My Adventures with Your Money

The Rise and Fall of Maxim & Gay

The place was New York. The time, March, 1901. My age was thirty. My cash capital, tightly placed in my pocket, was $7.30, and I had no other external resources. I was a rover and out of a job.

Since August of the year before I had been loafing. My last position, seven months before, was that of a reporter for the New Orleans Times-Democrat. My last newspaper assignment was the great Galveston cyclonic hurricane in which 15,000 lives were lost and $100,000,000 in property was destroyed. I covered that catastrophe for the New York Herald and other journals as well as for the New Orleans newspaper. It was a "beat" and I netted a big sum for a few days' hard work, but the money had all been spent for subsistence.

At the corner of Fortieth Street and Broadway I met an old-time racetrack friend, Dave Campbell. His face wore a hardy, healthful hue, but he bore unmistakable evidence of being down on his luck.

"Buy me a drink," he said.

"I've got thirty cents in change and I must have a cigar," I answered, "and you know I like good ones."

"Well, I'll take a beer," he said, "and you can buy yourself a perfecto."

No sooner said than done. The cigar and the drink were forthcoming. We sat down. It was a café with the regulation news-ticker near the lunch counter.

"Do you still bet on the horses?" asked Campbell.

"No, I haven't had a bet down in more than a year," I answered.

"Well, here's a letter I just received from Frank Mead at New Orleans, and it ought to make you some money," he said.

"There's a 'pig' down here named Silver Coin," the letter said, "that has been raced for work recently. I think he's fit and ready and that within the next few days they will place him in a race that he can win, and he will bring home the coonskins at odds of 10 to 1."

I had seen letters like that before, but my interest was aroused. I picked up a copy of the New York Morning Telegraph from the table. Turning the pages, I noticed a number of tipsters' advertisements, all claiming they were continually giving the public winners on the races.

THE BIRTH OF AN IDEA TO COIN MONEY

"Do these people make money?" I asked Campbell.

"Yes, they must," he answered, "because the ads have been running every day for months and months."

"Well, if poorly written ads like these can make money, what would well-written ads accomplish, and particularly from an information bureau which might give real information?" I queried. A moment later the ticker began its click, click, click.

"Here come the entries," said Campbell.

He went to the tape and ejaculated, "By Jiminy! Here's Silver Coin entered for to-morrow."

The coincidence stirred me.

"I've got an idea for an advertisement," I said. "Get me a sheet of paper."

It was supplied. I wrote:

Bet Your Last Dollar On

SILVER COIN

To-day

At New Orleans

He Will Win At 10 to 1

And then I faltered. "I must have a name for the signature," I said.

I picked up the newspaper again and turned to the page containing the entries for that day at the New Orleans races. A sire's name was given as St. Maxim.

"Maxim!" I said. "That's a good name. I'll use it. Now for one that will make euphony."

"Gay!" said Campbell. "How's that? It's sporty."

Thereupon I created the trade-mark of Maxim & Gay.

In a postscript to this advertisement I stated that the usual terms for this information were $5 per day and $25 per week, and that the day after next Maxim & Gay would have another selection, which would not be given away free.

"Maxim & Gay" were without an address. Half a block away on Broadway, at a real estate office, we were informed that upstairs they had some rooms to let. I engaged one of these for $15 a month-no pay for a week. Two tin signs were ordered painted, bearing the inscription, "Maxim & Gay." One was placed at the entrance of the building and the other on the door upstairs. The sign-painter extended credit.

Before bidding me adieu, Campbell exclaimed of a sudden:

"By golly! I can't understand that scheme. How can you make any money giving out that Silver Coin tip for nothing?"

"Watch and see!" I said.

Around to the Morning Telegraph office, then on Forty-second Street, I went.

"Insert this ad and give me $7 worth of space," I said, as I shelled out my last cent.

When the advertisement appeared the next morning, its aspect was disappointing. The space occupied was only fifty-six agate lines, or four inches, single-column measure. It looked puny. Would people notice it?

That afternoon Campbell and I took possession of the new office of Maxim & Gay. Luckily, a former tenant had left a desk and a chair behind, in lieu of a settlement for rent. In walked a tall Texan.

"Hey there!" he cried. "Here's $5. It's yours. Keep it. Answer my question, and no matter what way you answer it, it don't make any difference. The $5 is yours."

I looked up in amazement.

"Give me the source of your information on Silver Coin," he said. "I bet big money. If your dope is on the level, I'll bet a 'gob.' If it ain't, your confession will be cheap at $5, which will be all the money I'll lose."

I showed him the letter from Frank Mead.

"That's good enough for me," he said, turning on his heel.

Silver Coin won easily at 10 to 1.

The betting was so heavy in the New York pool-rooms that, at post time, when 10 to 1 was readily obtainable at the race-track, 6 to 1 was the best price that could be obtained in New York. It is history that the New York City pool-rooms at that time controlled by "Jimmy" Mahoney were literally "burned up" with winning wagers. Pool-room habitués argued it thus: "If the tip is not 'a good thing,' what object in the world would these people have for publishing the ad? If the horse loses, the cost of the advertisement is certainly lost. The only way they can win is for the horse to win." It was good logic-as far as it went.

THE HIGHER MATHEMATICS OF THE OPERATION

But it was really sophistry. If the horse lost, the inserter of the Maxim & Gay advertisement would be out exactly $7. If the $7 was used to bet on the horse, the most that Maxim & Gay could win would be $70. I was taking the same losing risk as the bettor, with a greater chance for gain. By investing $7 in the advertisement, it was possible for me to win much more money from the public by obtaining their patronage for the projected tipping bureau.

I recall that the experimental features of the advertisement appealed to me strongly and struck me as being a splendid test of the possibilities of the business. If the horse won and there were few responses to the advertisement it would be convincing on the point that there was no money in the tipster branch of the horse-racing game. I argued that if the racing public would not believe that an Information Bureau was what it cracked itself up to be, in the face of a positive demonstration, how could it be expected to believe the lurid claims of the fakers whose advertisements crowded the sporting papers daily and in which they claimed after the races were run that they named in advance the winners at all sorts of big odds?

The next morning about ten o'clock, Campbell called at my home and said that he had received another "good thing" by telegraph from Mead and that the name of the horse was Annie Lauretta, with probable odds of 40 to 1.

"Jiminy!" he exclaimed. "If we only get a few customers to-day and this one wins, what will happen?"

Leisurely we walked to the office. "If we get ten subscribers to-day to start with, we'll make a fine beginning," I said.

As we approached the Hotel Marlborough, which is opposite the building on Broadway in which the Maxim & Gay Company had its modest little office, our attention turned abruptly to a crowd of people who were being lined up by half a dozen policemen.

"What theater has a sale of seats to-day?" Campbell asked.

"Don't know," I answered.

As we approached the office, we found that the line extended into our own office building. As we ambled up the rickety stairs, we passed the crowd in line, one by one, until we discovered, to our great astonishment, that the line ended at our door.

We turned the key, walked in, locked the door, and stood aghast.

Holding up both hands, I gasped, "In heaven's name, what have we done?" I was appalled.

"Give 'em Annie Lauretta," cried Campbell.

"But suppose Annie don't win," I expostulated.

"Smokes!" exclaimed Campbell. "Are you going to turn down all those $5 bills?"

"Let's see that telegram," I faltered.

I perused it over and over again.

"Mead's judgment on Silver Coin is good enough reason to warrant advising people to put a wager on another one of his choices," Campbell argued. I agreed.

How to convey the information in merchantable form was the next question. A typist in the Hotel Marlborough, across the way, was sent for and asked to strike off the name "Annie Lauretta" 500 or 1,000 times on slips of paper. Envelopes were bought and a typed slip was placed in each. The line increased until it was a block and a half long.

When all was ready, the door was opened. Campbell passed the envelopes out as each man handed me $5. I stuffed the money in the right-hand drawer of the desk, and when that became choked, I stuffed it in the left-hand drawer. Finally, the money came so thick and fast that I picked up the waste-paper basket from the floor, lifted it to the top of the desk and asked the buyers to throw their money into the receptacle. When a man wanted change, I let him help himself.

For two and a half hours, or until within fifteen minutes of the calling of the first race at New Orleans, the crowd thronged in and out of our office. When the last man passed out we counted the money and found the day's proceeds to be $2,755.

"What will we do next?" asked Campbell. "What's my job, and what do I get?"

"How much do you want?" I asked.

"Ten dollars a day," he said.

Thereupon he got possession of the $10 and he admitted it was more money than he had seen in a month.

"What will we do next?" he repeated.

"Let us take a walk," I said. "Lock the office until after the fourth race, when we see what Annie Lauretta does."

We hied ourselves to a nearby resort and stood by the news ticker to see what would happen to Annie. It was half an hour since the third race had been reported.

"Fourth race-tick-tick-tick," it came. "A-Al--,"

"We've lost!" I cried.

"A-AL-ALPENA first."

There was grim silence.

"Tick-tick--,"

"Here she is!" yelled Campbell.

"A-N-N-I-E LAURETTA second-40-20-10" (meaning that the odds were 40 to 1, first, 20 to 1, second, and 10 to 1, third, and that those who had played "across the board" had won second and third money at great odds).

I boarded a Broadway car, rode down to the Stewart building and rented one of the finest suites of offices in its sacred purlieus. I ordered a leading furniture dealer to furnish it sumptuously. At night I walked over to the Morning Telegraph office, laid $250 on the counter, ordered inserted a flaring full-page ad. announcing that Maxim & Gay had given Annie Lauretta at 40, 20 and 10, second, and previously Silver Coin at 10 to 1, won, and were ready for more business.

A telegram was sent to Frank Mead, instructing him to spend money in every direction with a view to getting the very best information that could be obtained from handicappers, clockers, trainers and every other source he could reach. Mead continued to wire daily the name of one horse, which we promptly labeled and thereafter advertised daily as "The One Best Bet." Soon "One Best Bet" became a term to conjure with.

The success of this enterprise was phenomenal. In the course of two years it earned in excess of $1,500,000. There were some weeks when the business netted over $20,000 profits. At the height of its career, in the summer of 1902, at the Saratoga race meeting, when the pool-rooms in New York were open, our net profits for the meeting of a little less than three weeks were in excess of $50,000.

We established an office in Saratoga and our average daily sales on race days were 300 envelopes at $5 each. In New York the average was just as large, and, in addition, we had a large clientele in distant cities to whom we sent the information by telegraph. The wire business, in fact, increased to such an extent that it became necessary to call upon the Western Union and Postal Telegraph companies to furnish our office in the Stewart building with direct loops.

I spent the money as fast as I made it. I believed in our own information and made the fatal error of plunging on it. My error, as I afterwards concluded, was in not risking the same amount on every selection. Had I done this, I would not have suffered serious losses. The trouble was that every time a horse on which I wagered won, I was encouraged to bet several times as much on the next one, and by doubling and trebling my bets, I played an unequal game.

The expense of gathering this information within a few weeks increased to upwards of $1,000 a week, and it was not only our boast, but an actuality, that the Bureau did really give more than value received.

Undoubtedly, the evil of the venture was the gambling it incited; but the effort to secure reliable information was honest, and what young man of my age and of my experiences, having indulged in a lark of the Silver Coin variety, could withstand the temptation of seeing the thing through?

Among the leading patrons of the Maxim & Gay Company were soon numbered important horse owners on the turf, leading bookmakers and many leaders of both sexes in the smart set. Maxim & Gay made it a rule to sell no information of any kind to minors and often excluded young men from the offices for this reason.

HOW "THE ONE BEST BET" WAS COINED

Our methods of advertising were unique. We used full pages whenever possible, and it was a maxim in the establishment that small type was never intended for commercial uses. We used in our big display advertisements a nomenclature of the turf that had never before been heard except in the vicinity of the stables, and we coined words and phrases to suit almost every occasion. The word "clocker," meaning a man who holds a watch on horses in their exercise gallops, was original with us, and has since come into common use, as has the phrase, "The One Best Bet," which we also coined.

It was our aim, in using the language of horsemen, to be technical rather than vulgar, the theory being that, if we could convince professional horsemen that we knew what we were talking about, the general public would quickly fall in line.

One morning we were alarmed to see in the Morning Telegraph, on the page opposite our own daily effort, the advertisement of a new tipster who called himself "Dan Smith." Dan went Maxim & Gay "one better" in the use of race-track terminology. He evidently employed a number of negro clockers, for the horse lingo which he used in his advertisements smelled of soiled hay and the manure pile. It was awful! But it made a hit with race-goers, and before a week had passed we recognized "Smith" as a dangerous competitor.

We were loth to believe that the use of this horsy language was entirely responsible for Smith's success, for we knew that his tips were not so good as ours. We investigated. His trick was this: In the sheet that he sent out to his customers, he would name for every race at least five horses as having a chance to win. He advised his clients, in varying terms, to bet on every one of them, and if any one of them won, he would print next morning what he had said on the preceding day regarding the winner alone, leading the public to believe that the only horse he had fancied was the actual winner.

I decided to organize another Bureau to knock out Dan Smith. The intention was "to go" our competitor "a few better" in the use of vulgar horse-racing colloquialisms and exaggerated claims, and thus nauseate the betting public and "put the kibosh" on Dan. We created a fictitious advertiser whom we named "Two Spot," and the next morning there appeared at our instigation in the Morning Telegraph a large display advertisement, headed substantially as follows:

TWO SPOT

Turf Info. Merchant

Terms, $2 Daily; $10 Weekly

Following the style which Dan Smith had adopted in his racing sheets, "Two Spot" mentioned in his first advertisement, as a sample of his line of "dope," four or five horses to win each race, each one in more grandiloquent terms than the other, but these were selected because they, in reality, appeared to be the most likely losers of all the entries.

A woman was sent over to the newly-organized office of "Two Spot" to take charge of the salesroom. I was completely taken off my feet the next day when she informed me that the receipts, as a result of the first advertisement, were in excess of $300, and that the public not only did not read between the lines, but had actually fallen for the hoax.

To cap the climax, on the second day one of the "outsiders" which "Two Spot" named derisively as the one best bet "walked in" at 40 to 1!

Next day "Two Spot" did a land-office business, and within a few days we figured that the "Two Spot" venture would net $1,000 a week if continued. "Two Spot" then went after the game hammer and tongs and endeavored to gage the full credulity of the public.

The distinctive difference between "Two Spot" and Maxim & Gay was this: Maxim & Gay, except in one instance, which is chronicled herein, never pretended to have selected a winner when it had not, while "Two Spot" enjoying the same source of information as Maxim & Gay, worded his daily advices to clients so artfully as to be able to claim the next morning in his advertisements à la Dan Smith, the credit of having said something good about every winner.

The profits of Dan Smith's venture, I was informed, exceeded a quarter of a million dollars the first year, and the profits of "Two Spot," whose career was cut short within a month by a realization on our part that we could not afford to be identified with such an enterprise, was divided among the employees of the "Two Spot" office. "Two Spot" had been brought into being for the purpose of killing opposition and not for profit-making. The scheme failed of its purpose.

To give an idea of the character of some of the raw kind of advertising put out by "Two Spot," and for which the public fell, I recall this excerpt from one of his tipping sheets:

I am my own clocker. I have slept under horse-blankets for thirty years. I understand the lingo of horses. Last night, when I was taking my forty winks in the barn of Commando, I heard him whinny to Butterfly and tell her to keep out of his way to-day because he was going to "tin-can" it from start to finish, and if Butterfly tried to beat him, he would "savage" her. That makes it a cinch for Commando. Bet the works on him to win.

REAL INSIDE TURF INFORMATION

Maxim & Gay repeated the "Silver Coin" method of advertising only once during the entire career of the company. This happened in the spring of 1902, when John Rogers, trainer for William C. Whitney, sent to the post a mare named Smoke. Our information was that the mare would win, and our selections for the day named her to win-and she did. Two days later, she was again entered, against an inferior class of horses, and the handicap was entirely in her favor. Notwithstanding this, we inserted an advertisement which appeared in the newspapers on the morning of the race, reading substantially as follows:

"Don't bet on Smoke to-day. She will be favorite, but she will not win. Rockstorm will beat her."

Sure enough, Smoke opened up favorite in the betting. The betting commissioners of Mr. Whitney placed large wagers on the horse with the bookmakers. The bulk of the public's money, however, went on Rockstorm, and before post time thousands of dollars of the "wise" money followed suit.

Rockstorm won the race. Smoke led into the stretch, when up went her tail and she "blew up."

Immediately I was cross-questioned by messengers from the judges' stand. They asked our reason why we were so positive that Smoke would lose. Mr. Whitney, I was informed, was actually suspicious that his mare had been "pulled." The reason for the reversal of form, as I explained at the time, was this:

William Dozier, our chief clocker at the race-track, who had witnessed the preparation which Smoke received for the races, was of the opinion that her training had been rushed too fast, and that her first race, instead of putting her on edge, had caused a setback. Her first race, in fact, had "soured" her. Being a veteran horseman, he was positive that Smoke would lose. I afterwards learned that the training of Smoke had been left to an understrapper, and that Mr. Rogers himself was not responsible for her condition.

THE PUBLIC ASKS TO BE MYSTIFIED

The judges were apparently satisfied, but the public could not readily understand the truth, and we didn't point it out in our advertisements, because our policy was always to appear as mysterious as possible as to the source of our information.

Mystery played an important r?le in our organization, and it would have been better had we never succeeded in the Smoke coup. Up to this time my personal identity had not been revealed at the race-track, and even the bookmakers did not know who was the guiding spirit of Maxim & Gay. "Jimmy" Rowe, trainer for James R. Keene; Peter Wimmer, trainer for Captain S. S. Brown of Pittsburg, and John Rogers, trainer for William C. Whitney, were at this early period at various times the rumored sponsors for Maxim & Gay. The bookmakers and "talent" generally conceived the idea that nobody but a very competent trainer in the confidence of horse owners could possibly be responsible for so much exact information regarding the horses. Of course, the track officials who made it their business to know everything knew of my connection with the organization. No sooner, however, did their messengers ask an interview with me than the fact became public property around the race-track and the mask was off.

The effect for a while was very bad, for our business fell off considerably. "Bismarck" Korn, the well-known German bookmaker, put it to me this way on the day of the Smoke incident:

"You are the first horse tipster I effer saw dat vore eyeclasses, sported a cane, und vore tailor-made cloding. You look like a musicianer-not like a horseman. You're a vonder!"

Gottfried Walbaum, another old-time bookmaker, chimed in: "Dat vas obdaining money under false bredenses. I gafe your gompany dwendy-fife dollars a veek for two months alreaty. You gif me my money pack! You are a cheater!"

Riley Grannan, the plunger, said, "Got to hand it to you, kid! Any time you can put one over on the Weisenheimers that have been making a living on race-tracks for twenty years you are entitled to medals!"

The attitude of "Bismarck" and of Walbaum was amusing, that of Grannan flattering. But it was poor business, because most of these professional race-track people ceased for a while to subscribe for the Maxim & Gay service.

For months I had purposely kept myself in the background, fearing a dénouement of this very description. I recalled that in the late 80's, in a town of northern Vermont, when John L. Sullivan was advertised to appear in a sparring exhibition, his manager met him at the train, and, although it didn't rain and the sun didn't shine, an umbrella was raised to cover John L. while walking from the train to a waiting landau. No sooner did Sullivan enter the vehicle than the blinds were drawn. When the carriage reached the hotel, it stopped before a side door. The manager alighted before Sullivan, again quickly raised the umbrella and whisked the heavy-weight champion past the crowds and up to his room without exposing him to the view of anybody whatsoever.

Throughout the day Sullivan was screened from public gaze. His face was not seen by a single citizen of the town until he appeared on the stage that night.

I asked the manager why he was so very careful to shield Sullivan from the popular view prior to his appearance before the footlights. I recall that he said:

"If the public thought John L. was just an ordinary human being with black mustaches and a florid Celtic face, they wouldn't go to see him. The public demand that they be mystified, and to have shown people off the stage that Mr. Sullivan is just a plain, ordinary mortal would disillusion them and keep money out of the house."

That piece of showman's wisdom was fresh in mind during the early career of Maxim & Gay; and so long as Maxim & Gay kept race-track men guessing as to who was directing its destinies, the organization was a howling success. Its good periods were mixed with bad periods after the mystery of sponsorship was cleared up to the satisfaction of the professionals by the inquiry of the race-track judges into the Smoke affair.

A few weeks after the Smoke coup, our chief clocker informed us that the entries for a big stake race which would be run on the following Saturday had revealed to him a "soft spot for a sure winner," as he expressed himself, and he said we could advertise the happening in advance with small chance of going wrong. This we proceeded to do.

Money poured in by telegraph from distant cities for the "good thing" on Saturday. Our advertisement on the Thursday previous to the race read like this:

The Hog-Killing of the Year

Will Come Off at Sheepshead Bay

On Saturday, at 4 O'clock.

Be Sure to Have a Bet Down.

Telegraph Us $5 for the

Information

One of our constant patrons resided in Louisville. He was among the first to whom we telegraphed the information on Saturday morning. The race was run and the horse lost.

About 4:30 P.M. we received a dispatch from our Louisville customer, reading as follows: "The hog-killing came off on schedule time-here in Louisville. I was the hog."

Another message from a pool-room habitué reached us, reading: "Good game. Have sent for more money."

We were often in receipt of messages of similar character on occasions when our selections failed to win and our customers lost their money; but these communications were generally in good spirit.

On one occasion we had what we believed to be first-hand information regarding a horse which was being prepared for a big betting coup by Dave Gideon, one of the cleverest horsemen in the country. Following our customary method of using vividly glowing advertisements, with the blackest and heaviest gothic type in the print shop, we announced:

A GIGANTIC HOG-KILLING

We have Inside Information of a Long

Shot that Should Win To-morrow at

10 to 1 and Put Half of the Bookmakers

out of Business.

Be Sure to Have a Bet Down on

This One. Terms $5.

The argument of the advertisement, which appeared beneath these display lines, was couched in the most glowing terms, and made it very plain that our information came from a secret source, and, further, that we had spent legitimately a snug sum of money to secure the information. We also pointed out that the owner was one of the shrewdest betting men on the turf and seldom went astray when he put down a "plunge" bet on one of his own entries.

Next day the race was run. The horse did not finish "in the money."

The following day we received many letters, as we always did when one of our heavily advertised "good things" lost. One of the most unique of these epistles contained a remonstrance from a Philadelphia subscriber. He wrote in this vein:

Dear Sir:-You have been advertising for some days that you would have a gigantic hog-killing to-day. I was tempted by your advertising bait and fell-and fell heavily with my entire bank roll. My bucolic training should have warned me that "hog-killings" are not customary in the early Spring, but I fell anyway.

Permit me to state, having recovered my composure, that Armour or Swift need have no fear of you as a competitor in the pork-sticking line, for far from making a "hog-killing," you did not even crack an egg. Pardon me. Thanks. Good-by.

Yours truly,

-- --

PRESTIGE RESTORED BY A CLERK'S RUSE

In the Summer of the second year of Maxim & Gay's great money-gathering career, the Information Bureau was "out of luck" and the patronage of the Bureau fell away to almost nothing. At this period I was seriously ill and confined to my home. A man in my office decided to take advantage of my absence from the scene to improve business a bit on his own hook.

It was the habit of our track salesmen, dressed in khaki, to appear at the office at noon every day and receive a bundle of envelopes containing the tips on the races, and then immediately to proceed to the race-track, stand outside of the gates and vend them at $5 per envelope.

One day these men, without their knowledge, were supplied with envelopes containing blank sheets of paper instead of the mimeographed list of tips. When a handful of town customers reached the office, they were informed that the selections would be late that day and would be on sale at the track only.

At about half-past one o'clock the 'phone bell rang, and word came from the track messengers that apparently a mistake had been made, as their envelopes contained blanks. They were being compelled to refund money. They asked what to do.

"Wait," they were told. "We will send a messenger immediately with the tips."

The messenger never reached the track.

There were no tips issued.

On that day May J. won at odds of 200 to 1.

The next morning, the newspapers contained full-page advertisements announcing that Maxim & Gay had tipped May J. at 200 to 1 as the day's "One Best Bet." It could not have been done without a "come-back" if any tips had been issued.

A BOASTFUL RACE PLAYER GIVES AID

I was not present, but I learned as soon as I became convalescent that on the afternoon of the day the advertisement appeared claiming credit for May J. at 200 to 1, the office was thronged with new customers who enrolled for weekly subscriptions at a rate that put new life into the business. A few of the customers expressed some doubt as to whether Maxim & Gay gave out the 200 to 1 shot or not.

That afternoon there appeared on the scene a race player who, laying $5 down on the desk, said, "Give me your good things. I played May J. yesterday at 200 to 1 and I am rolling in money."

"Where did you buy your information?"

"From your man at the entrance to the track," he answered.

"At what time?" he was asked.

"A quarter to two," he replied.

"Say, young man, there were a lot of people who came in here this morning who said they were not sure we gave out that selection at all. Would you make an affidavit that you bought the information from us?"

"You bet I will!" he said; and thereupon a notary public was called in and the caller swore that he had bought the Maxim & Gay tips at the entrance to the race-track and that they contained May J. at 200 to 1.

That affidavit was posted in the office during the remainder of the day. When the clerk who performed this stunt was asked for more information as to how he came to secure such an affidavit, he gave absolute assurance that he did not offer the customer the smallest kind of bribe to make it, and that nothing but an innate desire to call himself "on top" had influenced the man to perjure himself.

But I could not tolerate the misleading advertising that had been done as a result of misplaced energy, and the man responsible for it did not remain with the company.

FORTUNE CHANGES HER MOOD AND SMILES AGAIN

Peculiarly enough, the May J. advertisement was followed by a series of brilliant successes for Maxim & Gay in the selection of winners at big odds, and, within a month our net earnings again reached $20,000 per week. Horse owners, horse trainers and society people who frequented the club-house at the race-track were our steadiest patrons.

The women particularly were most loyal to our bureau. The wife of a young multi-millionaire of international prominence was one of our most ardent followers. She would never think of putting down a bet without first consulting Maxim & Gay's selections. On a notable occasion, this lady arrived at the gate of the Morris Park race-track with her husband, in their automobile, and took the long stroll to the club-house. They were a trifle late for the first race; the horses were already going to the post up the Eclipse chute.

Suddenly the lady discovered she had forgotten to purchase Maxim & Gay's selections. Hastily calling her husband, she gave him a sharp berating for not reminding her to buy the selections. They had a short but earnest interview, which was suddenly terminated by the young man doing a sprint of a quarter of a mile down the asphalt walk from the club-house to the main entrance where the tips were sold by the uniformed employees of Maxim & Gay.

Those who witnessed the sprint of the young financier attested to the fact that he never showed as much swiftness of foot in his early college days; but even his unusual speed failed to get him back on time to acquaint his wife with the name of the horse selected by Maxim & Gay for the first race, the race having been run and the Maxim & Gay selection having won. The gentleman thereupon got a curtain lecture from his better half that astonished and amused the society patrons on the club-house balcony. Thereafter, he never forgot to get the Maxim & Gay selections. In fact, he made assurance doubly sure by engaging the colored attendant in charge of the field-glasses to deliver the selections to him daily immediately upon his arrival at the course.

Our popularity with racehorse proprietors was mixed. Among the horse owners with whom we transacted business was Colonel James E. Pepper, the late noted distiller and owner of a big breeding farm and a stable of runners. He was an ardent lover of horses, and maintained that his native Kentucky knowledge of thoroughbreds afforded him an opportunity to pick probable winners of horse-races better than any of "them -- faking tipsters." He had great confidence in his judgment for a while.

THE KENTUCKY COLONEL FALLS IN LINE

After separating himself from much cash, while one of his very intimate friends was "cleaning up" plenty of money on our selections, he finally strolled into our office one morning and sheepishly stated that one of his "fool friends" had asked him to step in and get our "fool selections" for him. We explained that it was against our rule to give out our choices before 12:30 P.M., whereat he grew exceedingly wroth. He finally agreed to our conditions, paid his money and was given an order to get the selections at the track-entrance from one of our messengers.

Nearly all of our choices won that day. Colonel Pepper came in the following morning and paid for another subscription, this time for a week's service. We were "in our stride," the majority of our selections winning from day to day, and Colonel Pepper had cause for exultation. On one of these days we divulged, on our racing sheet, the name of a "sleeper" that we were confident would win at 10 to 1, a big betting coup having been planned by that Napoleon of the turf, John Madden. The horse won at big odds, and Colonel Pepper made a "killing" on the information.

For the next day, our clockers had spotted another horse that had been got ready by the light of the moon, and we spread it pretty strong in our advertisements that the horse we would name could just fall down, get up again and then "roll home alone." The horse did not fall down; but he won; he "rolled home alone" by about ten lengths. He belonged to Colonel Pepper. It was anticipated that about 20 to 1 would be laid against this fellow, but on account of our strong tip, he opened at 10 to 1 and was played down to 3 to 1. The bookmakers were badly crimped.

The next day, as soon as the office opened, Colonel Pepper, hotter under the collar than even his name might indicate, stamped into the outer room. Slamming his cane down on the big mahogany table, he demanded in stentorian tones: "What in the -- does this -- business mean? Here I come and subscribe my good money to your -- fool tips, and you-all are so low-down mean as to give my hoss for the good thing yesterday! What does it mean, suh; what does it mean?"

The use of considerable diplomacy was necessary to calm down the irate Colonel, who had no compunctions in winning a big bet on Mr. Madden's "sleeper," but "-- it, suh, it is outrageous to treat me so."

The Colonel never got over that incident, and while he won a big bet on his own horse, he always claimed that Maxim & Gay had ruined the betting odds for him and that but for the vigilance of our clockers his winnings would have been twice as large. This was true, and time and again we ruined the price for many another owner who thought he was going to get away with something on the sly.

Bookmakers as a rule are very much self-satisfied about their knowledge of the mathematics of the game. In order to show them that they didn't know all about it, the Maxim & Gay Company inserted an advertisement one day reading substantially as follows:

YOU PAY US $5

WE REFUND $6

If the Horse We Name as

THE ONE BEST BET

To-day Does Not Win, We Will Not

Only Refund Our $5 Fee, Which Is

Paid Us for the Information, but Will

Pay Each Client an EXTRA DOLLAR

By Way of Forfeit.

Pay Us $5 To-day for Our One Best

Bet, and if the Horse Does Not Win

We Will Pay You $6 To-morrow.

MAXIM & GAY CO.

Our receipts that day were approximately $5,000. The horse did not win. We refunded $6,000 next day, and netted a considerable sum of money on the operation.

It happened to be a two-horse race. Our horse was at odds of 1 to 6 in the betting, that is to say, the bookmakers laid only one dollar against every six bet by the public. The other horse ruled at odds of 5 to 1, meaning that here the bookmakers laid five dollars against the public's one.

The Maxim & Gay Company sent to the track $1,000 out of the $5,000 paid in by its customers and wagered the $1,000 on the contending horse at odds of 5 to 1, drawing down $4,000 in winnings. From this money it paid its clients the thousand-dollar forfeit, netting $4,000 on the operation, after of course returning to them their own $5,000.

Had the 1 to 6 shot won, the clients who had received the winning tip would have been happy, while the Maxim & Gay Company would not have been compelled to refund any money and would have been ahead $4,000 on the operation, the $1,000 wagered and in that event lost in the betting ring on the other horse being subtracted from the $5,000 paid in by its customers. No matter which horse won our gain was sure to be $4,000 and we had here the ideal of a "sure thing."

It was a case of "taking candy from a baby"; and yet many of the wise bookmakers could not at first figure it out. Nearly all of them subscribed for the information. As for the public, they did not seem to catch on at all.

BETTING THE PUBLIC'S MONEY AT GREAT PROFIT

The Eastern racing season was about to close and it was decided to remove the entire force of clerks to New Orleans for the Winter and there to depart from the usual practice of selling tips only, and to bet the money of the American public on the horses at the race-track in whatever sums they wished to send. The company employed Sol Lichtenstein, then the most noted bookmaker on the American turf, to bet the money, and made him part of the organization, giving him an interest in the profits.

The Maxim & Gay Company at this time had made close to $1,000,000, and recklessly and improvidently I had let it slip through my fingers. It was "easy come and easy go." As I review that period in my career, I recall that the whole enterprise appeared to me in the light of an experiment-just trying out an idea, and having a lot of fun doing it. Because of its dazzling success I became so confident of my ability to make money at any time that I didn't take serious heed whether I accumulated or not. Besides, I had never loved money for money's sake. All the pleasure was in the accomplishing.

The races at New Orleans were advertised to start on Thanksgiving Day. On the 15th of October I ordered $20,000 worth of display advertising to run in thirty leading newspapers in the United States four days a week, until Thanksgiving. Credit was extended for the bill by one of the oldest advertising agencies in America.

The advertisements told the public to send their money to Maxim & Gay, Canal Street, New Orleans. On my arrival there, two days before Thanksgiving, I called at the post-office, and asked if there was any mail for Maxim & Gay. The post-office clerk appeared to be startled. He gazed at me as if he were watching a burglar in the act. His demeanor was almost uncanny. He didn't talk. He didn't even move. He just looked. Finally I asked, "What is the matter?"

"Wait a minute," he muttered.

He left the window. He did not return. Instead, what appeared to me to be a United States deputy marshal ambled up to my side and said, "See here; the Postmaster wants to see you."

I was escorted into a secluded chamber in the post-office building, and a few minutes later a post-office official, along with three or four assistants, came into the room.

"What's the trouble?" I asked.

"You bring us a recommendation as to who you are and what you are and all about yourself before we will answer any of your questions as to how much mail there is here for you," the official said.

I smiled. The advertising, then, was a success.

Having been employed as a newspaper man in New Orleans a few years before, I knew one of the leading lawyers of the city and several bank officials. Within thirty minutes I had lawyer and bank men before the Postmaster, vouching for my identity. Thereupon I was informed that there were 1,650 pieces of registered mail, evidently containing currency, and, in addition, twelve sacks of first-class mail matter, which contained many money-orders, checks and inquiries. The official said that in the money-order department they had notices of nearly 2,000 money-orders issued on New Orleans for the Maxim & Gay Company.

I sent a wagon for the mail, and notwithstanding the fact that a force of four men under me opened the letters and stayed with the job for two days, the task was not completed when the first race was called on Thanksgiving Day. On adding up the receipts, we found a little over $220,000.

The meeting continued 100 days, and our total receipts for the whole period were $1,300,000.

Maxim & Gay's system of money-making at New Orleans was as follows:

We charged each client $10 per week for the information. We charged 5 per cent. of the net winnings in addition, and we further contracted to settle with customers only at the closing odds for bets placed, retaining for ourselves the difference between the opening odds and the closing odds. The profit averaged approximately $7,000 a day for 100 days-to us.

As a guarantee of good faith, the Maxim & Gay Company agreed with its clients that each day it would deposit in the post-office and mail to them a letter bearing a postmark prior to the hour of the running of the race, naming the horse their money was to be wagered on; and this was always done. An honest effort, too, was always made to pick a horse that was likely to win, for even a child can see that if we did not intend to bet the money and wanted to pick losers, all we would have had to do was to make book in the betting ring at the race-track and not spend thousands of dollars in advertising for money to lay against ourselves.

Did we invariably bet the money of our clients on the horse we named?

Yes, always-except once!

$130,000 IS LOST AND WON IN A DAY

That incident is not easily forgotten by several. On this day the entry which we selected was one of Durnell & Hertz's string. The horse was known to be partial to a dry track. The "dope" said he could not win in heavy going. It was a beautiful sunshiny morning when we selected this horse to win, and at noon the envelopes containing the name of the horse were mailed in the post-office, as usual.

Something happened.

Half an hour before the race was run it began to rain in torrents and the track became a sea of mud. Durnell & Hertz, realizing that they were tempting fate to expect their horse to win under such conditions, appeared in the judges' stand and asked permission to scratch their entry. The judges refused. I asked Sol Lichtenstein, who had the wagering of our client's money in charge, what he proposed to do about betting on the horse under the changed conditions. He exclaimed, "Bet? Do you want to burn up the money?"

"Well, if he wins," I replied, "we will have to pay, because if he wins and you don't bet and we say we changed the selection on account of the rainstorm, they will not believe us and we will have trouble."

"Very well," he said. "You bet my book all the money, and we will, for the first time, book against our own choice. It's fair, because we must pay if we lose, and there is no way out of it. But don't burn up that money." I agreed.

The opening odds against the horse were 2 to 1. Had it been a dry track, he would have opened a hot favorite at 4 to 5 or so. Slowly the odds lengthened to 10 to 1, which was the ruling price at the close. Durnell & Hertz bet on another horse to win. Standing before Sol Lichtenstein's book, I said:

"Thirteen thousand on our selection, Sol."

"One hundred and thirty thousand to $13,000," he answered. "Here's your ticket."

Sol and I repaired to the press-stand to see the race. Durnell & Hertz's entry got off in the lead. At the quarter he was in front by two lengths. At the half the gap of daylight was five lengths. At the turn into the stretch the horse was leading by nearly a sixteenth of a mile. Then I heard a noise behind me as if a miniature dynamite bomb had exploded. Sol's heavy field-glasses had dropped to the floor.

Sol did not wait to see the finish. The horse won in a gallop.

At the office of Maxim & Gay accounts were figured and checks signed for the full amount of our obligations, and they were immediately mailed to all subscribers.

At midnight I met Sol in the lobby of the St. Charles Hotel. He looked worn.

"I guess that will hold us!" he moaned.

"Hold us?" I answered. "Nothing better ever happened. It'll make us!"

"You poor nut!" he exclaimed. "Lose $130,000 in a day and it will make you! Stop your noise!"

"Listen!" I rejoined. "At an expense of $3,000 for tolls I have telegraphed a full-page ad to fifty leading city newspapers, telling the public that we tipped this horse to-day at 10 to 1 and that we mailed checks to our customers to-night for $130,000. The gain we will reap in prestige and fresh business will repay our loss on the horse."

The next day the Western Union Telegraph Company found it necessary to assign three cashiers to the work of issuing checks to the Maxim & Gay Company for money telegraphed by new customers. Some individual remittances were as high as $2,000. The money telegraphed us amounted to about $150,000, and within ten days eighty per cent. of our own dividend checks were returned to us by our customers, indorsed back to us with instructions to double their bets, and within two weeks we were able to figure that in the neighborhood of $375,000 was sent us as a result.

A DISASTROUS NEWSPAPER WINDUP

During the progress of the New Orleans meeting, I purchased a controlling interest in the New York Daily America-a newspaper patterned after the Morning Telegraph-from a group of members of the Metropolitan Turf Association, who had sunk about $75,000 in the enterprise. The Morning Telegraph was in the hands of a receiver. I calculated that, by transferring the Maxim & Gay advertisements from the Morning Telegraph to the Daily America, I could make the Daily America pay and force the Morning Telegraph out of the field. Later, the late William C. Whitney, who was a shining light on the turf as well as in finance, was induced to purchase the Morning Telegraph. Then trouble began to brew for me.

One morning I was summoned to the offices of August Belmont on Nassau Street.

"For the good of the turf, you must omit your Maxim & Gay advertisements from the Daily America and other newspapers hereafter," declared Mr. Belmont on my entering his room.

"Why?" asked I.

"They flagrantly call attention to betting on the races," he replied.

"But you allow betting at the tracks."

"Yes," he replied, "but public sentiment is beginning to be aroused against betting, and an attack is bound to result."

It occurred to me that at that very time Mr. Whitney was engaged in disposing of his stock in various traction enterprises in New York to Mr. Belmont and his syndicate, and that in all probability Mr. Whitney had sought the assistance of Mr. Belmont to put the Daily America out of business in this way. It was apparent that the Daily America would lose money fast without the Maxim & Gay advertising. Maxim & Gay, too, would practically be compelled to close up shop if it could not advertise. I promised to consider.

Returning to the Daily America office, I decided to pay no attention to Mr. Belmont's request, having become convinced that it was conceived in the interest of the Morning Telegraph.

A few days later I was again summoned over the 'phone to Mr. Belmont's office. When I was ushered into Mr. Belmont's presence he said:

"If you don't quit advertising the Maxim & Gay Company in the Daily America, I will see William Travers Jerome, and he will stop you."

Mr. Jerome was then District Attorney, and the idea of doing anything that Mr. Jerome considered illegal appalled me.

"If Mr. Jerome sends word to me that the Maxim & Gay advertising is illegal, I will discontinue it," I said.

I did not hear from Mr. Jerome, and so went on with the advertising.

Within a few weeks the Washington race meeting opened at Bennings. When the Maxim & Gay staff reached there, we were all informed that the Post-office department was about to begin an investigation into our business affairs, and all of our staff voluntarily appeared before the inspectors and underwent an examination. Our books were also submitted. This investigation, coming on the heels of Mr. Belmont's threat, convinced me that the influence of Mr. Belmont and Mr. Whitney reached all the way to Washington, and I concluded that if I did not discontinue the Maxim & Gay advertising in the Daily America, and then, of course, discontinue the Daily America, they would make serious trouble. So I hung out the white flag. I announced my retirement from the Maxim & Gay Company and offered to sell my newspaper to Mr. Whitney.

My exchequer was low. Nearly every dollar I had made in the Maxim & Gay enterprise had been lost by me in plunging on the races myself.

During the following week Mr. Whitney received me at his palatial home on Fifth Avenue just after his breakfast hour. He interviewed me for about an hour, obtained my price on the paper, which was what I had put into it, namely $60,000, and promised to cable to Colonel Harvey, then, as now, the distinguished editor of the Harper publications, who was in Paris, asking his advice, saying that Colonel Harvey advised him in all newspaper matters. I did not hear from Mr. Whitney again; but I did discover that my business manager was in close communication with Mr. Whitney and that the state of my financial condition every evening was being religiously reported to him.

A few weeks later I was compelled to put the paper in the hands of a receiver, and a representative of Mr. Whitney bought it for $6,500, or about 10 cents on the dollar, and put it to sleep, leaving the field to the Morning Telegraph. From that moment the Morning Telegraph, which for a short period had been refusing all tipster advertising, resumed the acceptance of such business and has continued that policy up to this day.

A year after I retired from Maxim & Gay, Attorney-General Knox decided that racehorse tipping is an offense against the old lottery law, and those who now advertise tips instruct that no money be sent by mail.

Having lost the Daily America and having "blown" the Maxim & Gay Company, I was again broke. But my credit was good, particularly among race-track bookmakers. That Summer, 1904, I became a race-track plunger, first on borrowed money and then on my winnings. By June I had accumulated $100,000. In July I was nearly broke again. In August I was flush once more, having recouped to the extent of about $50,000. Early in September I went overboard; that is to say, I quit the track losing all the cash I had and owing about $8,000 to a friendly bookmaker.

Disgusted with myself, I longed for a change of atmosphere. I stayed around New York a few days, when the yearning to cut away from my moorings and to rid myself of the fever to gamble became overpowering. I bought a railroad ticket for California and, with $200 in my clothes, traveled to a ranch within fifty miles of San Francisco, where I hoed potatoes, and did other manual labor calculated to cure race-trackitis. In less than six weeks I felt myself a new man, and decided to stick to the simple life forevermore-away from race-tracks and other forms of gambling.

But I didn't.