As I walk along the Bois Boolong with an independant air
You can hear the girls declare, "He must be a Millionaire."
You can hear the girls declare, "He must be a Millionaire."
You can hear them sigh and wish to die, You can see them wink the other eye
At the man who broke the bank at Monte Carlo.
I hasten to point out that nobody has ever actually broken the bank in Monte Carlo. Should you be lucky enough to clean out a croupier, his table is covered in mourning cloth until a new employee arrives with more chips. This is referred to as "Faire sauter le banque", or blowing up the bank. Listen, if any casino in Monte Carlo should actually go broke, the residents would have to start paying taxes again, which they haven't done since 1869. I point this out so you can put Charles Schwab's behavior in context.
Thomas Edison (above, left) called his friend Charlie M. Schwab (center) a "Master Hustler". One of Charlie's public school teachers in the working class town of Loretto, Pennsylvania described him as "...a boy who...went on the principle of pretend that you know and...find out mighty quick.” Later in his life Charlie attempted to explain himself this way; "Here I am, a not over-good businessman, a second rate engineer. I can make poor mechanical drawings. I can play the piano after a fashion. In fact I am one of those proverbial-jack-of-all-trades, who are usually failures. Why I am not, I can't tell you."
It was Charlie's (above) boundless self-confidence which quickly brought him to the attention of his prudish boss, Andrew Carnegie (below). Carnegie became so fond of Charlie that when he sold out his steel mills to J.P. Morgan for $480 million in cash and stock, Carnegie made sure that Charlie got $25 million.
In February of 1901, Morgan combined Carnegie's steel mills with those of nine other companies and formed U.S. Steel. This gave him a near complete monopoly - 231 steel mills, 78 blast furnaces, some 60 iron and coal mines, a fleet of ore barges, 1,000 miles of railroad track and 79% of all American steel sales. There was only one problem. Carnegie had agreed to the sale only if the 39 year old Charlie Schwab was made President of U.S. Steel. And even if Charlie was well qualified for the job, (and he was) Morgan did not like hiring anyone whose first loyalty was not to him. But Morgan was not worried.
An intuitive judge of men, Morgan (above) knew who Charlie Schwab really was; a gambler. Charlie was happily married to his home town sweetheart, Eurania Dinkey. But in all other regards Charlies' life had been built on calculated risks. He enjoyed fast cars, fast women and roulette. While J.P.Morgan knew that Charlie had never lied to Carnegie, he also knew that Carnegie assumed that every person he liked was a Puritan, just like himself. And just a year after Charlie had overseen the formation of U.S. Steel, Morgan used Carnegie's myopia to get rid of Charlie.
I, to Monte Carlo went, just to raise my winter's rent.
Dame Fortune smiled upon me as she'd never done before,
And I've now such lots of money, I'm a gent. Yes, I've now such lots of money, I'm a gent.
I'm the man who broke the bank at Monte Carlo
Charlie arrived in France in January of 1902, for a "working vacation". He was accompanied by Eurania, his doctor, and a fellow steel magnet. Stopping in Paris, he bought a roadster, and then drove the 430 miles south to Nice (in just 18 hours), where he met up with (among others) Henri Rothschild. According to Charlie, they "made a jolly party … racing all over the Riviera”. Their diversions included, said Charlie, four visits to the casino 10 miles up the coast Azure at Monte Carlo. In fact Charlie was having such a good time that he failed to notice the presence in the Hôtel de Paris of several American newspaper reporters.
The story of his visits to the casino appeared in half a dozen newspapers on Monday, 13 January, 1902. The New York Sun trumpeted from Monte Carlo, "Charles M. Schwab is here and the lion of the day. (He) has been playing roulette...broke the bank this afternoon. He has had an extraordinary luck and repeatedly staked the maximum. ...the coupler pushed over to him $200,000, his winnings for the day....Mr. Schwab sauntered from table to table playing the maximums...." The New York Times editorialized, "A man who is at the head of a corporation with more than a billion dollars of capital stock...is under obligation to take some thought of his responsibilities...(and yet Charlie had joined) the intellectual and social dregs of Europe around the gaming tables of Monte Carlo, and there (made)..a prolonged effort to ‘beat’ a game which to a mathematical certainty cannot be beaten” But he did!
Reading all of this in his West Fifty-first Street mansion, Andrew Carnegie immediately cabled Charlie in Nice, "Public sentiment shocked...Probably have to resign. Serves you right." Then he sent a letter to JP Morgan, " I feel...as if a son had disgraced the family...He is unfit to be the head of the United States Steel Company—brilliant as his talents are...Never did he show any tendency to gambling when under me, or I should not have recommended him...He shows a sad lack of...good sense...I have had nothing wound me so deeply for many a long day, if ever. Sincerely Yours, Andrew Carnegie."
I patronised the tables at the Monte Carlo, Till they hadn't got a sou for a Christian or a Jew;
So I quickly went to Paris for the charms of mad'moiselle,
Who's the loadstone of my heart - what can I do, When with twenty tongues that she swears that she'll be true.
I'm the man who broke the bank at Monte Carlo"
Charlie issued the obligatory press statement. “I have been on an automobile trip through the south of France with a party of friends. ..I did visit the Casino at Monte Carlo, but the statements of sensational gambling are false.” He insisted he had won no more than $36 on any occasion. But it did not matter whether he had won at the tables or not. Charlie returned home on 16 February, 1902 (that's him, smiling), and now refused to even comment on the affair. That did not matter, either. Carnegie would never support him again. Morgan never said a word in public about the affair. He did not have to. Now that Charlie was isolated from his mentor, he was easy prey for Morgan.
The next year, 1903, Charlie was forced to resign from U.S. Steel. And without his dynamic leadership, Morgan's monopoly lost half of its market share by 1911. So much for J.P. Morgan's financial genius. Charlie went on to buy Bethlehem Steel (above), which he ran until shortly before his death, in 1939. But like all gamblers, he died broke. As Charlie himself said, "I have probably purchased fifty 'hot tips' in my career, maybe even more. When I put them all together, I know I am a net loser."
But what Charlie never did, as least publicly, was to ask what all those New York reporters were doing at the Casino in Monte Carlo, on that particular winter weekend in 1902. If he had asked the answer might have been that the man who actually broke the bank in Monte Carlo, and his own US Steel company, had been John Pierppoint Morgan (above and below), And he wasn't even there.
I stay indoors till after lunch, and then my daily walk
To the great Triumphal Arch is one grand triumphal march,
Observed by each observer with the keenness of a hawk,
I'm a mass of money, linen, silk and starch - I'm a mass of money, linen, silk and starch.