“It is,” Will Honeycutt said, in total resignation. “It certainly is.”
So Will Honeycutt set up a makeshift office in Chicago and from there began removing all Hyperion funds from the stock market and placing them into commercial real estate in that city, in a way that would attract as little attention as possible, the Hyperion Fund having become a significant enough player as to cause market fluctuation by any sudden investments or dramatic withdrawals.
“You will have a full year to withdraw funds discreetly and slowly,” Eleanor said. “That should prevent any adverse reaction.”
And as he had done so many times before, Will Honeycutt took on his new challenge with an obsessive intensity that deprived him of sleep and gave him the look of one deranged. He soon knew more about Chicago real estate than Eleanor thought possible.
On one of his visits back in Boston, Eleanor asked him, “And just what is it that you find so compelling in Chicago? Surely it cannot be simply the buying of buildings.”
He looked at her with wildness in his eyes and then laughed. “I know you think me possessed,” he said. “But I have found the futures market, and I must admit that I spend a good deal of time at the board of trade.”
“It is like the bucket shops, I gather,” Eleanor said.
“It is my new addiction, you would no doubt observe, speculating in pork bellies and wheat.”
“Buying and selling?” she asked, genuinely curious.
“Yes,” Will said. “There is a logic to it, all its own, and some people are good at it, instinctively, I believe you would say.”
“And you are one of those who are good at it, instinctively.”
“Yes,” Will said humorously. “Yes, I am. But you don’t need to worry. I have it all well within my control, and within my ten percent.”
“I never worry about you, Mr. Honeycutt. I know you will always return to sanity.” And she reached out and patted his arm.
“Speculation is my sanity,” he said. “I read the ticker tape and I take my notes and the patterns always appear to me. Now I follow the futures market.”
“I do not understand it, for sure, but I think it is where your genius lies,” she said. “I do not understand, and I can live with that.”
“To the world, I know, it appears to be a great game,” Will said, “but actually it is science, just very fast-moving science.”
“My talents are not in the sciences,” Eleanor said, “but I know we must be out of the market for 1907.”
“And I know my assignment,” Will said. “Move the Hyperion monies to real estate.” Then he stopped and looked straight at her. “But for the life of me I do not know where your genius lies.” And then, before she could respond, he said, “I truly do not.” In the long silence that followed, Eleanor found herself wondering where indeed her true talents did lie. Certainly not in the intricacies of managing a monetary fund, a far cry from the music and literature that had consumed her interests just a few years before.
But the moment passed, and she felt Will Honeycutt look away. “You are not going to tell me what really drives this fierce purpose in your life,” he said, “are you?”
“I can’t, Will,” she said.
“That’s all right,” Will Honeycutt concluded. “I can live with that.”
About six months into what Will Honeycutt had begun to call their “Chicago strategy,” the buying up of downtown commercial properties as they became available, he was evaluating their position. He enjoyed the life of a prudent investor in real estate, but the life lacked the excitement of watching stocks rise and fall. He came to Eleanor with a proposal. “I have been talking with Jesse Livermore,” he began.
She had grown to expect something dramatic when the conversation began with that preamble. “Yes?” she said, fully attentive. “And what has the esteemed Mr. Livermore said?”
“I have been so convincing in telling him my strong hunch that next year there will be a collapse that he has already devised a set of preconditions for instability, as he calls them. He insists that the conditions are indeed in place, and a collapse of the markets is indeed a possibility, perhaps even likely. He suggests a strategy.”
“And what does your Mr. Livermore recommend that we do with our money?”
“Not getting out, but selling short,” Will Honeycutt said succinctly. “Jesse agrees now that the market is ripe for a fall. He has already begun plans for borrowing large amounts of stock on margin, with a promise to pay back at the going rate on January 1, 1908, one year after the purchase and after the crash. I think we ought to follow suit. One borrows when the stock is riding high and then pays it back when the stock is considerably lowered in value.”
“And what if the market does not collapse and continues to boom?”
“Then the stock will be called, as they say, and Jesse Livermore will lose his shirt.” Will Honeycutt paused and looked at her for a long appraising moment. “But that will not happen.”
“How do you know?” Eleanor asked pointedly, forgetting perhaps how this whole turn began.
For a moment, Will Honeycutt stared in consternation, as if not believing the question. “But it was you who declared that it will collapse in 1907.”
“You are correct. I have predicted that.”
“And when will this collapse happen?”
“I do not know exactly. I only know that it will collapse, within the year 1907. And we shall be prepared.”
“And we should borrow against that fact.”
Eleanor sat up with an erect posture that signaled the end of the discussion. “We shall not. We are not gamblers, Mr. Honeycutt. We shall not be engaging in gamblers’ practices. We shall not benefit from the misery of others.” She did not bother to add that he had his ten percent to do with what he wished. That was his to deduce.
And so Will Honeycutt proceeded with the Chicago strategy and by the first months of 1907, the Hyperion Fund had no money remaining in the stock market. In its place, the fund now owned significant holdings in downtown Chicago, where Will Honeycutt had opened a small office.
“There is nothing to do now but wait,” he said to Eleanor.
As 1907 arrived, there was general agreement in the financial world that the country was sinking into financial recession, a condition that had concerned Frank Burden all year. “Now is not the time to do anything venturesome,” he told Eleanor one evening at dinner when she asked how his bank intended to proceed. “We shall hold tight,” he said, hold tight being a favored phrase of his.
“He has nothing to worry about,” Will Honeycutt said. “Boston banks are too conservative to speculate.”
It was not so with some of the biggest New York banks, Knickerbocker Trust being the most extreme. Most of the year 1907 passed without incident, and Will Honeycutt began to wonder aloud if perhaps the whole elaborate maneuver with Chicago real estate might have been a colossal waste of their time.
“Have patience, Mr. Honeycutt,” she said, her confidence never faltering. “We shall see.”
Then in October the wildness began when a group of speculators tried to corner the market in a Montana copper mining company.
“We have seen that before,” Eleanor said to Will Honeycutt, and they both agreed they were glad not to be in the middle of this one. By late October, a full-fledged panic ensued, and people all over the country were withdrawing their savings from banks large and small. Eleanor watched Frank’s reactions each morning as he read the newspapers. “What is happening?” she said.
“It is complicated,” Frank said. “I cannot explain, but Knickerbocker bank has made a colossal mistake, and it is not good. Boston banks would never do that.”
Then a few mornings later, he announced, “The crisis is over; Mr. Morgan has stepped in once again, as he did in the 1890s. He has gotten all the powerful financiers together, it seems, and forced an elaborate buyout, arranging for enough money to be pumped into the banks to keep them afloat. It will take time,” he concluded,
“but we will survive.”
By early 1908, Frank’s words bore out, and the crisis seemed past. In the meantime, as soon as the stock prices tumbled, Jesse Livermore was able to pay off his huge borrowings for next to nothing, and he made a fortune, as well as winning a reputation as the man who predicted the Crash of 1907. No one ever suspected the role Eleanor and the Hyperion Fund had played in his sensational and seemingly clairvoyant strategy.
“How did Jesse Livermore know what was coming?” Eleanor asked Will Honeycutt one morning.
“I told him,” Will said, “and he believed me.” Then he stared at her hard.
“And did you follow his lead and sell short with your own shares?” They both knew that was against the rules. Will had promised in the beginning to keep his own holdings within the Hyperion Fund, to gamble with only his ten percent.
“I did.”
“And you made a great deal of money?”
“I did.” He stared for a moment, then he asked point-blank, “How did you know?”
“I just did,” she said quickly. “I cannot say that I understand you, but I did know that.” And this time Will Honeycutt looked visibly shaken. “And that will not happen again, Mr. Honeycutt. You will not gamble with your own future again. Can I have your word on that?”
Will Honeycutt looked defiant for a moment, but remained silent, then said finally, “You can.” And that was that.
“And now,” Eleanor said again quickly, breaking the spell, “we have our work to do. We can begin reinvesting our Chicago money. We shall continue with motorcars. Again, it will be exclusively the new General Motors.”
“Shouldn’t we just leave it in Chicago?” Will said, very comfortable with the new investment skills he had acquired.
“No,” she said, “there is greater margin back in General Motors.”
And then after the crash of 1907 had run its course, both Eleanor and Will Honeycutt marveled, as did the whole country, at the omnipotence of Mr. J. P. Morgan. “I shall meet that man someday,” Eleanor said seriously, and Will Honeycutt shook his head again.
“I am sure you will,” he said.
“You will help me,” she said. She made no mention that the meeting, one she knew she was destined to arrange, would concern not investments but Eleanor’s foreknowledge of the fate of Mr. Morgan’s great ship the Titanic.
14
DR. HALL’S CONFERENCE
It was in 1906 that, sensing the seriousness of his heart condition, Eleanor decided to share with William James the first of her many secrets. “There is something I wish to tell you,” she said on one of their walks along the Charles River near Harvard.
“I am always glad for that,” he said.
“It concerns the book City of Music,” she said. “Jonathan Trumpp is a nom de plume.”
“I gathered,” James said. “An artistic young man not far removed from my brother’s crowd perhaps, although I was never able to discover who it might be.”
“Mr. Trumpp is a young woman.”
The great professor looked perplexed as if he, the one who considered every possibility, had not considered that possibility. “A young woman?” he repeated. “And just how would you know such a thing?”
“A young woman,” she said, “and one you know quite well.” She gazed out at the river until the message sank in.
“Oh my,” he said, with something like a gasp.
“I’m afraid so,” she said. “My nom de plume.”
“Goodness,” the great man said. “That is a matter for some consideration.”
“I know,” she said with a soft smile. “It takes some getting used to, even for me, I must admit, and after all this time. It began when I was in my last year at Smith. I had been to hear the New York Philharmonic and had penned a critique to the New York Times. I used the name of the janitor at our house.” William James shook his head slowly. “My letter was published, and the editors asked for more, which I wrote, two or three more pieces, using the same pen name. Then, after graduation my dear headmistress Miss Hewens, who knew of Mr. Trumpp’s true identity, suggested I travel to Vienna and write more. You were one who counseled that, I believe.”
He smiled warmly and nodded his agreement. “I do remember that part,” he said. “I thought it an excellent idea, to give you the breadth of experience. But I did not know of your writing.”
“I had quite a moving experience there in Vienna, and City of Music was the resultant work.”
William James gazed at her, taking in the import of what he had just learned. “This book caused quite a stir,” he said. “It is a poignant account of that city’s magical powers.” He smiled at the thought, then wrinkled his brow. “And its vulnerability,” he added. “And I believe it is credited for much of Gustav Mahler’s initial reputation in this country. A considerable reputation.”
“Yes.” She nodded. “He has changed how people look at music, I believe.”
“Well, well,” he said, beaming at her. “I enjoyed it the first time I read it, but I shall reread it with greater care. And with, I must admit, considerable pride,” he added, still shaking his head in disbelief, piecing it all together. “And that is why you went to Vienna in the first place,” he said.
“My dear El,” the professor said to her one morning shortly after that, “you have introduced me to the most interesting ideas and people.” He gazed at her again in amazement. “Since your sojourn in Vienna, you have changed dramatically. You seem to have developed a maturity beyond your years.” He searched for the word. “A gravity, as if you returned with some sort of mission. It has appeared that you have seen the world and know what is important and what is not.”
“Do you think I have become—” She paused, searching for the word. “Do you think I have become worldly?” she said.
He thought for a moment on the word. “Yes, worldly would be one way to describe the change I noticed, in the best sense, I would add,” he reassured her.
“My experience in Vienna was all-consuming. I became swept up in a situation that was both wonderful and horrible. I gave all to it and held back nothing. It has come at some price, I fear.” It was the first time that she had revealed to anyone some of the darker parts of this newfound worldliness.
“When you returned, you were different,” he said, a look of concern on his face.
“It is an old story, you know: the loss of innocence. Haven’t you observed that as a universal theme in literature?”
“That was my brother,” Dr. James said. “It was Henry who made that observation that the central theme in all world literature is the loss of innocence.” He gave her a look of genuine concern. “I suppose we ought to talk more about that,” he said.
“Perhaps we shall,” she said. “There is more I have to tell you.”
“As have I to tell you,” he said with a look of seriousness.
It was also on another of their long walks that he mentioned his friend Stanley Hall’s plans for a conference in 1909. “I would like to talk with Dr. Hall about that,” she said with an urgency that surprised William James. “I would like to make certain that he invites Sigmund Freud.”
Regardless of any troubling memories of her encounters with Sigmund Freud in Vienna, she knew the importance of his ideas. She knew from the journal the arrangements she needed to make in order for him to be introduced in America, and she knew it was her lot to pursue those moves with maximum effort and enthusiasm.
“Dr. Freud’s ideas are timely right now,” she said to William James. “There is something of vital importance in his talking cure, something the world needs.”
“Unconscious motivations,” her mentor said with a burst. “Dr. Freud’s talking cure is the key to understanding the unconscious mind. We have all heard much about him and his young colleague Carl Jung. Perhaps at Stanley’s conference we could meet them.”
When the original Austrian editions of his Interpretation of Dreams had arrived some years before, sent from Vienna by her fri
end Ernst Kleist, she had given two to Dr. James, knowing he would find some appropriate use for the extra copy, and the recipient had been G. Stanley Hall, a former student of James’s who had been founding president at Clark University in Worcester, Massachusetts. And Dr. James had conveyed to her how grateful Dr. Hall was for the gift. “He has found much to be impressed with,” James said.
Then, some weeks later, when Eleanor heard how Dr. Hall had followed up with correspondences to the Viennese doctor, she said to Dr. James, “I wish to meet him. I think we have much to talk about.” So Professor James paved the way for the visit by informing his former student and old friend Stanley Hall in Worcester of Eleanor’s exposure to Sigmund Freud’s ideas on her trip to Vienna.
“You are unusually well informed, Mrs. Burden,” the famously brilliant Hall said to her in that first conversation about psychology and Sigmund Freud.
“Psychology is one of my keen interests.”
“Eleanor met Sigmund Freud when she was in Vienna in 1897,” James added proudly.
“I am impressed,” Hall said. “And I think you will appreciate this.” He reached into a drawer in his desk and produced a paper-bound book, its white cover intact, although extremely well-worn and browned with use and age. “This is a most prized possession.” He ran a hand over the cover. “It is a copy of ‘the White Book,’ the now very rare translation of The Interpretation of Dreams, Freud’s most important exploration of the unconscious mind. It was found in a book dealer’s shop and bought for a handsome sum. It is a gift from one of my students. These English translations have become collectors’ items. You can see how tattered it is.”
“I am familiar with the book,” Eleanor said, her surprise barely noticeable. “I am impressed that you possess such a copy.”
Dr. James took the book and turned it over in his hands before passing it to Eleanor, who took the volume and also turned it over a number of times, examining it with care, before handing it back to Dr. Hall, letting on nothing of her intimate knowledge of the volume’s origins.
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