Yellow Kid" Weil

With the opening of the racing season, I tired of my saloon business and disposed of my interest. I expected to return to the tracks and continue as before. But I had forgotten about Madame Cleo and her bitterness toward me. She was not one to forget. To her, $2,500 was not a trifling sum.

The men put on my trail by her police-official friend caused me considerable difficulty in trying to sell “inside tips.” My operations at the track were considerably restricted.

Meanwhile the detectives had been contacting some of my victims. It was not long before they had enough evidence to take the case before the racing authorities. On the testimony of Madame Cleo and others, I was ruled off the turf for life.

This meant that I had to dispose of my horses. That was not difficult to do since several of them had developed into winners. However, the ruling didn’t prevent me from making wagers at the tracks.

I had met a fellow of my own age named Romeo Simpson. His father was a wealthy Chicagoan who owned considerable income property in the Loop. Romeo was a playboy and had no more scruples than I had. After I was ruled off the track I thought up a scheme for making money and suggested that he go in with me. My main reason for asking him was that I needed his father’s reputation and references behind our enterprise.

I held nothing back from Romeo. I told him the whole scheme and he knew from the start that it was not exactly honest. But to him it was a lark and he readily consented to go in with me.

I wanted to rent a suite of offices in the Woman’s Temple, one of the most exclusive buildings in Chicago at that time. (A good address is an asset to any business venture.) Diblee and Manierre, who managed the Woman’s Temple, had made it almost inaccessible to the average business man.

At the start, Romeo and I pooled our resources. We opened a substantial account at the Standard Trust and Savings Bank. We engaged temporary offices in the Flatiron Building and set up our business: SIMPSON AND WEIL, Bankers and Brokers.

Then we made application to Diblee and Manierre for space in the Woman’s Temple. Romeo’s father was delighted at the thought that his wayward son was going into business and let us use his references without stint. All the references were good because of the father’s position and reputation.

Diblee and Manierre made a thorough investigation and finally advised us that the application had been approved. We took a suite occupying half of a floor and moved in. It was like having a desk in the Bank of England - being on intimate terms with the old Lady of Threadneedle Street.

We engaged an advertising agency to place advertisements for us in periodicals and newspapers. We covered every section of the country except the immediate vicinity of Chicago. We didn’t want any business from the Chicago area. The ads read:

A LITTLE STORY OF A BIG SUCCESS
How $100 Makes $1,000
For details write
SIMPSON AND WEIL
Bankers and Brokers
Woman’s Temple Building
CHICAGO, ILLINOIS

I’d always known that many people were seeking easy money. But until the replies began to come in I never realized how vast this number was. The volume was tremendous. Anticipating inquiries, we had prepared an elaborate brochure, “The Source of a Tip.” In this, we explained how a tip originated (a tip on a fixed horse race), how a tip often was only a rumor, and how we, as owners of many of the nation’s finest horses, could furnish genuine information better than anybody else.

We listed two groups of horses: Horses We Formerly Owned and Horses We Now Own. The first was a bunch of dogs. But the second included many of the country’s top winners. We had fixed that by making deals with the owners of these horses. For a consideration they had transferred ownership of the horses to Simpson and Weil, and we had transferred ownership back to them. In our vaults we always had papers to prove that we owned the horses we claimed as ours.

The brochure further explained how we, as the owners of the most consistent winners, were in better position than anybody else to know just when these horses would win and what the odds would be. We proposed that the investor send us a hundred dollars to open an account. We would place bets for him on sure winners, using all or any part of his money. Every time we placed a bet, we would make a report of the amount placed and on what horse. We would mail the report immediately so that the investor could check with the postmark to determine that his bet had actually been placed before the time of the race.

We sent one of the brochures to everybody who answered our ad. In those days $100 was a lot of money and we hardly expected to find so many who had that much with which to speculate. But soon our mail was overwhelming. Remittances for $100 poured in. We had to take more space and enlarge our quarters. We put up cages and engaged cashiers and bookkeepers. To all outward appearances we had a real and prosperous bank.

Here is the way we worked. We would put Mr. Smith (who had an account of $100 with us) down on a ten dollar bet on a horse that had won. As soon as we knew the horse had won, we mailed the report to Mr. Smith. Perhaps he checked the postmarks, but he probably didn’t. The main thing he did was to check back with the race results and learn that his horse had won.

We kept Mr. Smith’s account for a month. At the end of the month, we sent him a remittance for $125, with this explanation:

“We are returning your original investment plus the earnings. We regret that the volume of our business makes it impossible to handle such small accounts.

We did the same thing to every account. Our letters only whetted the investor’s appetite. If he had more money, he immediately wrote in to ask how much he would have to invest to have us handle his account. We replied that we could handle nothing under $500. The response to this was so great that we soon raised the minimum to $1,000. We had a few inquiries about taking larger investments - $5,000 or more. I usually went to see these people in person.

Actually what we were doing was paying dividends on old accounts from the monies we received from new accounts - borrowing from Peter to pay Paul. The same scheme was used very successfully by some of the biggest swindlers in history. One man whose name I shall not mention had a few international reply coupons to show as physical assets and another man whose name I better not mention had a few power plants. But in both cases they depended on new money to pay dividends to the old accounts. We too had some assets.

Chief among these was a horse-player who had made a study of horses and their past performances. We engaged him as our expert handicapper for he could predict winners pretty accurately. I sometimes used a customer’s money to bet on his advice.

For example, he would figure out a good bet at 3 to 1. I would take $1,000 of a client’s money and bet it on the horse. The winnings would be $3,000. But I would write the customer that the horse had paid even money. My profit would be $2,000, the client’s would be $1,000. I made enough of these bets so that anyone who chose to investigate could see that we were actually doing what we claimed in our advertising.

But as soon as we had raised the minimum amount to $1,000, we instituted a service charge of ten dollars a month for each account. This eliminated the small fellows and the number of our accounts finally narrowed down to 400 large investors. From these alone we had an annual revenue of $480,000. I don’t recall the total amount invested, but we continued to use capital funds to pay big dividends. We seldom reported to an investor that his horse had failed to win. But occasionally we reported a loser to every client. The reason for this was purely psychological.

Perhaps I should explain that in those days there was no way the client could check up on how much his horse had won. The win, place, and show horses in each race were published in sport sections of the newspapers, but there was no pari-mutuel system. The only thing the customer could check on was the result. He could learn that his horse had won, but he had to take our word on the pay-off.

Our enterprise became so prosperous that in time we came to refer to it as the “Get-Rich-Quick Bank.” Both Romeo and I were getting rich quickly and I can’t tell you how much we made. It was the same old story of easy come, easy go. We spent a great deal. It was not at all uncommon for me to squander as much as $1,000 in a night’s festivity.

Nick Langraf had a bookmaking establishment in the basement of Bathhouse John Coughlin’s establishment. Diagonally across the street was the saloon of Powers and O’Brien, where a man I recall now only as Andy also made book. Next door was a barber shop. The barber chairs were in the front. In the rear of the shop was a large vacant space that extended to the rear of the building. In the rear was a freight elevator no longer in use.

Nick had a prosperous business, fully equipped with Western Union wire service. One day a fellow named “Fats” Levine came to me and suggested that we go into business “making book.” He pointed out the large vacant space in the rear of the barber shop.

Then he outlined his plan, and I agreed to go in with him. All telephones were then of the wall type. We scouted around and finally found a telephone, which we “borrowed.” Fats Levine affixed it to the wall (though it wasn’t connected) and we were ready for business.

I stood at the basement entrance to Nick Langraf’s place and told all who were about to enter: “Nick is having his place redecorated and is temporarily closed. You can make your bets in the rear of the barber shop across the street.”

I succeeded in steering Nick’s customers to our makeshift room in the back of the barber shop. They went in and placed their bets with Fats Levine, who stood at the phone and supposedly received the results. Of course nobody ever won. I saw to that. Andy, the bookmaker in Powers and O’Brien, got the results by ticker tape, and it was his custom to pass the tape along to the barber shop.

I acted as Andy’s messenger. But between the time I left him and my arrival in the barber shop I cut the tape and switched it in such a way that the winning horse always appeared to be second or third, while the place or show horse appeared to be the winner. Anybody who lost a bet to Fats had only to step up front to the barber shop to check up.

We had one particularly good customer. He was an iceman who had the entire Loop territory. His commissions were high and it was not uncommon for him to bet up to $1,000 a day. He never questioned the results until one day when he happened to go into Powers and O’Brien’s for a drink after he had lost $800 to Fats. To his amazement he saw that Andy had posted his horse as the winner.

He came storming back into our place where Fats stood in front of the telephone with the receiver in his hand. He grabbed Fats’ collar and demanded an explanation.

Fats started to explain that there had been a slight mix-up with the ticker tape. The iceman was ready to accept this explanation. But in earnestly trying to convince him, Fats stepped away from the phone, the receiver in his hand. The phone was attached only by a nail, and it came tumbling down.

Fats dropped the receiver and made a dash for the rear. I followed. The only exit was the freight elevator, which was not in operation. It stood empty. We scrambled to the top and began climbing up the elevator cables. We almost reached the next floor when the cables became greasy. We got the grease all over our hands and were stopped. We held on for a few moments, then gradually began to slip.

The iceman was a big, husky brute. He waited for us with a murderous gleam in his eyes. As soon as we were within reach, he grabbed us, pulled us down and, handling us as if we were toys, cracked our heads together. Then he gave us both a good beating, recovered his money, and left.

That ended our business. When Nick Langraf heard the story it answered the question in his mind: what had happened to all his customers?

For two weeks after that we didn’t go near the Loop. The incident was the occasion for a lot of fun in the saloons and poolrooms in the vicinity of Bathhouse John’s. At that time Admiral Dewey was the most talked-of figure of the day. It was the custom for the Daily Inter-Ocean to send news bulletins relating to the war to the various Loop establishments. One such bulletin served as a model for the ribbing we took:

Until the days of the Get-Rich-Quick Bank, I hadn’t seen Coyne, though I knew he had become postmaster. One day his superintendent of delivery, Colonel Stewart, called at my office. The postmaster was curious to know what sort of business brought such a tremendous amount of mail.

Of course, I didn’t tell the postal representative all that we were doing. But I did give him the story of how we were able to get absolutely reliable inside tips. This was reported to Coyne, who came to see me.

He was enthusiastic about the possibilities and offered to make an investment. I agreed to take him in as a silent partner. He didn’t know that the fat dividends we were paying were skimmed from the money that was constantly coming in.

This money continued to flow in steadily. But both Romeo and I were so intent on having a good time that we became remiss in the matter of paying the investors. We began to get some beefs.

Then one day the mail dwindled to a trickle. For several days there was practically none. I couldn’t understand it, until my secretary told me what was happening. Romeo had become involved with several women. He had mistresses in half-a-dozen different places and was supporting them lavishly.

I was in a quandary. I called Fred Coyne and told him what had happened. Coyne decided to withdraw and advised that I do likewise.

Acting on this advice, I engaged a suite at the Stratford Hotel, taking my secretary with me. I said nothing to Romeo, but soon the shoe was on the other foot. I was getting all the firm’s mail. Romeo, who had said nothing before, now wondered what had happened to our business.

“Why the sudden concern?” I inquired. “You’ve spent very little time around here for weeks. If you had been on the job, you would have known that we haven’t been receiving many checks. Frankly, Romeo, I think we’re through.”

There wasn’t much Romeo could say to this. He had devoted very little time to the business. The complaints that began to come in were against me, not him. Those complaints were all from the wealthier investors - the little fellows had been paid off.

And the heavy investors were the ones who remembered me. In every case I had gone to visit them when I learned of their interest and ability to invest large sums.

Both Romeo and I had profited. Besides handsome salaries, we had reaped large dividends for the special benefit of Simpson and Weil. Romeo, who continued to be a playboy even after we entered the business, had squandered all his share.

I had spent plenty too. But being the active partner, I had less time to devote to amusement and managed to save a tidy sum.

Finally the complaints got into the hands of the police. I decided that an ocean voyage would be good for me. I told my wife I was going to Paris on business.

I spent several months in Paris having a good time. In those days no passport was required and anybody who had the price of a steamship ticket could go abroad. I had learned German from my father and French from my mother. I now had an opportunity to put both to good use, particularly French.

The nearest approach I made to business was in observing how the French loved the dollars they took from wealthy American tourists. A number of Americans I ran into used Letters of Credit to obtain funds in Paris. I learned all I could about Letters of Credit and later put this knowledge to profitable use.

When my funds became depleted I decided to return to Chicago. I felt enough time had elapsed to allow the investors in the Get-Rich-Quick Bank to cool off and that it was safe for me to go back.