It happened also on this day that everyone was thinking of something else. That was nothing less than the imminent bankruptcy of the United States Treasury. This delirious event now seemed inevitable.
For several weeks uninterruptedly there had been a run on the government’s gold fund. People were frantic to exchange white money for gold. They waited in a writhing line that kept its insatiable head inside the doors of the sub-Treasury. Its body flowed down the long steps, lay along the north side of Wall Street and terminated in a wriggling tail around the corner in William Street, five minutes’ walk away. It moved steadily forward by successive movements of contraction and elongation. Each day at 3 o’clock the sub-Treasury, slamming its doors, cut off the monster’s head. Each morning at 10 o’clock there was a new and hungrier head waiting to push its way in the instant the doors opened. Its food was gold and nothing else, for it lived there night and day. The particles might change; its total character was always the same. Greed and fear were the integrating principles. Human beings were the helpless cells. It grew. Steadily it ate its way deeper into the nation’s gold reserve, and there was no controlling it, for Congress had said that white money and gold were of equal value and could not believe it was not so. The paying tellers worked very slowly to gain time.
The spectacle was weirdly fascinating. I had been going every day at lunch time to see it. This day the spectators were more numerous than usual, the street was congested with them, because the officers of the sub-Treasury had just telegraphed to Washington saying they could hold out only a few hours more. That meant the gold was nearly gone. It meant that the United States Treasury might at any moment put up its shutters and post a notice: “CLOSED. Payments suspended. No more gold.”
Never had the line been so excited, so terribly ophidian in its aspect. Its writhings were sickening. The police handled it as the zoo keepers handle a great serpent. That is, they kept it straight. If once it should begin to coil the panic would be uncontrollable.
Particles detached themselves from the tail and ran up and down the body trying to buy places nearer the head. Those nearest the head hotly disputed the right of substitution, as when someone came to take a position he had been paying another to hold. In the tense babel of voices there came sudden fissures of stillness, so that one heard one’s own breathing or the far-off sounds of river traffic. At those moments what was passing before the eyes had the phantastic reality of a dream.
In the throng on the opposite side of the street I ran into Galt and Jonas Gates together. Later it occurred to me that I had never before seen Galt with any director of the Great Midwestern, and it surprised me particularly, as an after thought, that he should know Gates. Just then, however, there was no thinking of anything but the drama in view. Everyone talked to everyone else under the levelling pressure of mass excitement.
“Have you heard?” I asked Galt. “The sub-Treasury has notified Washington that it cannot hold out. It may suspend at any moment.”
“I suppose then eighty million healthy people will have nothing to eat, nothing to wear, no place to go, nothing to do with their idle hands. We’ll all go to hell in a handbasket.”
He spoke loudly. Many faces turned toward us. A very tall, lean man, with a wild light in his eyes and a convulsive, turkey neck, laid a hand on Gait’s arm.
“Right you are, my friend, if I understand your remark. We are about to witness the dawn of a new era. I have proved it. In this little pamphlet, entitled, ‘The Crime of Money—thirty reasons why it should be abolished on earth,’ I show—”
“Don’t jingle your Adam’s apple at me,” said Galt, giving him a look of droll contempt.
The man was struck dumb. Feeling all eyes focused on the exaggerated object thus caricatured in one astonishing stroke he began to gulp uncontrollably. There were shouts of hysterical laughter. In the confusion Galt disappeared, dragging Gates with him.
The sub-Treasury held out until three o’clock and closed its doors once more in a solvent manner, probably, for the last time. Everybody believed it would capitulate to the ophidian thing the next day. There was no escape. Events were in the lap of despair.
CHAPTER VII
DARING THE DARK
i
AT five o’clock that evening Galt called me on the telephone and asked me to come to his office. I had never been there. It was at 15 Exchange Place, up a long brass-mounted stairway, second floor front. The building was one of a type that has vanished,—gas lighted, wise and old, scornful of the repetitious human scene, full of phantom echoes. On his door was the name, Henry M. Galt, and nothing else. Inside was first a small, bare room in which the only light was the little that came through the opaque glass of a partition door marked “Private.” I hesitated and was about to knock on this inner door when Galt shouted:
“Come in, Coxey.”
He was alone, sitting with his hat on at a double desk between two screened windows at the far side of the room. He did not look up at once. “Sit down a minute,” he said, and went on reading some documents.
The equipment of his establishment was mysteriously simple,—a stock ticker at one of the windows, a row of ten telephones fastened to the wall over a long shelf on which to write in a standing position, a bookkeeper’s high desk and stool, several chairs, a water cooler in disuse, a neglected newspaper file in the corner, a safe, and that was all.
“We are waiting for Gates,” he said, with divided attention, reading still while talking. “I want you to witness... gn-n-n-u-u, how do you spell unsalable, ala or ale?... Yes... that’s what I made it... witness our signatures.... We get superstitious down here... in this witches’ garden... we do. There are things that grow best when planted in the last phase of the moon,... on a cloudy night... dogs barking.... There he is.”
Jonas Gates walked straight in, sat down at the other side of the desk without speaking, and reached for the papers, which Galt passed to him one by one in a certain order. Having read them carefully he signed them. Then Galt signed them, rose, beckoned me to sit in his place, and put the documents before me separately, showing of each one only the last page. There were six in all,—three originals which went back to Gates and three duplicates which Galt retained. There was a seventh which apparently required neither to be jointly signed nor witnessed. It lay all the time face up on Gates’ side of the desk. I noted the large printed title of that one. It was a mortgage deed. Gates put it with the three others which were his, snapped a rubber band around them and went out, leaving no word or sign behind him.
“Crime enough for one day,” said Galt, going to the safe. “You are coming up for dinner. Turn out that light there above you.”
“Did you expect Great Midwestern to go bankrupt?” I asked as we walked down the stairway.
He did not answer me directly, nor at all for a long time. When we were seated in the L train he said: “So you know that I was buying the stock all the way down?”
“Yes.”
He did not speak again until we left the train at 50th Street.
“No, I didn’t expect it,” he said. “It wasn’t inevitable until the Lord burned up the corn crop. But I allowed for it, and what’s worse in one way is better in another. We’re all right. In the reorganization I’ll get the position I want. I’ll be one of ten men in a board room. Everything else follows from that.”
ii
As Natalie met us I observed her keenly, thinking she would betray a feeling of anxiety. But she knew his moods at sight and met them exactly. To my surprise she hailed him gaily and he responded. Then they fell to wrangling over nothing at all and carried on a fierce make-believe quarrel until dinner time.
At the table he tried to force a general spirit of raillery and made reckless sallies in all directions. They failed miserably until Natalie joined him in a merciless attack upon Vera. It was entirely gratuitous. When it had gone very far Mrs. Galt was on the point of interfering, but checked the impulse, leaving Vera to take care of herself. She held
her own with the two of them. When the game lagged Natalie would whisper to Galt. He would say, “No-o-o-o-o!” with exaggerated incredulity, and they would begin again. Suddenly they turned on me, Natalie beginning.
“Don’t you think Coxey ought to get married?” Galt’s name for me had long been current in the household.
“Coxey, here? No. Nobody would marry him,” said Galt.
“But he’s sometimes quite nice,” said Natalie.
They discussed my character as if I were not there, the kind of wife I should have and what would please Heaven to come of it. Natalie knew, as Galt didn’t, that this was teasing Vera still.
Dinner was nearly over when Gram’ma Galt asked her terrible question. “What is the price of Great Midwestern stock today?”
Galt answered quietly: “One-and-a-half.”
There was no more conversation after that.
Later when we were alone I asked Vera if the house had been pledged.
“The mortgage was executed yesterday,” she said. “It’s roof and all this time.”
“He doesn’t seem at all depressed,” I said.
“No,” she answered. “That is his way with disaster. We’ve seen it before.”
“Don’t you admire him for it, though?”
“I hate him!” she cried passionately. The intensity of her emotion astonished me. Her hands were clenched, her eyes were large and her body quivered. We were sitting together on the sofa. I got up and walked around. When I looked at her again she lay face downward in the pillows, weeping convulsively.
CHAPTER VIII
LOW WATER
i
WELL, the United States Treasury did not hang out the bankrupt’s sign. What happened instead was that President Cleveland in his solitary strength met a mad crisis in a great way. He engaged a group of international bankers to import gold from Europe and paid them for it in government bonds. The terms were hard, but the government, owing to the fascinated stupidity of Congress, was in a helpless plight. What Cleveland had the courage to face was the fact that any terms were better than none. It was fundamentally a question of psychology. The spell had somehow to be broken. The richest and most resourceful country in the world was about to commit financial suicide for a fetich. All that was necessary to save it was to restore the notion,—merely the notion,—of gold solvency. People really did not want gold to hoard or keep. They wanted only to think they could get it if they did want it.
The news of the President’s transaction with the bankers, appearing in the morning papers, produced a profound sensation. The white money people denounced him with a fury that was indecent. Many men of his own political faith turned against him, thinking he had destroyed their party. Congress was amazed. There was talk of impeachment proceedings. Popular indignation was extreme and unreasoning. The White House had sold out the country to Wall Street. Mankind was about to be crucified upon a cross of gold. The principle of evil had at last prevailed.
Thus people reacted emotionally to an event which marked the beginning of a return of sanity. Upon the verities of the case the effect of Cleveland’s act was positive. While the nation raved the malady itself began to yield. That ophidian monster which was devouring the gold reserve began to disintegrate from the tail upward. Presently only the head was left and that disappeared with the arrival of the first consignment of gold from Europe under the government’s contract with the bankers.
The full cure of course was not immediate. But never again were people altogether mad. As the tide reverses its movement invisibly, with many apparent self-contradictions in the surf line on the sand, so it is with the course of events. Between the tail of the ebb and the first of the flood there is a time of slack with no tendency at all. That also is true in the rhythm of human activities.
ii
Historically it is noted that a stake set in the wet sand on the morning after the Great Midwestern’s confession of insolvency would have indicated the extreme low water mark of that strange ebb tide in the economic affairs of this country the unnatural extent and duration of which was owing to the moon of a complex delusion. There was first a time of slack before the flood began to run,—a time of mixed omens, of alternating hope and doubt. Yet all the time unawares the country grew richer because people worked hard, consumed less than they produced and, stored the surplus in the form of capital until the reservoirs were ready to overflow.
As for the Great Midwestern, everything came to pass as Galt predicted. Valentine was appointed by the court to work the railroad as receiver. In that rôle he returned to his desk. The word “president” was erased from the glass door of his office; the word “receiver” was painted there instead. That was the only visible sign of the changed status. We paid our way with receiver’s certificates, issued under the direction of the court. Dust settled in the Board Room, where formerly the directors met. Trains continued to move as before.
CHAPTER IX
FORTH HE GOES
i
LIFE in this financial limbo would have exactly suited the placid temperament of our organization but for the distracting activities of Galt. With Valentine’s permission he took that old vice-president’s desk in Harbinger’s office and began to keep hours. Such hours! He was always there when Harbinger arrived. At ten he went to the Stock Exchange; at three he returned. He was still there when Harbinger went home. The scrubwomen complained of him, that he kept them waiting until late at night. Sometimes for that reason they left the room unswept. Insatiably he called for records, data, unheard of compilations of statistics. He wrangled with John Harrier, the treasurer, for hours on end over the nature of assets and past accounting. Their voices might often be heard in adjacent rooms, pitched in the key of a fish wives’ quarrel.
Harrier was an autocratic person whose ancient way of accounting had never before been challenged nor very deeply analyzed. With so much laxity at the top of. the organization he had been able to do as he pleased, and being a pessimist his tendency was to undervalue potential assets, such as lands, undeveloped oil and mining rights and deferred claims. Gradually he wrote them off, a little each year, until in his financial statements they appeared as nominal items. His judgments were arbitrary and passed without question. This had been going on for many years. The result was that a great deal of tangible property, immediately unproductive yet in fact very valuable, had been almost lost sight of. The Great Midwestern, like the country, was richer than anybody would believe. And nobody cared. Live working assets were in general so unprofitable, especially in the case of railroads, that dormant assets were treated with contempt. Galt valued them. He knew how Harrier had sunk them in his figures and forced him step by step to disclose them.
“They are at it again,” Harbinger said, coming in one evening to sit for a while in my room, bringing some papers with him.
“Who?”
“Galt and Harrier. I can’t think for their incessant caterwauling.”
“How do you get along with him?” I asked.
“With Galt? He makes me very uncomfortable. There’s no concealing anything from him.”
“Do you still dislike him?”
“Oh, no. That wears off. I’ve been watching his mind work. It’s a marvellous piece of mechanism.” He went on with his work. “I know at last what he’s doing,” he said suddenly.
“What?”
“He’s developing a plan of reorganization.”
That was true. I had known it for some time. He accumulated his data by day in the office and worked it up by night in his room at home. He showed it to me as it progressed. There was a good deal of writing in it. The facts required interpretation. He was awkward at writing and I helped him with it, phrasing his ideas. The financial exposition was one part only. There was then the physical aspect of the property to be dealt with. When it came to that he spent six weeks out on the road. Three days after he set out on this errand we began to receive messages by telegraph from our operating officials, traffic managers, agents a
nd division superintendents, to this effect:
“Who is Henry M. Galt?”
At Valentine’s direction I answered all of them, saying: “Treat Henry M. Galt with every courtesy.”
He went over every mile of the right of way, inspected every shop and yard, talked with the agents and work masters and finally scandalized the department of traffic by going through all the contracts in force with large shippers. He studied traffic conditions throughout the territory, had a look at competing lines and conferred with bankers, merchants and chamber of commerce presidents about improving the Great Midwestern’s service.
He returned with a mass of material which we worked on every night feverishly, for he was beginning to be very impatient. The physical aspect of the property having been treated from an original point of view, there followed an illuminating discussion of business policy. Good will had been leaving the Great Midwestern, owing to the unaccommodating nature of its service. This fact he emphasized brutally and then outlined the means whereby the road’s former prestige might be regained.
Never had a railroad been so intelligently surveyed before. The work as it lay finished one midnight on Galt’s table represented an incredible amount of labor. More than that, it represented creative imagination in three areas,—finance, physical development and business policy. The financial thesis was that the Great Midwestern should be reorganized without assessing the stockholders in the usual way. All that was necessary was to sell them new securities on the basis of dormant assets. This was a new idea.
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