Chapter 51

One of the painful phases of Cowperwood’s further negotiations at this time was the need he faced, or thought he did, of employing Englishmen rather than Americans as his assistants in all departments of his work. De Sota Sippens was the first victim, and he was almost brokenhearted, for he had come to like London. Joined with his ever-successful Chief, as he argued, he expected to shine here. More than that, he was eager to sharpen his wits and energies against those of these assured and almost condescending Englishmen, who, he was perfectly satisfied, knew nothing about the business of traction. However, to soften the blow as much as possible, Cowperwood placed him in charge of his Chicago financial affairs.

One of Cowperwood’s methods of raising capital was the use of the holding company, an underlying organization which would bring in sufficient money to buy the companies which he wished to control and at the same time furnish him with the necessary shares for that control. In this instance, his Railway Equipment & Construction Company was formed, with dummy directors and chairmen, and in which all who joined him were eventually to possess founder’s shares. Johnson acted as solicitor and counsel at a salary of £ 3, 000 a year. And thereafter, in a private agreement drawn by him—but most carefully gone over by Cowperwood’s attorneys—and signed by Johnson, Stane, and Cowperwood, it was stipulated that from then on their various shares in both the District and the Metropolitan, either then and there owned or subsequently to be acquired, were to be voted as one in any official vote that looked to the reorganization and sale of the District and the Metropolitan to the new company later to be organized. And in this new company they were to receive three shares of its issue for each one of their old shares.

And now, for Johnson, there was the really great task of running about in quest of blocks of scattered shares of both the District and the Metropolitan, which shares, up to £ 500, 000 he had orders from Cowperwood to buy, but under various names. Also to work up, among the old directors, knowledge of as well as enthusiasm for Cowperwood and his proposed plans. As for Stane, he was to buy as many more shares of these old companies as he could obtain, with a view to voting with Cowperwood in his new undertaking, and he, too, where possible, was to bring his personal influence to bear on all such as he knew.

As a result of these activities, a veritable landslide of investors descended upon Cowperwood. And many American as well as English financiers, realizing the importance of the properties which he was gathering in, now also attempted to get franchises for themselves, which franchises by that time were most difficult to obtain. One of those who became interested was no less a person than Stanford Drake, also an American financier, who made applications to Parliament for franchises for lines which, if built, would have paralleled the Cowperwood lines for a very considerable distance, and thus, practically split the income for these territories.

This disturbed Cowperwood not a little, for it had to be stopped without arousing English opposition to both men, since the English were opposed to American entrance into this field, whether it be the entrance of Mr. Drake or Mr. Cowperwood. In consequence, the usual legal battles on the part of each ensued. For each pointed out the assumed defects of the other and each minimized the import of what his rival was trying to do.

For his part, Cowperwood pointed out that the Drake line as planned would run, in part, through fairly good residence sections, but it would also be compelled to run through open fields for a distance of ten miles before it would reach paying territory. He also pointed out that the Drake line was to be a single-track line, one track in a tunnel, while his system would be double-track throughout. At the same time, the Drake interests proceeded to counter with the claim that Cowperwood’s roads were under the Thames embankment, while their roads were under the Strand and other business streets; that Mr. Cowperwood’s roads were away from trade, and theirs would take people to trade. However, Cowperwood added that parallel lines were mutually destructive, did not pay, for he knew if the Drake crowd succeeded in getting franchises for their system, no matter how it was developed, his own line would be affected to a considerable extent. This, of course, he did not admit at the time; instead, he announced that he could not understand why the House of Drake would indulge in any such venture. And to make matters as smooth as possible, he said he believed that Mr. Drake’s London branch, rather than Mr. Drake himself, was responsible for the error. He went on to say further that Mr. Drake was a great man, and he believed eventually, when the matter was made clear to him, he would not put any money into it.

Yet in spite of all these sweet words, Mr. Drake’s lawyers, going before Parliament, introduced a bill seeking a franchise, and Mr. Cowperwood’s lawyers introduced a rival bill for the lines he wanted to build. The result was that Parliament put both bills off until the following November and did not favor either one, which delay was a kind of victory for Cowperwood, he being so much further ahead in the development of his over-all scheme. In fact, he was heard to say that he did not enjoy going into any project unless there was some opposition, and, as everything was fair in love and war, he was prepared to oppose the Drake interests to the last ditch.

But the interest of Stanford Drake was aroused to the necessity for a real battle with Cowperwood. Having vast funds at his disposal, he made Cowperwood an offer of $5, 000, 000 for the privilege of sharing the Piccadilly Circus Station, which belonged to Cowperwood and which would obviously be needed by Drake in his system. At the same time he also offered Cowperwood $2, 500, 000 if he would call off his army of lawyers who were then and there preparing to fight Drake’s application to Parliament for permission to build his proposed road. Of course, the offers were refused by Cowperwood.

At the same time there was the London United Company which was planning to build a road from Hyde Park Corner to Shepherd’s Bush, the preliminary negotiations for which they had worked out. They went to Drake and offered to unite their line with his, and asked for a franchise from the city. They also asked Drake to operate the line as a whole if and when completed. Drake refused. Then they asked to be permitted to operate their section. Again Drake refused. Whereupon they offered their section to Cowperwood, although they had as yet no franchise for it. Cowperwood notified them to see Speyer & Company, a financing concern that operated not only in England and America but throughout Europe. This firm, after looking into the matter and seeing that they might, by benefiting Cowperwood, eventually benefit themselves, decided to buy all the existing rights which this particular company owned, after which they proceeded to syndicate the entire block of shares. Their counsel, then and there before the Parliament Tubes Committee on other matters, asked to withdraw their request for a franchise. As Drake had been pleading for only one total franchise for a year, this invalidated the whole plea. Drake returned with a request to be allowed a franchise for their section. But as their original request had called for no such thing, and there was no such bill before the committee, Cowperwood’s counsel argued that the whole matter must be thrown out. And Mr. Drake’s scheme was withdrawn.

The dramatic conclusion of this fight between two such outstanding adversaries was reported in detail by both English and American newspapers, and the London County Council, which favored a system of transit development which would make travel convenient for all London, enthused over the victory of Mr. Cowperwood, citing him as a man of broad and valuable social qualities which deserved a most favorable reception everywhere.

Cowperwood, taking advantage of this sentiment, made much of the social benefits that would result from his vast enterprise. His system, he announced, would ultimately carry as many as 200, 000, 000 passengers a year, would have one class of coach, a uniform five-cent fare, and be a fully connected system which would enable a traveler to go all the way by subway, thereby providing an object lesson in rapid transit, cheap fares, and frequent service.

Personally, at this time, Cowperwood was prospering so enormously that he was able to attend to matters other than those concerning the gathering of shares and profits. For instance, for mere publicity purposes, he bought Turner’s painting, “Rockets and Blue Lights, ” for $78, 000, and hung it in his office.