V Wanted: Thirty-Five Millions
The offices of McVeigh and Mackie, brokers and financial agents, are in Broad Street, and the windows of the room used for board meetings look down upon the angle where beats the money pulse of the nation.
Ford had successfully resisted the temptation to lobby for his scheme during the one-day interval between his conference with Mr. Colbrith and the date of the called meeting of the directors. It was not any mistaken sense of loyalty to the president that restrained him; on the contrary, he decided that Mr. Colbrith’s declaration of war left him free to fight as he would. But upon due consideration he concluded to set the advantage of an assault en masse over against the dubious gain of an advanced skirmish line, and when he turned out of Broadway into Wall Street on the morning of destiny the men whom he was to meet and convince were still no more to him than a list of names in the Poor’s Manual, consulted within the hour for the purpose.
He was early on the battle-ground; much too early, he thought, when a clerk ushered him into the board room in the rear of the brokers’ offices. As yet there was only one person present—a young man who was lounging in the easiest of the leather-covered chairs and yawning dismally. At the first glance the face seemed oddly and strikingly familiar; but when the young man marked the new-comer’s entrance, the small hand-bag in which the amateur promoter carried his papers, and got up to shake hands, Ford found the suggestive gropings baffled.
“My name is Adair,” said the lounger genially; “and I suppose you are the Mr. Ford Uncle Sidney has been telling us about. Pull up a chair and sit by the window. It’s the only amusement you’ll have until the clan gathers.”
Ford looked at his watch.
“I seem to be ahead of time,” he remarked. “I understood Mr. Colbrith to say that the meeting would be called for ten o’clock.”
“Oh, that’s all right; and so he did,” rejoined the other cheerfully. “But that means anything up to noon for a directors’ meeting in New York.” Then, after a pause: “Do you know any of us personally, Mr. Ford?”
Ford was rummaging in his memory again. “I ought to know you, Mr. Adair. It isn’t very decent to drag in resemblances, but—”
“The resemblance is the real thing, this time,” said Adair. “You saw me day before yesterday, driving out of the Overlook grounds as you were going in.”
Ford shook his head.
“No; it goes back of that; sometime I’ll remember how and where. But to answer your question: I know Mr. Colbrith slightly, but I’ve never met any of the directors.”
“Well, you are meeting one at this moment,” laughed the young man, crossing his legs comfortably. “But I am the easiest mark of the lot,” he added. “I inherited my holdings in Pacific Southwestern.”
Ford was crucially anxious to find out how the battle was likely to go, and his companion seemed amiably communicative.
“Since you call Mr. Colbrith ‘Uncle Sidney,’ I infer that you know what I am here for, Mr. Adair. How do you think my proposition is likely to strike the board?”
Again the young man laughed.
“Fancy your asking me!” he said. “I haven’t talked with any one but Uncle Sidney; and the most I could get out of him was that you wanted thirty-five million dollars to spend.”
“Well,” said the Westerner anxiously, “am I going to get it?”
“You can search me,” was the good-natured rejoinder. “But from my knowledge of the men you are going presently to wrestle with, I should say ’no’ and italicize it.”
“Perhaps it might help me a little if I could know in advance the particular reason for the italics,” Ford suggested.
“Oh, sure. The principal reason is that your name isn’t Hill or Harriman or Morgan or Gates. Money is ridiculously sheepish. It will follow a known leader blindly, idiotically. But if it doesn’t hear the familiar tinkle of the leader’s bell, it is mighty apt to huddle and run back.”
Ford’s smile was grim.
“I don’t mind saying to you, Mr. Adair, that this is one of the times when it will be much safer to huddle and run forward. Have you seen the half-yearly report?”
“I? Heaven forbid! I have never seen anything out of the Pacific Southwestern—not even a dividend.”
Ford would very willingly have tried to share his enthusiasm with the care-free young man, whose face was still vaguely but persistently remindful of some impression antedating the automobile passing; but now the other members of the board were dropping in by twos and threes, and privacy was at an end.
Just before President Colbrith took his place at the head of the long table to call the meeting to order, Adair leaned forward to say in low tones: “I couldn’t give you the tip you wanted, Mr. Ford, but I can give you another which may serve as well. If your good word doesn’t win out, scare ’em—scare ’em stiff! I don’t know but you could frighten half a million or so out of me if you should try.”
“Thank you,” said Ford. “I may take you at your word,”—and just then Mr. Colbrith rose in his place, fingering his thin white beard rather nervously, Ford thought, and rapping on the table for silence.
It was admitted on all hands that the president of the Pacific Southwestern was a careful man and a thrifty. It was these qualities which had first determined his election. There were many small stock-holders in the company, and it is the foible of small stock-holders to believe that rigid economy counts for more than adventurous outreachings in the larger field.
“Gentlemen,” he began, his high, raucous voice rasping the silence like the filing of a saw, “this meeting is called, as you have probably been informed, for the purpose of considering a plan for betterments submitted by Mr. Stuart Ford, who is at the present time superintendent of our Plug Mountain Division.
“In making this unusual innovation, and in introducing Mr. Ford, I desire to say that I have been actuated by that motive of prudence which, while it stands firmly upon its own feet, is willing to consider suggestions from without, even when these suggestions appear to be totally at variance with a policy of careful and judicious financiering.
“In presenting Mr. Ford as the son of an old friend, long since gone to his reward, I wish it distinctly understood that I am in no sense committed to his plan. The policy of this company under the present administration has been uniformly cautious and prudent: Mr. Ford would throw caution and prudence to the winds. Our best efforts have been directed toward the saving of the ultimate dollar of expense: Mr. Ford urges us to spend millions. We have been trying to dispose of some of our non-paying branches: Mr. Ford would have us acquire others and build new lines.”
While Mr. Colbrith was speaking, Adair was rapidly characterizing the members for Ford, checking them off upon his fingers.
“The little man at Uncle Sidney’s right is Mackie, and the miserly looking one next to him is McVeigh,” he whispered. “One of them will furnish your coffin, and the other will drive the nails into it. The big man with the beard is Brewster—a multimillionaire; and the one who looks like Senator Bailey is Magnus, president of the Mohican National. Connolly, the fat Irishman, is a politician—wads of money, but not much interest in the game. The other three—”
But now the president had made an end and was beckoning to Ford.
The young engineer rose, feeling much as if a bucket of ice-water had been suddenly emptied down the back of his neck. But one of his saving qualities was the spring-like resilience which responds instantly to a shock. Spreading his papers on the table, he began with a little apology.
“I didn’t come here this morning prepared to make a promoter’s speech; and perhaps it is just as well, since my gift, if I have one, lies in doing things rather than in talking about them. But I can lay a few facts before you which you may deem worthy of consideration.”
From this as a beginning he went on swiftly and incisively. The Pacific Southwestern, in its present condition, was a failure. It was an incomplete line, trying vainly to hold its own against great and powerful systems overlapping it at either end. The remedy lay in extension. The acquisition of a controlling interest in three short roads, which, pieced together, would bridge the gap between the Missouri River and Chicago, would place the Pacific Southwestern upon an equal footing with its competitors as a grain carrier. By standardizing the Plug Mountain narrow gauge and extending it to Salt Lake and beyond, the line would secure a western outlet, and would be in a position to demand its share of transcontinental business.
To finance these two extensions a capital of thirty-five million dollars would be needed; five million dollars for the purchase of the majority stock in the three short roads, and the remainder for the western outlet. These assertions were not guesses: by referring to exhibits marked “a” “b” and “f,” his hearers would find accurate estimates of cost, not only of construction, but also of stock purchases.
As to the manner of providing the capital, he had only a suggestion to offer. The five million dollars necessary for the acquirement of a controlling interest in the three short roads would be a fair investment. It could be covered immediately by a reissue—share for share—of the reorganization stock of the P. S-W., which would amply secure the investors, since the stock of the most prosperous of the three local roads was listed at twenty-eight, ten points lower than the present market quotation of P. S-W.
The thirty million dollar extension fund might be raised by issuing second mortgage bonds upon the entire system, or the new line itself could be bonded mile for mile under a separate charter. Ford modestly disclaimed any intention of dictating the financial policy; this was not in his line. But again he would submit facts. The grain crop in the West was phenomenally large in prospect. With its own eastern terminal in Chicago, the Pacific Southwestern could control the grain shipments in its own territory. With the moving of the grain, the depressed P. S-W. stock would inevitably recover, and on a rising market the new issue of bonds could doubtless be floated.
The enthusiast closed his argument with a hasty summing-up of the benefits which must, in the nature of things, accrue. From being an alien link in the great transcontinental chain, the Pacific Southwestern would rise at a bound to the dignity of a great railway system; a power to be reckoned with among the other great systems gridironing the West. Its earnings would be enhanced at every point; cross lines which now fed its competitors would become its allies; the local lines to be welded into the eastern end of the system would share at once in the prosperity of a strong through line.
For the western extension he could speak from personal knowledge of the region to be penetrated. Apart from the new line’s prime object—that of providing an outlet for the system—there was a goodly heritage of local business awaiting the first railroad to reach the untapped territory. Mines, valueless now for the lack of transportation facilities, would become abundant producers; and there were many fertile valleys and mesas to attract the ranchman, who would find on the western slopes of the mountains an unfailing water supply for his reservoirs and ditches. Ford did not hesitate to predict that within a short time the extension would earn more, mile for mile, than the grain-belt portion of the system.
When he sat down he felt that his cause was lost. There was no enthusiasm, no approval, in the faces of his auditors. After a short and informal discussion, in which the engineer was called on to explain his plans and estimates in detail to one and another of the members, Magnus, the bank president, sufficiently summed up the sense of the meeting when he said:
“There is no question about the ingenuity of your plan, Mr. Ford. You must have given a great deal of time and thought to it. But it is rather too large for us, I’m afraid, and there are too many contingencies. Your province, I understand, is the building and operating of railroads, and it is nothing to your discredit that you are unfamiliar with the difficulties of financing an undertaking as vast as this proposal of yours.”
“I don’t deny the difficulties,” said Ford. “But they wouldn’t seem to be insuperable.”
“Not from your point of view,” rejoined the banker suavely. “But you will admit that they are very considerable. The opposition on the part of the competing systems would be something tremendous. No stone would be left unturned in the effort to dismount us. To go no further into the matter than the proposed purchase of the majority stocks in the three short roads: at the first signal in that field you would find those stocks flying skyward in ten-point advances, and your five millions wouldn’t be a drop in the bucket. In view of the difficulties, I think I voice the conviction of the board when I say that the plan is too hazardous.”
The nods of assent were too numerous to leave Ford any hope of turning the tide in his favor. He rose, gathered up his papers, and reached for his hat.
“It is very pointedly your own funeral, gentlemen,” he said curtly. “‘Nothing venture, nothing have’ is an old proverb, but it is as true now as it was when it was coined. With P. S-W. stock at thirty-eight and steadily declining; with another dividend about to be passed; and with the certainty that the July interest on the bonds will have to be defaulted unless some compromise can be effected with the bondholders—”
“What’s that you’re saying?” broke in Mackie, whose P. S-W. holdings were large.
Ford drew a folded paper from his pocket and laid it on the table.
“I was merely quoting from the auditor’s semiannual report, of which that is a summary,” he said, indicating the folded paper. “The report itself will doubtless reach you in a day or two. It would seem to an unprejudiced observer that the present condition spells something like a receivership, unless you have the bondholders with you.”
“One moment, Mr. Ford,” interposed the banker member; but Ford was working up to his climax and refused to be side-tracked.
“Of course, as an officer of the company, I have felt in duty bound to bring my grist first to the company’s mill. But if you gentlemen don’t wish to grind it, it will be ground, notwithstanding. I could very easily have found a market for my proposal without coming to New York.”
With which parting shot, and a word of apology for having taken the time of the board to no good purpose, he bowed himself out, closing the door upon a second attempt on the part of the banker member to renew the argument.