The negotiations concerning two and a half millions of bonds for the construction of the Omaha Bridge were successful, and as these bonds had been purchased by persons connected with the Union Pacific before I had anything to do with the company, it was for them and not for the Union Pacific Company that the negotiations were conducted.  This was not explained to me by the director who talked with me before I left for London.  Unfortunately, when I returned to New York I found that the entire proceeds of the bonds, including my profit, had been appropriated by the parties to pay their own debts, and I was thus beaten out of a handsome sum, and had to credit to profit and loss my expenses and time.  I had never before been cheated and found it out so positively and so clearly.  I saw that I was still young and had a good deal to learn.  Many men can be trusted, but a few need watching.

CHAPTER XII

BUSINESS NEGOTIATIONS

Complete success attended a negotiation which I conducted about this time for Colonel William Phillips, president of the Allegheny Valley Railway at Pittsburgh.  One day the Colonel entered my New York office and told me that he needed money badly, but that he could get no house in America to entertain the idea of purchasing five millions of bonds of his company although they were to be guaranteed by the Pennsylvania Railroad Company.  The old gentleman felt sure that he was being driven from pillar to post by the bankers because they had agreed among themselves to purchase the bonds only upon their own terms.  He asked ninety cents on the dollar for them, but this the bankers considered preposterously high.  Those were the days when Western railway bonds were often sold to the bankers at eighty cents on the dollar.

Colonel Phillips said he had come to see whether I could not suggest some way out of his difficulty.  He had pressing need for two hundred and fifty thousand dollars, and this Mr. Thomson, of the Pennsylvania Railroad, could not give him.  The Allegheny bonds were seven per cents, but they were payable, not in gold, but in currency, in America.  They were therefore wholly unsuited for the foreign market.  But I knew that the Pennsylvania Railroad Company had a large amount of Philadelphia and Erie Railroad six per cent gold bonds in its treasury.  It would be a most desirable exchange on its part, I thought, to give these bonds for the seven per cent Allegheny bonds which bore its guarantee.

I telegraphed Mr. Thomson, asking if the Pennsylvania Railroad Company would take two hundred and fifty thousand dollars at interest and lend it to the Allegheny Railway Company.  Mr. Thomson replied, “Certainly.”  Colonel Phillips was happy.  He agreed, in consideration of my services, to give me a sixty-days option to take his five millions of bonds at the desired ninety cents on the dollar.  I laid the matter before