Chapter 22

by Upton Sinclair

　　At eight the next morning the train from the Adirondacks arrived,and Montague was awakened by his brother at the telephone. "Have youseen this morning's Despatch?" was Oliver's first word.

　　"I haven't seen it," said Montague; "but I know what's in it."

　　"About the Trust Company of the Republic?" asked Oliver.

　　"Yes," said the other. "I was told the story before I telegraphedyou."

　　"But my God, man," cried Oliver--"then why aren't you down town?"

　　"I'm going to let my money stay."

　　"What?"

　　"I believe that the institution is sound; and I am not going toleave Prentice in the lurch. I telegraphed you, so that you could doas you chose."

　　It was a moment or two before Oliver could find words to reply.

　　"Thanks!" he said. "You might have done a little more--sent somebodydown to keep a place in line for me. You're out of your mind, butthere's no time to talk about it now. Good-by." And so he rang off.

　　Montague dressed and had his breakfast; in the meantime he glancedover a copy of the Despatch, where, in the account of the day'sevents, he found the fatal statements about the Trust Company of theRepublic. It was very interesting to Montague to read thesenewspapers and see the picture of events which they presented to thepublic. They all told what they could not avoid telling--that is,the events which were public matters; but they never by any chancegave a hint of the reasons for the happenings--you would havesupposed that all these upheavals in the banking world were so manythunderbolts which had fallen from the heavens above. And each daythey gave more of their space to insisting that the previous day'smisfortunes were the last--that by no chance could there be any morethunderbolts to fall.

　　When he went down town, he rode one station farther than usual inorder to pass the Trust Company of the Republic. He found a line ofpeople extending halfway round the block, and in the minute that hestood watching there were a score or more added to it. Police werepatrolling up and down--it was not many hours later that they werecompelled to adopt the expedient of issuing numbered tickets tothose who waited in the line.

　　Montague walked on toward the front, looking for his brother. But hehad not gone very far before he gave an exclamation of amazement. Hesaw a short, stout, grey-haired figure, which he recognised, even byits back. "Major Venable!" he gasped.

　　The Major whirled about. "Montague!" he exclaimed. "My God, you arejust in time to save my life!"

　　"What do you want?" asked the other.

　　"I want a chair!" gasped the Major, whose purple features seemedabout to burst with his unwonted exertions. "I've been standing herefor two hours. In another minute more I should have sat down on thesidewalk."

　　"Where can I get a chair?" asked Montague, biting his tongue inorder to repress his amusement.

　　"Over on Broadway," said the Major. "Go into one of the stores, andmake somebody sell you one. Pay anything--I don't care."

　　So Montague went back, and entered a leather-goods store, where hesaw several cane-seated chairs. He was free to laugh then all hepleased; and he explained the situation to one of the clerks, whodemurred at five dollars, but finally consented for ten dollars totake the risk of displeasing his employer. For fifty cents moreMontague found a boy to carry it, and he returned in triumph to hisvenerable friend.

　　"I never expected to see you in a position like this," he remarked."I thought you always knew things in advance."

　　"By the Lord, Montague!" muttered the other, "I've got a quarter ofa million in this place."

　　"I've got about one-fourth as much myself," said Montague.

　　"What!" cried the Major. "Then what are you doing?"

　　"I'm going to leave it in," said Montague. "I have reason to knowthat that report in the Despatch is simply a blunder, and that theinstitution is sound."

　　"But, man, there'll be a run on it!" sputtered the old gentleman.

　　"There will, if everybody behaves like you. You don't need yourquarter of a million to pay for your lunch, do you?"

　　The Major was too much amazed to find a reply.

　　"You put your money in a trust company," the other continued, "andyou know that it only keeps five per cent reserve, and is liable topay a hundred per cent of its deposits. How can you expect it to dothat?"

　　"I don't expect it," said the Major, grimly; "I expect to be amongthe five per cent." And he cast his eye up the line, and added, "Irather think I am."

　　Montague went on ahead, and found his brother, with only about ascore of people ahead of him. Apparently not many of the depositorsof the Trust Company read their newspapers before eight o'clock inthe morning.

　　"Do you want a chair, too?" asked Montague. "I just got one for theMajor."

　　"Is he here, too?" exclaimed Oliver. "Good Heavens! No, I don't wanta chair," he added, "I'll get through early. But, Allan, tellme--what in the world is the matter? Do you really mean that your moneyis still in here?"

　　"It's here," the other answered. "There's no use arguing aboutit--come over to the office when you get your money."

　　"I got the train just by half a minute," said Oliver. "Poor BertieStuyvesant didn't get up in time, and he's coming on a special--he'sgot about three hundred thousand in here. It was to pay for his newyacht."

　　"I guess some of the yacht-makers won't be quite so busy from nowon," remarked the other, as he moved away.

　　That afternoon he heard the story of how General Prentice, as adirector of the Gotham Trust, had voted that the institution shouldnot close its doors, and then, as president of the Trust Company ofthe Republic, had sent over and cashed a check for a milliondollars. None of the newspapers printed that story, but it ran frommouth to mouth, and was soon the jest of the whole city. Men saidthat it was this act of treachery which had taken the heart out ofthe Gotham Trust Company directors, and led to the closing of itsdoors.

　　Such was the beginning of the panic as Montague saw it. It had allworked out beautifully, according to the schedule. The stock marketwas falling to pieces--some of the leading stocks were fallingseveral points between transactions, and Wyman and Hegan and the Oiland Steel people were hammering the market and getting ready for thekilling. And at the same time, representatives of Waterman inWashington were interviewing the President, and setting before himthe desperate plight of the Mississippi Steel Company. Already thestructure of the country's finances was tottering; and here was onemore big failure threatening. Realising the desperate situation, theSteel Trust was willing to do its part to save the country--it wouldtake over the Mississippi Steel Company, provided only that theGovernment would not interfere. The desired promise was given; andso that last of Waterman's purposes was accomplished.

　　But there was one factor in the problem upon which few had reckoned,and that was the vast public which furnished all the money for thegame--the people to whom dollars were not simply gamblers' chips,but to whom they stood for the necessities of life; business men whomust have them to pay their clerks on Saturday afternoon;working-men who needed them for rent and food; helpless widows andorphans to whom they meant safety from starvation. These unhappypeople had no means of knowing that financial institutions, whichwere perfectly sound and able to pay their depositors, might bewrecked deliberately in a gamblers' game. When they heard that bankswere tottering, and were being besieged for money, they concludedthat there must be real danger--that the long-predicted crash mustbe at hand. They descended upon Wall Street in hordes--the wholefinancial district was packed with terrified crowds, and squads ofpolicemen rode through upon horseback in order to keep open thestreets.

　　"Somebody asked for a dollar," was the way one banker phrased it.Wall Street had been doing business with pieces of paper; and nowsomeone asked for a dollar, and it was discovered that the dollarhad been mislaid.

　　It was an experience for which the captains of finance were notentirely prepared; they had forgotten the public. It was like somegreat convulsion of nature, which made mockery of all the powers ofmen, and left the beholder dazed and terrified. In Wall Street menstood as if in a valley, and saw far up above them the starting ofan avalanche; they stood fascinated with horror, and watched itgathering headway; saw the clouds of dust rising up, and heard theroar of it swelling, and realised that it was a matter of only asecond or two before it would be upon them and sweep them todestruction.

　　The lines of people before the Gotham Trust and the Trust Company ofthe Republic were now blocks in length; and every hour one heard ofruns upon new institutions. There were women wringing their handsand crying in nervous excitement; there were old people, scarcelyable to totter; there were people who had risen from sick-beds, andwho stood all through the day and night, shivering in the keenOctober winds.

　　Runs had begun on the savings banks also; over on the East Side thealarm had reached the ignorant foreign population. It had spreadwith the speed of lightning all over the country; already there werereports of runs in other cities, and from thousands and tens ofthousands of banks in East and South and West came demands upon theMetropolis for money. And there was no money anywhere.

　　And so the masters of the Banking Trust realised to their annoyancethat the monster which they had turned loose might get beyond theircontrol. Runs were beginning upon institutions in which theythemselves were concerned. In the face of madness such as this, eventhe twenty-five per cent reserves of the national banks would not besufficient. The moving of the cotton and grain crops had takenhundreds of millions from New York; and there was no money to be gotby any chance from abroad. Everywhere they turned, they faced thisappalling scarcity of money; nothing could be sold, no money couldbe borrowed. The few who had succeeded in getting their cash wererenting safe-deposit boxes and hiding the actual coin.

　　And so, all their purposes having been accomplished, the bankers setto work to stem the tide. Frantic telegrams were sent to Washington,and the Secretary of the Treasury deposited six million dollars inthe national banks of the Metropolis, and then came on himself toconsult.

　　Men turned to Dan Waterman, who was everywhere recognised as themaster of the banking world. The rivalry of the different factionsceased in the presence of this peril; and Waterman became suddenly aking, with practically absolute control of the resources of everybank in the city. Even the Government placed itself in his hands;the Secretary of the Treasury became one of his clerks, and bankpresidents and financiers came crowding into his office likepanic-stricken children. Even the proudest and most defiant men,like Wyman and Hegan, took his orders and listened humbly to histirades.

　　All these events were public history, and one might follow them dayby day in the newspapers. Waterman's earlier acts had been plannedand carried out in darkness. No one knew, no one had the faintestsuspicion. But now newspaper reporters attended the conferences andtrailed Waterman about wherever he went, and the public was invitedto the wonderful spectacle of this battle-worn veteran, rousinghimself for one last desperate campaign and saving the honour andcredit of the country.

　　The public hung upon his lightest word, praying for his success. TheSecretary of the Treasury sat in the Sub-Treasury building near hisoffice, and poured out the funds of the Government under hisdirection. Thirty-two million dollars in all were thus placed withthe national banks; and from all these institutions Waterman drewthe funds which he poured into the vaults of the imperilled banksand trust companies. It was a time when one man's peril was everyman's, and none might stand alone. And Waterman was a despot,imperious and terrible. "I have taken care of my bank," said onepresident; "and I intend to shut myself up in it and wait until thestorm is over." "If you do," Waterman retorted, "I will build a wallaround you, and you will never get out of it again!" And so thebanker contributed the necessary number of millions.

　　The fight centred around the imperilled Trust Company of theRepublic. It was recognised by everyone that if Prentice'sinstitution went down, it would mean defeat. Longer and longer grewthe line of waiting depositors; the vaults were nearly empty. Thecashiers adopted the expedient of paying very slowly--they wouldtake half an hour or more to investigate a single check; and thusthey kept going until more money arrived. The savings banks of thecity agreed unanimously to close their doors, availing themselves oftheir legal right to demand sixty days before paying. The nationalbanks resorted to the expedient of paying with clearing-housecertificates. The newspapers preached confidence and cheered thepublic--even the newsboys were silenced, so that their shrill criesmight no longer increase the public excitement. Groups of mountedpolicemen swept up and down the streets, keeping the crowds upon themove.

　　And so at last came the fateful Thursday, the climax of the panic. Apall seemed to have fallen upon Wall Street. Men ran here and there,bareheaded and pale with fright. Upon the floor of the StockExchange men held their breath. The market was falling to pieces.All sales had stopped; one might quote any price one chose, for itwas impossible to borrow a dollar. Interest rates had gone to onehundred and fifty per cent to two hundred per cent; a man might haveoffered a thousand per cent for a large sum and not obtained it. Thebrokers stood about, gazing at each other in utter despair. Such anhour had never before been known.

　　All this time the funds of the Government had been withheld from theExchange. The Government must not help the gamblers, everyoneinsisted. But now had come the moment when it seemed that theExchange must be closed. Thousands of firms would be ruined, thebusiness of the country would be paralysed. There came word that thePittsburg Exchange had closed. So once more the terrified magnatescrowded into Waterman's office. Once more the funds of theGovernment were poured into the banks; and from the banks they cameto Waterman; and within a few minutes after the crisis haddeveloped, the announcement was made that Dan Waterman would lendtwenty-five million dollars at ten per cent.

　　So the peril was averted. Brokers upon the floor wept for joy, andcheers rang through all the Street. A mob of men gathered in frontof Waterman's office, singing a chorus of adulation.

　　All these events Montague followed day by day. He was passingthrough Wall Street that Thursday afternoon, and he heard the crowdssinging. He turned away, bitter and sick at heart. Could a moretragic piece of irony have been imagined than this--that the man,who of all men had been responsible for this terrible calamity,should be heralded before the whole country as the one who avertedit! Could there have been a more appalling illustration of the wayin which the masters of the Metropolis were wont to hoodwink itsblind and helpless population?

　　There was only one man to whom Montague could vent his feelings;only one man besides himself who knew the real truth. Montague gotthe habit, when he left his work, of stopping at the Expressbuilding, and listening for a few minutes to the grumbling of Bates.

　　Bates would have each day's news fresh from the inside; not only thethings which would be printed on the morrow, but the things whichwould never be printed anywhere. And he and Montague would feed thefires of each other's rage. One day it would be one of the Express'sown editorials, in which it was pointed out that the intemperatespeeches and reckless policies of the President were now bearingtheir natural fruit; another day it would be a letter from aprominent clergyman, naming Waterman as the President's successor.

　　Men were beside themselves with wonder at the generosity of Watermanin lending twenty-five millions at ten per cent. But it was not hisown money--it was the money of the national banks which he waslending; and this was money which the national banks had got fromthe Government, and for which they paid the Government no interestat all. There was never any graft in the world so easy as thenational bank graft, declared Bates. These smooth gentlemen got thepeople's money to build their institutions. They got the Governmentto deposit money with them, and they paid the Government nothing,and charged the people interest for it. They had the privilege ofissuing a few hundred millions of bank-notes, and they chargedinterest for these and paid the Government nothing. And then, to capthe climax, they used their profits to buy up the Government! Theyfilled the Treasury Department with their people, and when they gotinto trouble, the Sub-Treasury was emptied into their vaults. And inthe face of all this, the people agitated for postal savings banks,and couldn't get them. In other countries the people had banks wherethey could put their money with absolute certainty; for no one hadever known such a thing as a run upon a postal bank.

　　"Sometimes," said Bates, "it seems almost as if our people werehypnotised. You saw all this life insurance scandal, Mr. Montague;and there's one simple and obvious remedy for all the evils--if wehad Government life insurance, it could never fail, and there'dbe no surplus for Wall Street gamblers. It sounds almostincredible--but do you know, I followed that agitation as I don'tbelieve any other man in this country followed it--and from first tolast I don't believe that one single suggestion of that remedy was evermade in print!"

　　A startled look had come upon Montague's face as he listened. "Idon't believe I ever thought of it myself!" he exclaimed.

　　And Bates shrugged his shoulders. "You see!" he said. "So it goes."