Thorstein Veblen - Achieving Prosperity - Ultimate Collection

“My dear Sir,” urged Rolleum, sweetly, “this legitimate business enterprise must succeed, and must secure wealth, reputation, and influence to all connected with it. We know that you are above pecuniary considerations, and that you do not need our influence, or anybody’s. We need yours. And you need not do any work. I will do that. We only need your name. And merely as a matter of form, because the officers are expected to be interested in their own company, I have set apart two thousand shares, being at half par or $5 a share, $10,000 of stock, to stand in your name. See how respectable all these Trustees are!” And he showed the list and preached upon the items of it.

“This man is worth so many millions, that man is such an influential editor. Could I have obtained such names if this were not a perfectly square thing?”

Ten thousand dollars will go some ways towards squaring almost anything, with many people, even if it is a mere matter of form; and so the old gentleman consented. This fixed the whole official “slate.”

Now to set up the machine.

In a few days of sharp running and talking, Rolleum and Digwell accomplished this, as follows:

First , they hired and furnished handsomely, paying cash whenever they couldn’t help it, a couple of pleasant first floor rooms close to Wall Street. No dingy desk-room up in some dark corner or attic, for them. Respectability is the thing for Rolleum.

Second , they hired a lawyer to draft the proper papers, and had the New York and Rangoon Petroleum Company “Duly incorporated under the mining and statute laws of the State of New York,” with charter, by-laws, seal, officers’ names, and everything fine, new, grand, magnificent, impressive, formal, respectable and business-like.

Third , they now had every requisite of a powerful, enterprising and highly successful corporation, except the small trifles of money, land and oil. But what are these, to such geniuses as Rolleum and Digwell? Singular if having invented and set the trap, they could not catch the birds!

They bought about three pints of oil, for one dollar; and that settled one part of the question. They bought it ready sorted and vialled and labelled; some crude and green, some yellowish, some limpid as water, half a dozen or so of different specimens. These, in their tall vials of most respectable appearance, they placed casually on the mantel-piece of the outer office. They were specimens of the oils which the company’s wells are confidently expected to yield—when they get ‘em!

Last of all—land and money. Subscriptions to capital stock are to furnish money, money will buy land. And saying we’ve got land will procure subscriptions.

“It’s not much of a lie, after all,” said Rolleum, confidentially, to brother Digwell. “When we’ve said we’ve got it for awhile, we shall get it. It’s not a lie at all. It’s only discounting the truth at sixty days!”

So he and Digwell went to work and made a splendid prospectus and advertisement, the latter an abridged edition of the former. This prospectus was a great triumph of business lying mixed with plums and spices of truth, and all set forth with taking “display lines.”

It began with a stately row of names: New York and Rangoon Petroleum Company; Honorable Abraham Bee, President; Peter Rolleum, Esq., Vice President; Diddle Digwell, Esq., Secretary; and so on. With cool impudence it then gave a list headed “Lands and Property”—not saying “of the Company” for fear of a prosecution for swindling. But the list below began with the words “the oil lands to be conveyed to the Company are as follows:” “that’s exactly it” quoth Rolleum—“no lie there, at any rate. They are to ‘to be conveyed’ to us—if we choose—just as soon as we can pay for them.” And then the list went on from “No. 1” to “No. 43,” giving in a row all those memoranda which Rolleum had obtained in Venango County and the region round about, of the descriptions of the real estate which the landsharks up there would be glad to sell for what they asked for it.

The Prospectus said the capital of the company was one million dollars, in one hundred thousand shares at ten dollars each. But in order to obtain a WORKING CAPITAL, twenty thousand shares are offered for a limited period at five dollars each, not subject to further assessment.

And it added, though with more phrases, something to the following effect: Hurry! Pay quick! Or you will lose your chance! In conclusion the whole was wound up with many wise and moral observations about legitimate business, interests of stockholders, heavy capitalists, economical management, and other such things; and it bestowed some rather fat compliments upon the honorable Abraham Bee and the Trustees.

Having concocted this choice morsel of bait, they set it in the great stream of newspapers, there to catch fish. In plain terms, with some cash and some credit—for their means would not even reach to pay in advance the whole of their first advertising bill—they managed to have their advertisement published during several weeks in a carefully chosen group of about thirty of the principal newspapers of the United States.

The whole web was now woven; and Rolleum and Digwell, like two hungry spiders, squatted in their den, every nerve thrilling to feel the first buzz of the first fly. It was natural that the scamps should feel a good deal excited: it was life or death with them. If a confiding public, in answer to their impassioned appeal, should generously remit, they were made men for life. If not, instead of being rich and respected gentlemen, they were ridiculous, detected swindlers.

Well—they succeeded. So truthful is our Great American Nation—so confiding, so sure of the truth of what is said in print, even if only in the advertising columns of a newspaper—so certain of the good faith of people who have their names printed in large capitals and with a handle at one end—that actually these fellows had a hundred thousand dollars in bank within ten weeks—before they owned one foot of land, or one inch of well, or one drop of oil, except those three pints in the vials on the office shelf!

And remember this is no imaginary case. I am giving point by point the exact transactions of a real Petroleum Company.

Everything I have told was done, only if possible with a more false and baseless impudence than I have described. And scores and scores of other Petroleum Companies have been organized in ways exactly as unprincipled. Some of them may perhaps have proceeded as real business concerns. Some have stopped and disappeared as soon as the managers could get a handsome sum of money into their pockets for stock.

What the result will be, in the present case, I don’t know. The New York and Rangoon Petroleum Company, when I last knew about it, “still lived.” They had—or said they had—bought some land. I have not heard of their receiving any oil raised from their own wells. They have sent off a monstrous quantity of circulars, prospectuses and advertisements. They caused a portrait and biography of the Honorable A. Bee to be printed in a very respectable periodical, and paid five hundred dollars for it. They had themselves systematically puffed up to the seventh heaven in a long series of articles in another periodical, and paid the owner of it $2,000 or so in stock . They talk very big about a dividend. But although they have received a great deal of money, and paid out a great deal, I do not know of their paying their stockholders any yet. If they should, it would not prove much. For it is sometimes considered “a good dodge” to declare and pay a large dividend before any real profits have been earned; as this is calculated to enhance the price of shares, and to make them “go off like hot cakes.”