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Steel's, A Forgotten Stock Market Scandal From The 1920's

They say that history is written by the winners, but maybe it should not always be about the winners. The losers, especially the ones who had what it takes to win, can be fascinating. That certainly applies to the L. R. Steel Company, founded in Buffalo in 1919 and bankrupt by 1923, leaving 60,000 investors about $26 million poorer. This early chain store competitor of Woolworth’s could have been Wal-Mart, but ended up being more like Enron.

This book came into existence because I discovered a long-lost treasure trove of internal company documents and photos from the L.R. Steel Company.

It was a pure accident. I stumbled onto the documents while researching my great-uncle, Clayton Pickard, who vanished in 1923 after working for Steel’s. I was only interested in finding out what happened to Clayton, but I found one of the biggest stock scandals in American history.

There were thousands of pages of company newsletters with hundreds of photos. It was like opening a time capsule that had been sealed since 1923. I was the first person to read them since they were bound and stored. I started reading them in a random fashion, as you might thumb through a magazine. I was drawn in by the creativity, enthusiasm, and foresight of this business. There were personal stories about employees, photos of customers and their children, accounts of elaborate parties and enthusiastic business meetings, and photos of bands playing at new store openings.

These were not just typical company newsletters. There were things that seemed odd for the times: women in management, a Black man in a newspaper advertisement, and some employees over 80 years old. And lots of big ideas: Could Niagara Falls really become the international center of commerce under Steel’s direction? And why was a chain of retail stores producing a silent film about their business?

Throughout it all was the dynamic personality of Leonard Rambler Steel, the creative genius who founded the company.

I was hooked. I realized that I was being given an insider’s view into an exceptionally creative and apparently successful company that was somehow involved in the disappearance of my great uncle. I felt like I had opened a time capsule from the start of the Roaring Twenties that gave me a ring-side seat into that exciting time.

I went back to the beginning and read them all in order. I just couldn’t stop. Eventually, I digitized all the newsletters so that I could search the text. I found eleven references to Clayton Pickard.

The newsletters ended abruptly on February 17, 1923, but the story was not over. I read old newspapers, court records, and legal documents to see how it ended.

I had no idea that I was reading about one of the biggest stock market scandals up to that time. My subsequent research revealed that more people lost money in Steel’s than in Ponzi’s scandal, although that fact seems to have been forgotten by history.

The L.R. Steel Company could have been Wal-Mart, but ended up like Enron.