Chapter XX (2)

“Verita,” he said at once and gravely, “_this_ is no light matter. _This_ cannot be overlooked. Your own ancestral acres! It is really _most_ dreadful. You have absolutely identified the place by your detailed description of the thatches and the drains. Thatches and drains are no longer mere impersonal matters of picturesque possibility, as in the past. The low-lying politics of the present government have unduly exalted the drain and all but carried off the thatch. To write lightly of the matter is the reverse of pardonable. Indeed, I may say without fear of prevarication that it is a _very_ serious offense. Statements such as yours, put in the peculiarly unfortunate manner which you have somehow hit upon, stir people up beyond all reason. You remember that American book about the pigs in the jungle near Chicago? Do you recollect that it nearly wrecked the whole slaughtering industry? These things are better left alone. There is no knowing to what end they may lead. You might bring about a question in the House. Consider _that_ possibility. Such fearful issues have arisen out of most trivial matters. In the present state of German tiles, we must put down with a hand of steel all reference to English thatches. I trust that you are following me?” The bishop paused, quite out of breath.

“But I have a purpose,” said Lady Verita. “Have you read my story?”

“In part--only in part; vespers intervened to spare me useless pain. But that little was enough--too much, in fact. It is pulling the very foundations from under our civilization to write as you have written. I cannot in justice deny that your description of life among the poor is a remarkable piece of work, but no good can come of descriptions of life among the poor. Indeed, in my estimation, it is a thing that never should be done. We have our master’s own warrant for the continual existence of the poor, and we may not question his statement. ‘Always with you,’ he said. What could be clearer? In my estimation, their elimination would undermine the whole foundation of that crown of virtue, Christian charity.”

“But I don’t agree with that view,” said Lady Verita; “I disagree with it completely. I think that the situation of the poor can be vastly improved; in fact, it _is_ being improved; which absolutely proves that it can be. That’s logic.”

“Not at all,” protested the bishop; “on the contrary, it’s altogether the opposite of logical. I have it on the authority of nearly all who view the matter as I do, that things are getting continually worse. And with things getting continually worse, the case is proved in opposition to all law and all your so-called logic. I must decline to argue the matter, for the simple reason that the only side to take is mine. Therefore, do not let us go into it. Nothing can be gained by discussing. No one denies that the country has fallen on evil days, but that is a mere trifle compared to the horror of what you have written--and to think that it should have been written by one in the lofty station of your father’s daughter!” Again the bishop paused for breath.

“I’m interested in the poor,” said Lady Veritas, meditatively.

“Perhaps we had best leave the poor out of the question,” said the bishop, who was noted for the firmness with which he adhered to any ground that he had once taken. “As a churchman of more than ordinary weight, I may say that I have ever deprecated the wasting of words as to the economic position of the poor. The poor, in my opinion, are becoming far too prominent. They occupy at present a position never intended in that divine order of things to which I have already referred. It is a position that even the most casual observer must admit is far beyond their limited capabilities to hold. Much of the provision which is needed--and I may say even bitterly needed--by the church is now being diverted to what may well be denominated as the bottomless pit wherein dwell the poor. The poor are fast becoming the rich. The rich are rapidly being pauperized for the unreasonable aggrandizement of the poor. The situation will all too soon become completely unbearable. Now, I put it to you,”--the bishop warmed suddenly in his most persuasive pulpit manner,--“why make it worse? A story like yours is to all intents and purposes a suggestion as to making everything better, and _what_ could be worse? I may say without fear of prevarication that this is a serious matter. It is a very serious matter. Here in your story you have your childhood home desecrated! Our old ancestral acres stripped for the popular gaze! Why did you do it? Or, if an unconquerable longing to perpetuate them in print obsessed you, why did you not perpetuate the beeches or the wild boar or one of the sweet old stories of dole and dungeon? Why drag forth into the fierce light of the present unfortunate tendency to look into matters which, after all”--

“Dear uncle,” said Lady Verita, quite wearied by the length as well as the breadth of her right reverend relative’s scope, “to say the truth, the story is about Ireland. Any one who reads it carefully through to the end sees that. The difficulty is that no one reads anything through to the end nowadays. They skip all but the love scenes. There isn’t a word about any of us or our own wretched belongings in the whole thing. It is all about County Mayo.”

“County Mayo!” cried the bishop.

“Yes,” said his niece, “it is all about County Mayo. Of course it is written very carefully, just as the other story was, and I had a fancy that it might lead some readers to think, ‘Whom the cap fits, let him wear it.’ It has amused me not a little to see how the guilty jump at conclusions. I drew a picture of the French Revolution, and every one cried out that I was writing of ourselves. And now I write of a poor corner in a poor county in Ireland, and your own conscience at once attaches my silly tale to a poor corner in a poor county in England. That amuses me.”

A dull red glowed in the bishop’s angry face. He never had liked this girl, and now he felt that he disliked her intensely. But of course there was no more to be said. An English bishop must not allow himself to be interested in Ireland.

“I am afraid that your youthful spirits will cause you to do what you never can undo,” he said, carefully avoiding her glance of fun as he rose stiffly.

“They have,” said his niece.

“You admit it. Yes, I should imagine so. I”--

Just here Captain Adair was announced.

“Dear uncle,” said Verita, putting her hand into the captain’s while she looked toward the bishop, “we are what Fate wills in our weaving, and I am busy unraveling my skein, that’s all.”

The bishop shook his head in a rather irritated manner and went away. Left alone together, the captain kissed her ladyship and drew her to a seat on the divan.

“My uncle has been expostulating about ‘The Earl’s Own County,’” she said then.

“It’s an awful sell,” said Adair, half angry, half laughing; “down to the last line, every one thinks it’s your place. Of course _I_ always read to the last line before I say anything now. I’ve learned your little way.”

Verita laughed brightly.

“But isn’t it droll that directly I deny it, no one sees the real truth in the descriptions any more?”

“Y-e-s,” said the captain, looking into her pretty face; “and yet I wish that you wouldn’t--’pon my soul I do. You might consider _me_ a little, I think. You know what a hard time I have. I’ve stood such a lot for you. We have all stood such a lot with you. The trouble is, you’re so much too clever for a woman. All women are nowadays. They’re going ahead of all the rules of the game. And you go ahead of all the rest of them.”

“Somebody must go ahead, or progress would cease,” said Lady Verita. “We’ve sat around quite a bit waiting for the men to do things lately, I think.”

“Oh, but we’d be so comfortable if progress ceased, don’t you think?” protested the captain. “Hang it all! if I don’t think that that progress cult is at the bottom of every trouble in the world these days. If everybody’s going to join in for progress, there never will be any peace any more. And as for women like you, Vera dear, if you ever do get the vote, you’ll find yourself a thorn in the side of your party. It’s that way with the clever men always: one has to give the country over to ’em just to keep ’em quiet.”

“I never shall have any party,” said Lady Verita, thoughtfully. “I don’t believe in party politics. I’ll believe in any party that will give even the devil his due. That’s all.”

“That would be the worst party of all,” said the captain; “that would be the kind that no one ever would know which lobby you’d see ’em in.” He stopped to shake his head sadly, for there seemed to him so much of which he should despair, and he, like most well-born Englishmen, did so long to be hopeful and happy! “I do wish you’d quit all this,” he continued, “and settle down like other girls. Some day I’ll get on my feet, and then we’ll tell every one. It really isn’t any of it my fault, you know.”

Lady Verita looked at him not unkindly,--he was a handsome fellow,--and was aware of a sincere wish that she were not so very much the cleverer of the two, or, at least, that he wouldn’t be so ready to admit it.

“I’m aiming to accomplish something,” she said, speaking almost as sadly as he had spoken. “When I’ve done it, I’ll cease writing; but I can’t before. You know that I never do anything very long, however, so I shall soon finish with this.”

But this was cold comfort for the captain.

“You keep me so upset, Vera,” he said after a moment’s painful reflection. “I never know what you’ll do next.”

She laughed a little.

“But there’s one thing I must say,” he added, “and you must remember it, too: don’t you ever write anything about me, because that’s something I won’t stand for. Promise me that.”

Lady Verita did not promise. She kissed him instead, and he did not notice the alteration in the program.

* * * * *

It was only a moon or two later that my lady’s last tale appeared in print. It was called “If I were only a Duke.” Captain Adair was the hero, and society, on noting the latter fact, was shaken to its very center. The captain was in Malta with a special commission of inquiry into the chance of a night attack from Germany; but he had a sister in London, who mailed him a copy the day that it appeared.

The framework of the story was remarkable.

“Of course they’re engaged,” people said everywhere; “they _must_ be.”

“We know that it’s true about his being poor,” said the cabinet minister’s wife to her cousin; “she didn’t need to tell _that_.”

“And that his uncle’s a beast,” rejoined the cousin.

“He’ll rage when he reads this,” continued the cabinet minister’s wife; “it _is_ rather a give-away, I do think. He might have made them an allowance.”

“To think of her writing openly that, after all the labor she had had to get him to offer himself, it is too bad that she must wait indefinitely to be married!” The cousin sighed deeply. As she had been waiting twenty-five years for some allowance to be made for her own marriage, she felt a secret sympathy with Lady Verita.

“A most shocking confession,” said the cabinet minister’s wife, knowing just what the sigh meant, and being one of those wives who never regard an allowance as necessary when the maiden ladies of the family marry. And then she gathered up her wrap and departed.

The old duke, even if he was a beast, had always been a very dignified beast; but the commotion about his supposedly published parsimony shook even his conception of noble rights. He went in his big blue car to call at the house where the dreadful young woman stayed when she was at home. The countess, her mother, was laid up with her head, as usual. Lady Verita received his grace exactly as she received most persons in these trying times.

“I suppose it is the story,” she said as she greeted him. She wasn’t a bit afraid of him, having learned to regard him as much the same stuff as the rest of humanity, only more in her way.

“Yes, it is the story,” he said haughtily. He regarded it as most unfortunate that she herself differed so widely from the rest of humanity. “It’s really too bad of you, don’t you know. If Clifford wishes to marry, I’ll give him a little something regular. He ought to know that. You ought to know that. What’s the good of rowing?”

Lady Verita lowered her eyes. She thought that there had been a deal of good in rowing, since it had brought his close-fisted grace to this.

“But it’s very shocking to write it out for the _hoi polloi_, don’t you know,” the duke continued vigorously; “I must beg, if you marry Clifford, that we have no more of this kind of thing.”

“But it wasn’t meant for any one we know,” protested Lady Verita.

“Yes, it was,” said the duke, putting up his glass and glaring at her; “everything you’ve written has been straight from the shoulder. I read the other two, and it was rubbish to suppose you meant the French Revolution or Ireland. Ireland, indeed! Any one with half an eye could see what you meant. And I don’t need even half an eye to see what you mean now. You mean to marry Clifford, and you wish to do it at once. Dash it all! if putting it off is going to lead to more of these stories, and putting it forward will stop ’em, I’ll set you up in housekeeping to stop ’em. We can’t let this kind of thing continue.”

“Thank you so much,” said Lady Verita, casting down her eyes modestly. “We _are_ betrothed.”

“Yes, I thought so,” said the duke; “I’ve reason to think so, for every one’s been telling me so for the last two years. But what beats me is how, with your daring, you haven’t found a way to marry him before this.”

Lady Verita hesitated.

“I have,” she said finally.

* * * * *

On receipt of the magazine, Captain Adair flew home as if he had been a dynamite cartridge. For the first time in his life he was stirred enough to be really very much worth while.

“What did I tell you?” he cried, rushing in upon the guilty person without even having stopped to be brushed by his valet. “Now you _have_ done it. We’ll _have_ to tell now.”

Verita wasn’t in the least upset. If he had been plate-glass and she had been a hammer, she couldn’t have been more aware of where the advantage lay.

“We’ll have to tell now,” he repeated; “in fact, you have virtually told already.”

She did not deny it. But she rose and went to him. There was something about her that always had a calming effect when he was vexed, and the charm worked this time as always. He took her hands, clasped them behind his neck, and drew her to him.

“Do let us announce it,” he said in a tone that was muffled by circumstances.

She returned his kiss, for although she knew all his mental deficiencies, she loved him dearly.

“I want to tell,” he whispered; “I’ve always wanted to tell, you know. What if we are poor? We’ll scrape along somehow. We’ll open a flower-shop or a laundry or something.”

She laid her face against his breast.

“I think we’d better tell, too,” she said. “That was the reason why I wrote the story. Writing stories is such a simple way of bringing the truth before the public.”

“But our marriage isn’t on a par with the state of the times nor the condition of your father’s estate,” he reminded her.

“No, not exactly,” she admitted; “but it was something that I felt should be known and which required careful leading up to.”

He kissed her again.

“But you’ll let it be known now?” he asked.

She did not say:

“I’ve wanted it known all the time, but you were so beastly afraid of your uncle.” Instead she murmured, “We’ll send an announcement to the newspapers to-night.”

Then she looked at him and smiled, and then for an instant her heart misgave her and she sighed. She knew that she had gained her purpose, and she knew that she liked him better than any other man; but she was a _femme d’esprit_, and she knew also that although he would one day be a duke, he never would be her equal. And, like all clever women who marry future dukes for love, she could but sigh slightly.

[7] This story was received by ~The Century~ shortly before the death of the author, which occurred February 4, 1913.

ST. ELIZABETH OF HUNGARY. BY FRANCISCO ZURBARÁN

(TIMOTHY COLE’S WOOD ENGRAVINGS OF MASTERPIECES IN AMERICAN GALLERIES)]

TIMOTHY COLE’S
WOOD ENGRAVINGS
OF
MASTERPIECES
IN
AMERICAN GALLERIES

ST. ELIZABETH
OF HUNGARY

BY

ZURBARÁN
]

THE RETURN TO HARD MONEY

BY CHARLES A. CONANT

Formerly Washington Correspondent of the New York “Journal of Commerce”

WITH PORTRAITS AND CARTOONS

TAXES FOR EVERYBODY

When the wrack and waste of war are done, and ceased are the tumults and the shouting, the harder task lies before the statesman and the financier of paying the cost. A great war, at least down to very recent times, has usually carried with it haphazard and wasteful financing, an oppressive debt, unequal and burdensome taxation, and a depreciated currency. The aftermath of the Civil War was no exception. At its close all these evils lay heavy upon the people of the United States.

The public debt stood at $2,846,000,000, or about $80 per capita; and of this amount nearly $1,900,000,000 was paying interest at the rate of six per cent., or higher. The ordinary expenditures of the Government, including the support of the armies, were running at the rate of about $3,300,000 a day, while receipts from taxation and other sources than loans were falling below $1,000,000 a day. The man of business could not affix his signature to a check, a receipt, or a bill of exchange, receive a legacy or transfer a piece of real estate, without paying a tax. Cotton was taxed two cents a pound; salt, six cents a hundred pounds; sugar, from two to three and a half cents a pound. Manufacturers were paying licenses for the right to do business, and also taxes upon the value of their output whether a profit emerged or not; middlemen were taxed upon the volume of goods dealt in, irrespective of the fact that such goods had already paid several times. Among other taxes were those levied on matches, photographs, lottery tickets, perfumery, theaters, and carriages; and additions made by repairs to the value of a carriage or a machine paid their own distinctive tax. Incomes were taxed up to twelve and one half per cent. There existed, in short, to use the terse language of David A. Wells, “a system of internal taxation which for its universality and peculiarities has no parallel in anything which had theretofore been recorded in civil history.”

A FLOOD OF PAPER MONEY

The currency consisted of irredeemable paper, a part issued by national banks, a part by State banks, and a part directly from the government printing-presses. Its value, which had been as low as $35.09 in gold for $100 in paper, in July, 1864, was still less than $70 in gold after the stimulus of Lee’s surrender. Prices of commodities, which had fluctuated even more wildly than the gold premium, showed an average for leading articles, in the first quarter of 1865, representing 2.62 times the corresponding average just before the war.

Brave and energetic as had been the policy of Salmon P. Chase as Secretary of the Treasury in grappling with the problems of the war, he made two economic errors which greatly added to the difficulties that confronted his successor. He continued too long the policy of borrowing instead of taxing, thereby impairing the public credit and adding to the cost of his borrowings; and he opened the Pandora’s box of legal-tender paper money, which left its mark upon our political history for nearly half a century.

DAVID A. WELLS]

McCULLOCH’S FACULTY FOR ECONOMY

The problems presented to Hugh McCulloch, when he succeeded to the headship of the Treasury in Lincoln’s second cabinet, were to reduce expenditures, to reorganize taxation, to systematize and consolidate the debt, and to restore stability to the currency. The country was fortunate in having such a man as Mr. McCulloch to perform these services. Of long experience as a practical banker, he had been made Comptroller of the Currency upon the reorganization of the national banking system, and was familiar with all branches of government finance. Fortunately, also, he was not a politician. He was a descendant of that small but prolific colony of Scotch and Scotch-Irish who settled in northern New England, whose sturdy courage enriched the blood of all other races with which it was mingled. His views of what was required to restore sanity to the national finances were not warped by fear of popular clamor; and if they went further than the condition of the country warranted in the direction of monetary contraction, they at least set a standard of national honor and obligation which was like a beacon set on a hill to the supporters of honest money.

Toward reducing expenditures, rapid progress was made as the million men who had sprung to arms at the call of the country were mustered out of the Grand Army and returned to their plows and workshops. Expenditures for the War Department, which were $1,030,000,000 in 1865, were brought down the next year to $283,000,000, and in 1867 to $95,000,000. On the side of reducing and simplifying taxation much was accomplished by the clear-headed young man who had been called into consultation by President Lincoln a few weeks before his death. This man, David A. Wells, tall, gaunt, and deadly in earnest, had perhaps a greater capacity for massing facts than any other American economist. At his suggestion, the war taxes, which had fettered production and exchange, began to drop from the limbs of industry. By the act of July 13, 1866, taxes on articles of common consumption were abolished, the income tax was suspended from and after June 30, 1870, and the foundations were laid of the existing system of internal revenue, taxing substantially only spirits and tobacco.

Of the elaborate operations of refunding, which converted obligations paying six and seven per cent. into five, four, and finally even into three per cent. securities, and raised American credit to the level of that of other powerful nations, it is not desirable, here, to set forth the details. It is enough to say that the funded debt was reduced within ten years after the war by nearly $500,000,000, and that interest payments upon it, which in 1867 were $143,700,000, had fallen in 1877 to $97,100,000. Even more remarkable in figures were the achievements of later years; but if it is by obstacles overcome that the greatness of a victory is measured, then the palm of achievement belongs to those earlier years when, in the language of Secretary McCulloch, “the industry of one third part of the country, by reason of the war and the unsettled state of its political affairs, has been exceedingly depressed, and the other two thirds by no means exerted their full productive power.”

A MEASURE OF THE COUNTRY’S GROWTH

For America was still only on the threshold of that wonderful development which was to make her in the beginning of the twentieth century one of the half-dozen great Powers of the world; with a homogeneous white population second in numbers only to that of Russia; with accumulated wealth exceeding in per capita average that of any other country except perhaps England; and with imperial interests in Cuba, Porto Rico, Central America, Samoa, the Philippine Islands, and China.

The population of the United States in 1860 was only 31,443,000, or less than one third what it was in 1912; and the estimated total wealth was $16,159,616,000, or about one seventh of the great accumulations of to-day. Of these amounts, moreover, the South had taken out of the Union a proportion which may be estimated roughly at two fifths. Railway mileage, which was 30,626 for the whole Union in 1860, had increased only to 35,085 in 1865, or less than one seventh the mileage of to-day. Much of the country west of the Mississippi was still an untracked wilderness. Senator John Sherman, after the adjournment of Congress in 1866, made a vacation trip with his brother, General William T. Sherman, in the general’s official inspection of army posts. The Central Pacific Railroad ended at Fort Kearney, and thence the party traveled in light army-wagons drawn by mules, camping at night, sleeping in the wagons, the horses parked near by, guarded by sentinels, and with the frequent menace of Indian attack.

Skilful as was the financial leadership required to reduce expenditures, reform taxation, and refund the debt, these were the least difficult in a sense of the economic problems of the war, because they were chiefly problems of legislation. Much more serious were the questions of escape from the hectic influences of war prices and conditions and of inflated government-paper issues; and these were to give their color to the industrial and financial history of the country for a generation. Dreams of untold fortunes derived from speculation in the securities of new railways were rendered peculiarly vivid by the disorganized state of the currency and the fluctuations in its gold value, stimulated by manipulation in the gold-room of the New York Stock Exchange, but due fundamentally to uncertainty as to the quantity of currency in circulation and as to when it would be made redeemable. Thaddeus Stevens went to the extreme of declaring that one of the measures proposed, with the approval of the Secretary of the Treasury, would put under the absolute and uncontrolled discretion of that official more than sixteen hundred million dollars’ worth of paper money, and would confer upon him more power “than was ever before conferred upon any one man in a government claiming to have a constitution.” It is small wonder that amid such possibilities speculation became a rankly luxuriant growth of the financial markets.

“BLACK FRIDAY”

Typical of these conditions was the famous “Black Friday” of September 24, 1869. It was the result of a daring speculation on the part of Jay Gould, “Jim” Fisk, and kindred spirits in Wall Street to corner the gold stock of the country and compel short sellers of the yellow metal to settle with them at their own price. Plans were carefully laid early in the summer of 1869 to enlist President Grant’s sympathy by convincing him that high prices were necessary to the prosperity of the country, and at the same time to entangle Mrs. Grant, her brother-in-law, A. R. Corbin (the husband of General Grant’s sister Virginia), the President’s private secretary, General Horace Porter, the Collector of the Port of New York, and others close to the President, in the appearance of a corrupt conspiracy to participate in the profits of the corner. It was planned to bring to a stop the sales of gold which were being made from time to time by the Secretary of the Treasury, and which tended to supply the demand for gold for the payment of customs and other special purposes, and thereby keep down its price. The tendency of the yellow metal had been downward during the spring, and the quotations of early September stood at about 135.

The effort to convince President Grant that he ought not to interfere by throwing Treasury gold upon the market was begun as early as the middle of June, when the President was on board one of the Fall River steamers on his way to Boston. Supper was served at nine o’clock, and the conversation was deftly turned to the state of the country, the crops, and the financial outlook. On Gould’s own confession, President Grant’s favorite rôle of a listener stood him in good stead. After listening for a long time to the talk, which had been carefully planned by Gould and in which Corbin and others took part, the President remarked that he thought there was a certain amount of fictitiousness about the prosperity of the country, and that the bubble might as well be tapped in one way as another. This remark, according to Gould, in his testimony before the Congressional Committee of investigation, “struck across us like a wet blanket.” They concluded that the President was a contractionist.

The game was by no means abandoned, however, as a result of this first rebuff. A prominent English financier who was visiting the country advocated the theory that business interests required an advance in the price of gold in order to move the crops and sell them on favorable terms in foreign markets. Corbin was a willing convert to this theory, for he was already a party to a pool in which Gould and Fisk were members. Corbin was put forward to talk to the President whenever he came in contact with him, and even introduced Gould for the purpose of presenting his views. The President, according to Corbin, engaged in these conversations with reluctance, and the moment any allusion was made to the future policy of the Government he became very reticent. Fisk also tried his hand on the President, but without much success. Thus matters dragged along until September, when the President wrote a letter to the Secretary of the Treasury, George S. Boutwell, suggesting that it would not be wise to sell gold in large amounts to force down the price while the crops were moving, as it might embarrass the West. This was the first ray of light from the Presidential office that had reached the conspirators. It is not certain that they knew definitely of this letter; but on the third and fourth of September gold began to rise rapidly, and on the sixth it touched 137-⅝.

About two weeks later, with President Grant staying at a small country place in Washington, Pennsylvania (on a visit to William Smith, a cousin of Mrs. Grant), far from the railway and the telegraph, the time seemed ripe to push up the price of the yellow metal, drive the “shorts” to cover, and compel them to settle. The final coup was played by getting Corbin to write a letter to the President, urging him not to interfere in the struggle between the two factions in the gold market by ordering or permitting sales of gold by the Treasury. A faithful messenger, W. O. Chapin, was selected to take this letter to Pittsburgh, and from there by carriage to Washington, thirty miles distant. It was testified by General Horace Porter, secretary to the President, that they were engaged one morning in playing a game of croquet when General Porter was told that a gentleman wished to see him. The messenger was asked to wait until the game was finished, when he handed Porter a note stating that he had a letter which he desired to deliver to the President. The letter was shown to the President, who glanced over it and said to the bearer, “No answer.” General Porter then called the President’s attention to the peculiarity of the missive being brought so far by a special messenger, with a letter of introduction. The President was set to thinking. The letter, which Corbin and his conspirators were relying upon to prevent interference by the Secretary of the Treasury, proved their ruin. President Grant began to see through the plot, and suggested to Mrs. Grant to say in a letter she was writing to Mrs. Corbin that rumors had reached her that Mr. Corbin was connected with speculators in New York, and that she hoped, if this were true, that he would disengage himself from them at once, adding that the President was very much distressed at such rumors.

Mrs. Grant’s letter caused something approaching a panic in the ranks of the gold speculators. When Gould called at Corbin’s house on the evening of Wednesday, September 22, and read the contents of the letter, it was apparent to him that Corbin had no such influence over the President as had been expected, and that a blow from the Treasury might fall at any hour. It was a picturesque spectacle, described by Gould himself in his testimony, when the two were shut in the library near midnight, Corbin bending over the table and straining with dim eyes to decipher the contents of the letter, written in pencil to his wife, while the gold-room gambler, looking over his shoulder, caught with his sharper vision every word. Corbin had already prepared a letter to the President denying that he had any interest in the movement, direct or indirect, and now told Gould that he must send the letter by the first mail; but that, if it were sent, its statements must be true. He proposed, therefore, to Gould that they should settle his (Corbin’s) account, paying him his accrued profits, which as gold stood that night would amount to more than $100,000, in addition to $25,000 which he had already received. Gould put the matter over until morning and eventually drew a check, which, however, never was paid to Corbin.

Gould knew better than to divulge the unfortunate news to Fisk. It appeared to be his plan to let him and their brokers continue to buy gold and force up its price, while Gould himself was unostentatiously getting rid of his stock at maximum prices. Fisk entered the gold-room the next morning and struck terror into the hearts of the “bears” by offering to bet any part of $50,000 that gold would sell at 200. Thursday afternoon gold closed at about 144, and the conspirators held a meeting in the evening to lay plans for the next day’s campaign. They held calls for more than $100,000,000 in gold, and there were not more than $15,000,000 of gold and gold certificates in New York, outside of the Sub-Treasury. They had a full list of those who were short of gold, including more than two hundred and fifty prominent firms; and it was proposed to publish this list next morning, and to inform the victims that if they did not settle at 160 before three o’clock, a higher rate would be demanded. This detail was abandoned because they were advised by counsel that under the statutes of New York such a course would constitute a conspiracy. Fisk was asked the next morning why he feared any sale the Treasury could make, since the clique held calls for more gold than both the Treasury and the city could command. His answer was, “Oh, our phantom gold can’t stand the weight of the real stuff!”

About Friday noon, the blow from the Treasury fell. President Grant had returned from Pennsylvania to Washington on the previous afternoon, and in the evening had held a consultation with the Secretary of the Treasury. Both agreed that if the price of gold should be forced higher, so as to threaten a general financial panic, it would be their duty to interfere to protect business interests. Friday morning the price advanced rapidly, and telegrams poured into Washington from all parts of the country, urging the Government to interfere and if possible prevent a financial crash. At a conference, held soon after eleven o’clock, it was agreed to sell $4,000,000 of Treasury gold. The message to the assistant treasurer at New York, General Butterfield, was not sent in cipher, and soon the news was in everybody’s mouth. In the meantime, James Brown, a Scottish banker of New York, with the support of leading merchants, offered successively to sell $1,000,000 gold at 162, another $1,000,000 at 161, and $5,000,000 more at 160. The market began to break; and when ten minutes afterward the news came that the Treasury would sell, the price fell from 160 to 133.

COMMODORE CORNELIUS VANDERBILT]

It was with difficulty that Gould and Fisk escaped from the fury of the ruined victims who had been following their lead, and succeeded in finding refuge in their up-town stronghold, the office of the Erie Railroad Company at Twenty-third Street and Eighth Avenue. During Thursday and Friday they had sold out at high rates a large part of the gold they had purchased, and had made many private settlements at rates ruinous to their victims. They now repudiated all the purchases they had made through Belden, the principal broker who had acted as their agent. They called on Corbin and overwhelmed him with denunciations. As Fisk told the story, Corbin “was on one side of the table weeping and wailing, and I was gnashing my teeth.” In vain they despatched Corbin to Washington to plead with Grant to suspend the order to sell. The President cut him short with the remark that that subject was closed. Corbin returned to New York and did not even see his fellow conspirators when he got back. As Fisk characterized the situation, “Matters took such a turn that it was no use; it was each man drag out his own corpse.” Afterward it was shown that neither Mrs. Grant nor General Porter was in any way connected with the conspiracy.

THE ERA OF RAILWAY BUILDING

“Black Friday” was only a symptom of the deeper disorders of the body politic. The minority of the committee of the House which investigated the “Black Friday” episode declared that “no one doubts that if the constitutional currency of coin had remained to us, such panics would have been, and would now be, impossible.” The stimulus to over-expansion afforded by an unstable currency operated also upon mercantile enterprise and railway development. The demand for the extension of the railway network over new farm land, and across the Rocky Mountains to the Pacific, became the channel through which speculative influences converged to bring on the panic of 1873. Already, in 1862, Congress had granted a charter for the construction of the Union Pacific line, and in 1864 it granted further aid by making the United States bonds that were to be issued for construction purposes a subordinate lien to that of the bonds of the company sold in the market. Thus, as John Sherman put it, “The constructors of these roads, who were mainly directors and managers of the company, practically received as profit a large portion of the bonds of the United States issued in aid of the work, and almost the entire capital stock of the company.” At the same time was enacted the Northern Pacific charter, which, according to the same authority, was an act “with broad and general powers, carelessly defined, and with scarcely any safeguards to protect the Government and its lavish grants of land.”

Already, shortly before the war, the ground had been cleared for extensive railway enterprises by the knitting together of small roads into trunk lines connecting New York with the Mississippi Valley. Originally, eleven companies owned and operated the lines making up the route between Albany and Buffalo. After this anomaly disappeared, it remained for the genius of Commodore Vanderbilt to acquire the Hudson River road in 1864 and the New York Central lines in 1867, and to bear his share in the picturesque battles of the Stock Exchange and the courts, which gave such fascination to this lawless epoch of American finance.

VANDERBILT AND DREW

It was the period of Cornelius Vanderbilt, Daniel Drew, Jay Gould, and “Jim” Fisk; the period in which were conceived and carried out the famous “corners” in Harlem, in Hudson River, and in Erie stocks. None of the leaders in these speculations would have shone in Newport or in the polished, well-groomed crowd that watches the races at Deauville or takes the “cures” at Vichy or at Nauheim. Cornelius Vanderbilt, the son of a farmer in moderate circumstances on Staten Island, was ferrying passengers over to New York at sixteen years of age, and at the age of eighteen owned two boats and was captain of a third. He derived his education from practical experience, his successes from innate shrewdness. Daniel Drew, beginning as a drover and afterward the keeper of a tavern, never sought to rise socially above his early environment. To a reported trick of his in early life is ascribed the familiar stock-market expression, “watering stock.” According to the legend, Drew gave his cattle salt in order to create a thirst, which would cause them to drink freely and make them appear bigger and fatter when brought to market. He was negligent in his attire, even to the verge of slovenliness, and never departed from the provincial pronunciation of his youth. In many a broker’s office where he called for his securities his loud demand for “them sheers” was long remembered.

THE BATTLE OF THE GIANTS OVER ERIE

“The Commodore,” as Vanderbilt was familiarly called, was seeking to develop the Hudson River property, when he found it assailed by a large “bear” element. Immediately taking the situation in hand, he tricked his opponents into the belief that his position was weak, and lured them into increasing their output of short stock. Getting virtually all the real stock in existence into his possession, and accepting contracts for additional amounts from the short interest, he soon had the market at his mercy. From 112 the stock rose in a few days to 180. The shorts, unable to make the deliveries they had contracted for, begged for mercy, and the stock was sold back to them at a handsome profit.

Much more complicated and daring were the operations of Daniel Drew, Jay Gould, and Fisk in Erie. The story of their use of the Erie road is worth outlining, if only to illustrate methods which in the financial world of to-day would no longer be tolerated, even if they were possible. In July, 1868, the Erie Railroad became the personal property of Fisk and Gould. The board of directors held no meetings; the executive committee never was called together. The Erie offices were moved to a white marble “palace” on the corner of Eighth Avenue and Twenty-third Street, which was furnished with vulgar ostentation, contained an opera-house (still a popular theater), and was connected with the private apartments of Fisk. Just before this (in 1866), Drew had operated his famous plan of loaning money to the Erie Railroad on the security of stock and convertible bonds, and converting the bonds into stock to meet his short contracts.

It was the acquisition by Commodore Vanderbilt in 1867 of the New York Central Railroad which brought him into conflict with Drew and Gould. “The Commodore” desired to acquire Erie. To guard against the transformation of more “convertible bonds” into stock, he employed the services of Frank Work to obtain from Judge Barnard an injunction restraining Drew from the payment of interest on $3,500,000 in bonds, pending an investigation of his accounts as treasurer of the railway. But Drew was equal to the emergency. Under a statute authorizing any railroad to create and issue its own stock in exchange for that of a leased line, he and his associates issued against an insignificant property, worth perhaps $250,000, the amount of $2,000,000 in Erie stock. Deals and counter-deals, and injunctions to restrain injunctions, did not prevent Fisk from seizing the enjoined stock certificates by force, nor Drew from aiding him by throwing 50,000 shares on the market and breaking Vanderbilt’s attempted “corner.” It is said that while new stock was thus being put out, Fisk summed up the purposes of his clique toward Vanderbilt in the remark, “If this printing-press don’t break down, I’ll give the old hog all he wants of Erie.” Vanderbilt was credited with spending $7,000,000 in this operation, and it was the wonder of his friends that he was not ruined.

To tell fully the story of these battles of the financial giants would be beyond the scope of a sketch like this. How Gould and Fisk succeeded Drew in control of the Erie; how they nearly ruined him when he came back into the speculative field; how Judge Barnard authorized Gould and Fisk to sell their Erie stock, issued at 40, back to the corporation at any price less than par, is a story of surpassing interest, but it represents methods long since discarded in American finance.

THE CHICAGO AND BOSTON FIRES

During these years of unsettlement and wild speculation, the country seemed pursued by an evil destiny. About two years after business credit was so seriously disturbed by the incidents of “Black Friday,” a destruction of capital amounting to more than $200,000,000 was caused by the great fire in Chicago, and within another thirteen months came the great fire in Boston. It was a quiet Sunday on October 8, 1871, when a small wooden barn on De Koven Street, Chicago, surrounded by cheaply-built wooden buildings and lumber-yards, burst into flames. Sweeping ruthlessly through the fire-traps of the western division of the city, the fire soon got beyond control, wiped out the Union Depot and the Pittsburgh and Fort Wayne Terminal, and destroyed in this division alone five hundred buildings. This, however, was only a beginning. All night Sunday and the following Monday the flames steadily advanced over the southern division, comprising nearly the whole of the business district, and then to the northern division, comprising many private residences. Business blocks of brick and granite melted like wax before the flames, which swept clear up to the water-front of Lake Michigan, and spread a pall of smoke and cinders far across the northern sky. All the wholesale stores, the newspaper offices, and the principal banks, insurance-and law-offices were reduced to smoldering heaps of ruins. The court-house, custom-house, and other public buildings, and nearly all the hotels, suffered the same fate. Crowds of people, driven from their homes, camped in the parks and sought refuge in the buildings left standing.

In the southern division, which was the business district, it was calculated that 3650 buildings were destroyed, including 1600 stores, twenty-eight hotels, and sixty manufacturing establishments. The number of people rendered homeless was estimated at 2250 in the western division, 21,800 in the southern division, and 74,450 in the northern division. The total money loss in buildings was calculated at $53,000,000; business stocks and produce, $84,000,000; and personal effects, $58,000,000. This total of nearly $200,000,000 was swelled by the depreciation of property which naturally followed such a destruction of values. The total valuation of the city before the fire was estimated at $620,000,000, and the population at 334,270. The insurance in force in the burned district was about $100,000,000; but fifty-six insurance companies suspended, and only about $40,000,000 in insurance was collected.

The Boston fire broke out on Saturday, November 9, 1872. The fire-department was crippled in fighting the fire by a remarkable epidemic, or distemper, which prevailed among the horses. So completely were the horses of the city disabled that ordinary local deliveries of merchandise had almost come to a standstill; some of the street-railways had ceased running, and teaming by oxen or by gangs of men was the only means of moving freight. On Saturday, October 26, a meeting was held at the City Hall of the board of engineers of the fire-department to decide upon a course of action in case of serious fire during the distemper. It was decided that the strength of each fire company should be temporarily doubled by the enlistment of volunteers, and that drag-ropes should be furnished each engine-house for the purpose of drawing the apparatus by hand. But with these precautions was taken a step which probably contributed materially to the delay in attacking the fire of two weeks later. It was provided that the hose-jumpers should alone be taken out on a first alarm, and that the engines were to follow only in case of a second alarm, unless the fire was above the third story.

The neighborhood in which the fire broke out was at the corner of Kingston and Summer streets. This corner was then on the fringe of the business district, with the remains of some of the old aristocratic homes of the city still standing, which had, however, for the most part, been converted into boarding-houses. It was in a five-story granite block that the fire began, and the whole building seemed to leap into flames before there was any response from the fire-department. Inexplicable delays seemed to attend the arrival of the engines. The fire was already visible in Charlestown before 7:10, and the alarm at City Hall was received only at 7:24 ~P.M.~ from box No. 52. Box No. 52 was known among the city firemen as “a bad box,” because it was in the heart of the dry-goods district, which was filled up with costly and inflammable stocks, and the principal water-mains were of insufficient size, put in years before, when it was a region of quiet dwellings. Only two engines left their quarters on the first alarm. Two others soon followed, but it required the third alarm, at 7:34, to bring out the rest of the force. Then, as the fire was gaining headway, went out the general alarm, and messages were rushed by telegraph to neighboring towns and cities to come to the aid of Boston.

The fire was already beyond control. Walls were toppling into the street, great billows of flame surged into the air, and the fire began pressing through street after street until it destroyed Trinity Church and threatened the Old South. At this historic spot was wrought something like the “miracle” that occurred on the field of Waterloo, when the burning of the chapel at Hougomont stopped when it reached the crucifix. The Old South was saved, and the fire was checked at Milk Street on the line between Devonshire and Washington streets.

The out-of-town engines in the meantime had been pouring into the city at all hours of Saturday night and up to Sunday morning, and rendered heroic services in raising a wall of water against the flames. Crowds of citizens gathered on the corners and watched the struggle to stay the fire. President Eliot of Harvard University mingled with the crowd, his mind weighed down perhaps by the thought of the injury to Harvard’s endowments invested in Boston real estate. Phillips Brooks, the young rector of Trinity, stayed in the church, then on Summer Street, near Hawley, until lines of flame were creeping along the rafters. Powder was used in some cases to blow up buildings and thereby destroy the fuel for the flames.

In Boston as in Chicago, soldiers were called to the aid of the civil authorities to patrol the smoking heaps of ruins, in which were buried many safes containing money, jewelry, and valuable documents. Serious as the fire was, it did not sweep over any such territory as in Chicago, nor represent half of the Chicago loss. The total loss in Boston was estimated at $75,291,530, out of a valuation for the entire city (which did not then include Charlestown and other suburbs) of $682,724,300. Buildings and property were largely insured, but the magnitude of the calamity again carried down many insurance companies and permitted them to pay only a percentage of their losses. Upon the whole, however, the insurance companies acquitted themselves with remarkable credit, the Massachusetts mutual companies, of which there were fourteen, paying losses in full except two. Companies organized in other States to the number of about 120, which had Boston risks, paid their losses in full, with the exception of four companies.

THE PANIC OF 1873