Other large transactions followed in rapid succession. Among the most interesting of these was the collecting of the plots that constitute the present site of the Broad Exchange Building, directly opposite the Stock Exchange; the purchase of the Knox Building at the corner of Fortieth Street and Fifth Avenue; and my joining in the purchase of the Plaza Hotel, by means of a brief telephone conversation, for $3,000,000.
In 1904, as the Subway neared completion, I was astonished to find that there had been no activity in real estate in anticipation of the benefits that would accrue from the increased transportation facilities in the upper part of New York and the Bronx. I therefore enlisted the assistance of my nephew, Robert E. Simon, and of J. Clarence Davies, and organized what was dubbed by some of the real estate operators the “Subway Boom.” On behalf of the company and some associates, we purchased all the big plots that abutted the various transit lines, and could be secured at reasonable prices. In a period of ninety days we purchased in the Bronx, in the Dyckman district, in Washington Heights, and Fort George, about 2,500 lots which were eventually sold for $9,000,000.
In 1905, when I realized that a cessation of prosperity and the necessary declining market that would follow was imminent, I called on Mr. Olcott and asked him whether our young company could rely upon the assistance of the Central Trust Company, with whom we kept our largest account; he told me that if a panic such as I feared should come everybody would have to look out for himself; that if my accounts and securities would justify his making a loan at 6 per cent. he would do so, but as far as his depositing with our company a few million dollars, as I had suggested, he would not consider it. I went right next door to Mr. Stillman, and asked him a similar question, first telling him the attitude Mr. Olcott had taken. Mr. Stillman said I was but one of the many customers of his bank; his holdings in my company were relatively small; that the new, unseasoned financial institutions would be the first to suffer in case the public commenced to doubt the stability of the financial institutions. “Although it is known that you have a splendid board of directors, and have the good will of some of the big interests like the Mutual Life and the Central Trust Company, and my institution also, still it is well known that none of us control your institution and are, therefore, not responsible for it. You do not belong to any one, but I am willing to see you through, no matter what happens.”