CHAPTER XVIII.
“Uncle Sam to the rescue!”
David Morning returned to New York three days after the dinner party described in the last chapter. His typewriters were in attendance as usual, and he began opening his accumulated correspondance, when his secretary knocked at the door communicating with the next room, and, entering, said to his employer:—
“Mr. Morning, pardon me for disturbing you, but will you please step into the phonograph room. There is a good deal of matter on the cylinders which has been placed there by others in your absence, and, I judge, placed there inadvertently. I think you had better hear it yourself before it is transcribed.”
Morning walked into the other room and was for half an hour an interested auditor of the revelations of the wonderful phonograph. He directed his secretary to remove, label, and lock up the cylinders containing the dinner-party conversation, and said in conclusion:—
“Mr. Stephens, somebody has evidently been having a dinner party in this room during my absence. It was not a nice thing for the proprietors to do, but I shall not notice it. Try to find out who dined here, without disclosing that I am aware that the room was occupied. I think I recognize the voices of the occupants, but I wish to be sure.”
By inquiring among the waiters, the secretary ascertained, and reported to Mr. Morning, that the guests were Claybank, Wolf, and Gray.
That night our hero departed for Washington, and early next morning he was closeted with the secretary of the treasury, to whom he revealed the knowledge gathered from the phonograph cylinders.
“It is an infamous piece of business,” said the secretary warmly, “but what, Mr. Morning, can I do about it?”
“Mr. Secretary,” said Morning, “will you pardon me for saying frankly that it is your duty to baffle these conspirators and restore values to their normal condition. It is the business of the government to provide a supply of money for the needs and uses of commerce. These scoundrels will bring about a panic by locking up in the vaults of New York, Philadelphia, and Boston banks, $300,000,000, which ought to be in circulation among the people. You have three hundred millions of coin and paper money in the treasury. Why not pour this money into Wall Street, break the back of this conspiracy, and relieve the people?”
“But I have no authority, Mr. Morning, as you must know, to use one dollar of this money for any other purposes than those designated by law. If I had the power, believe me, I would be only too glad to exercise it as you desire.”
“Does not the Act of Congress of February, 1894, known as the free coinage law, permit you, Mr. Secretary, to substitute gold or silver bars of standard fineness, for the coined money and paper money in the treasury vaults?”
“Yes,” replied the secretary, “but I do not see how that law can be invoked to relieve the situation. There are not three hundred millions of gold and silver ingots in private ownership in the country, or, probably, in the world. The very large output of $1,000,000 in gold per week from the Morning mine will not serve us in this exigency. It would require six years’ yield of your mine, Mr. Morning, to furnish enough gold to release the money now in the treasury, and baffle Messrs. Gray, Claybank, and Wolf. Three hundred millions of dollars is a good deal of money, Mr. Morning—a good deal of money.”
“Relatively it is, Mr. Secretary, but I have five times that sum in gold bars here, in Philadelphia, and New York.”
The secretary glanced at the Arizona Gold King, and looked uneasily at the bell cord which hung above his desk.
“No, I am not crazy,” said Morning with a laugh, “though I do not blame you for thinking so. The time has come somewhat sooner than I expected for intrusting you with my secret. The Morning mine is a phenomenal deposit of gold. It is so large that, fearing any general knowledge of its extent might cause demonetization of gold by the nations, I took measures to conceal its true yield, and for every ounce of gold which I shipped to New York or London as the ostensible product of the mine, I shipped twenty-five other ounces disguised as pig-copper to this city, or New York, or Philadelphia, or Liverpool. In the latter place $1,000,000,000 are stored, and there are $500,000,000 in each of the American cities I have named. A month ago I sent four of my trusted men from the mine to this city, where they have since been busy with cold chisels, releasing the gold bars from their copper moulds. They will go from here to Philadelphia and New York, and thence to Liverpool, for similar labors. I did not intend, Mr. Secretary, to offer any of this gold for coinage or sale until able to present it simultaneously at European and American mints. But the present exigency induces me to turn over to the United States for coinage, the five hundred millions of gold bars now ready for delivery in this city. I may add, Mr. Secretary, to quiet the apprehensions which your deep interest in the commercial prosperity of the country might lead you to entertain, that I have not intended, and do not now intend, to throw $2,500,000,000 of new money immediately into the channels of commerce. I shall change the gold bars into money at once, in order that the present value may not, by demonetization, be taken away from gold; but, once transformed into money, it will be fed gradually to the world, and not precipitated upon it.”
“But, Mr. Morning, it will require the constant labor for a long time of the mint and all its branches to coin this large sum, and you require the money at once.”
“I propose, Mr. Secretary, to avail myself of the law of February, 1894, and claim treasury notes for my ingots. That Act of Congress will enable you to print in two or three days enough bills of large denomination to cover the whole sum.”
“You astound me, Mr. Morning, but I suppose I must believe you.”
“If you will ride with me to the foot of Sixth Street, Mr. Secretary, I will exhibit to you $500,000,000 in gold bars.”
“But, Mr. Morning, even $500,000,000 suddenly poured into Wall Street will create a wilder panic and precipitate worse results, than those which may come from the pending conspiracy.”
“I do not think so,” said Morning quietly. “It is contraction and not inflation that hurts. A flood may be disastrous to the crops in places, but a general drought will surely kill them all.”
“If Congress were in session, Mr. Morning, it would be likely to demonetize gold. It would never suffer fifteen hundred millions of money to be thus added to the present currency. Why, such an amount will double at once the entire paper and metallic money of the country!”
“But Congress is not in session, Mr. Secretary, and you will pardon me for saying that, whatever may be your individual opinion as to consequences, you have no power to refuse to issue gold notes as fast as you can cause them to be engraved, for any amount of gold bars that I may offer.”
“True,” replied the secretary.
“But I repeat, Mr. Secretary, that I hope to guard against the evils you apprehend. I should be an unworthy custodian of the great trust which has come into my hands, if I could misuse it to harm either my country or my fellow-men.”
“For the present I can only use the ingots which are here in Washington. The New York and Philadelphia hoards will be ready in about a month, when I shall require treasury notes for them, but before I offer them to you, and before their existence shall be known generally, I shall endeavor to place in the mints at London, Paris, Berlin, Madrid, Milan, Vienna, and St. Petersburg, and in the banks of the principal cities of Europe simultaneously, in exchange for metallic and paper money of those countries, the one thousand millions now in Liverpool.”
The secretary bowed.
“Will you order three hundred millions of gold notes, of the denomination of $1,000 each, printed at once, and arrange to weigh, test, and receive the five hundred millions of bars in my warehouse at the foot of Sixth Street? If it be not irregular, you might receive the ingots where they are, deliver to me at once the two hundred millions of paper money now in the treasury vaults, and the remaining three hundred millions when printed. The gold bars can be removed to the treasury vaults at your convenience. I ask that this method be followed because, if I am to relieve the situation in New York, I must be on hand there with the actual currency. Ordinarily treasury drafts would answer the purpose, but, under present circumstances, they would be useless, as no bank could cash them, and they are not a legal tender. These bandits will have locked up all the money in special deposits, and their well-devised scheme can only be baffled by one who has—outside of any channel within their control, and outside of their knowledge—a vast sum in actual money.”
“How, may I ask, do you propose to defeat their plans, Mr. Morning?”
“My brokers will purchase for cash all the stocks they offer, and, on deposit of sufficient margin, loan them the stocks back again, to be again sold to me. In brief, I will take all their ‘shorts,’ and all the stocks sold by others which their conspiracy will force upon the market. When they have forced prices down to a point where they are ready to cover their shorts and buy for an advance, I will suddenly jump prices to the level they occupied before the conspirators commenced their operations, and thus commend to their own lips the bitter draught they have prepared for others. I shall know—for I have many sources of information, Mr. Secretary—I shall know what portion of my purchases of stock will come from the conspirators, and what portion from men who will be forced by the panic to part with their holdings. I shall subsequently make good to those others all their losses. The one or two hundred millions which I may by this process extract from Mr. Gray, Mr. Claybank, and Mr. Wolf, I shall not”—and Morning smiled—“restore to them. I shall devote it to founding and maintaining industrial schools.”
“Your plan, Mr. Morning, is a brave and gigantic one. Is there no chance of its failure?”
“Not if I can have your co-operation, Mr. Secretary, in keeping secret for a week or ten days the fact that you have, under the law of February, 1894, received five hundred millions of ingot gold, and issued treasury notes therefor. These scoundrels will have locked up all the available money in the great financial centers. They know that, under the present law, the three hundred millions of paper and coin money in the government vaults cannot be released so as to flow into the channels of commerce except by deposits of gold or silver bullion to take its place. My secret has been carefully kept, and they do not dream of the existence in private ownership of five hundred millions, or even fifty millions, in gold bars. If I can keep this secret from them until the hour to strike arrives, I will give them a lesson that will cure them for the future of any disposition to lock up money and constrict the arterial blood of commerce for the purposes of private gain.”
“But will not their losses be largely on paper, Mr. Morning? What if they refuse to pay?”
“I shall not go into court with them, Mr. Secretary, and it will not be necessary. Let me further illustrate. They sell one thousand shares say of Northwestern at $110, and I buy it. They take the $110,000 received by them from my broker and add to it ten or twenty thousand dollars for margin, and borrow from me the one thousand shares of Northwestern just sold me, depositing the one hundred and twenty or one hundred and thirty thousand dollars as security for the return of the borrowed stock. When Northwestern, under the pressure of their sales, descends to $100, they put up additional margin for the stock borrowed, and borrow more stock on the same terms. If they continue this process until they have forced Northwestern down to $80 or $70, and could then buy enough to replace the borrowed stock and call in the money they had deposited as ‘margin,’ they would make as profit the difference between the low price at which they purchased and the average of their sales. But if Northwestern should suddenly jump in price to a point higher than the value to which they had margined it, then my brokers would purchase, at this high rate, enough Northwestern to make good the stock loaned to them, using for that purpose the money deposited by the conspirators as ‘margin.’ I propose to let these gentlemen have all the rope they want, and when they attempt to turn and become buyers, I will spring stocks at once to their original price, and confiscate all their margins.”
“I will aid you, Mr. Morning, as you request, by keeping our transactions secret as far as possible, though I can’t promise you success in that. At least a dozen men will be required to print the gold notes in the Bureau of Engraving and Printing, and those men will know of the issuance of so vast a sum as $300,000,000. Half a dozen more must know of the removal of the two hundred millions of paper money now in the treasury vaults, and at least a dozen men will be needed to weigh and remove the gold bars from your warehouse. What is known to thirty men will soon, I fear, be known to the world. I will detail only discreet men, who shall work under pledges of secrecy, the violation of which shall cost them their places, but, after every precaution shall have been taken, who shall baffle the ubiquitous newspaper reporter in search of a ‘scoop’? He will crawl through the coal hole or the area railings. He will walk with the cats on the top of spikes and broken bottles. He will act as a car-driver, a barber, or a purchaser of old clothing. I verily believe that if he had lived in the olden days he would have coaxed Cæsar to reveal the plan of his next campaign, and wrested from the Egyptian Sphinx her secret. I fear, Mr. Morning, that the reporters will prove too much for us.”
“I have had some experience in keeping secrets, Mr. Secretary, and if you will permit me to direct the details of the movement, I will undertake that no inkling of it shall reach the ears of the reporters.”
“How will you avoid it, Mr. Morning?”
“Anticipating your consent and co-operation, Mr. Secretary, I directed the captain of my steam yacht, the Oro, to come here from New York without delay, and by to-night she will be moored in the Potomac, opposite the warehouse at the foot of Sixth Street. I propose that, with the officials and men whose duty it will be to test and weigh the gold bars, you shall examine them where they are in the warehouse. You will take the keys and take possession, and, if you desire, will detail guards for the warehouse who will not know what they are guarding. As soon as satisfied of the quality and quantity of the gold, you will direct the printing of three hundred millions of treasury notes, and will deliver me the two hundred millions of paper money now in the treasury vaults. The three hundred millions can be printed in bills of the denomination of $1,000, and may be packed in five good-sized trunks. The $200,000,000 now in the treasury, being in bills of smaller denominations, will require fifteen trunks for their accommodation. My four trusted men, who have been busy here for the past month cutting the gold bars out of their copper jackets, will procure fifteen trunks of different makes and marks, and after they have been filled with currency at the treasury vaults, will carry them in an express wagon, which I will purchase, to the railroad depot, and check them for New York in four different lots, purchasing two or three passage tickets for New York for each lot of trunks. They will go as ordinary baggage to New York, and there be taken to my office on Broadway, without exciting suspicion or comment. Two of the men will return from New York here, and a similar plan can be pursued with the $300,000,000, which will be printed in the meantime.”
“I do not yet see, Mr. Morning, how you propose to close the mouths of the treasury officials engaged in the business here.”
“I ask, Mr. Secretary, that for all this work you will select reliable men, unmarried, and who can be absent from their places of abode for a fortnight without comment. Inform each man selected that he will be employed in a matter requiring secrecy, and that it will involve an ocean trip. I propose that every man connected with the transaction, except yourself, Mr. Secretary, every man, from the official who tests the gold, to the official who packs the currency into the trunks, shall, from the time he enters upon the performance of his duty, until it is completed, remain in place. I will have food, and, if need be, cots for sleeping at the warehouse, and the placing of the currency in the trunks will not require more than an hour or two of time. Each man, as he completes his duty, will go on board the Oro, and when all are on board, the steamer will put to sea, with orders to cruise for two weeks and then return here. Each of the gentlemen taking this voyage will be presented by me with the sum of $1,000 for his services. The examination and weighing of the gold bars in the warehouse, and the packing and shipment of the two hundred millions of paper money now in the treasury, can, I think, be completed by to-morrow, and the Oro steam out to-morrow night, with a passenger list including the names of all those who have any knowledge of the fact that two hundred millions of treasury notes are on their way to New York, and that the government has $500,000,000 worth of gold bars in its vaults.”
“And how about the three hundred millions of notes ordered printed?”
“Those engaged in the printing can be similarly detailed, similarly instructed, and similarly dealt with. I have chartered the New Dominion, now lying at Norfolk, for a voyage to Port au Prince, on the island of Santa Domingo. She has steam up, awaiting orders. She will be here in time, and all those who have knowledge of the printing or shipment of the other three hundred millions, will, on the completion of their duties, go on board of her for a trip to Hayti, and, on their return a fortnight afterwards, receive the same gift of $1,000 each for his services.”
“Your plan is ingenious, yet simple, Mr. Morning, and seems likely to be effective. So far as this department is concerned, its execution will involve a departure from all rules and precedents, and I shall not escape hot criticism if I order it, especially from the New York papers controlled by the conspirators. But I see nothing really wrong or objectionable in it, and ‘nice customs courtesy to great kings,’ and you are a great king, Mr. Morning.”
“Say rather that the exigency is a great king, Mr. Secretary. You will then aid me as I ask you.”
“Yes.”
“Thank you, Mr. Secretary. In the future any favor you may ask of me, personal or official, will not be denied.”