“And as a part of your compensation you will always have ten percent of the Hyperion Fund at your disposal to do with as you wish, to use to gain knowledge of how the stock market works.”
“That is very generous.”
“And also essential for your education,” she said, thinking of the discomfort of traveling alone to Cincinnati, reaching out her hand and accepting his. “Now, with regard to that year’s salary you did not accept when first offered—”
“You need not apologize,” he interrupted. “I had my chance, and I did not avail myself.”
“Other opportunities will present themselves. There will be many chances to invest. As I said, you will become a very wealthy man.” She paused. “Now, there is something I do need to give you.” She withdrew from her purse for the second time an envelope. “I can offer this to you now.” She handed it to him.
He opened the envelope and examined its contents carefully, a look of confusion on his face. “It is the year’s salary,” he said, “purchased six months ago.”
“It is,” she said. “Cincinnati Soap and Candle stock purchased back then, in your name. Now worth considerably more. Double, actually. All you need to do is redeem it for the highly valued Procter and Gamble stock.”
“You knew I would say yes. You knew I was about to lose my position here.”
“I did not know—” Eleanor began, then stopped herself. “It had to be,” she said. “And now you are on your way, it would appear.”
“We are on our way, Miss Putnam.”
“Indeed we are,” she said, and she rose and extended her hand to say good-bye.
Ted Honeycutt said nothing at first, giving his head only the slightest nod, staring blankly at the envelope he held in his hand. “Tomorrow,” he said finally, “I begin. And where are we going to put it all?”
“Northern Pacific,” she said. “We put it all into Northern Pacific.”
“All of it?”
“All of it,” she said. “This will be good for you. You can test your wings and begin to learn how to move around in this brave new world.”
“And how on earth do you know to do that?” he said, and then paused to think. “Intuition?”
“Intuition, Mr. Honeycutt. You will become accustomed to such spontaneous and decisive bursts, I fear.”
Ted Honeycutt only shook his head in disbelief. “I’m not intuitive,” he said, looking quite serious.
“One last detail, Mr. Honeycutt,” she added suddenly. “Has anyone ever called you Will?”
“Not for years,” he said. “It is the name from my childhood.”
“Now, I wish that for the extent of your tenure with the Hyperion Fund, you shall be called Will Honeycutt.” And so the last piece of the hiring business was settled.
She did not at this time mention in any way that she would need his help in the most important of her challenges: recruiting Arnauld Esterhazy from the comfort of his life in Vienna to his teaching assignment at St. Gregory’s School.
8
PRIMA MATERIA
Little did Eleanor suspect that she was creating a monster. From the moment of her recruitment of him this newly minted Will Honeycutt took to his new life with great enthusiasm. “I do not enter into anything halfway,” he said. From the beginning, she described how he would be fully in charge of the Hyperion Fund.
“You are the executive director,” she told him, “but when I tell you to invest, you must invest. Is that absolutely clear?”
“Absolutely clear,” her new employee said with certainty.
“And you must follow with your share of the fund. You must invest those as I say. No deviations or gambling with your own funds. Is that also clear?” He nodded. And then she explained again about his 10 percent fund, the monies he could do with what he wished. “I would like you to learn all you can about investing, and therefore you will always have that portion of our holdings to invest as you see fit.”
And then she set him on his first project. She pulled out the large stack of papers that was the translation of Dr. Freud’s book. “This is the only copy in English of this very important book, and I wish for it to be published in a very limited edition. It will remain quite secret.” Being new to his position, Will Honeycutt did not question or object.
Eleanor then told Will Honeycutt of a small publisher and bookbinder in Boston, where he made the arrangements for publishing the book, keeping Eleanor removed from the negotiations, just in case anyone tried to track down the source of the underground edition. Within three months, Will delivered to her four hundred paper-bound copies of The Interpretation of Dreams. And this time she set him about wrapping each copy and preparing each for mailing. Before long, the bulk of that number was mailed in unmarked envelopes from numerous post offices in New England to the leading historians, social scientists, and psychologists in the country, and nearly all the major magazines and newspapers.
With no markings of any kind other than title and author on the books themselves and the sworn secrecy of their producers, the origin of the publication became a great mystery. And Sigmund Freud began to be better known in America than he was in Europe outside Vienna. The reason was, of course, the mysterious “White Book,” Will Honeycutt’s first project for the secret Hyperion Fund.
And then there were the bucket shops. “Master the ticker-tape machine,” a friend of his had told him when he first announced his new appointment, “and then master the bucket shops.” So, following his friend’s advice, at the same time he was pursuing his surreptitious publishing career Will Honeycutt walked into a world he had never known existed and before long was knee-deep in stock speculation.
The bucket shops were essentially betting parlors for the stock market and had been a national rage for two or three decades. They were made possible by the advent of the telegraph and the ticker-tape machine, which provided the minute-by-minute fluctuations in stock prices on Wall Street, almost instantaneously, thanks to Thomas Edison’s invention of the quadruplex, which allowed multiple messages to be carried over a single wire.
The name “bucket shop” was derived from a time when boys in London used to drain the remainders of discarded pub beer kegs into buckets and gather in hideaways to drink and gamble. In the betting shops that began to spring up in London first, then America, the city’s working folk would gather and make wagers on stock fluctuations that were written in chalk on blackboards as fast as they came off the ticker tape. The bucket shops operated like horse-race parlors.
“If you want a quick lesson in stock speculation, get to know these bucket shops,” one old-timer in a bowler hat told Will Honeycutt, sitting beside him in one of the storefront locations. “If you want to know about bucket shops, get to know the Boy Trader. He has been banned from playing here and just about everywhere else in the country.”
The Boy Trader was a young man just Will’s age named Jesse Livermore, who had grown up in Boston and began placing bets on stocks at age sixteen. From an early age a genius with numbers and memory of them, he kept meticulous notebooks on the behaviors of the many stocks being traded on the New York market in those days. Jesse found that he could keep track of statistics in his head and project with uncanny accuracy the individual stocks that were ready to move, and he could take out bets accordingly, winning with such regularity that the shops refused his business. “It is just the type of mind Jesse has,” Will explained to Eleanor. “Mine works a little that way.”
Eleanor tried to suppress a laugh. “I would say that your mind works a lot that way,” she said. Not understanding fully the degree to which her new partner was involved in this new obsession, she watched with amusement. “This is good,” she told him. “This is what the ten percent fund is meant for. I wish that you get to know the stock market.”
“You think it strange for a physicist, don’t you?”
“I am learning not to be surprised by anything you do,” she said.
“It is a system,” he said quickly. “I l
ike seeing through to the base of things, to the prima materia, the medieval alchemists used to say, to the very heart of how things work. Physics was simply my way of doing that, don’t you see? Seeing through to the atomic level.”
“That is it, isn’t it?” Eleanor said, as if a veil had been lifted from her eyes. “You really do see through to this prima materia. Like the alchemists.”
“I do,” Will said seriously. “Yes, I cannot help myself, it seems.”
“And that is what you are doing here,” Eleanor said in conclusion. “When you read that ticker-tape machine, you are somehow doing that.”
“I get lost in the figures, I will admit. I read the tape, and I can see what is happening at that base prima materia level, and I can usually predict what will happen next.”
“You can see the companies and the people represented in the flow of numbers on the ticker tape?” Eleanor asked, trying to understand. She had seen enough of the stream of paper tape spewing forth from the rapidly clicking machine to know that she would soon be overwhelmed by it.
Will Honeycutt stared at her with a look of incomprehension. “Companies and people?” he said. “I don’t see the companies and the people. I see numbers, only numbers.”
“But with the stock market the numbers represent human actions, do they not? Complex human actions.”
Again, Will Honeycutt stared at her for an uncomfortable moment. “Numbers,” he said bluntly. “What is it that you do not understand about numbers?”
At that moment, Eleanor wished very much to ease the tension between them. “Mr. Honeycutt, I do not understand the numbers here. But I do know that I do not wish to in any way discourage you.”
“You cannot discourage me,” the new associate said. “Remember, I am a very determined fellow.”
Will traveled to New York City in search of this Jesse Livermore, and the two men found that they had much in common. At first, Jesse proposed that Will, an unknown face, do his bidding for him, but soon both Will and his new mentor realized that the young scientist needed to take off on his own and develop his own mastery of the numbers.
“Remember,” Jesse said, “bucket shops aren’t like the real thing. The transactions are too simple. The prices come in on the ticker tape and go up on the chalkboard. It’s instantaneous. You put down your money on the stock and keep reading the tape and watch for trends, for the rise or fall. Then you cash in, and you make your profit, no delays, no commissions, no fluctuations. A keen way for a ticker-tape whiz to make money.”
“I’ll never be as good as you with the real thing,” Will said, acknowledging Jesse’s true genius with what went on in New York, “but I am learning what comes in on the ticker tape.”
“Keep your bets small,” Jesse advised, “so as you don’t call attention to yourself. That way they’ll let you stay around while you learn those ropes. My problem was that I made a lot of money and attracted a lot of attention.”
So Will Honeycutt went back to Boston and spent part of each day in the bucket shops and began keeping his own copious notes. “You are becoming a ticker-tape expert,” Eleanor said to him one day. “I am not certain that is entirely a good thing. We need to watch out for you.”
“Say, you’re getting the hang of this,” Jesse said to him one morning as his apprentice returned to New York and came to him with a handful of bills.
“I’m trying to see the whole canvas, not just the numbers,” Will said.
“We make a good team,” Jesse said, which Will took as one of the great compliments of his life.
Having moved past the small-stakes world of the bucket shops, Jesse was now investing in the much more complex game of the real New York stock market. “You can come join me here later,” he said to his protégé.
“My calling is in Boston,” Will said. He had never considered divulging the secret of Eleanor and her Hyperion Fund and the 10 percent he was allowed to gamble with, nor the steadying normalcy he found from reporting in and working beside her every week.
“Still, keep in mind that here is where the big game is,” Jesse said, referring to the New York Stock Exchange. “This is where you make the big money. And no one stops you from trading.”
Eleanor noticed Will’s attention to the shops and some of the near-addiction of his frequenting them, but she did not worry. “I am glad to see that you are learning the investment game,” she told him as she noticed the ebb and flow of his 10 percent account. “It is a long way from the physics department of Harvard. I hope you don’t mind that I lured you away from there.”
“Oh, no,” Will said with a satisfied, distracted smile. “I much prefer the excitement of this. It is the real world, not an ivy-walled sanctuary. I’m able to keep my head up among workers,” he said, “and I make more money than my professors ever had. Just wait till I get to Jesse’s level.”
“Be careful,” Eleanor admonished him, aware that her new partner seemed to be neither eating nor sleeping. “It is, after all, gambling.”
“Gambling with knowledge,” Will said. “I am learning to read the ticker tape. That is the secret edge, where the real mastery lies.”
The first years of the new century were a perfect time to become involved with investments and speculation. They were years of great national prosperity. Abundant harvests, new supplies of gold, significant world demand for American goods, all added up to a booming American economy. Keeping track of the companies that seemed on the brink of boom times was easy for someone of Will Honeycutt’s passion for analysis, and the artificial world of bucket-shop speculations seemed made for him, a perfect place to learn and to expend nervous energy, of which her Will Honeycutt had a great deal.
So Will took funds from the 10 percent of the Hyperion Fund and invested every day, watching his choices pay off or lose, and each day, as he got better and better at Jesse’s numbers game, he watched his share of the fund increase. Eleanor would visit him at their small rented office and, marveling at his copious notes, take pleasure in seeing the former physics student showing more and more interest in stocks and bonds.
“You are developing a true expertise,” she said.
“It is a fascination,” Will said back with a distracted smile. “I wish to make the ticker tape my whole life.”
“I know you exaggerate,” Eleanor said with a genial smile, and her partner stared at her. What Eleanor did not see at that time was how the new discipline was becoming for Will Honeycutt what it had become previously for Jesse Livermore: a full-blown obsession.
She did not notice fully, perhaps, the change in her new colleague because she had her mind elsewhere, on her developing correspondence with Arnauld in Vienna and her next big project, ensuring that the young Viennese would end up in Boston.
9
THE WRONG MAN
Just as everything came to a head with the Northern Pacific stock eruption in the spring of 1901, she discovered the truth about Will Honeycutt. It all came to her as an epiphany when she saw the name on a document in her fiancé Frank Burden’s office that shook her to her core. Nothing was going to be easy. She had already learned that.
“Who is this?” she said to Frank, pointing to the name in the description of a stock transaction in the portfolio of her family holdings that his bank managed.
Frank, not detecting anything of great significance in her question, answered quickly. “He’s the bank’s man in Chicago,” he said. “He’s a brilliant fellow and knows everything about commodities and bonds.”
“Is he from Boston?”
“He grew up here, in Milton, and went to Harvard. His whole family has gone to Harvard. He goes by Williams.”
“Williams Honeycutt,” she said dumbly, running it all through her mind. “Does anyone call him Will Honeycutt?”
“I suppose so. I’ve never heard it though.”
“And he lives here?”
“No, he lives and works in Chicago. He moved out there for the bank. We’re trying to get him to come back.”
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br /> “May I keep this?” she said, holding the stock transaction document. “I’d like to read it.”
“Pretty dry stuff,” Frank said. “I doubt you’d find anything you can understand in it. It’s all financial terms, you know.”
“That’s all right,” she said. “I’d like to get to know this T. Williams Honeycutt of yours.”
The shocking discovery came at the same moment when the man from Loeb and Sons had telegraphed with the warning, as she had asked. There had been the anticipated sudden movement in the Northern Pacific stock, and she thought, This is it. The time has come. She tried to get in touch with Will Honeycutt, but he was nowhere to be found. What a time to go missing, she thought, with little charity.
“When that stock begins to move,” she had told him just a week before, “you had better be there in person. When the warning comes, you go immediately. I will follow when you think it right. I’ll depend on you.” And now the warning from New York had come, and her colleague had disappeared. And there seemed to be no way to contact him. She would have to go herself.
She had held back uneasy feelings about Will ever since the wildness of his bucket-shop obsessions, or from the very start, she would have to admit now. He was a “strange fellow,” as William James said, “rather bereft of social grace.” And now there was the entry of this second T. Williams Honeycutt, one far better suited for the task she had in mind and probably much easier to get along with. Things were very far from settled in her world, and she intended to do something about it, as soon as she found him.
Now, all the way to New York City on the train herself, she kept looking down at the paper Frank had given her, and the name. And once again, the old question returned: Should she have acted or waited for events to unfold? There was a second T. Williams Honeycutt, one already well versed in the stock market, brilliant, from a Harvard family, probably a relative of her Will’s, one he had known well, from birth. Had she waited, perhaps that young man would have come to her. By stepping in early and recruiting the Ted Honeycutt from William James’s experience, she had forced matters and had caused the error. Had she been patient and waited, things would have turned out differently.
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