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October 29, 1929
Many prominent financiers, industrialists, and politicians the world over had passed beneath the carved crest on the lintel of Leviticus' library. Precious few understood its true significance. Not that anyone would believe the mysterious legacy that had been passed down through generations, a secret Leviticus' family had been sworn to protect since time immemorial.
Seated behind his huge desk in a mahogany wing chair, Leviticus hunched over a pile of papers, struggling to concentrate on the task at hand. It had been a very long day, and his one glass of whiskey had nearly put him to sleep. The letters on the page at the top of the pile wavered back and forth. He squinted and rubbed his eyes deeply with the balls of his fists. Leviticus' long, thin facial features were still handsome, despite his thick mane of white hair, but his once sharp coal black eyes were not as strong as they had once been. And today, they were heavy with fatigue. He closed them for a moment and sat absolutely still, listening to the pleasant sound of the fire crackling a few feet away across the room.
Without warning, a sharp pain erupted behind his sternum. With a labored intake of breath, he clutched his chest and slumped over on the desk. He struggled to catch his breath as he felt the choking sensation that had become all too familiar of late. With his right hand he clutched his blood soaked handkerchief, which he used to cover his mouth as his body was racked with uncontrollable coughing. As he coughed and wheezed, the library door swung silently open. His guest stood in the entry way, grim faced and inwardly shocked at the old man's deteriorating condition.
Randolph watched, his hand frozen on the ornate bronze doorknob, while his father choked out gobs of bloody spittle into his handkerchief. His thoughts turned dark. The old man's tuberculosis was rapidly draining away his life. My God, he thought, struggling to keep his emotions in check. He had no idea the disease had progressed so quickly. The reason behind the sudden and cryptic demand for his return from Europe was now clear. The dutiful son politely waited, refusing to enter the library until the coughing fit subsided. The last thing Randolph wanted was to embarrass his father.
After one last deep wet gasp, Leviticus wiped off his mouth and slumped back in the chair. He wondered how long it would take to die, and prayed the end would come quickly. The last thing he wanted to do was rot away on a bed, choking to death and losing his dignity.
The old man straightened up with some effort and turned his head toward the door. "Randolph!" Even in pain Leviticus managed a broad smile. Stuffing his handkerchief in his pocket, he reached for his cane and lifted himself out of his chair. He would greet his son standing. "I am pleased you made such good time on the crossing. How's Catherine? Is London's weather still giving her fits? And my grandson, tell me, how is Bernard doing?"
Randolph smiled broadly in return as he crossed the richly carpeted room and walked around the grand desk to give his father a careful, though heartfelt, hug. As he did so, he bit his lip in horror. His father was nothing but skin and bones. He pulled back and looked him in the eye. "She and the little man are fine, you need not worry about them. What do the doctors say about your condition?"
"To hell with the doctors! What do they know anyway?" Leviticus growled in return, swinging his hand as if swatting a fly. He escorted Randolph around the front of his desk to the fireplace, where both men settled down into a pair of plush chairs facing the roaring hearth. "I enjoy the solitude and warmth of this fireplace more and more each day," whispered Leviticus.
"I noticed our investments are giving you a bit of enjoyment too, given the stock markets' dilemma." Randolph replied following with an amused laugh. As always, the old man was at the top of his game, despite the brave indifference regarding his health.
"Did you secure our interest in Europe?" Leviticus asked, raising his eyebrows as he always did when he asked a serious question.
"Yes, father, and just in the nick of time, considering current events." Randolph chuckled softly. "I have to admit, though, you sure do cut things close."
Leviticus joined him in the soft laugher that quickly ended in another coughing spell. Randolph jumped up to help the old man, who waved back his son with one hand while covering his mouth with the other.
"Damn this disease," thought Randolph as he stood helplessly by, twisting his hands together in frustration. He also knew he was vulnerable in the face of his father's limited future. When the coughing subsided, he took a step and leaned down, placing a firm hand on his father's shoulder. "You don't need to worry about our European partners or our investments there, although things were a little tight until the events of the last seven days. You had many of the family members scratching their heads."
"Let them scratch themselves bald!" Leviticus shot back with a grim smile. He put away the stained handkerchief a second time and straightened his shoulders. "Have a seat." His voice took a sudden, serious turn. "It's time I complete your training, son. Tomorrow you will take over our empire."
Randolph felt his stomach tighten with excitement as he sat next to Leviticus. At last, he thought with relief. He had finally reached the end of his apprenticeship, as had his father and the fathers before him. This final passing of the torch was not without its sadness for it had been hastened along by Leviticus' impending demise. Randolph remained quiet while his father rallied his strength and began to speak.
Slowly and methodically, Leviticus spelled out the recent events that he had anticipated and engineered. The results were in the books, undeniable, real. The stock market had crashed. In just four trading days, its value had plummeted more than 39%. The worst was yet to come.
His father's plans before the crash had been simply ingenious. In the months leading up to October 24, 1929, the Group's bankers in both the United States and Europe transferred their personal cash into a Swiss bank account. J. P Morgan's bank secured the American holdings by following the same procedure. The family and other close associates were instructed to follow Leviticus' orders to the letter. Other prominent financial players followed suit. Joseph Kennedy liquidated his stock positions and the entire Group's real estate holdings, with the exception of their main business locations and immediate family homes.
J. P. Morgan's brokerage firm sold the members' securities while the markets were setting new highs. Selling into the market allowed easy fills for their sell orders and drew little attention from either the market makers or the press. By the time the stock market began to collapse on October 24th, Leviticus had done the impossible. He had converted into cash and precious metals nearly seventy-two billion dollars of his own personal holdings, the holdings of his family, and the wealthiest members of his organization. Every penny was safely secured outside the reach of any government.
With obvious glee, Leviticus continued to detail the events of the crash. As the minutes ticked past, Randolph watched and listened in rapt awe as his father found strength he did not know he still had, his words gaining strength, his voice now strong and steady. To Leviticus, the crash was spectacular by any measure.
On Thursday, October 24, the market opened at 9:30 a.m. Mayhem broke loose on the floor within hours of the opening bell. The ticker tape machine fell behind by an hour and a half, leaving investors frantically scrambling to place sell orders for their investments without even knowing the current bid/ask prices. Within a short time, utter panic entrenched itself on the floor. As word spread of the selling frenzy, thousands of frantic investors gathered outside the stock exchanges and brokerages firms. Police were dispatched to insure the safety of the traders. As the trading day wore on it became more difficult to separate fact from fiction. Rumors had reached epidemic levels.
Shortly before noon, the Chicago and Buffalo Exchanges had to close down. The New York Times was abuzz with the rumor that eleven well-known speculators had committed suicide. The New York Stock Exchange closed the visitor's gallery to keep the desperate scenes below from spreading additional panic.
In the span of a few hours a record eight million shares traded hands. The pits were filled to capacity with traders and locals. Runners ran madly from one firm's trader to another. Jackets were shed, ties left to dangle, and the floor was covered with unfilled orders. To the right of the podium, the seven-story windows admitted the sparkle of sunlight, but to the frantic traders bustling about below, bedlam had set in, carrying with it a fear none had ever known before.
An American Red Cross flag hung incongruously across from the big board. It was an eerie sight for the men gathered on the floor, caught as they were in a cyclone of events as terrible as any catastrophic crisis they could imagine. Searching for answers, their eyes were drawn to the empty podium for an announcement that would end their agony.
On that day, Leviticus' time had come. Standing in J. P. Morgan's office, he put his lucrative plans into action. It began with a well-placed leak to reporters that an unprecedented meeting was taking place at the office of J. P. Morgan and Company. This meeting involved the most important men in finance and banking. Once the leak was set, Leviticus instructed Thomas Lamont, a senior partner at Morgan, to make the following statement to newspaper reporters: "There has been a little distress selling on the Stock Exchange due to a technical condition of the market," and that things were "susceptible to betterment."
As planned, the bankers jumped to assure their investors, trying desperately not to expose their already neutral market positions. Within a short time the market began moving up in response to Lamont's statement, but its climb was short-lived. Leviticus watched in anticipation as the market began to roll over.
It was at that point Leviticus' first hurdle presented itself. Richard Whitney, a partner to Morgan and vice-president of the NYSE, called Morgan and begged him to act as quickly as possible to shore up the market. Morgan explained the request to Leviticus. Furious, Leviticus demanded that the turncoat Whitney return to the bank. Whitney was disobeying his orders.
Visibly shaking, Morgan relayed the directive, listened for a few moments to Whitney's reply, and looked at Leviticus in stunned disbelief. "Go ahead and hang yourself if you want to!" he shouted into the phone, "but the bank is not going to back you!" With that, Morgan slammed down the phone and stared at Leviticus. "The man has lost his mind. Dick Whitney just told me that he would turn this around even if he had to use his own personal holdings!"
Leviticus shrugged and offered a smug smile. "It won't do any good, you know, the market is cooked!" Both men looked at the clock. It was 1:30 p.m.
Richard Whitney, meanwhile, walked onto the exchange floor. The silence was deafening, you could hear a pin drop. No one could have imagined what was about to take place. The press and just about everyone else had expected someone to take to the podium and announce that the NYSE would close. Instead, Whitney held up his hands palms in, and yelled out a 205 buy order for 10,000 shares of U.S. Steel. The current asking price was 195 which sent a clear message no trader could ignore. Fear no longer gripped the traders. As history would later record, an insatiable greed permeated all those present. No one wanted to miss the new bull market! The floor erupted in a fury of both buy and sell orders.
Whitney wasn't finished yet. He continued shouting similar orders for another ten minutes, stirring the traders' fury for a dozen more blue chip stocks. Frantic buying and selling continued for the rest of the day, but by the time the bell finally rang, the market was still down more than 20%. Leviticus nodded knowingly as he smiled at Morgan. It was as he expected.
The next day, Friday the 25th, the market traded flat to sideways as it entered the weekend. But when it opened on Monday the 28th, the market broke and ended down another 13%.
Randolph sat transfixed, his mouth slightly open as he stared into Leviticus' glowing eyes. "And by the end of Tuesday," concluded the old man, "the market tumbled another 11%."
The damage was done.
* * *
Both men sat quietly for a few minutes. Only the fire spoke. Now that his story was finished, the vigor that had suddenly flowed into Leviticus' withered body left it just as quickly.
"It is time. Help me up, son."
Together, father and son exited the library and walked down a short hallway to an adjoining room. Randolph pushed open the large double oak doors. In the middle of the room was a matching oak library table. Sitting squarely in the center was an object Randolph would come to understand better than anything else in his life.
It was an ancient Egyptian box. Many years ago, his grandfather Benjamin had told him the story of its origins and travels. After the genius of its engineering and humble beginnings, the ornately carved wooden box with a granite top had made its way to Egypt in 2585 BC, where it was used by Pharaoh Khufu to build Egypt's Great Pyramid. According to legend, it was stolen from Gaza by the magician Djedi and eventually came under the control of the cult of Isis around 1300 BC. After the fall of Alexandria, the box was secreted away to Rome by Ptolomy I, a Greek general in Macedonian service. There, the box's capabilities were utilized in ways unimaginable to those who had come before.
Today, October 29, 1929, its awesome power would be transferred to Randolph.
Leviticus took Randolph's hand and placed it on the granite lid. Randolph could almost feel the incredible supremacy contained within. "The empire is now yours, my son," whispered the old man. "I'll give you my last instructions now."
With that, Leviticus turned slowly around and sat down in a chair. A relaxed, almost relieved look, spilled over him. The torch had been passed. The short coughing fit that swept through his body ended almost as soon as it began. He swallowed with some difficulty and then, finally, began. Randolph bent low to hear his father's voice, which had been growing weaker and softer by the second. By now it was barely audible.
The old man pointed to the dials on the right side of the box and spelled out his instructions carefully. First, Randolph would convert 60% of the group's cash to buy DOW blue chips stocks by the middle of the next month, November 1929. Leviticus had a pen in his hand and wrote out his instructions on a pad of paper he always carried with him in his jacket pocket. "You will have no problem executing the positions. The market makers and locals will be more than glad to fill your orders. The remaining balance of the money should be left safely in cash." He paused and looked carefully at Randolph. "Is that clear?"
Leviticus nodded and cleared his throat. "Next, during the middle of the month of April 1930, you must not only liquidate your positions to cash during the market rally, but in addition, sell-short the same blue chip stocks with 100% of the group's capital. However," Leviticus carefully cautioned Randolph, "be forewarned that the Group will protest mightily. Ignore them. My closest associates will stand by your decision."
He stopped again to make sure Randolph understood. Only after his son nodded in agreement did he continue. "Your next move is to close all your short-sell positions in the middle of October 1932 and take the profits to safe holdings." He was done writing. His spidery hand was still, his final command to his closest associates issued.
Randolph was now in charge.
* * *
Leviticus was laid to rest long before the final results of the 1929 stock market crash were written. The market moved down to the middle of November 1929 just as he expected. Though down nearly 40%, the market gained back half its losses by the middle of April 1930, delivering to Randolph and the Group an extraordinary profit. And then the market began its long journey down until October 1932, by which time it had lost 89% of its value. The profits envisioned by Leviticus were fully realized and topped one hundred and thirty-seven billion dollars by the time Randolph closed their positions.
The coffin was finally nailed shut on the market, ensuring Randolph a victory of astounding proportion. His handling of the crash, an honor his father had enjoyed during the 1907 market collapse, sealed his position as head of the Group.
Randolph leaned over his father's sprawling mahogany desk, delighted with the legacy the old man had left him. Shortly after Leviticus' death, he and Catherine had moved into the house overlooking Central Park. The home echoed with children's laughter and scampering feet.
Randolph was thinking about how much he missed Leviticus when his son raced through the pocket doors to the library with a nanny in close pursuit. Smiling, Randolph scooped up the fleeing Bernard in his arms.
"Now, where were you going in such a rush?" he teased, tussling the youngster's hair as he waved the girl off. He sat Bernard down on the desk and gazed thoughtfully at his son.
History, he knew, would repeat itself. Will he be ready when his time comes?