The Titanic Plan
Title Page
PROLOGUE
CHAPTER 1
CHAPTER 2
CHAPTER 3
CHAPTER 4
CHAPTER 5
CHAPTER 6
CHAPTER 7
CHAPTER 8
CHAPTER 9
CHAPTER 10
CHAPTER 11
CHAPTER 12
CHAPTER 13
CHAPTER 14
CHAPTER 15
CHAPTER 16
CHAPTER 17
CHAPTER 18
CHAPTER 19
CHAPTER 20
CHAPTER 21
CHAPTER 22
CHAPTER 23
CHAPTER 24
CHAPTER 25
CHAPTER 26
CHAPTER 27
CHAPTER 28
CHAPTER 29
CHAPTER 30
CHAPTER 31
CHAPTER 32
CHAPTER 33
CHAPTER 34
CHAPTER 35
CHAPTER 36
CHAPTER 37
CHAPTER 38
CHAPTER 39
CHAPTER 40
CHAPTER 4 1
CHAPTER 42
CHAPTER 43
CHAPTER 44
CHAPTER 45
CHAPTER 46
CHAPTER 47
CHAPTER 48
CHAPTER 49
CHAPTER 50
CHAPTER 51
CHAPTER 52
CHAPTER 53
CHAPTER 54
CHAPTER 55
CHAPTER 56
CHAPTER 57
CHAPTER 58
CHAPTER 59
CHAPTER 60
CHAPTER 61
CHAPTER 62
CHAPTER 63
CHAPTER 64
CHAPTER 65
EPILOGUE
The Titanic Plan
Michael Bockman
Story By
Ron Freeman
License Notes: All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means or stored in a database or retrieval system, except for brief quotation in reviews or articles, without prior written permission of the author and publisher.
Cover Design: Evelyn Bernhard
www.thetitanicplan.com
for Ron
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PROLOGUE
WEDNESDAY, OCTOBER 16, 1907
It was his favorite hymn: “Rock of Ages, cleft for me, let me hide myself in Thee…” He sang it open-throated and with vigor, hardly caring that his booming voice was decidedly off-key. “Let the waters and the blood, From Thy wounded side which flowed…” He didn’t hear his coarse singing anyway, all that filled his ears was the harmonious blend of 3,000 fellow Christians finding comfort in God. And he was happily among them, just one of the legions, a foot soldier in Jesus’ army. Marching with these troops there was no weight on his shoulders, no responsibility other than to praise God and bask in his glory. “Be of sin the double cure; Save from wrath and make me pure…”
As the swirl of joyous voices echoed through Richmond’s Grand Convention Hall, a young man hurried down the center aisle, stopped at row 17 and handed a telegram to a thin, dry priest on the aisle. Who handed it to his wife next to him, who handed it to a crimson clothed bishop next to her and on down the row until the telegram reached an imposing, white-haired man in the center of the aisle who was so wrapped up in the glory of the hymn that it took his assistant three attempts to get his attention. Disturbed by the intrusion, the imposing, white-haired man glared at his assistant, his ice blue eyes glowering hawk-like over his tremendous strawberry nose. There was no mistaking that look of displeasure. There was no mistaking the man. The last thing J. Pierpont Morgan wanted was to be brought back into the earthly realm when he was dancing so rapturously in the kingdom of God. And so he turned away, closed his eyes and raised his voice even louder. “Foul, I to the fountain fly; Wash me, Savior, or I die.”
The message delivered to Morgan was one of alarm. Fear was building within the financial community like a magma dome within a volcano. Perhaps it would deflate itself, perhaps it could be deflated (maybe with Morgan’s help) or, most likely, it would blow up and set in motion a chain of events that would plunge America into economic chaos.
The day the dire telegram was delivered to Morgan, the President of the United States, Theodore Roosevelt, was feeling “just bully.” He was on the move, which was his natural state of being. Earlier that week he had completed a trip down the Mississippi River on a paddle steamer accompanied by twenty state governors. The patriotic and the curious lined the banks of the old river to catch a glimpse and pay their respects to the country’s leader as he passed by. He then headed to the countryside for a hunt. Deep in the Louisiana canebrakes, making a kill of “three bears, six deer, one wild turkey, twelve squirrels, one duck, one opossum, and one wildcat,” Roosevelt got word of the first hints of a Wall Street panic. If it worried him, he didn’t show it. Wall Street was the domain of the forces he did battle with – the corporate powerhouses, the money trusts, the robber barons. “Those money men could take care of themselves,” Roosevelt declared to a group of reporters covering his trip.
Unfortunately, he was wrong.
The first major crack in the system occurred when overzealous speculators tried to take over a major mining firm, the United Copper Company. To make the deal, the speculators wove together financial backing from a consortium of banks and trusts, including the very prominent and stable Knickerbocker Trust, headed by Morgan’s friend, Charles T. Barney. The takeover bid not only fell apart, but ultimately left the mining company, two brokerage houses and a bank in ruins. When word got out that the Knickerbocker Trust was a major player in the fiasco, the first snowball started rolling. Spooked Knickerbocker depositors began withdrawing their money, money the trust had already speculated on other deals. Many of the Knickerbocker depositors were state and national banks across the country, all uninsured and all bracing for a cash run by their own depositors of everyday Americans.
Trying not to add to the sense of panic, Morgan decided to stay at the Episcopal Convention until it ended on Saturday, October 19. When everyone at the convention joined hands and sang the final hymn, Morgan, as he always did, surrendered to the power of
God. He believed he had a bargain with the Lord: Morgan would maintain the stability of America’s financial markets, and God, more often than not, would bless him with a healthy bottom line.
Morgan left for New York that evening. His train was held in Washington D.C. at midnight. Morgan sat alone on the rear platform of his private car, the only light in the night being the glow from the tip of his cigar. Arriving in New York City the next morning, Morgan was rushed by cab to his ivy-covered mansion at the corner of Madison Avenue and 36th Street. He didn’t even change clothes, dashing next door to his library – a solid marble building that resembled an impenetrable fortress guarded by two life-sized stone lions, their haunches taut as if ready to spring on some unsuspecting prey. Waiting for Morgan in the library’s inner sanctum were his closest associates, who laid out a chilling scenario of the unfolding events that would “make all previous panics look like child’s play.”
Monday morning, October 21, the board of directors of the Knickerbocker Trust met with Morgan at his Wall Street office. They spelled out the dire trouble: they had $60 million on deposit, but only $10 million was fluid cash. If there was a run, the Knickerbocker would fail. They pleaded with Morgan to use his backing to help save the trust. Morgan listened, smoked several cigars, weighed what it would take, reflected on the risk involved, smoked a few more cigars and stared impassively at the desperate directors. The only thing agreed upon was that the Knickerbocker Trust would open for business the next day and try to weather the storm.
Long before dawn a restless crowd began gathering outside the Knickerbocker Trust building at Fifth Avenue and 34th Street. There was a chill in the autumn air. When the doors opened at 8 a.m., jittery depositors pushed into the building, desperate to cash their accounts out. Just over a mile south, on Wall Street, dark suited men, their heads topped by black derbies, waited for the dreaded, inevitable news. As clocks struck noon through Manhattan, the Knickerbocker Trust had paid out $8 million. By 2 p.m. it was over; the last funds were withdrawn; the formidable Knickerbocker Trust had failed. Those who understood the crisis realized that a financial Armageddon was at hand.
Through the next critical days the financial system of the United States teetered on complete ruin. Without any governmental safety net, such as a Federal Reserve Bank, there was no mechanism to end the downward spiral. Banks from around the country were calling in their money from the New York institutions. Stock prices were plummeting. Wall Street was thick with crowds of nervous men milling aimlessly about, praying their life’s savings were not about to evaporate.
Morgan tried to fight the financial fires by continually dousing them with cash. He received a $10 million contribution from a syndicate of bankers that was matched by a government transfer of $25 million to a “rescue fund” that Morgan controlled. In essence, the United States government had turned over the reins of the country’s economic operations to the very private bankers Roosevelt was battling over anti-trust issues. Despite his bluster, the President realized his administration could do nothing more than try and assure a nervous public that everything would be all right and let the bankers sort out the mess they created.
Throughout the second week of the panic there were runs on banks across the nation. Some smaller banks and trusts failed. People lost their life savings. Businesses were driven into bankruptcy. Stories of personal despair and desperation were reported from all corners of the country. From a banker’s point of view though, it was manageable – the major markets were holding and that’s all that really mattered. Morgan and his team of bankers and financiers continued to prop up banks with cash to instill confidence and keep the Stock Exchange level. It appeared the end of the crisis was in sight. Then a whole new firestorm unexpectedly erupted.
Next to J. P. Morgan & Company, the largest and most prestigious brokerage house in America was the firm of Moore & Schley. Among its largest assets was a southern steel company called Tennessee Coal & Iron Company, known simply as TC&I. It was a solid, though hardly spectacular, business. The problem was that the firm’s head, Grant Schley, was using TC&I as collateral for speculative loans. With the panic, those loans were called. Schley needed to come up with over $35 million dollars worth of cash or else his brokerage house would also collapse. And with that collapse, all the hard work Morgan had done would come crashing down in a sudden heap. Morgan was deemed the only person who could save the situation. But to do so, he would have to purchase TC&I. The problem was, Morgan already owned America’s largest steel company, U.S. Steel. If a deal was put together, an anti-trust suit would surely come from Roosevelt. Morgan weighed his options, the most important factor being not to rekindle the panic into a full-fledged wildfire.
Morgan carefully put the pieces in place, twisting arms and creating a complicated stock swap that would have TC&I merge, rather than be purchased outright, with U.S. Steel. Still, there was one last obstacle: Roosevelt.
On November 4, 1907, Elbert Gary and Henry Clay Frick, two steel magnates who helped Morgan work out the TC&I-U.S Steel deal, went to the White House for breakfast. They outlined the terms of the merger to Roosevelt over eggs and flapjacks. They stressed the consequences of another panic if the deal fell through and made sure Roosevelt was aware of the extraordinary effort Morgan made in order to protect the financial foundation of the country. Roosevelt, the battling trustbuster, the tormentor of corporations, the robber barons great foe, docilely acquiesced and approved the merger he would have never agreed to under normal circumstances.
At four minutes to ten that Monday morning, Morgan’s office received a call from the White House relaying Roosevelt’s approval of the deal. With that, the crisis officially ended. The stock market shot up. At the lunch hour, an exhausted 70-year-old man stepped down his office’s short shelf of steps to a waiting cab. He was showered with thunderous cheers from the crowd that had gathered outside 23 Wall Street. Morgan was being hailed as the single greatest economic force in American history. He alone had wrestled back the explosive forces that threatened to ruin the U.S. economy. Morgan knew he had won. And he vowed to himself that he would do whatever it takes to prevent anything like the Panic of ’07 from ever happening again.
On Thursday, November 14, 1907, less than a month after the first hint of trouble, Charles Barney, Morgan’s friend and the former head of the Knickerbocker Trust, the institution whose insolvency touched off the panic, pressed a gun barrel to his abdomen and pulled the trigger. The bullet traveled upward into his neck. He died later that day.
CHAPTER 1
DECEMBER 31, 1907
They would be arriving soon, those that were still alive. Coming up Fifth Avenue in their horse drawn carriages, they would ignore the vulgar coughs and spits of the automobiles that motored by. The carriages would pull up to the corner at 65th Street. Horses would restlessly snort steam in the chill evening air. And then a woman would emerge.
Stepping down, she would lift the hem of her bejeweled ball gown and take the arm of her ancient husband. The couple would disappear into the gray limestone chateau that would have been more appropriate in 16th Century Paris than 20th Century Manhattan. Inside they would be announced in a grand ritual that made them who they were – a Vanderbilt or an Astor or a Waldorf or a Winthrop. And the others at the party would turn just oh-so-slightly to notice, sizing up the family and status, the scandals and rumors, the glow or sallow of the skin, the clearness or fogginess in the eye.
Yes, they would be arriving soon, thought John Jacob Astor IV as he scuttled about to make sure the house was ready. The table for 400 was set, the orchestra was in place, the servants – all 70 of them – stood stiffly like soldiers at their stations. Astor scurried up the foyer’s staircase to his mother’s room for one final check. He was, after all, throwing this New Year’s Ball for her; it was his way of letting her once more be who she was: The Mrs. Caroline Webster Schermerhorn Astor – the greatest, most revered woman in American society.
The Mrs. Astor was splayed across he
r bed when her diligent son John walked in. Two maids and a dresser were rolling and tugging her over the huge mattress so she might be maneuvered into her ball gown.
“Mother?” he asked.
“Yes, James,” she answered as the servants hoisted her into a strategic upright position, allowing them to draw the gown over her head.
“It’s John, mother. James is your son-in-law.”
The Mrs. Astor squealed, “Aaaaooowwwww!!” as one of the maids tucked her hands under Mrs. Astor’s armpits to hoist her up.
“They’ll be arriving soon,” Astor muttered to no one in particular. “We’ll bring her out maybe an hour after it starts. I’ll let you know.”
None of the help acknowledge him, they were too busy working Mrs. Astor into her dress. Astor shuffled over to his mother. He stroked the few long gray hairs that remained on her nearly bald head and kissed it tenderly.
***
There was another man tending to his old mother that night. Far south of Manhattan, he was in a large, white gabled house near the Savannah riverbank in Augusta, Georgia. Outside a soft breeze whispered through the naked magnolia branches. Inside the man was tipping a decanter of aged bourbon into two finely cut crystal tumblers, then precisely diluting it with an equal amount of water. He placed the glasses on a tray next to two carefully folded linen napkins and walked the drinks into the living room, setting them in front of the shrunken woman seated before the fire.
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