To give myself credit where credit is due me, Billy Sullivan told me, personally and in a couple of letters, that he wanted to thank me for coming up with the proposal when I did because otherwise he would have gone to the league meetings empty-handed and the franchise undoubtedly would have been moved. I can also state without fear of contradiction—and if I am contradicted, I'm going to state it anyway—that I gave E. M. Loew the idea of attaching the stadium to a racing operation. With no cost for the land, Loew was able to build his stadium—one similar to the layout we had on the boards—for just about the amount I had projected.
Now let me tell you the last of my increasingly sad story. I had taken the job as president of Suffolk Downs at a salary of $50,000 a year. Nate Dolin, an old friend from Cleveland days, and I would each get 10% of any profits over a million dollars and—here comes the really attractive part of the proposition—we would each be given a five-year option to buy 15% of the track. I was to have absolute control over every phase of the Suffolk Downs operation. That for me was an essential part of the deal with Realty Equities. I had never run anything for anybody else before, and I knew myself well enough to understand that I was probably constitutionally incapable of accepting suggestions, let alone direction, from some moneymen sitting in an ivory tower in New York.
It was not my lack of knowledge about racing or the management of a track that did me in. It was lack of knowledge about the more recent refinements in high conglomerate financing. I had absolute control of the operation of the track all right, but what I hadn't been smart enough to do was to define the financial relationship between Suffolk and Realty Equities. As the parent company, once the hard times came, Realty had the power to drain us dry. When you don't have any money, face it, finances become the controlling factor in the operation. And that is what happened.
By its very nature a conglomerate is an animal on the prowl; it is always hungry. As it swallows new companies, it is in continuous need of money. Morris Karp, the genius of Realty, had been diversifying at a rapid rate—too rapid—and as money tightened in the early days of the Nixon Administration and the economy weakened, some of his subsidiary companies ran into trouble. Soon the weakness could no longer be hidden from public view. Banks began calling for more solid collateral.
The Realty stock went down, down, down. In 1969 it had traded at $35. When auditors refused to certify the company's balance sheet and the American Exchange suspended trading on Aug. 3, 1970 the stock stood at $6.
Before that I had begun to have suspicions about the credibility of Realty. I decided it would be an excellent idea to send to New York for the company's balance sheet. It showed a capital surplus of over $20 million. But the balance sheet was so handsomely decorated with figures on acquisitions and so tangled with footnotes as to be wholly incomprehensible. To say that the public has full disclosure because a corporation distributes that kind of gobbledygook to its shareholders is balderdash.
Even I, whose livelihood depended on Realty's healthy operation, couldn't figure out how things stood. It was not till trading in the stock was suspended on Wall Street that I fully understood my ship had been shot out from under me.
All of a sudden our checks were bouncing all over the place. Creditors were popping out of every corner. Good, solid, dearly beloved creditors who were as essential to our operation as Ma Bell and Pa Gas. To say nothing of an old Dutch uncle known around the racetrack as the Revere police department. Our arrangement with the Revere police called for them to pay the men who were assigned to patrol the track and for us to reimburse the department. There is something very funny about having a check to the police department bounce.
What had happened was that Realty in the preceding months had borrowed substantial amounts from us and we were having trouble getting the money back. Real trouble. The Suffolk bank account was empty. If I wrote another check and dropped it on the floor it would have bounced so high it would have set a record for the steeplechase. I pleaded desperately with the New York office to send us enough cash to pay our bills. I really needed $75,000 to satisfy our creditors, but at that point I was willing to settle for less. They sent me $45,000 and just in time. The telephone and gas companies had been threatening to cut off service.
It was then that I decided it was time to sever connections with Suffolk. To show what desperate straits we were in, I literally did not have enough money to hold a suitable press conference announcing my retirement. Fortunately the Baseball Writers Dinner was coming up that week, and the press corps would be there. I told a few jokes that evening, directed a few barbs at the more distinguished personages on the dais and then made my announcement.