by Studs Terkel
ARTHUR A. ROBERTSON
His offices are on an upper floor of a New York skyscraper. On the walls are paintings and photographs. A portrait of President Johnson is inscribed “To my friend, a patriot who serves his country.” Another, of Hubert Humphrey—“To my friend, Arthur Robertson, with all my good wishes.” Also, a photograph of Dwight Eisenhower: “To my friend, Arthur Robertson.” There are other mementoes of appreciation from Americans in high places.
He recounts his early days as a war correspondent, advertising man, and engineer. “We built a section of the Sixth Avenue subway. I’ve had a peculiar kind of career. I’m an industrialist. I had been in Germany where I picked up a number of porcelain enamel plants. I had a hog’s hair concession from the Russian government. I used to sell them to the outdoor advertising plants for brushes. With several associates, I bought a company nineteen years ago for $1,600,000. We’re on the New York Stock Exchange now and recently turned down $200 million for it. I’m chairman of the board. I control the company. I built it.
“I thought seriously of retiring in 1928 when I was thirty. I had seven figures by the time I was twenty four.”
In 1929, it was strictly a gambling casino with loaded dice. The few sharks taking advantage of the multitude of suckers. It was exchanging expensive dogs for expensive cats. There had been a recession in 1921. We came out of it about 1924. Then began the climb, the spurt, with no limit stakes. Frenzied finance that made Ponzi20 look like an amateur. I saw shoeshine boys buying $50,000 worth of stock with $500 down. Everything was bought on hope.
Today, if you want to buy $100 worth of stock, you have to put up $80 and the broker will put up $20. In those days, you could put up $8 or $10. That was really responsible for the collapse. The slightest shake-up caused calamity because people didn’t have the money required to cover the other $90 or so. There were not the controls you have today. They just sold you out: an unwilling seller to an unwilling buyer.
A cigar stock at the time was selling for $115 a share. The market collapsed. I got a call from the company president. Could I loan him $200 million? I refused, because at the time I had to protect my own fences, including those of my closest friends. His $115 stock dropped to $2 and he jumped out of the window of his Wall Street office.
There was a man who headed a company that had $17 million in cash. He was one of the leaders of his industry and controlled three or four situations that are today household words. When his stock began to drop, he began to protect it. When he came out of the second drop, the man was completely wiped out. He owed three banks a million dollars each.
The banks were in the same position he was, except that the government came to their aid and saved them. Suddenly they became holier than thou, and took over the businesses of the companies that owed them money. They discharged the experts, who had built the businesses, and put in their own men. I bought one of these companies from the banks. They sold it to me in order to stop their losses.
The worst day-to-day operators of businesses are bankers. They are great when it comes to scrutinizing a balance sheet. By training they’re conservative, because they’re loaning you other people’s money. Consequently, they do not take the calculated risks operating businesses requires. They were losing so much money that they were tickled to get it off their backs. I recently sold it for $2 million. I bought it in 1933 for $33,000.
In the early thirties, I was known as a scavenger. I used to buy broken-down businesses that banks took over. That was one of my best eras of prosperity. The whole period was characterized by men who were legends. When you talked about $1 million you were talking about loose change. Three or four of these men would get together, run up a stock to ridiculous prices and unload it on the unsuspecting public. The minute you heard of a man like Durant or Jesse Livermore buying stock, everybody followed. They knew it was going to go up. The only problem was to get out before they dumped it.
Durant owned General Motors twice and lost it twice...was worth way in excess of a billion dollars on paper, by present standards, four or five billion. He started his own automobile company, and it went under. When the Crash came, he caved in, like the rest of ’em. The last I heard of him I was told he ended up running a bowling alley. It was all on paper. Everybody in those days expected the sun to shine forever.
October 29, 1929, yeah. A frenzy. I must have gotten calls from a dozen and a half friends who were desperate. In each case, there was no sense in loaning them the money that they would give the broker. Tomorrow they’d be worse off than yesterday. Suicides, left and right, made a terrific impression on me, of course. People I knew. It was heartbreaking. One day you saw the prices at a hundred, the next day at $20, at $15.
On Wall Street, the people walked around like zombies. It was like Death Takes A Holiday. It was very dark. You saw people who yesterday rode around in Cadillacs lucky now to have carfare.
One of my friends said to me, “If things keep on as they are, we’ll all have to go begging.” I asked, “Who from?”
Many brokers did not lose money. They made fortunes on commissions while their customers went broke. The only brokers that got hurt badly were those that gambled on their own—or failed to sell out in time customers’ accounts that were underwater. Of course, the brokerage business fell off badly, and practically all pulled in their belts, closed down offices, and threw people out of work.
Banks used to get eighteen percent for call money—money with which to buy stock that paid perhaps one or two-percent dividends. They figured the price would continue to rise. Everybody was banking on it. I used to receive as much as twenty-two percent from brokers who borrowed from me. Twenty-two percent for money!
Men who built empires in utilities, would buy a small utility, add a big profit to it for themselves and sell it back to their own public company. That’s how some like Samuel Insull became immensely wealthy. The thing that caused the Insull crash is the same that caused all these frenzied financiers to go broke. No matter how much they had, they’d pyramid it for more.
I had a great friend, John Hertz. At one time he owned ninety percent of the Yellow Cab stock. John also owned the Checker Cab. He also owned the Surface Line buses of Chicago. He was reputed to be worth $400 to $500 million. He asked me one day to join him on a yacht. There I met two men of such stature that I was in awe: Durant and Jesse Livermore.
We talked of all their holdings. Livermore said: “I own what I believe to be the controlling stock of IBM and Philip Morris.” So I asked, “Why do you bother with anything else?” He answered, “I only understand stock. I can’t bother with businesses.” So I asked, “Do men of your kind put away $10 million where nobody can ever touch it?” He looked at me and answered. “Young man, what’s the use of having ten million if you can’t have big money?”
In 1934—after he went through two bankruptcies in succession—my accountant asked if I’d back Livermore. He was broke and wanted to make a comeback in the market. He always made a comeback and paid everybody off with interest. I agreed to do it. I put up $400,000. By 1939, we made enough money so that each of us could have $1,300,000 profit after taxes. Jesse was by this time in the late sixties, having gone through two bankruptcies. “Wouldn’t it be wise to cash in?” I asked him. In those days, you could live like a king for $50,000 a year. He said he could just never get along on a pittance.
So I sold out, took my profits, and left Jesse on his own. He kept telling me he was going to make the killing of the century. Ben Smith, known as “Sell ’Em Short Ben,” was in Europe and told him there was not going to be a war. Believing in Smith, Livermore went short on grain. 21 For every dollar he owned, plus everything he could pyramid.
When I arrived in Argentina, I learned that Germany invaded Poland. Poor Jesse was on the phone. “Art, you have to save me.” I refused to do anything, being so far away. I knew it would be throwing good money after bad.
A couple of months later, I was back in New York, with Jesse waiting for me in
my office. The poor fellow had lost everything he could lay his hands on. He asked for a $5,000 loan, which, of course, I gave him. Three days later, Jesse had gone to eat breakfast in the Sherry-Netherlands, went to the lavatory and shot himself. They found a note made out to me for $5,000. This was the man who said, “What’s the use having ten million if you can’t have big money?” Jesse was one of the most brilliant minds in the trading world. He knew the crops of every area where grain grew. He was a great student, but always over-optimistic.
Did you sense the Crash coming in 1929?
I recognized it in May and saved myself a lot of money. I sold a good deal of my stocks in May. It was a case of becoming frightened. But, of course, I did not sell out completely, and finished with a very substantial loss.
In 1927 when I read Lindbergh was planning his memorable flight, I bought Wright Aeronautic stock. He was going to fly in a plane I heard was made by Wright. I lived in Milwaukee then. My office was about a mile from my home. When I left my house, I checked with my broker. By the time I reached my office, I had made sixty-five points. The idea of everything moving so fast was frightening. Everything you bought just seemed to have no ceiling.
People say we’re getting a repetition of 1929. I don’t see how it is possible. Today with SEC22 controls and bank insurance, people know their savings are safe. If everybody believes, it’s like believing in counterfeit money. Until it’s caught, it serves its purpose.
In 1932 I came to New York to open an office in the Flatiron Building. Macfadden, the health faddist, created penny restaurants. There was a Negro chap I took a liking to that I had to deal with. He agreed to line up seventy-five people who needed to be fed. At six o‘clock I would leave my office, I’d march seventy-five of ’em into the Macfadden restaurant and I’d feed em for seven cents apiece. I did this every day. It was just unbelievable, the bread lines. The only thing I could compare it with was Germany in 1922. It looked like there was no tomorrow.
I remember the Bank Holiday. I was one of the lucky ones. I had a smart brother-in-law, an attorney. One day he said to me, “I don’t feel comfortable about the bank situation. I think we ought to have a lot of cash.” About eight weeks before the bank closings, we decided to take every dollar out of the banks. We must have taken out close to a million dollars. In Clyde, Ohio, where I had a porcelain enamel plant, they used my signature for money. I used to come in every Saturday and Sunday and deliver the cash. I would go around the department stores that I knew in Milwaukee and give them thirty-day IOU’s of $1.05 for a dollar if they would give me cash.
In 1933, the night Jake Factor, “The Barber,” was kidnapped, an associate of mine, his wife, and a niece from Wyoming were dancing in a night club. Each of us had $25,000 cash in our socks. We were leaving the following morning for Clyde, and I was supposed to bring in $100,000 to meet bills and the payroll. We were all dancing on $25,000 apiece. In the very place where Jake Factor was kidnaped for $100,000. The damn fools, they could have grabbed us and had the cash.
CLIFFORD BURKE
The Negro was born in depression. It didn’t mean too much to him, The Great American Depression, as you call it. There was no such thing. The best he could be is a janitor or a porter or shoeshine boy. It only became official when it hit the white man. If you can tell me the difference between the depression today and the Depression of 1932 for a black man, I’d like to know it. Now, it’s worse, because of the prices. Know the rents they’re payin’ out here? I hate to tell ya.
He is a pensioner. Most of his days are spent as a volunteer with a community organization in the black ghetto on the West Side of the city.
We had one big advantage. Our wives, they could go to the store and get a bag of beans or a sack of flour and a piece of fat meat, and they could cook this. And we could eat it. Steak? A steak would kick in my stomach like a mule in a tin stable. Now you take the white fella, he couldn’t do this. His wife would tell him: Look, if you can’t do any better than this, I’m gonna leave you. I seen it happen. He couldn’t stand bringing home beans instead of steak and capon. And he couldn’t stand the idea of going on relief like a Negro.
You take a fella had a job paying him $60, and here I am making $25. If I go home taking beans to me wife, we’ll eat it. It isn’t exactly what we want, but we’ll eat it. The white man that’s been making big money, he’s taking beans home, his wife’ll say: Get out. [Laughs.]
Why did these big wheels kill themselves? They weren’t able to live up to the standards they were accustomed to, and they got ashamed in front of their women. You see, you can tell anybody a lie, and he’ll agree with you. But you start layin’ down the facts of real life, he won’t accept it. The American white man has been superior so long, he can’t figure out why he should come down.
I remember a friend of mine, he didn’t know he was a Negro. I mean he acted like he never knew it. He got tied downtown with some stock. He blew about twenty thousand. He came home and drank a bottle of poison. A bottle of iodine or something like that. It was a rarity to hear a Negro killing himself over a financial situation. He might have killed himself over some woman. Or getting in a fight. But when it came to the financial end of it, there were so few who had anything. [Laughs.]
I made out during that...Great Depression. [Laughs.] Worked as a teamster for a lumber yard. Forty cents an hour. Monday we’d have a little work. They’d say come back Friday. There wasn’t no need to look for another job. The few people working, most all of them were white.
So I had another little hustle. I used to play pool pretty good. And I’d ride from poolroom to poolroom on this bicycle. I used to beat these guys, gamble what we had. I’d leave home with a dollar. First couple of games I could beat this guy, I’d put that money in my pocket. I’d take the rest of what I beat him out of and hustle the day on that. Sometimes I’d come home with a dollar and a half extra. That was a whole lot of money. Everybody was out trying to beat the other guy, so he could make it. It was pathetic.
I never applied for PWA or WPA, ‘cause as long as I could hustle, there was no point in beating the other fellow out of a job, cuttin’ some other guy out....
DOC GRAHAM
A mutual acquaintance, Kid Pharaoh, insisted that we meet. Doc Graham had obviously seen better days.
“My introduction to Chicago was when a guy got his head blowed off right across from where I went to stay. In that neighborhood where I gravitated, there was every kind of character that was ever invented. Con men, heist men, burglars, peet men: you name it, they had it.
“These are highly sophisticated endeavors. To be proficient at it—well, my God, you spent a lifetime. And then you might fall, through not being sophisticated enough. You may have committed a common error, leaving fingerprints....”
I was a caged panther. It was a jungle. Survival was the law of the land. I watched so many of my partners fall along the way. I decided the modus operandi was bad. Unavailing, non-productive. After spending ten Saturdays in jail, one right after another, I changed my modus operandi.
What were you in jail for?
Various allegations. All alleged. I been a con man, a heist man—you name it.
How does a heist man differ from a con man?
One is by force and the other is by guile. Very few people have encompassed both. I was very daring. When I came to the city and seen groceries on the sidewalk, I swore I’d never be hungry again. My family was extremely poor. My father was an unsuccessful gambler, and my mother was a missionary. Not much money was connected with either profession.
A family conflict...?
Yes, slightly. He threw the Bible in the fire. He was right, incidentally. [Laughs.] My mother didn’t see it that way.
I’m sixty-one, and I have never held a Social Security card. I’m not knocking it. I have been what society generally refers to as a parasite. But I don’t think I’d be a nicer fellow if I held two jobs.
My teacher was Count Victor Lustig. He was perhaps the greates
t con man the United States has ever known. Lustig’s outstanding achievement was getting put in jail and paying a Texas sheriff off with $30,000 counterfeit. And the sheriff made the penitentiary also. He got to be a believer. And he went into the counterfeit profession.
Another teacher was Titanic Thompson. He was the greatest card mechanic that ever arrived on the scene. Nick the Greek23 wouldn’t make him a butler. A footman. He couldn’t open the door for him. Ace played the crimp. A crimp is putting a weave in a card that you’d need a microscope to see it. I know the techniques, but having had my arm half removed, I had to switch left-handed, deal left-handed. I’m ambidexterous.
An accident...?
With a colored North American. The twenties and early thirties was a jungle, where only the strong survived and the weak fell by the wayside. In Chicago, at the time, the unsophisticated either belonged to the Bugs Moran mob or the Capone mob. The fellas with talent didn’t bother with either one. And went around and robbed both of ’em.
We were extremely independent. Since I’m Irish, I had a working affiliate with Bugs Moran’s outfit. In case muscle was needed beyond what I had, I called on Moran for help. On the other hand, Moran might use me to help him in one of his operations.
The nature of one operation was: if you had a load of whiskey hijacked, we went over and reloaded it on a truck, while several surrounded the place with machine guns, sawed-off shotguns, et cetera.
