Cowperwood, no less than other men of wealth, was opposed to what he deemed a crack-brained idea—that of maintaining a parity between gold and silver by law. Confiscation was his word for it—the confiscation of the wealth of the few for the benefit of the many. Most of all was he opposed to it because he feared that this unrest, which was obviously growing, foreshadowed a class war in which investors would run to cover and money be locked in strong-boxes. At once he began to shorten sail, to invest only in the soundest securities, and to convert all his weaker ones into cash.
To meet current emergencies, however, he was compelled to borrow heavily here and there, and in doing so he was quick to note that those banks representing his enemies in Chicago and elsewhere were willing to accept his various stocks as collateral, providing he would accept loans subject to call. He did so gladly, at the same time suspecting Hand, Schryhart, Arneel, and Merrill of some scheme to wreck him, providing they could get him where the calling of his loans suddenly and in concert would financially embarrass him. “I think I know what that crew are up to,” he once observed to Addison, at this period. “Well, they will have to rise very early in the morning if they catch me napping.”
The thing that he suspected was really true. Schryhart, Hand, and Arneel, watching him through their agents and brokers, had soon discovered—in the very earliest phases of the silver agitation and before the real storm broke—that he was borrowing in New York, in London, in certain quarters of Chicago, and elsewhere. “It looks to me,” said Schryhart, one day, to his friend Arneel, “as if our friend has gotten in a little too deep. He has overreached himself. These elevated-road schemes of his have eaten up too much capital. There is another election coming on next fall, and he knows we are going to fight tooth and nail. He needs money to electrify his surface lines. If we could trace out exactly where he stands, and where he has borrowed, we might know what to do.”
“Unless I am greatly mistaken,” replied Arneel, “he is in a tight place or is rapidly getting there. This silver agitation is beginning to weaken stocks and tighten money. I suggest that our banks here loan him all the money he wants on call. When the time comes, if he isn’t ready, we can shut him up tighter than a drum. If we can pick up any other loans he’s made anywhere else, well and good.”
Mr. Arneel said this without a shadow of bitterness or humor. In some tight hour, perhaps, now fast approaching, Mr. Cowperwood would be promised salvation—“saved” on condition that he should leave Chicago forever. There were those who would take over his property in the interest of the city and upright government and administer it accordingly.
Unfortunately, at this very time Messrs. Hand, Schryhart, and Arneel were themselves concerned in a little venture to which the threatened silver agitation could bode nothing but ill. This concerned so simple a thing as matches, a commodity which at this time, along with many others, had been trustified and was yielding a fine profit. “American Match” was a stock which was already listed on every exchange and which was selling steadily around one hundred and twenty.
The geniuses who had first planned a combination of all match concerns and a monopoly of the trade in America were two men, Messrs. Hull and Stackpole—bankers and brokers, primarily. Mr. Phineas Hull was a small, ferret-like, calculating man with a sparse growth of dusty-brown hair and an eyelid, the right one, which was partially paralyzed and drooped heavily, giving him a characterful and yet at times a sinister expression.
His partner, Mr. Benoni Stackpole, had been once a stage-driver in Arkansas, and later a horse-trader. He was a man of great force and calculation—large, oleaginous, politic, and courageous. Without the ultimate brain capacity of such men as Arneel, Hand, and Merrill, he was, nevertheless, resourceful and able. He had started somewhat late in the race for wealth, but now, with all his strength, he was endeavoring to bring to fruition this plan which, with the aid of Hull, he had formulated. Inspired by the thought of great wealth, they had first secured control of the stock of one match company, and had then put themselves in a position to bargain with the owners of others. The patents and processes controlled by one company and another had been combined, and the field had been broadened as much as possible.
But to do all this a great deal of money had been required, much more than was in possession of either Hull or Stackpole. Both of them being Western men, they looked first to Western capital. Hand, Schryhart, Arneel, and Merrill were in turn appealed to, and great blocks of the new stock were sold to them at inside figures. By the means thus afforded the combination proceeded apace. Patents for exclusive processes were taken over from all sides, and the idea of invading Europe and eventually controlling the market of the world had its inception. At the same time it occurred to each and all of their lordly patrons that it would be a splendid thing if the stock they had purchased at forty-five, and which was now selling in open market at one hundred and twenty, should go to three hundred, where, if these monopolistic dreams were true, it properly belonged. A little more of this stock—the destiny of which at this time seemed sure and splendid—would not be amiss. And so there began a quiet campaign on the part of each capitalist to gather enough of it to realize a true fortune on the rise.
A game of this kind is never played with the remainder of the financial community entirely unaware of what is on foot. In the inner circles of brokerage life rumors were soon abroad that a tremendous boom was in store for American Match. Cowperwood heard of it through Addison, always at the center of financial rumor, and the two of them bought heavily, though not so heavily but that they could clear out at any time with at least a slight margin in their favor. During a period of eight months the stock slowly moved upward, finally crossing the two-hundred mark and reaching two-twenty, at which figure both Addison and Cowperwood sold, realizing nearly a million between them on their investment.
In the mean time the foreshadowed political storm was brewing. At first a cloud no larger than a man’s hand, it matured swiftly in the late months of 1895, and by the spring of 1896 it had become portentous and was ready to burst. With the climacteric nomination of the “Apostle of Free Silver” for President of the United States, which followed in July, a chill settled down over the conservative and financial elements of the country. What Cowperwood had wisely proceeded to do months before, others less far-seeing, from Maine to California and from the Gulf to Canada, began to do now. Bank-deposits were in part withdrawn; feeble or uncertain securities were thrown upon the market. All at once Schryhart, Arneel, Hand, and Merrill realized that they were in more or less of a trap in regard to their large holdings in American Match. Having gathered vast quantities of this stock, which had been issued in blocks of millions, it was now necessary to sustain the market or sell at a loss. Since money was needed by many holders, and this stock was selling at two-twenty, telegraphic orders began to pour in from all parts of the country to sell on the Chicago Exchange, where the deal was being engineered and where the market obviously existed. All of the instigators of the deal conferred, and decided to sustain the market. Messrs. Hull and Stackpole, being the nominal heads of the trust, were delegated to buy, they in turn calling on the principal investors to take their share, pro rata. Hand, Schryhart, Arneel, and Merrill, weighted with this inpouring flood of stock, which they had to take at two-twenty, hurried to their favorite banks, hypothecating vast quantities at one-fifty and over, and using the money so obtained to take care of the additional shares which they were compelled to buy.