Inside a smoke-filled office with a view of Wall Street's stone canyons, Mr. A. L. Pierce hung up heavy bakelite telephone and stared at order pad on his desk. Ink ridiculed him, a record of lunacy. SELL ALL. BONDS/UTILITIES. BUY: P&G, RCA, HALOID.
Pierce was a shark, as his largest client had assured him. He'd gone on panics, on corners, on crashes. He'd torn down small fortunes and built larger ones. He was a man of the tape, refined in the language of bids and asks. This… this was not like that. This was not a strategy; it bordered on financial apostasy.
It was a barren fall of 1931, with a worldwide economy slowly expiring, that American utility bonds and railroads were scripture. They were pretty much the only rocks in a sea of mud. Liquidating a portfolio of such stocks—stocks of a John D. Rockefeller daughter—was absolute madness. And for what? "Radio toys," as the bears referred to RCA. Soap and shortening, no explosive high though they were steady positions. And Haloid? He'd sent a clerk to search up the name of the corporation. A fleck of dust in Rochester.
His expert opinion, the one he would not be brave enough to utter, was that the Rockefeller son-in-law, Mr. Ezra Prentice, must have lost his mind due to the pressure of the Depression. But his orders, communicated through the old man himself, were not to be broken. Weary-eyed, he picked up another telephone, his direct line with his men on the floor of the Exchange. The shark would do his bidding. He would take the lambs to slaughter.
The stock market delivered its verdict next day. It moved fast and ruthlessly.
As if in answer to some heavenly joke perpetrated on Ezra, a selling avalanche deluged the market as soon as the opening bell rang out. A rumormongering snippet that another bank would collapse in Chicago sent a shiver down the spine of the panicky herd. Down went the Dow Jones Industrial Average. RCA stock, a speculative darling, dropped a gut-twisting five percent within the first hour. Pillar of blue chips Procter & Gamble lost a frightening three percent. Haloid, as an illiquid stock infrequently traded, hardly moved, but its bid-askpread grew into a canyon, an unmistakable signal that no one was taking a position.
Ezra's aggressive, get-big-fast act, on its first day of life, was a disaster on paper. He took a portfolio of low-grade, interest-earning investments and converted it into a portfolio of speculative vehicles bleeding value at a horrific rate.
John D. Rockefeller Jr. was no fool. He despised the filthy business of stock-picking, but he presided over a vast army of bankers, lawyers, and managers of trusts who managed the family's giant philanthropic endeavors. An institutional-sized sell order, keyed to the name of Prentice and, more importantly, to Alta Rockefeller Prentice's dowry trust, was not a quiet business. It was a Richter scale seismic shudder in old money.
By noon, the unthinkable happened. A discreet telephone call was conducted by the very "concerned" senior partner of a well-known bank to Junior's office at 26 Broadway. The banker organized his phrases in terms of layers of deference and respect, but his substance was harsh: your brother-in-law just committed a spectacular act of folly with your sister's money.
Junior, with irrevocable proof of Ezra's madness in his possession, paid no heed to courtesy of any kind. He wrote no letter; he requested no conference. He stormed into Kykuit's corridors like an indignant archangel of wrath, his face a blend of righteous anger. He saw Ezra and Alta sipping tea in their isolated sitting room, a tender drop of family tranquility he was about to upset.
He stormed into the room without taking the trouble of knocking, a telegram crumpled in his white-knuckle clutch. "Is this true?" he asked, his voice not harsh, but with a strength that was terrifying. He slammed the piece of paper onto the fragile table between them, juddering the porcelain tea cups.
Alta flinched. Ezra deposited his cup back onto its saucer with composed ease.
"Did you," Junior continued, sputtering out his words as if they were poisonous refuse, "cash in Alta's entire dowry—my father's gift, a sacred trust—and your own inheritance in a wild gamble on the stock exchange?"
The telegram was the bank's confirmation, detailing its record-breaking selling of bonds and reciprocal buying. There was no mistaking its evidence.
Alta's face went pale. She looked from the telegram to her husband, her eyes wide with disbelief and a deepening horror. "Ezra? My dowry?" she whispered, her voice hardly audible. "You sold it... you sold everything without my consent?"
It was a profound question in a 1931 world. Those funds were theirs to manage legally as head of household, a situation no judge would prosecute. And still, the moral breach was an abyss. This was her shield, her legacy from her father, and he'd wagered it without a word. That magnificent castle he swore to take care of her now seemed to have been built out of a foundation of lies and deception.
Jason stood between both of them. He did not panic or feel guilty. This was a strategic move of the proceedings. A market would not pay you without first making an effort to break you. He held his face a mask of immovable calm, his body at ease. He looked past Junior, his eyes fixing on his panic-stricken wife.
"Yes, I did," he said with a subdued but determined tone, quieting Junior's rage.
"You madman!" exclaimed Junior. "You'll be ruined! You've ruined my sister!"
He did not answer, his eyes still locked onto Alta's. "I did it," he continued, as though they were alone in the room, "because holding bonds as the government itself is going to actively devalue its own currency is not safety. It is a slow-motion loss guarantee. I did not take a chance, Alta. I took a deliberate bet on this country's future."
Tears swelled in Alta's eyes, falling down her face. "A business decision?" she coughed out, her voice shaking. "Ezra, it's in the paper that your stock took another tumble today! You've lost a fortune! In one day!"
He leaned over the table and grasped her hand. His hand was warm, rock steady. "Paper losses don't amount to jack squat," he said, his tone low, hypnotic, urgent. "The market is a manic-depressive creature. It is moody. I am not. We did not lose a bundle. We exchanged overpriced paper for underpriced shares of American commerce."
He wrung her hand. "Listen to me, Alta."
She hesitated to raise her tearstained eyes to his.
"Give me one week," he said, his tone deliberate and measured. "Just one week. Let your faith be in me for seven days. You will know. The market is going to come back. And when it comes back, it is going to be sharp."
It was an insane promise. Exact. Non-falsifiable. In a marketplace that for two years had seen only misery, predicting a rally was absurd. Predicting one within a seven-day horizon was the rambling of a lunatic or a prophet. He had done no more than planted a time bomb beneath his own credibility, his relationship, his very presence in this universe.