talked with me before I left
for London. Unfortunately, when I returned to New York I found that
the entire proceeds of the bonds, including my profit, had been
appropriated by the parties to pay their own debts, and I was thus
beaten out of a handsome sum, and had to credit to profit and loss my
expenses and time. I had never before been cheated and found it out so
positively and so clearly. I saw that I was still young and had a good
deal to learn. Many men can be trusted, but a few need watching.

CHAPTER XII

BUSINESS NEGOTIATIONS

Complete success attended a negotiation which I conducted about this
time for Colonel William Phillips, president of the Allegheny Valley
Railway at Pittsburgh. One day the Colonel entered my New York office
and told me that he needed money badly, but that he could get no house
in America to entertain the idea of purchasing five millions of bonds
of his company although they were to be guaranteed by the Pennsylvania
Railroad Company. The old gentleman felt sure that he was being driven
from pillar to post by the bankers because they had agreed among
themselves to purchase the bonds only upon their own terms. He asked
ninety cents on the dollar for them, but this the bankers considered
preposterously high. Those were the days when Western railway bonds
were often sold to the bankers at eighty cents on the dollar.

Colonel Phillips said he had come to see whether I could not suggest
some way out of his difficulty. He had pressing need for two hundred
and fifty thousand dollars, and this Mr. Thomson, of the Pennsylvania
Railroad, could not give him. The Allegheny bonds were seven per
cents, but they were payable, not in gold, but in currency, in
America. They were therefore wholly unsuited for the foreign market.
But I knew that the Pennsylvania Railroad Company had a large amount
of Philadelphia and Erie Railroad six per cent gold bonds in its
treasury. It would be a most desirable exchange on its part, I
thought, to give these bonds for the seven per cent Allegheny bonds
which bore its guarantee.

I telegraphed Mr. Thomson, asking if the Pennsylvania Railroad Company
would take two hundred and fifty thousand dollars at interest and lend
it to the Allegheny Railway Company. Mr. Thomson replied, "Certainly."
Colonel Phillips was happy. He agreed, in consideration of my
services, to give me a sixty-days option to take his five millions of
bonds at the desired ninety cents on the