Back in his California days, when Hoover was choosing between employment with the Geological Survey and an opportunity with a big mining concern, Professor Branner had advised him that “when one becomes connected with large interests of any kind nowadays, he has to live on the jump, as it were, for such interests, if they are successful, are well organized and run like big machines.”1
“On the jump” is how Hoover now lived. In less than four years he had jumped from California to Australia, and from Australia to China, and from China to England. Starting in October 1901, using London as his base, he would in a series of short and long hops, by steamship and train, jump clear around the globe five times in five years. As his friend Will Irwin wrote, Hoover “boarded an ocean liner as casually as you or I take a trolley-car to our daily jobs.” The Suez Canal became as familiar to him as Wapsinonoc Creek. He perfected the conduct of business afloat, receiving at each port a bag of reports and letters, sometimes responding with answers and instructions while the steamer coaled, other times taking them aboard and answering at the next wire head.2
The jumping was not always geographical. He jumped from one ambitious project to another, from unimpeachable success to gnawing failure, from high conceit to mental breakdown, from fortune to the brink of financial ruin, from personal controversy and highly publicized trials to Kensington dinner parties and his wife’s café society. What Branner had got wrong was that almost none of this activity betrayed the least evidence of machine-like organization and precision. Lou was closer to the mark with a meteorological allusion. “The Hoover plans are like clouds,” she wrote, “and come and go as rapidly.”3
The Hoovers spent only a few weeks in London at the end of 1901, just long enough for Bert to finalize his agreement with Bewick, Moreing. He purchased his partnership for $40,000, a sum he had to borrow from the firm. Hoover would be the operating partner, spending most of his time in the field. There was a lot to operate at Bewick, Moreing. The firm was involved in some twenty mines around the world: coal in China and the Transvaal, tin in Cornwall, gold in South Africa and Western Australia; copper in Canada, silver in Nevada, and turquoise in the Sinai Peninsula. For his services he would receive 20 percent of all profits over a period of ten years.
Hoover’s first stop on taking up his new duties was Western Australia. He arrived in Fremantle in mid-January 1902 and took Lou on a tour of his old haunts. Observant locals noticed small changes in Hoover’s appearance since his last visit. He had added weight and lost his facial hair, and the squareness of his jaw had become more pronounced. His habits, however, were much the same. He stood with his legs apart and his hands deep in his trouser pockets, jingling his change. His hazel eyes still found his feet during conversation and they wrinkled at the corners on those rare occasions when he smiled.
The outback had not much improved in his absence, although his old nemesis Williams had departed. Hoover cleared out managers he considered loyal to the old regime and installed his own people in their stead. He consolidated properties and further reduced operating expenses by demanding more of his workers for the same salaries. Never short on audacity, he tried to sign up all of the major properties in the gold belt, aiming for a working monopoly in Western Australia. In the same manner as his old friends at the Oregon Land Company, he took control of ancillary lines of business—stores, foundries, and insurance companies—pushing aside middlemen and purchasing supplies in volume. The profits Bewick, Moreing made in these side businesses, together with the opportunities for insider trading open to a mine’s managers, made the actual management fees paid the company by the property’s owners almost incidental.
Back in London by spring, the Hoovers faced the problem of where to live. They already shared one property. On their way through California the previous autumn they had arranged through Lou’s father to build a cottage in Monterey. It was something of a claim stake, a sign of their commitment to return to the United States once Bert had established his career. For their first summer in England, they leased a two-story cottage at Walton-on-Thames. Lou settled in and took up the violin. Bert scarcely noticed the place. His workdays were occupied with business; on weekends he charged over the English and Welsh countryside in his new automobile, a French Panhard with a massive ten-horsepower engine. In midseason he made a lightning-fast voyage to British Columbia and back, covering sixteen thousand miles in six weeks. He dropped in on his brother and sister along the way and found both of them married, Theodore satisfactorily, and May not, at least to Herbert’s mind. She had wed her old beau, Cornelius Van Ness Leavitt. By autumn, the Hoovers had relocated to London, the center of the mining world and site of his firm’s headquarters. They lived in a spacious apartment at 39 Hyde Park Gate, a fashionable cul-de-sac between Kensington Palace and the Royal Albert Hall. They got settled just on time for the roof to fall in at Bewick, Moreing.4
On Christmas Eve, 1902, the Hoovers had turkey with the Evanses, followed on Christmas Day by turkey and dancing with the Grays, followed on Boxing Day by a noon turkey dinner at the home of Mr. and Mrs. A. Stanley Rowe. After this last meal, the Hoovers joined the Rowes and several of the five Rowe children for a pantomime of Kingsley’s The Water Babies at the Garrick.
Hoover, never the most perceptive of companions, thought his host seemed “highly nervous and filled with foreboding” throughout the afternoon. An accountant and a partner at Bewick, Moreing, Rowe asked Lou if she would raise his five children in the event that anything happened to him. On the way home, the Hoovers discussed what might be amiss and decided that Rowe was suffering from “the liver,” as the English called mild depression.5
On December 29, Hoover arrived at his office and picked up a letter dated the previous evening. It was from Rowe, marked private and confidential. It said that he was leaving London. He was also resigning as a partner in Bewick, Moreing and as secretary of one of the mining properties it managed, the Great Fingall Consolidated. Rowe was in deep trouble: “I forebore telling you before Christmas so as to leave a few days of peace.”6
Hoover picked up the telephone and learned from a hysterical Mrs. Rowe that her husband had told her the previous evening that he was ruined. He had said good-bye to the children, shaved his mustache, and vanished into the night from their home at Hyde Park Square with the additional disguise of an oversized pair of eyeglasses. He had left a second letter with instructions that it be conveyed to Hoover. This letter, written, like the first, in a hurried hand, explained that Rowe had suffered losses in stock market speculation and that he had tried to cover the shortfalls by forging and selling a quarter million dollars’ worth of stock in the Great Fingall. His fraud had been detected. The mine’s chairman had confronted Rowe on December 23, precipitating his flight. He claimed to have had “no dishonest intention” and to have suffered “the tortures of hell in my mind” over these affairs. “Dear Hoover,” he concluded, “forgive me. I meant well.”7
A dumbfounded Hoover wondered where to turn. Moreing, the man with the most at stake in the disaster, was out of town. Hoover would later write that Moreing was off hunting tigers in Manchuria when, in fact, he was in China smoothing over a lot of ill feelings in the wake of the Kaiping deal, and thus unavailable to Hoover in Bewick, Moreing’s moment of crisis.8
Hoover called a meeting of Bewick, Moreing’s lawyers and advisers, who gathered in the company’s offices late in the afternoon. In his usual matter-of-fact voice, Hoover read excerpts from Rowe’s letters, eliciting choruses of “I’ll be damned!” with each successive disclosure. Hoover would later claim to have decided at that meeting on behalf of the firm, and at the risk of Moreing’s wrath, to cover all losses suffered by outsiders due to Rowe’s misdeeds. He would always insist that the company had no legal liability for the forgeries and that its generosity stemmed from concern for its reputation and a sense of moral responsibility. In a cable to Moreing in China, however, he mentioned that he had received advice that the partners were liable jointly and personally for Rowe’s misdeeds, and that they were in danger of being “entirely ruined for the future and our firm destroyed.” Bewick, Moreing had no choice but to make good the losses.9
A notice was sent to the press announcing the forgeries and embezzlements as well as Rowe’s confession and Bewick, Moreing’s commitment to restitution. Hoover spent several days on the phone nursing brokers, businesses, and individuals affected by the crimes, promising to make them whole out of the goodness of his heart. To his relief, Moreing eventually cabled approval of the plans to compensate victims. There is no question that Hoover was shaken by the Rowe revelations. His career was on the line, as was the survival of the company he had paid $40,000 to join. Yet even with angry brokers breathing down his neck and the eyes of London’s financial community on him, he coolly suggested to Moreing that the Great Fingall was trading at an all-time low and that they might accumulate shares “with a view to recovering part of loss.”10
The Rowe affair was a minor sensation in the British papers. Police searched high and low for the absconding accountant. Market scolds tut-tutted at yet another financial scandal courtesy of the Western Australian mining scene. These were “the most horrible events which could possibly have happened to us,” said Hoover. Gloomy, exhausted, frustrated by the investigations and negotiations, Bert permitted Lou to drag him to Brighton for a weekend’s rest. They stayed at the fashionable Metropole, expecting to walk on the downs one day and play in the sand another. It rained and blew a freezing gale all weekend. They returned home a day early.11
The storm at Bewick, Moreing meanwhile cleared, thanks in part to Hoover’s efforts, the quick promise to cover all losses having played well in the press and in the mining fraternity. It was an expensive tactic, however, saddling the firm with financial burdens that would take years to clear. Hoover had to take on a share of the losses. His total indebtedness was now in the neighborhood of $300,000. A compensating benefit was that Rowe was written out of the partnership agreement, allowing Hoover a larger share in future profits. “I’ve still got position and opportunity to recoup,” he wrote his brother.12
He spoke too soon. A London broker named Edgar Storey brought suit against Hoover claiming that Rowe and Hoover had reneged on a promise to buy $100,000 in shares from Storey on joint account. The accusation implicated Hoover in Rowe’s crimes and threatened to sink his professional reputation. Hoover maintained that he knew nothing of Rowe’s promises to Storey but a jury found for Storey and awarded him $30,000. Facing bankruptcy and disgrace, Hoover appealed.13
In the midst of this struggle, another bolt struck Hoover and his partners, this one from out of the East. Almost from the moment their deal was signed, Detring and Chang had been complaining that the terms under which the Chinese Engineering and Mining Company had been transferred to Moreing and his various partners and managers were being breached, with Chinese shareholders excluded from meetings of the new corporation. They had also discovered that the new company had been secretly and unnecessarily saddled with a huge debenture, that hundreds of thousands of shares in the company had been distributed to members of Moreing’s syndicate for no cash consideration, and that the articles of association Moreing had registered in London made no provisions for Chinese management or other conditions of the memorandum negotiated by Hoover and Chang. During his visit to China, Moreing had tried and failed to assuage Detring and Chang with a promise of more shares.
Newspapers from Peking to London reported on the anger of the Chinese shareholders, with some opining that Moreing’s antics reflected poorly on all British businesses in the East. The British Foreign Office looked into the matter and determined that the deal was rotten. The diplomats had no sympathy for Chang, whom they considered a “notorious” adventurer, or for Detring, whom they described as “a fearsome scallywag.” One official wrote that in a fair world at least two of Chang, Detring, and Detring’s son-in-law (who had a small role in the affair), would have been shot in the Boxer uprising. “What makes [them] wild is that they thought themselves rather smarter than most people, and yet got themselves fairly had by a Yankee man of straw acting for Moreing.” The Foreign Office saw clearly that this man of straw, Hoover, had “fleeced” the Chinese shareholders. The whole thing, one envoy summarized, was “a case of rogues falling out.”14
All of this attention on the Chinese Engineering and Mining Company was troublesome for Chang. He came under pressure from his imperial masters to recoup the mines, or at least to negotiate a better deal for the Chinese. On May 7, 1903, his lawyers brought suit in a British court against C. Algernon Moreing, the firm of Bewick, Moreing, and the newly incorporated Chinese Engineering and Mining Company. Chang asked that the British court either enforce the terms of the memorandum under which the original Chinese Engineering and Mining Company was transferred or declare that the mines had been fraudulently obtained and nullify the agreement. Hoover was not a named defendant in the suit. Nevertheless, he was now a partner in the company and his fingerprints were all over the disputed deal.15
From winter through the spring of 1903, Hoover rose early for breakfast and worked hard all day, not stopping to eat again until he returned home, edgy and morose, for supper. His mind ranged frantically over his troubles and debts and all that had happened since he had left Stanford. It had been eight years of the hardest work and worry, and he had nothing but debt to show for it. He rightly blamed Rowe for some of his misfortune. He also kicked himself for not having returned to America earlier. There was a point in 1901 when he could have sold his shares in the Chinese Engineering and Mining Company for $250,000 and waved off Bewick, Moreing. He did the math and figured that even with his shareholdings and an annual income of $60,000 it would be two or more years before he got his head above water. In the meantime, the Storey and Chang suits dragged through the courts. It was all too much.16
Hoover had an extraordinary constitution, able to withstand enormous strain and constant exertion, even when he was at his most pessimistic. He could focus like a laser for days and weeks on a single point or, if the situation demanded, juggle dozens of problems simultaneously. But his extraordinary constitution gave way in May or June of 1903. He dropped everything and took a monthlong vacation on the French Riviera, where Lou treated him with pastries and cigars. He informed his brother of his collapse with a single line in a July letter: “I was ordered away by the doctor as the late jar had rather smashed my nerves but I am allright again and though we are compelled to draw in our horns a little we have hopes of getting on our feet again someday.”17
Lou continued to do her best to alleviate his troubles. At the end of a bad day, she would welcome him home, put his head on her lap, and apply ice to his fevered forehead. Ever practical, she fished out some of her scribblings from China and sent them around to magazines in hopes that an article would fetch a few extra dollars to lighten their financial load. She played bezique with him nightly in a vain effort to distract him. As she told her mother:
He is so active, mentally, that it keeps me more than busy thinking of something new to give him entertainment for a few hours. And of course if he realized it was done for that special purpose he would cease to be “entertained” at once. Such long stretches of London are not good for him at one time. There are such a multitude of things that can be done at the office that of course he is never satisfied unless they are all going just as fast as possible, and that keeps up too high a tension. He reads three or four hours in bed nearly every night so I don’t think it is good for him to spend the early part of the evening the same way. Consequently it is “up to me” to find the amusement—for he scarcely ever goes anywhere without me. He belongs to one of the nicest London clubs—and doesn’t go inside it once in three months. Tonight he is going to an engineers dinner…where Ambassador Choate was one of the guests. Last night we had four Germans dining with us. Tomorrow one of our Italian friends who made our recent little trip so interesting is coming. So we manage to be almost as cosmopolitan here as in China.18
What Lou didn’t tell her mother was that she was pregnant. She waited until she was almost due before breaking the news in order to keep her parents in Monterey. “It is too bad,” she apologized, “that so many things had to come together—all Bert’s troubles—the fact that he could not go to America now—that I could not possibly think of leaving him—that we will probably have to go away somewhere in the autumn so for economical reasons could not suggest your coming over for such a few weeks before then.” Lou gave birth to Herbert Charles Hoover Jr. on the morning of August 4, 1903.19
Hoover received more welcome news in the fall when an appeals court dismissed the Storey verdict against him on grounds that the plaintiff had failed to prove an understanding between Rowe and the defendant. Storey would appeal in turn to the House of Lords, unsuccessfully. The Lord Chancellor found “not a particle of evidence” to implicate Hoover.20
Around the same time, Rowe was nabbed in Toronto, where he had been working under an alias at a brokerage house. Canada had been good to him: the arrest occurred shortly before he was to have been made a partner. He was shipped back to London and sentenced to ten years in prison. Hoover sent checks from time to time to help support the Rowe children, who were being raised by their aunt, Mrs. Rowe having apparently followed her husband’s lead and disappeared.21
On his release after serving eight years, Rowe would write to thank Hoover and to suggest a meeting. He received the following response, along with a check for twenty pounds:
My wife and myself have done the same for the children that we should have done for any other under similar circumstances and I think your real indebtedness is towards your sister, few people of whose loyalty exist in this world.
I do not think any good could arise from a meeting between us for, when all is said and done, your actions caused me five years of absolutely fruitless work in the best portion of my life; nor do I see that we should have any further relations. I have no vindictive feeling in the matter and I shall be only too glad if by your future career you can reestablish your good name, and above all, give your children a proper position in the world.22
A month after he was born, Herbert Hoover Jr. was introduced to life on the jump. He was packed into a basket by his parents and hauled to Western Australia, along with his nurse. His father made a monthlong inspection tour of Bewick, Moreing mines and caught up with his reading aboard ships and trains. In this manner, he devoured Carlyle’s French Revolution, Gibbon’s The History of the Decline and Fall of the Roman Empire, and countless detective stories. “At times it seemed to me that I would exhaust all the books on earth,” he later said. “But the supply still holds out.”23
On Christmas Day, the family sailed for California, where Herbert Jr. performed for his grandparents before returning to London in February. Circumnavigation was a rare experience for any individual at the dawn of the twentieth century. Herbert Jr. had completed his first by the age of six months. He would squeeze in a second as a one-year-old.
The child’s father, meanwhile, had some success in repairing his firm’s finances. His exceptional performance as a manager had increased dividends at existing Bewick, Moreing properties and won new contracts to operate other mines. He was known in the goldfields for doing rigorous financial reporting, hiring top talent, and producing ore at an unusually low cost per ton. There was some exaggeration of his gains; for instance, Hoover was more aggressive than most mining operators in eliminating from his operating budgets anything that might be construed as a capital cost. He also had his share of setbacks, deals that never produced a dividend, and mines that failed to yield metal; he would either refuse to acknowledge the failures or blame them on others. His success and his firm’s progress were nonetheless indisputable. By 1904, Bewick, Moreing’s share of gold production in Australia had more than doubled to 50 percent, taking it a long way toward Hoover’s goal of monopolizing the goldfields. He estimated that the total market capitalization of the Australian mines under his control was more than $70 million.24
Now a major figure in one of the world’s richest mineral plays, Hoover was routinely invited onto the boards of companies active in the region. Journalists sought him out as an authoritative voice from the mining sector, and he was becoming increasingly adept at working the press. He cultivated mining correspondents at trade journals, the Economist, and the Financial Times, using them both to boost his profile and promote his stocks. He also picked up a pen himself from time to time and wrote pseudonymous commentaries on such topics as organizational excellence and the regrettable proliferation of “titled non-entities” and “pompous dignitaries” on mining boards. He aired his views on the inferior racial characteristics of nonwhite labor forces. He liked to argue for the ethical superiority of firms that did not speculate in shares, even though the Bewick, Moreing partnership agreement had recently dropped its oft-breached prohibitions on partners trading stock in the properties they managed. He made great use of letters to the editor, sometimes anonymously attacking his fellow directors, other times raising a straw argument with a letter under an assumed name and then responding, vigorously and righteously, in his own name.25
Not all of Hoover’s journalistic efforts were self-serving. Some were worthwhile contributions to professional issues—the training of engineers, the causes of speculative bubbles, and so on. Whatever his subject matter, Hoover’s tone was always businesslike. He knew his limits. He did not seek to be known as a personality. His intention was that his achievements and his status be recognized.
There was another reason for Hoover to keep burnishing his reputation, along with that of his firm: both remained under attack. In the spring of 1904, with the dust still settling from the Rowe defalcations and the Storey trial, and with Chang’s suit still hanging over their heads, Hoover and Bewick, Moreing were hit by two fresh debacles in Australia.
On May 25, the governor of Western Australia announced a Royal Commission that would investigate Hoover’s practice of bidding down wages by importing workers from Italy—a “dago influx” that had outraged newspapers and unions. And just as that commission was lining up some seventy witnesses, most of them hostile to Bewick, Moreing, one of the company’s major deals in the goldfields was going horribly wrong. Hoover and Moreing had entered into an agreement to manage the Great Boulder Perseverance Mine, one of the legendary pits on Australia’s Golden Mile. In order to get the valuable management contract, they had agreed to a reckless kickback scheme with the mine’s chairman, and they were so anxious to close that they did not commission an independent survey of the mine, which turned out to contain a fifth of the recoverable gold claimed for it. This shortfall and the financial chicanery were soon exposed, the company’s share value collapsed, and another Royal Commission was launched. The cumulative effect of the mounting lawsuits, investigations, and financial calamities broke Hoover once again.26
“This finds me enroute to Johannesburg,” he wrote his brother from the first-class saloon of the steamer Carisbrook Castle on July 21, 1904. He enumerated his burdens, including the rapid expansion of Bewick, Moreing’s business, the Rowe frauds, and the Great Boulder misrepresentations. They had “all been too much for my nerves. I found myself slipping memory and unable at concentration of thought—and being able to sleep but 3 to 5 hours the Doctor ordered me off.”27
It is difficult to say what was happening to Hoover in these breakdowns. He was not forthcoming on the subject. He paid little attention to his physical well-being, and still less to his emotional life. He was not one for quiet hours in close examination of his feelings or his conscience, let alone for recording his observations in letters or diaries. He used work, reading, and ceaseless activity to keep from being trapped alone with his thoughts and emotions.
He seems even to have lacked the vocabulary to identify his problems. His language in his reports to his brother is stilted, even by Hooverian standards—“unable at concentration of thought.” He does mention doctors, which suggests that he preferred to emphasize the physiological dimensions of his problems. There was no shame in a man’s machinery giving out under the pressures of work. Yet he also attributes both crashes to “nerves.” A case of nerves by plain definition meant that he was overcome by worries, anxieties, or depression. This is as close as Hoover would ever come to admitting emotional frailty. It is all he would ever say about it.28
Lou, knowing him well, encouraged him to keep busy and avoid introspection. She understood that inactivity threw him back upon his internal resources, with dark results. He would brood, find the worst in everything, and get lost in forebodings. “If you want to get the gloomiest view on any subject on earth,” she once said, “ask Bert about it.” Hoover did have much to brood about in the lead-up to these breakdowns. It seems likely that his mind was playing out all possible outcomes and that by dwelling upon the more catastrophic of them he had convinced himself that the world was crumbling beneath him.29
He spent most of the first twelve days of his voyage to Cape Town under the covers in his cabin. By the time the steamer docked, he appears to have largely recovered. He kept a busy schedule of visits to South African mining properties, meetings, and dinners. He turned thirty along the way.
Hoover’s problems, of course, were waiting for him on his return. The Royal Commission on Immigration of Non-British Labour reported in November that only one in twenty-five jobs went to an alien, although it did find concentrations of foreign workers in certain mines managed by Bewick, Moreing. The commission believed that they were hired for their servility in an effort by the company to evade government labor policies. The report recommended that the alien workforce at most mines be capped at one-seventh of the total. As the author and enforcer of Bewick, Moreing’s Australian labor policies, Hoover bore the brunt of the implicit criticisms in the report. He was also ultimately responsible for safety levels in his properties. On several occasions between 1903 and 1905, Bewick, Moreing was cited for dangerous and unhealthy working conditions. Workers were said to be unduly exposed to dust and fumes and falling rock. A 1905 Royal Commission on the Ventilation and Sanitation of Mines was critical of most operators in the region, and it found that the air quality at the Sons of Gwalia was “notably bad.” That the Western Australian parliament was launching six or eight royal commissions a year on subjects as trivial as whether to use stone or stucco in the building of new law courts takes some of the sting from these findings. They did, however, challenge the integrity of Hoover’s operations and raise questions about how he obtained his stellar results.30
Tough as things were in Australia, it was the highly publicized Chang suit that posed the greatest ongoing threat to Hoover’s reputation, and he knew it. Tortured by delays in the preliminaries, he let his distress show by complaining to the court that the plaintiff had made “the most serious allegations against myself personally” yet seemed in no hurry to bring them to trial.31
Chang Yen-Mao did finally engage Bewick, Moreing and Company, and Charles Algernon Moreing, before Mr. Justice Joyce of the Chancery division of the High Court of Justice on January 17, 1905. The trial ran sixteen days and captivated the London press. It involved the largest transfer of property in the history of China, including some $50 million worth of high-grade coal (Hoover’s own estimate). Adding to the drama, as Hoover would later lament, was the colorful figure of Chang, a mandarin of the third button, parading in his dress silks and cap as “an innocent Asiatic.”32
Chang, among the first witnesses called, did not take the oath usually administered by the courts but instead stood erect, held up his right hand, and made an affirmation of his own device. He was seated on a chair at the bench, with his interpreter in the witness box. According to press reports, Chang gave his evidence “with considerable animation and much gesture, and the fluency of his language constituted a thorough test of the capacity of the interpreter.” He recounted his arrest at Tientsin and explained his motives in pursuing joint British-Chinese oversight for his mines. He described his heated meetings with Hoover and Detring, and the threats and insults made by Hoover, which he deemed too obscene to repeat at trial. He expressed disappointment that Moreing et al. had ignored the terms of their February 19 memorandum, the key issue at trial. He and Detring both objected to hundreds of thousands of shares having been given away and the company being burdened with a large debenture.33
Hoover was on the stand for two days of examination and cross-examination, speaking throughout in dull tones and clipped sentences, looking no one in the eye. He sang a new tune under oath, as did everyone in Moreing’s circle. He acknowledged that the February 19 memorandum was binding, and claimed that he had done his best to uphold the document, including its joint-management provisions. When confronted with a later letter to Moreing detailing plans to free himself of “any interference from the Chinese board,” he said that he was merely suggesting that the manager would have control of day-to-day operations subject to oversight by the Chinese board. Asked to explain a further reference to the Chinese board as a farce, he said he meant that the board might be improved. His testimony was disingenuous. The statements highlighted by the prosecutors were consistent with Hoover’s earlier comments to Moreing that without absolute control of the Kaiping mines, the game was not worth the candle. Hoover also admitted on the stand to having harsh words with Chang. He excused his language on the grounds that the mandarin seemed at the time to be reneging on their deal.34
On March 1, Justice Joyce found for Chang, emphatically. The February 19 memorandum, he said, was binding on both parties. The defendants had declined to recognize it as having any force or to abide by its provisions, yet they somehow believed themselves entitled to possession of the property. This amounted to “a flagrant breach of faith” that would not be tolerated under the laws of any country. The judge seemed appalled that Hoover “actually took possession of some of the title deeds of the property by main force.” He saw plausible grounds for contending that the Chinese Engineering and Mining Company Ltd. had been defrauded of nearly 425,000 shares by the Europeans, and suggested the plaintiffs might have further recourse to the law on this point.35
Moreing and the defendants were ordered to either honor the February 19 memorandum or see the transfer of the company set aside on grounds that it had been fraudulently obtained. Costs were awarded to Chang. Joyce cleared the mandarin of any impropriety or bad faith, “which is more than I can say for some of the other parties concerned.” Hoover would later obtain and apparently destroy every copy of the court minutes he could find (one set has survived).36
Hoover now began looking for the exit at Bewick, Moreing, prompted in part by the firm’s bad odor. He had abided Moreing’s sharp practices in the early years of his career, displaying a high tolerance for scoundrels: “God deliver me from a fool,” he once wrote. “I would rather do business with a rogue any day if he has brains.” But he was now in his thirties, a husband and a father, and his concern for his reputation was catching up to his hunger for money and position, and the blots on his record were increasingly difficult to hide. It was best to leave Moreing with the mess they had made and strike out on his own.37
Another reason to want out was Hoover’s confidence in his ability to thrive outside Moreing’s orbit. He knew how to make money in mining, and it had occurred to him that he could get by on his own without having to take orders from anyone. Hoover tried to sell his stake in Bewick, Moreing but finding that he was a year or two from getting the price he wanted, he continued with his life of toil and travel, and used his time aboard ships to undertake what he later called a thorough “re-education of myself,” reading by his count thousands of volumes on history, economics, politics, government, and sociology. It took the company until early 1907 to clear its obligations from the Rowe embezzlements. Hoover opened a fine bottle of claret to celebrate.38
He had another opportunity for a toast on July 17, 1907, with the birth of his second son, Allan Henry. Within weeks, in fine Hoover tradition, the child was packed into a basket and carried off on his first transoceanic voyage.* Not long after the family’s return to London, Hoover resumed his efforts to sell out of Bewick, Moreing, a project made difficult by the fact that he had signed a ten-year commitment to the firm in 1903. He asked Moreing to allow him to retire early for reasons of ill health attributable to continuous overwork. He gave his precise ailment as “consumption of the brain,” a type of fever considered a legitimate cause of death at the time.39
Moreing did not believe for a moment that Hoover’s brain was rotting or that he had any intention of retiring. Moreing knew that Hoover was an excellent engineer and a shrewd operator, relentless, ambitious, quick to exploit opportunities and adopt new technology, always hiring the best people, increasingly adept at finance, and well connected in London’s capital markets. He had all the makings of a fierce competitor.
Hoover was told that he was welcome to sell his shares to another engineer, William Loring, provided that he sign a restrictive covenant. The covenant was a fat document with extensive clauses precluding Hoover from competing directly or indirectly in any mining or engineering activity in the British Empire or anywhere else Bewick, Moreing had interests without the express written consent of Bewick, Moreing. The covenant would apply for a period of ten years from the date of June 30, 1908. In case Hoover saw any wiggle room in the long paragraphs in which these restrictions were detailed, the document added:
The Covenants in this Clause hereinbefore contained shall be read as repeated nine separate times with nine several periods of nine, eight, seven, six, five, four, three, two, and one years respectively inserted in each of the said covenants instead of the period of ten years from the 30th June 1908.40
Moreing probably knew that Hoover liked to boast that no contract had yet been written that he could not escape.
Hoover signed the restrictive covenant, received $150,000 from Loring for his stake, and was permitted to stay as a director of various Bewick, Moreing firms. He almost immediately validated Moreing’s caution. Freed from the partnership, Hoover retired for exactly three weeks to the resorts of Brighton in the company of his family before returning to the city and setting up offices at 62 London Wall, the same prestigious address as Bewick, Moreing. Throughout the autumn, he took on two new directorships and worked like a fiend to establish himself as an independent mining financier, organizing companies and directing capital flows, mainly although not exclusively in regions outside of those occupied by his old firm. Moreing watched him warily.41
* True to another family tradition, Allan was named after his father’s favorite uncle, Allen, with the spelling confused. Hoover himself would use both spellings interchangeably.