Will Honeycutt has known all along, she said to herself, as she fumed inwardly, looking out the train window as Connecticut farmland rolled past. The man, this second T. Williams Honeycutt, was his cousin, after all. That is what really irked her. She would confront him as soon as she got to New York, and demand an explanation, if she could find him. And she was pretty sure what the outcome was going to be. It was in no way good. Left alone again, she struggled now to get command in her mind of at least the situation with Northern Pacific.
The railroad company’s stock where, per instructions from the page in the journal, Eleanor had placed all her funds had been in decline. As a result Will Honeycutt—now at the peak of his bucket-shop trading frenzy—was beginning to feel the investment was a disaster and worse, a product of his employer’s total whimsy. The Hyperion Fund, over which he, with his new “expertise” in the market, was supposed to have some oversight, was now invested solely in that one commodity, a large mistake, as any stock speculator knew. Eleanor insisted on holding tight, and losing value by the week.
Will had broached the subject of reconsidering. “I suppose it would do no good,” he said, aware of Eleanor’s intransigence on certain subjects, “to try to talk you out of what looks like a very unwise investment and into moving at least part of your investment to something with more promise.”
“You are correct,” she said without flinching. “It would do no good. And it is our investment.”
“Our investment,” he said. “And it would do no good?”
“It would do no good, Mr. Honeycutt. Our monies are exactly where they should be.”
“I thought as much.”
“You are becoming quite confident with analysis of the market, I see. That is very good.”
“I am coming along, I guess you would say. And I know enough to know it is not wise to have all eggs in one basket, even if they are good eggs, which these of Northern Pacific are not.”
“My dear Mr. Honeycutt, I know your concern and your desire to move our investments about. We will hold. You will just have to trust me. From time to time, you will just have to do that. But this one time I will tell you this: If our position has not at least doubled within the year, I will grant you any wish you want.”
“Any wish?” he said. “My, you seem very confident.”
“Any wish,” Eleanor replied. “And, yes, you are correct in your assessment. About some things, I am supremely confident.”
And Will Honeycutt could only shake his head in disbelief.
And then the call had come from Loeb and Sons that the stock had begun to move. “You will have to be in New York City, I fear,” she had said to Will in that early May of 1901. They had been working together for over a year. “It might be for only a short time. We shall have to move quickly.” From the time of their purchase they had placed the full amount of Northern Pacific stock in the hands of the Loeb investment house, and Eleanor knew that if they made known their intention to sell the whole bundle at five hundred, the good investment bankers would have thought them stark raving mad, but she wished them to be forewarned. If there was any unusual movement, she wished to be informed immediately. Hence the telegram on that May morning when Will Honeycutt was nowhere to be found.
Will Honeycutt had been incredulous when she told him the preposterous idea of holding out for the high figure. “But Northern Pacific started at thirty-five,” he had said. “It is a decline from fifty when we bought. Five hundred is ten times what we paid for those holdings six months ago.”
“That is correct,” Eleanor said with finality, seeing no reason for further explanation. She looked at him for a moment. “And you will keep our strategy confidential.”
“Do you think I have learned nothing?” Honeycutt said blankly. “I tell no one anything.”
“Good,” Eleanor said. “I shall hold to my faith in you.” The fewer people who knew of her foreknowledge the better, she knew. Because of its volatile nature, her information derived from the journal must be kept secret.
Now, in Will Honeycutt’s absence, having no idea where he was, she would have to be in New York herself. She would have to be present when and if the stock prices began to rise as the journal foretold, and she had just learned of the other T. Williams Honeycutt, a disturbing discovery that was going to require a face-to-face confrontation, and action. Perhaps Will had heard of her discovery and fled.
“I will join you at the Loeb offices,” she would have told him had she been able to. He was to introduce her as his secretary, in that world of men. But now, she was forced to travel to New York and represent her holdings herself, alone.
How on earth, she thought on the long train ride, was she ever going to extract herself from this fateful mistake?
When she arrived at the Loeb office on Wall Street, Mr. Loeb Sr.’s secretary welcomed her and said, “They are convening in the conference room.” She walked in and saw two Loeb men standing beside a tall, neatly dressed man of finance she nearly did not recognize. It was her partner, Will Honeycutt.
“We have been here for some time,” one of the Loeb men said. “Mr. Honeycutt is minding the ticker tape for us. We are waiting.”
Will had kept up with the rising action on his own and hustled to New York when he realized what was happening. “I told them to notify you,” he apologized. “I see from your consternation that they neglected to tell you that I was already on the job.” Eleanor was stunned to see him and stunned to see how firmly in charge he was.
Already, when Eleanor arrived at noon, action had begun, and she had no chance to raise her sensitive subject. Will was busy watching the tape and barely greeted her. “I’m glad you are here,” he said. “Something is up. Already this morning we have had ten or twelve inquiries.” And she noticed immediately that there was something very different about his bearing. “I am assuming that you want us to hold.”
“We hold for five hundred,” she said in little more than a whisper, wishing none of the Loeb men to know their outrageous strategy.
“Good,” Will Honeycutt said. “As I suspected. It is already over one hundred, and people are wondering why we don’t sell off at least a part.”
And then it hit.
As with all the specific instructions Eleanor took secretly from her Vienna knowledge, past and future, she would try to investigate ahead of time and determine how the instructed investment would work, how it would end up being the absolute right thing to do. But often there was no clue, and she would just have to go blindly where that knowledge dictated. Such was the case with the Northern Pacific purchase.
From what she could see, the Northern Pacific Railway was to become an important link from the Great Lakes to Puget Sound on the Pacific coast, a northern rival to the great transcontinental railroad completed through Utah and the Sierra Nevada to Sacramento gold country in the late 1860s. There seemed to be no reason why the stock would suddenly shoot up disproportionately to any other railroad stock. All she knew from a note in the journal was that sometime in early May the fund would sell all its holdings for an unbelievable price.
Suddenly, on that fateful morning, a representative from the House of Morgan approached young Honeycutt quietly and explained that he would buy the entire lot that Hyperion was holding for two hundred dollars a share. She noticed the change in him almost immediately. Something had definitely happened. Will tried his best poker face and reported that he would get back. He had been reading the ticker tape. Privately, he told Eleanor, “It’s gone to high two hundreds, Miss Putnam,” enunciating when she resisted. “That would quadruple the fund.”
“We hold for five hundred,” Will Honeycutt told the Loeb representative calmly.
“But, Mr. Honeycutt—” he began, incredulous. “Would you at least move some?”
“Hold it all,” Mr. Honeycutt said, and then, after a pause, he returned to the Morgan man with the answer.
The man’s demeanor immediately turned to fury. He fixed his beady eyes on his obvio
usly inexperienced opponent, questioning his very authority. “Mr. Morgan himself wishes this,” he continued, as if that would be enough.
“We are holding for five hundred,” Will said, staring back at the Morgan man in a long, awkward moment of silence.
“Very well,” the man said. “You can report back to your mystery controller that you will certainly regret this.” He stared for a moment. “Let me ask you something,” he said solemnly.
“You may ask.”
“Are you Jewish, Mr. Honeycutt?”
Will Honeycutt paused for a moment, his eyes fixed on the Morgan man without blinking, nowhere near intimidation or panic. And looking back on it later, Eleanor concluded that this was his supreme moment, and if one wished to find the exact instant in which this inexperienced apprentice rose to the demands of the adventure to which he had been called, this was it. “It would seem to me,” Will Honeycutt said, again slowly and calmly, looking around the room, at Eleanor and the Loeb man, “that we are all red-blooded American capitalists here.” And the Morgan man, looking apoplectic, as if he might explode, turned and walked out of the room. Eleanor stood back and watched in something like amazement. Seeing her colleague in this new persona had an unexpected effect on her. It was only later that she realized the powerful impact on her. She was being taken care of.
The next offer was three hundred fifty, well above what Will had just read on the ticker tape. The offer was no longer from the Morgans and for only one-half the shares. “This is going wild. We must take it,” Will Honeycutt said emphatically. “I do not know a lot about these kinds of panics, but I do know that when the bubble bursts it does so suddenly and is bound to disappear soon. Three fifty is a huge increase. It would be wise to act.” There was now a calm urgency in his voice, again, no panic, just a calm urgency.
“We are holding at five hundred, Mr. Honeycutt,” Eleanor said.
What neither Eleanor nor Will Honeycutt had any way of knowing until later was that they and the whole investment world had been swept up in a huge competition between the forces of Edward Henry Harriman, head of the Union Pacific Railroad, who was also looking for a road which could connect his company to Chicago, and the house of J. P. Morgan. Harriman was making a bid to buy up enough shares to control the railroad, and Morgan was determined not to let that happen. It was a power struggle between two industrial giants, one totally out of proportion to the worth of the railroad itself. Because so many individuals and houses, seeing the price rise out of control, were short-selling and about to lose it all, the fierce competition began to envelop the whole market and consequently the whole financial system of the country. J. P. Morgan had caused it. Sometimes wise and sometimes impulsive, the great financier playing the part of the dual-natured Zeus on the top of Mount Olympus was now acting purely on ego, determined not to be bettered by any rival, no matter the stakes. And from southern France he had issued the fateful order to his underlings in New York, “Buy at any price.”
The entire market was surging out of control, always on the brink of ruinous free-fall, and yet the offers came rolling in. Brokers all over the street thought they had to obtain Northern Pacific shares to protect themselves. The price shot up ever higher and higher, and T. Williams Honeycutt and the Hyperion Fund held tight. By two o’clock that afternoon, with pandemonium reigning, and offers flying in from all corners, they had received many offers at well over five hundred. “Send for the Morgan man,” Will said calmly, now fully in charge.
With couriers dashing into the Loeb offices Eleanor watched in awed silence and then said to her partner, “You see why we needed to be here in person.”
“I do.” He barely had time to respond as the Morgan man rushed into the room, this time with a totally different demeanor, this time with an unmistakable look of panic in his eyes.
“We’ll meet your request,” Will Honeycutt said bluntly.
“At what price?” the man said.
“At the promised five hundred. But we have offers for a good deal more than that. And the offers keep climbing by the minute.” Even as they spoke a messenger entered the room and laid in his hand an offer for half the shares at seven hundred fifty. By the end of the day, before the collapse, offers would rise above one thousand dollars a share.
“We will match any offer you have,” the Morgan man said, eyeing the paper. “For the full number of shares.”
“There will be no need for that,” Will Honeycutt said without emotion, raising himself to his full five feet nine inches and looking calmly at the man from the House of Morgan. “I told you we would sell at five hundred,” he said. “We will sell at five hundred.” With a firm, confident handshake from the seller’s side, the deal was struck and the new persona of T. Williams Honeycutt, experienced fund manager, was firmly established.
“You did magnificently,” Eleanor said to her young partner as they left the offices of Loeb, quite forgetting her intention to replace him. There was a clearly evident admiration in her voice. “I cannot believe how calm you were.”
“I did what needed to be done,” he said, and once again Eleanor was surprised by his poise.
“Did your friend Democritus appear to you?” she said with a touch of whimsy in her voice.
“No, not this time,” Will said with total seriousness. “This time it was Alexander Hamilton.”
“Alexander Hamilton!” Eleanor exclaimed. “How is that?”
“Alexander Hamilton came to me in a dream, so I began talking to him, writing down our conversation. It turns out that he was the first treasurer of the United States, something I had totally forgotten. He was most helpful.”
Eleanor could only shake her head in amazement. Whatever works, she heard the pragmatic William James saying in her ear. “This has been a most extraordinary day,” she said, revealing a rush of exuberance. “You, Mr. Honeycutt, have handled yourself with great aplomb, coached by Mr. Hamilton or not. We shall retire to my hotel room to celebrate.”
10
A CELEBRATION
The mood was ecstatic. “Living on the very edge!” Eleanor exclaimed. “Absolutely magnificent,” she reiterated as they were halfway through a ten-year-old bottle of Château Mouton Rothschild. She had her feet up on the coffee table in front of her and had in her hand a thin, discreet Cuban cigar Will had just given her. “But I do not wish to do it often.” She had been impressed beyond words by Will Honeycutt and by her own calm. With his strength at her side there in the high-stakes game of powerful men, she felt exhilarated and fearless, so unlike the refined persona of a proper Boston girl, and so caught up in a childlike giddiness, she realized later, she had never experienced in her own sad childhood.
“Wall Street tycoons celebrate with cigars,” he had pronounced, then waited in such a way that it sounded very much like a challenge.
“Is that a Hamiltonian suggestion?” she had quipped, accepting the offered victory cigar.
“No doubt, he might have,” he said. “But this suggestion was pure Jesse Livermore.”
So there she sat now, feet propped up, wineglass and cigar in hand. Will examined the image for a long moment. “That is certainly not the world’s image of Eleanor Putnam, refined Boston lady,” he said.
“Well, the world had better get used to it,” she said with satisfaction. She had taken a large puff and with her head back had attempted a smoke ring, but she coughed and released just a small, formless cloud. “What a disgusting habit,” she said with a frown, eyeing the cigar. Her partner smiled and said nothing. Then she gave him a serious look. “You showed nerves of steel, Mr. H. You stood up to the House of Morgan.”
“What circumstance dictated,” he said. “Your Hyperion Fund is now over five million dollars.” He paused, just a little bit tipsy, as if to absorb himself what he had just concluded.
“Our Hyperion Fund,” she said.
“Our Hyperion Fund,” he said. “And I fear that our Hyperion Fund is not anonymous anymore.”
“And of your pri
vate funds? You followed suit?”
“As instructed, Miss Putnam. I sold my total holdings for the five hundred.” Then he added, “As required by our agreement.”
“That makes you a very wealthy man, Mr. H.”
“It does indeed.”
“And the Special Fund, your allowed ten percent to risk? What of that?”
Ted Honeycutt looked sheepish. “I risked,” he said quickly, the ragged look of the bucket-shop veteran coming into his eyes. The Special Fund was indeed, as intended, how he had learned, he rationalized, as he looked at its erratic performance over the time they had worked together. “I am afraid I gambled and did not follow your lead.”
“As allowed in our contract.”
“Yes, but—”
She interrupted him. “No need to apologize, Mr. Honeycutt. You were learning valuable lessons.” She paused and gave him a kind smile. “But now I wish to know the details.”
At first, Will said nothing and looked down at the carpet. “I waited for one thousand.”
She stared at him, letting the words sink in. “You sold at one thousand?”
“It was my speculator self,” Will said. “I was playing a hunch.”
“And that is what Alexander Hamilton would have done.”
Will looked down for a moment, not sure how much to divulge. “It is what he advised.”
For just an instant, a look of concern came onto her face, and Will Honeycutt, the man who heard voices, looked at her distractedly. Then a broad smile burst onto his face. “I am just joking,” he said. “The decision was all Will Honeycutt, bucket-shop master.” He paused and took a puff of his cigar. “Ten percent of our shares, bought at thirty-five and sold at one thousand.”
“And the Special Fund is now back in the black,” Eleanor said, her eyes wide.
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