The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1904-02-07
THE BREAK IN TURPENTINE. /;
az EDWIN LEFEvRE
Copyright 1908, by Mcclure Phillips
az EDWIN LEFEvRE

In the beginning of the beginning the
aistillers of turpentine carried competition
to the quarreling point.
1t was Alfred Neustadt. a banker In a
famous .turpentine district. who first called
his brother-in-law's attention to the pitia-
BILE sight Jacob Greenbaum's soul thrilled
during Neustadt's recital He decided to
form a turpentine trust.
First he bought for a song all the bank
rupt stills-seven of them. Then ne Sc
cured options on nine others, the tired-un-
to-death plants. Then the banking house
of Greenbaum, Lazarus & Co. stepped IN,
interested accomplices, duped or coerced
into selling enough other distillers to as
sumo success, cajoled he more stubborn,
wheedled the more credulous, gave way
gracefully to the shrewder and gathered
them all into the fold The American
Turpentine Company was formed with a
capital stock of s3O,O00.C COO. or 100000
shares at 500 each. The cash needed to
pay Greenbaum. Neustadt and others who
sold their plants for part cash and part
stock. was provided by an issue of s25,-
100000 of per cent bonds, underwritten
by syndicate composed of Greenbaun.
Lazarus and Co., 1. and S. Wechsler Nor
lis Steinfelder's Sons. Refs and Stern.
Kohn. Fischel and Co., SHERMAN and
Lndheim. Rosenthal, Shaffran and Co.
and Zcrnan Brokers'.
In due course of time the public sub
scribed for the greater part of the $685.
0G0. 900 of bonds, and both bonds and
stock were 'listed" on the New York
Stock Exchange-that is. they were placed
on the list of securities which members
may buy or sell on the floor of the
Exchange.
Tabularly expressed. the syndicate's OPP
erations were as follows:
Authorized Stock ............ $50, 900. 900
Authorized bonds ............... 100000
Total ....................... SIS, 000, 0C0
Actual worth of property ...... 12.soo.ooo
Paid to owners for forty -one d.stilleries.
representing 90 per cent of the turpentine
production land 121 per cent Of the con-
sumption) of the United States:
Cash from bond sales ..l...... SIS, 975, 9S3
bonos $4,000, COO
STOCK OBSERVATION-DISCLOSURES. 1928, 500
Total Observation-Disclosures. $39. 225. 1888
Syndicate's commission, stock :. 1885, 500
Retained in company's treas
uTy, unlssued ................. 10000
Expenses and discounts on bonds
etc., OBSERVATION-DISCLOSURES. 7S5,717
Total Observation-Disclosures. $55 000. 900
These figures were not for publication.
They told the exact truth. 1t remained
for the syndicate to make a market"
All the manufacturers who had received
stock in part payment were told most i'm
r.. al
their holdings under any circumstances at
any price below SIS a share.
Mr.. Greenbaum took charge of the mar
ket conduct of ''Turp,' as the tape called
the stock of the American Turpentine
Company. At first. the price was marked
up by means of matched orders-pre-
concerted and therefore not bona fide
ira nsact:ons.
'Turp'' began at %. and as the syndicate
had all the stock in the market. it was
easily manipulated upward to 30. Every
( day many thousands of shares, according
TO the Stock Exchanges records. changed
hands''-from Greenbaums right to bis
left and back again-and the price rose
steadily. But something was absent. The
manipulation was not convincing. II did
not make the general public nibble.
Every attempt to sell ''Turp' met with
failure. At length it was decided to allow
the price to sink back to an ''invitingly
low level. 1t was done. But still the in
vited public refused to buy. Efforts to
encourage short interest to over-extend
itself into "squeezeable" proportions failee
similarly.
In the course of the next few months
after series of injudicious fluctuations,
which gave to ''Turp' bad name, even
UralJ 1yIa
ing accounts of the company's wonderful
business and after distributing less than
$1,000 shares. the members of the "Tur.
pentine Skindicate,' as it was popularity
called. sorrowfully acknowledged that.
while they had skillfully organized the
trust and had done fairly well with the
bonds. they certainly were not bowling
successes as manipulators. During the
following eight months they sold more
stock. They spared not the widow nor
the orphan. They even stuck their in
innate friends. They had sold for some
thing which had cost them nothing; 1t
was natural to wish to sell more.
1t was decided to put "Turp' stock In
the hands of Samuel Wimbledon Sharpe,
the best manipulation Wall Street had
ever known. Greenbaum said he would
conduct the negotiations with the great
plunger.
Sharpe was financial freeance free
hooter and iree-thinker As manipula-
tor of stock values he had no equal.
On the bull side he rushed stock up
ward SO steadily, 50 boldly and brilliantly,
but, above all, 50 persuasivey that lesser
gamblers almost fought to be allowed to
take it off his hands at incredibly high
prices. And when in the conduct of one
OF his mastery bear campaigns he saw
Git to hammer the market, value melted
away as by magic-Satanic magic, the
poor lambs thought
Greenbaum was promptly admitted TO
Sharpe's private office. 1t was half
darkened room, the windows having wire
screens summer and winter in order that
prying eyes across the street might not
see his visitors or his confidential brokers,
whose identity it was advisable should
remain unknown to- the street He was
walking up and down the room causing
firm, time TO time to look at the tape.