. The only way they could possibly help was by selling me the corn Stratton would not sell me. The rest was easy.

First, I put in orders to buy five hundred thousand bushels of corn every eighth of a cent down. After these orders were in I gave to each of four houses an order to sell simultaneously fifty thousand bushels of oats at the market. That, I figured, ought to make a quick break in oats. Knowing how the traders’ minds worked, it was a cinch that they would instantly think that Armour was gunning for Stratton. Seeing the attack opened in oats they would logically conclude that the next break would be in corn and they would start to sell it. If that corner in corn was busted, the pickings would be fabulous.

First, I placed orders to buy five hundred thousand bushels of corn for every eighth of a cent the price fell. Then I gave each of four brokerage houses an order to sell fifty thousand bushels of oats at the market price, all at once. I figured that would cause a quick drop in oats prices. I knew how traders thought, so I was sure they would immediately think Armour was going after Stratton. Seeing the attack begin in oats, they would logically conclude that corn prices would fall next. Then they would start selling corn. If that corner in corn was broken, the profits would be fabulous.

My dope on the psychology of the Chicago traders was absolutely correct. When they saw oats breaking on the scattered selling they promptly jumped on corn and sold it with great enthusiasm. I was able to buy six million bushels of corn in the next ten minutes. The moment I found that their selling of corn ceased I simply bought in the other four million bushels at the market. Of course that made the price go up again, but the net result of my manœuvre was that I covered the entire line of ten million bushels within one-half cent of the price prevailing at the time I started to cover on the traders’ selling. The two hundred thousand bushels of oats that I sold short to start the traders’ selling of corn I covered at a loss of only three thousand dollars. That was pretty cheap bear bait. The profits I had made in wheat offset so much of my deficit in corn that my total loss on all my grain trades that time was only twenty-five thousand dollars. Afterwards corn went up twenty-five cents a bushel. Stratton undoubtedly had me at his mercy. If I had set about buying my ten million bushels of corn without bothering to think of the price there is no telling what I would have had to pay.

My read on the psychology of the Chicago traders was absolutely right. When they saw oats prices falling from scattered selling, they quickly jumped on corn and sold it enthusiastically. I was able to buy six million bushels of corn in the next ten minutes. As soon as they stopped selling corn, I simply bought the other four million bushels at the market price. Of course, that drove the price up again. But my maneuver let me cover my entire short position of ten million bushels within half a cent of the price when I started buying as the traders sold. I had sold 200,000 bushels of oats short to start the traders selling corn. I covered that position at a loss of only $3,000. That was pretty cheap bear bait. My wheat profits offset so much of my loss on corn that my total loss on all my grain trades that time was only $25,000. Afterward, corn went up twenty-five cents a bushel. Stratton undoubtedly had me at his mercy. If I had started buying my ten million bushels of corn without worrying about the price, there is no telling what I would have had to pay.

A man can’t spend years at one thing and not acquire a habitual attitude towards it quite unlike that of the average beginner. The difference distinguishes the professional from the amateur. It is the way a man looks at things that makes or loses money for him in the speculative markets. The public has the dilettante’s point of view toward his own effort. The ego obtrudes itself unduly and the thinking therefore is not deep or exhaustive. The professional concerns himself with doing the right thing rather than with making money, knowing that the profit takes care of itself if the other things are attended to. A trader gets to play the game as the professional billiard player does—that is, he looks far ahead instead of considering the particular shot before him. It gets to be an instinct to play for position.

A person who spends years doing one thing develops a habitual attitude very different from a beginner’s. That difference separates the professional from the amateur. In speculative markets, the way a person looks at things determines whether they make or lose money. The public approaches its own efforts like amateurs. People let their egos get in the way, so their thinking is neither deep nor thorough. The professional focuses on doing the right thing rather than making money, knowing that profits will take care of themselves if everything else is handled properly. A trader learns to play the game like a professional billiards player. The trader looks far ahead instead of thinking only about the shot at hand. Playing for position becomes instinctive.

I remember hearing a story about Addison Cammack that illustrates very nicely what I wish to point out. From all I have heard, I am inclined to think that Cammack was one of the ablest stock traders the Street ever saw. He was not a chronic bear as many believe, but he felt the greater appeal of trading on the bear side, of utilizing in his behalf the two great human factors of hope and fear. He is credited with coining the warning: “Don’t sell stocks when the sap is running up the trees!” and the old-timers tell me that his biggest winnings were made on the bull side, so that it is plain he did not play prejudices but conditions. At all events, he was a consummate trader. It seems that once—this was way back at the tag end of a bull market—Cammack was bearish, and J. Arthur Joseph, the financial writer and raconteur, knew it. The market, however, was not only strong but still rising, in response to prodding by the bull leaders and optimistic reports by the newspapers. Knowing what use a trader like Cammack could make of bearish information, Joseph rushed to Cammack’s office one day with glad tidings.

I remember hearing a story about Addison Cammack that illustrates the point I want to make. From all I have heard, I believe Cammack was probably one of the best stock traders Wall Street ever saw. Many people believe he was always bearish, but he was not. He simply found it more appealing to trade on the bear side, using the two great human forces of hope and fear to his advantage. He is credited with coining the warning: “Don’t sell stocks when the sap is running up the trees!” The old-timers tell me he made his biggest winnings on the bull side. Clearly, he traded according to conditions, not prejudices. In any case, he was a master trader. Once, long ago, near the end of a bull market, Cammack was bearish. J. Arthur Joseph, the financial writer and storyteller, knew this. But the market was not only strong, it was still rising, driven by the bull leaders and optimistic newspaper reports. Joseph knew how a trader like Cammack could use bearish information. So one day he rushed to Cammack’s office with good news.

“Mr. Cammack, I have a very good friend who is a transfer clerk in the St. Paul office and he has just told me something which I think you ought to know.”

“Mr. Cammack, a very good friend of mine is a transfer clerk in the St. Paul office. He just told me something I think you should know.”

“What is it?” asked Cammack listlessly.

“What is it?” Cammack asked without much interest.

“You’ve turned, haven’t you? You are bearish now?” asked Joseph, to make sure. If Cammack wasn’t interested he wasn’t going to waste precious ammunition.

“You’ve changed your position, haven’t you? You’re bearish now?” Joseph asked to make sure. If Cammack wasn’t interested, Joseph wasn’t going to waste precious ammunition.

“Yes. What’s the wonderful information?”

“I went around to the St. Paul office to-day, as I do in my news-gathering rounds two or three times a week, and my friend there said to me: ‘The Old Man is selling stock.’ He meant William Rockefeller. ‘Is he really, Jimmy?’ I said to him, and he answered, ‘Yes; he is selling fifteen hundred shares every three-eighths of a point up. I’ve been transferring the stock for two or three days now.’ I didn’t lose any time, but came right over to tell you.”

“I went to the St. Paul office today. I stop there two or three times a week to gather news. My friend there said to me, ‘The Old Man is selling stock.’ He meant William Rockefeller. ‘Is he really, Jimmy?’ I asked. He answered, ‘Yes. He is selling fifteen hundred shares for every three-eighths of a point the price goes up. I’ve been transferring the stock for two or three days now.’ I didn’t waste any time. I came right over to tell you.”

Cammack was not easily excited, and, moreover, was so accustomed to having all manner of people rush madly into his office with all manner of news, gossip, rumors, tips and lies that he had grown distrustful of them all. He merely said now, “Are you sure you heard right, Joseph?”

Cammack was not easily excited. He was also used to all kinds of people rushing into his office with all kinds of news, gossip, rumors, tips, and lies. So he had grown distrustful of all of it. He simply said, “Are you sure you heard right, Joseph?”

“Am I sure? Certainly I am sure! Do you think I am deaf?” said Joseph.

“Am I sure? Of course I’m sure! Do you think I’m deaf?” said Joseph.

“Are you sure of your man?”

“Are you sure about your man?”

“Absolutely!” declared Joseph. “I’ve known him for years. He has never lied to me. He wouldn’t! No object! I know he is absolutely reliable and I’d stake my life on what he tells me. I know him as well as I know anybody in this world—a great deal better than you seem to know me, after all these years.”

“Absolutely!” Joseph said. “I’ve known him for years. He has never lied to me. He wouldn’t! He has no reason to! I know he is completely reliable, and I’d stake my life on what he tells me. I know him as well as I know anyone in the world. In fact, I know him much better than you seem to know me, even after all these years.”

“Sure of him, eh?” And Cammack again looked at Joseph. Then he said, “Well, you ought to know.” He called his broker, W. B. Wheeler. Joseph expected to hear him give an order to sell at least fifty thousand shares of St. Paul. William Rockefeller was disposing of his holdings in St. Paul, taking advantage of the strength of the market. Whether it was investment stock or speculative holdings was irrelevant. The one important fact was that the best stock trader of the Standard Oil crowd was getting out of St. Paul. What would the average man have done if he had received the news from a trustworthy source? No need to ask.

“Sure of him, eh?” Cammack looked at Joseph again. Then he said, “Well, you ought to know.” He called his broker, W. B. Wheeler. Joseph expected Cammack to order Wheeler to sell at least fifty thousand shares of St. Paul. William Rockefeller was selling his St. Paul holdings, taking advantage of the strong market. It did not matter whether he held the stock for investment or speculation. The important fact was that the best stock trader in the Standard Oil crowd was getting out of St. Paul. What would the average person have done if he had received this news from a trustworthy source? No need to ask.

But Cammack, the ablest bear operator of his day, who was bearish on the market just then, said to his broker, “Billy, go over to the board and buy fifteen hundred St. Paul every three-eighths up.” The stock was then in the nineties.

But Cammack was the most skilled bear trader of his day, and he expected the market to fall. He said to his broker, “Billy, go to the trading board and buy 1,500 shares of St. Paul every time the price rises three-eighths of a point.” The stock was trading in the nineties at the time.

“Don’t you mean sell?” interjected Joseph hastily. He was no novice in Wall Street, but he was thinking of the market from the point of view of the newspaper man and, incidentally, of the general public. The price certainly ought to go down on the news of inside selling. And there was no better inside selling than Mr. William Rockefeller’s. The Standard Oil getting out and Cammack buying! It couldn’t be!

“Don’t you mean sell?” Joseph quickly interrupted. He was no beginner on Wall Street. But he was looking at the market from a newspaper reporter’s point of view and, for that matter, the general public’s. The price surely ought to fall on news of insiders selling. And no insider’s selling was more significant than Mr. William Rockefeller’s. Standard Oil getting out and Cammack buying! It couldn’t be!

“No,” said Cammack; “I mean buy!”

“No,” Cammack said, “I mean buy!”

“Don’t you believe me?”

“Yes!”

“Don’t you believe my information?”

“Yes.”

“Aren’t you bearish?”

“Don’t you think the market will fall?”

“Yes.”

“Well, then?”

“That’s why I’m buying. Listen to me now: You keep in touch with that reliable friend of yours and the moment the scaled selling stops, let me know. Instantly! Do you understand?”

“That’s why I’m buying. Listen to me. Stay in touch with that reliable friend of yours. The moment the scaled selling stops, let me know. Immediately! Do you understand?”

“Yes,” said Joseph, and went away, not quite sure he could fathom Cammack’s motives in buying William Rockefeller’s stock. It was the knowledge that Cammack was bearish on the entire market that made his manœuvre so difficult to explain. However, Joseph saw his friend the transfer clerk and told him he wanted to be tipped off when the Old Man got through selling. Regularly twice a day Joseph called on his friend to inquire.

“Yes,” said Joseph, and left, not quite sure why Cammack was buying William Rockefeller’s stock. Cammack’s move was hard to explain because Joseph knew he was bearish on the entire market. However, Joseph saw his friend, the transfer clerk, and asked him to let him know when the Old Man had finished selling. Joseph checked with his friend twice a day.

One day the transfer clerk told him, “There isn’t any more stock coming from the Old Man.” Joseph thanked him and ran to Cammack’s office with the information.

One day the transfer clerk told him, “There’s no more stock coming from the Old Man.” Joseph thanked him and ran to Cammack’s office with the news.

Cammack listened attentively, turned to Wheeler and asked, “Billy, how much St. Paul have we got in the office?” Wheeler looked it up and reported that they had accumulated about sixty thousand shares.

Cammack listened carefully, then turned to Wheeler and asked, “Billy, how much St. Paul stock do we have in the office?” Wheeler checked and reported that they had accumulated about sixty thousand shares.

Cammack, being bearish, had been putting out short lines in the other Grangers as well as in various other stocks, even before he began to buy St. Paul. He was now heavily short of the market. He promptly ordered Wheeler to sell the sixty thousand shares of St. Paul that they were long of, and more besides. He used his long holdings of St. Paul as a lever to depress the general list and greatly benefit his operations for a decline.

Cammack expected prices to fall. Even before he began buying St. Paul, he had been short selling other Granger railroad stocks and various other stocks. He now had a large short position in the market. He promptly ordered Wheeler to sell the 60,000 shares of St. Paul they owned, and to sell additional shares short. He used their St. Paul holdings to drive down stock prices across the market, greatly benefiting his bets on a decline.

St. Paul didn’t stop on that move until it reached forty-four and Cammack made a killing in it. He played his cards with consummate skill and profited accordingly. The point I would make is his habitual attitude toward trading. He didn’t have to reflect. He saw instantly what was far more important to him than his profit on that one stock. He saw that he had providentially been offered an opportunity to begin his big bear operations not only at the proper time but with a proper initial push. The St. Paul tip made him buy instead of sell because he saw at once that it gave him a vast supply of the best ammunition for his bear campaign.

St. Paul’s drop didn’t stop until the stock reached forty-four, and Cammack made a killing in it. He played his cards with consummate skill and profited accordingly. The point I want to make is his habitual attitude toward trading. He didn’t have to stop and think. He saw instantly what mattered far more to him than his profit on that one stock. He saw that, as if by providence, he had been offered a chance to begin his big bear operations at the right time and with the right initial push. The St. Paul tip made him buy instead of sell, because he saw at once that it gave him a vast supply of the best ammunition for his bear campaign.

To get back to myself. After I closed my trade in wheat and corn I went South in my yacht. I cruised about in Florida waters, having a grand old time. The fishing was great. Everything was lovely. I didn’t have a care in the world and I wasn’t looking for any.

Back to my story. After I closed my wheat and corn trade, I went south on my yacht. I cruised around Florida waters and had a great time. The fishing was great. Everything was wonderful. I didn’t have a care in the world, and I wasn’t looking for any.

One day I went ashore at Palm Beach. I met a lot of Wall Street friends and others. They were all talking about the most picturesque cotton speculator of the day. A report from New York had it that Percy Thomas had lost every cent. It wasn’t a commercial bankruptcy; merely the rumor of the world-famous operator’s second Waterloo in the cotton market.

One day I went ashore at Palm Beach. I met many Wall Street friends and others. They were all talking about the most colorful cotton speculator of the day. A report from New York said Percy Thomas had lost every cent. It wasn’t a business bankruptcy, just a rumor that the world-famous speculator had suffered his second Waterloo in the cotton market.

I had always felt a great admiration for him. The first I ever heard of him was through the newspapers at the time of the failure of the Stock Exchange house of Sheldon & Thomas, when Thomas tried to corner cotton. Sheldon, who did not have the vision or the courage of his partner, got cold feet on the very verge of success. At least, so the Street said at the time. At all events, instead of making a killing they made one of the most sensational failures in years. I forget how many millions. The firm was wound up and Thomas went to work alone. He devoted himself exclusively to cotton and it was not long before he was on his feet again. He paid off his creditors in full with interest—debts he was not legally obliged to discharge—and withal had a million dollars left to himself. His comeback in the cotton market was in its way as remarkable as Deacon S. V. White’s famous stock-market exploit of paying off one million dollars in one year. Thomas’ pluck and brains made me admire him immensely.

I had always admired him greatly. I first heard of him in the newspapers when the Stock Exchange firm Sheldon & Thomas failed. The failure came when Thomas tried to corner the cotton market. Sheldon lacked his partner’s vision and courage, and he lost his nerve just as they were about to succeed. At least, that was what Wall Street said at the time. In any case, instead of making a fortune, they suffered one of the most sensational failures in years. I forget how many millions they lost. The firm was closed down, and Thomas went to work on his own. He focused entirely on cotton, and before long he was back on his feet. He paid his creditors in full, with interest, even though he was not legally required to pay those debts. He still had a million dollars left for himself. His comeback in the cotton market was remarkable in its own way. It was comparable to Deacon S. V. White’s famous stock market feat of paying off one million dollars in a year. Thomas’ courage and intelligence made me admire him immensely.

Everybody in Palm Beach was talking about the collapse of Thomas’ deal in March cotton. You know how the talk goes—and grows; the amount of misinformation and exaggeration and improvements that you hear. Why, I’ve seen a rumor about myself grow so that the fellow who started it did not recognize it when it came back to him in less than twenty-four hours, swollen with new and picturesque details.

Everybody in Palm Beach was talking about the collapse of Thomas’ March cotton deal. You know how talk spreads and grows. You hear all kinds of misinformation, exaggerations, and embellishments. I’ve seen a rumor about myself grow so much that the man who started it didn’t recognize it when it came back to him. That was less than twenty-four hours later, and the rumor was full of colorful new details.

The news of Percy Thomas’ latest misadventure turned my mind from the fishing to the cotton market. I got files of the trade papers and read them to get a line on conditions. When I got back to New York I gave myself up to studying the market. Everybody was bearish and everybody was selling July cotton. You know how people are. I suppose it is the contagion of example that makes a man do something because everybody around him is doing the same thing. Perhaps it is some phase or variety in the herd instinct. In any case it was, in the opinion of hundreds of traders, the wise and proper thing to sell July cotton—and so safe too! You couldn’t call that general selling reckless; the word is too conservative. The traders simply saw one side to the market and a great big profit. They certainly expected a collapse in prices.

News of Percy Thomas’ latest misadventure turned my attention from fishing to the cotton market. I got back issues of the trade papers and read them to understand conditions. When I returned to New York, I devoted myself to studying the market. Everyone was bearish, and everyone was selling July cotton. You know how people are. I suppose people follow the example of everyone around them. Perhaps it is some form of herd instinct. In any case, hundreds of traders thought selling July cotton was the wise and proper thing to do. And it was so safe, too! Calling all that selling reckless would be too mild. The traders saw only one side of the market and a huge profit. They certainly expected prices to collapse.

I saw all this, of course, and it struck me that the chaps who were short didn’t have a terrible lot of time to cover in. The more I studied the situation the clearer I saw this, until I finally decided to buy July cotton. I went to work and quickly bought one hundred thousand bales. I experienced no trouble in getting it because it came from so many sellers. It seemed to me that I could have offered a reward of one million dollars for the capture, dead or alive, of a single trader who was not selling July cotton and nobody would have claimed it.

I saw all this, of course, and realized that the traders who had sold short didn’t have much time to buy back their positions. The more I studied the situation, the clearer that became. Finally, I decided to buy July cotton. I got to work and quickly bought one hundred thousand bales. I had no trouble buying it because so many people were selling. It seemed to me that I could have offered a million-dollar reward for the capture, dead or alive, of a single trader who wasn’t selling July cotton. Nobody would have claimed it.

I should say this was in the latter part of May. I kept buying more and they kept on selling it to me until I had picked up all the floating contracts and I had one hundred and twenty thousand bales. A couple of days after I had bought the last of it it began to go up. Once it started the market was kind enough to keep on doing very well indeed—that is, it went up from forty to fifty points a day.

I would say this was in late May. I kept buying more, and they kept selling to me. I bought up all the floating contracts and had 120,000 bales. A couple of days after I bought the last of them, the price began to rise. Once the market started rising, it was kind enough to keep doing very well indeed. It rose forty to fifty points a day.

One Saturday—this was about ten days after I began operations—the price began to creep up. I did not know whether there was any more July cotton for sale. It was up to me to find out, so I waited until the last ten minutes. At that time, I knew, it was usual for those fellows to be short and if the market closed up for the day they would be safely hooked. So I sent in four different orders to buy five thousand bales each, at the market, at the same time. That ran the price up thirty points and the shorts were doing their best to wriggle away. The market closed at the top. All I did, remember, was to buy that last twenty thousand bales.

One Saturday, about ten days after I started trading, the price began to creep up. I didn’t know whether any more July cotton was for sale. I had to find out, so I waited until the last ten minutes. I knew those fellows were usually short at that point. If the market closed up for the day, they would be safely hooked. So I sent in four orders at the same time, each to buy five thousand bales at the market price. The orders drove the price up thirty points, and the shorts did their best to wriggle away. The market closed at its highest point. Remember, all I did was buy those last twenty thousand bales.

The next day was Sunday. But on Monday, Liverpool was due to open up twenty points to be on a parity with the advance in New York. Instead, it came fifty points higher. That meant that Liverpool had exceeded our advance by 100 per cent. I had nothing to do with the rise in that market. This showed me that my deductions had been sound and that I was trading along the line of least resistance. At the same time I was not losing sight of the fact that I had a whopping big line to dispose of. A market may advance sharply or rise gradually and yet not possess the power to absorb more than a certain amount of selling.

The next day was Sunday. On Monday, Liverpool was expected to open twenty points higher to match the advance in New York. Instead, it opened fifty points higher. That meant Liverpool had exceeded our advance by 100 percent. I had nothing to do with the rise in Liverpool. It showed me that my reasoning had been sound and that I was trading along the line of least resistance. At the same time, I kept in mind that I had a huge position to sell. A market may rise sharply or gradually, yet still be unable to absorb more than a certain amount of selling.

Of course the Liverpool cables made our own market wild. But I noticed the higher it went the scarcer July cotton seemed to be. I wasn’t letting go any of mine. Altogether that Monday was an exciting and not very cheerful day for the bears; but for all that, I could detect no signs of impending bear panic; no beginnings of a blind stampede to cover. And I had one hundred and forty thousand bales for which I must find a market.

Of course, the cables from Liverpool sent our market into a frenzy. But I noticed that the higher the market rose, the scarcer July cotton seemed to be. I wasn’t selling any of mine. All in all, Monday was an exciting and rather grim day for the bears. Even so, I saw no signs that the bears were about to panic. There was no sign of a blind rush to cover their short positions. And I had 140,000 bales I needed to find a market for.

On Tuesday morning as I was walking to my office I met a friend at the entrance of the building.

On Tuesday morning, I met a friend at the building entrance as I was walking to my office.

“That was quite a story in the World this morning,” he said with a smile.

“What story?” I asked.

“What? Do you mean to tell me you haven’t seen it?”

“What? Are you telling me you haven’t seen it?”

“I never see the World,” I said. “What is the story?”

“I never read the World,” I said. “What’s the story?”

“Why, it’s all about you. It says you’ve got July cotton cornered.”

“Why, it’s all about you. It says you’ve cornered the July cotton market.”

“I haven’t seen it,” I told him and left him. I don’t know whether he believed me or not. He probably thought it was highly inconsiderate of me not to tell him whether it was true or not.

“I haven’t seen it,” I told him, then left. I don’t know whether he believed me. He probably thought I was very inconsiderate not to tell him whether it was true.

When I got to the office I sent out for a copy of the paper. Sure enough, there it was, on the front page, in big headlines:

When I got to the office, I sent for a copy of the paper. Sure enough, there it was on the front page, in big headlines:

JULY COTTON CORNERED BY LARRY LIVINGSTON

LARRY LIVINGSTON CORNERS JULY COTTON

Of course I knew at once that the article would play the dickens with the market. If I had deliberately studied ways and means of disposing of my one hundred and forty thousand bales to the best advantage I couldn’t have hit upon a better plan. It would not have been possible to find one. That article at that very moment was being read all over the country either in the World or in other papers quoting it. It had been cabled to Europe. That was plain from the Liverpool prices. That market was simply wild. No wonder, with such news.

Of course, I knew at once that the article would wreak havoc on the market. If I had carefully studied how to sell my 140,000 bales to the best advantage, I couldn’t have found a better plan. There was no better one. At that very moment, people all over the country were reading the article in the World or in other papers quoting it. The article had been cabled to Europe. That was clear from the Liverpool prices. The market there was simply wild. No wonder, with news like that.

Of course I knew what New York would do, and what I ought to do. The market here opened at ten o’clock. At ten minutes after ten I did not own any cotton. I let them have every one of my one hundred and forty thousand bales. For most of my line I received what proved to be the top prices of the day. The traders made the market for me. All I really did was to see a heaven-sent opportunity to get rid of my cotton. I grasped it because I couldn’t help it. What else could I do?

Of course, I knew what New York would do and what I should do. The market here opened at ten o’clock. By ten minutes past ten, I didn’t own any cotton. I sold them all 140,000 of my bales. For most of my holdings, I got what turned out to be the day’s highest prices. The traders created the market for me. All I really did was see a heaven-sent opportunity to get rid of my cotton. I took it because I couldn’t help myself. What else could I do?

The problem that I knew would take a great deal of hard thinking to solve was thus solved for me by an accident. If the World had not published that article I never would have been able to dispose of my line without sacrificing the greater portion of my paper profits. Selling one hundred and forty thousand bales of cotton without sending the price down was a trick beyond my powers. But the World story turned it for me very nicely.

I knew the problem would take a great deal of hard thinking to solve, but an accident solved it for me. If the World had not published that article, I could never have sold my position without sacrificing most of my paper profits. Selling 140,000 bales of cotton without driving down the price was beyond my powers. But the World story did the trick for me very nicely.

Why the World published it I cannot tell you. I never knew. I suppose the writer was tipped off by some friend in the cotton market and he thought he was printing a scoop. I didn’t see him or anybody from the World. I didn’t know it was printed that morning until after nine o’clock; and if it had not been for my friend calling my attention to it I would not have know it then.

I can’t tell you why the World published it. I never knew. I suppose a friend in the cotton market tipped off the writer, and he thought he had a scoop. I didn’t see him or anyone else from the World. I didn’t know it had been printed that morning until after nine o’clock. And if my friend hadn’t pointed it out, I wouldn’t have known even then.

Without it I wouldn’t have had a market big enough to unload in. That is one trouble about trading on a large scale. You cannot sneak out as you can when you pike along. You cannot always sell out when you wish or when you think it wise. You have to get out when you can; when you have a market that will absorb your entire line. Failure to grasp the opportunity to get out may cost you millions. You cannot hesitate. If you do you are lost. Neither can you try stunts like running up the price on the bears by means of competitive buying, for you may thereby reduce the absorbing capacity. And I want to tell you that perceiving your opportunity is not as easy as it sounds. A man must be on the lookout so alertly that when his chance sticks in its head at his door he must grab it.

Without it, I wouldn’t have had a market big enough to sell everything I held. That is one problem with trading on a large scale. You can’t slip out quietly as you can when you trade in small amounts. You can’t always sell everything when you want to or when you think it’s wise. You have to get out when you can, when the market can absorb your entire position. Missing the chance to get out may cost you millions. You can’t hesitate. If you do, you’re lost. You can’t try tricks like forcing prices up against the bears by buying competitively. That may reduce the market’s capacity to absorb your holdings. And I want to tell you that spotting your opportunity isn’t as easy as it sounds. A man must stay so alert that when his chance sticks its head in the door, he grabs it.

Of course not everybody knew about my fortunate accident. In Wall Street, and, for that matter, everywhere else, any accident that makes big money for a man is regarded with suspicion. When the accident is unprofitable it is never considered an accident but the logical outcome of your hoggishness or of the swelled head. But when there is a profit they call it loot and talk about how well unscrupulousness fares, and how ill conservatism and decency.

Of course, not everyone knew about my lucky accident. On Wall Street, and everywhere else for that matter, people are suspicious of any accident that makes a man big money. When an accident loses you money, it is never considered an accident. People see it as the logical result of your greed or inflated ego. But when you make a profit, they call it loot. They talk about how well dishonesty pays, and how poorly caution and decency pay.

It was not only the evil-minded shorts smarting under punishment brought about by their own recklessness who accused me of having deliberately planned the coup. Other people thought the same thing.

The evil-minded short sellers were stinging from losses caused by their own recklessness. They accused me of deliberately planning the coup. They were not the only ones. Other people thought so too.

One of the biggest men in cotton in the entire world met me a day or two later and said, “That was certainly the slickest deal you ever put over, Livingston. I was wondering how much you were going to lose when you came to market that line of yours. You knew this market was not big enough to take more than fifty or sixty thousand bales without selling off, and how you were going to work off the rest and not lose all your paper profits was beginning to interest me. I didn’t think of your scheme. It certainly was slick.”

A day or two later, one of the biggest cotton traders in the world met me and said, “That was certainly the slickest deal you ever pulled off, Livingston. I was wondering how much you would lose when you tried to sell your cotton. You knew the market couldn’t take more than fifty or sixty thousand bales without prices falling. I was getting interested in how you would sell the rest without losing all your paper profits. I didn’t think of your plan. It certainly was slick.”

“I had nothing to do with it,” I assured him as earnestly as I could.

“I had nothing to do with it,” I told him as sincerely as I could.

But all he did was to repeat: “Mighty slick, my boy. Mighty slick! Don’t be so modest!”

But all he did was repeat: “Very clever, my boy. Very clever! Don’t be so modest!”

It was after that deal that some of the papers referred to me as the Cotton King. But, as I said, I really was not entitled to that crown. It is not necessary to tell you that there is not enough money in the United States to buy the columns of the New York World or enough personal pull to secure the publication of a story like that. It gave me an utterly unearned reputation that time.

It was after that deal that some of the papers called me the Cotton King. But, as I said, I really didn’t deserve that crown. I hardly need to tell you that there isn’t enough money in the United States to buy the news columns of the New York World. Nor is there enough personal influence to get a story like that published. That time, it gave me a reputation I had done nothing to earn.

But I have not told this story to moralize on the crowns that are sometimes pressed down upon the brows of undeserving traders or to emphasize the need of seizing the opportunity, no matter where or how it comes. My object merely was to account for the vast amount of newspaper notoriety that came to me as a result of my deal in July cotton. If it hadn’t been for the newspapers I never would have met that remarkable man, Percy Thomas.

But I haven’t told this story to preach about the honors sometimes heaped on undeserving traders. Nor did I tell it to stress the need to seize an opportunity, no matter where or how it comes. I only wanted to explain the widespread newspaper attention I received because of my deal in July cotton. If it hadn’t been for the newspapers, I never would have met that remarkable man, Percy Thomas.