Mr. Thomson and suggested an exchange, which that company was only too glad to make, as it saved one per cent interest on the bonds.  I sailed at once for London with the control of five millions of first mortgage Philadelphia and Erie Bonds, guaranteed by the Pennsylvania Railroad Company—­a magnificent security for which I wanted a high price.  And here comes in one of the greatest of the hits and misses of my financial life.

I wrote the Barings from Queenstown that I had for sale a security which even their house might unhesitatingly consider.  On my arrival in London I found at the hotel a note from them requesting me to call.  I did so the next morning, and before I had left their banking house I had closed an agreement by which they were to bring out this loan, and that until they sold the bonds at par, less their two and a half per cent commission, they would advance the Pennsylvania Railroad Company four millions of dollars at five per cent interest.  The sale left me a clear profit of more than half a million dollars.

The papers were ordered to be drawn up, but as I was leaving Mr. Russell Sturgis said they had just heard that Mr. Baring himself was coming up to town in the morning.  They had arranged to hold a “court,” and as it would be fitting to lay the transaction before him as a matter of courtesy they would postpone the signing of the papers until the morrow.  If I would call at two o’clock the transaction would be closed.

Never shall I forget the oppressed feeling which overcame me as I stepped out and proceeded to the telegraph office to wire President Thomson.  Something told me that I ought not to do so.  I would wait till to-morrow when I had the contract in my pocket.  I walked from the banking house to the Langham Hotel—­four long miles.  When I reached there I found a messenger waiting breathless to hand me a sealed note from the Barings.  Bismarck had locked up a hundred millions in Magdeburg.  The financial world was panic-stricken, and the Barings begged to say that under the circumstances they could not propose to Mr. Baring to go on with the matter.  There was as much chance that I should be struck by lightning on my way home as that an arrangement agreed to by the Barings should be broken.  And yet it was.  It was too great a blow to produce anything like irritation or indignation.  I was meek enough to be quite resigned, and merely congratulated myself that I had not telegraphed Mr. Thomson.

I decided not to return to the Barings, and although J.S.  Morgan & Co. had been bringing out a great many American securities I subsequently sold the bonds to them at a reduced price as compared with that agreed to by the Barings.  I thought it best not to go to Morgan & Co. at first, because I had understood from Colonel Phillips that the bonds had been unsuccessfully offered by him to their house in America and I supposed that the Morgans in London might consider themselves connected with the negotiations through their house