had said--and the tone of his voice--he closed it apologetically and, to
excuse himself said, very quickly: “Certainly, Mr. Grinnell, certainly.”
He busied himself with the expostulating head of the bank’s foreign
exchange department. It was an extraordinary transaction, but the
Metropolitan was an extraordinary bank, and Mr. Dawson was an
extraordinary man when vexed.
He came back and asked: “Payable to whom, Mr. Grinnell?”
“To my order, please.”
“Yes, sir; yes, sir.”
The bill of exchange for £2,000,000 was made out on Waring Bros., of
London, in favour of George K. Grinnell. Mr. Williams handed it to
Grinnell with an obsequious little flourish and said, “Thank you, Mr.
Grinnell.”
“Thank _you_,” said Grinnell smiling. “Good-morning.”
Mr. Williams bowed him out.
Grinnell walked briskly up Wall Street to the Wolff Building, and
entered the office of Wolff, Herzog & Co.
“I should like to see Mr. Isaac Herzog,” he told a spectacled,
middle-aged man who sat by a little table near the gate of a railing
on the other side of which was a half-door of ground glass marked
“Private.”
The gate-keeper, incredibly myopic, peered at him through such thick
lenses that his eyes looked unpleasantly unnatural.
“Vhat ees yoor peezness, pleaze?”
“Tell Mr. Herzog that I come on a very important matter.”
“Ach!” The middle-aged man shrugged his shoulders with a sort of
regretful despair, and then shook his head. Everybody that came there
always came on very important matters--including book agents and pedlars
disguised as gentlemen.
“I’ve come direct from Mr. Richard Dawson, president of the Metropolitan
National Bank, to see Mr. Herzog. Tell him that--”
“Pleaze sit down,” he opened the gate and pointed to a chair. Grinnell
obeyed and the man left. Presently he returned.
“Mr. Herzog vill see you, sir,” and Grinnell was ushered into the office
of the head of the firm, for Mr. Wolff had been dead many years, and
his son-in-law and partner reigned in his stead--a far greater king of
finance.
He was a little man, white-haired and patriarchially whiskered. His
features were of a pronounced Jewish type. His eyes were alert but
kindly--kindly rather than merely good-natured. The accumulated wisdom
of five thousand years was in this Hebrew banker’s business soul; and
with it that respect for the higher Law that has made Israel endure as
a nation through the marching centuries while other races have risen,
flourished, and disappeared, blended into the composite types of to-day.
“Good-afternoon, sir. Mr. Dawson sent you?” asked Mr. Herzog, with a
strong German accent. He knew English thoroughly, like a scholar--a
German scholar.
“He didn’t send me. I--”
“You have been admitted under that impression,” Mr. Herzog said this
sternly--a rebuke for a falsehood rather than irritation over what
seemed likely to be the wasting of a very busy banker’s valuable time.
The young man before him did not look shabby enough to be a professional
mendicant, but there was something deferential about his manner that
might mean a more expensive appeal. Amateurs have exaggerated ideas.
“Excuse me, Mr. Herzog. I told your man, when he thought you couldn’t or
wouldn’t see me, that I came from Mr. Dawson’s office to see you. It’s
true. I did leave him a few minutes ago. I know your reputation, Mr.
Herzog, and I have come to you because I am in need of help.”
Mr. Herzog was famous as a philanthropist. He maintained at his own
expense a sort of personal charity bureau to which applicants for help
were referred, that he might give much but, above all, that he might
give intelligently. He spoke to the young man with cold austerity:
“I beg to refer you to Mr. Asiel, room 82, upstairs, sir. He will
investigate your case. But I do not like the way in which you have
gained admission to this office, sir.” He nodded dismissingly.
“One moment, Mr. Herzog,” said Grin-nell, smiling. “I wish your help in
a business matter. I wish to buy one hundred million dollars of the best
railroad bonds.”
A spasm of alarm contracted Mr. Herzog’s face. It passed and he said
soothingly, with an accent more Germanic than ever: “Why, yes, of
course. Yes, yes! I shall be very glad to do so. I will ask the
gentleman in charge of our bond department to do as you wish. He is
a very nice young man; a very competent young man. He knows all about
bonds. Will you allow me to go after him? I shall return directly.”
Grinnell laughed out and out. It was a laugh unaffectedly merry. But Mr.
Herzog turned pale and breathed a bit quickly.
The young man drew from his pocket-book some checks.
“Here are four certified checks for one million dollars each, and a
draft on Waring Bros., of London, for two millions sterling. Won’t you
please look at them before you go for the nice young man in charge of
your bond department?”
Mr. Herzog instead looked at the door; the young man barred his exit.
He was atavistically a fatalist. What was to be, was to be. Mr. Herzog,
calm now from resignation, turned to the checks. One look was enough.
His face changed, but having grown resigned to death, the banker did
not now sigh with relief. He merely said, very quietly, as if he were
resuming the thread of his conversation: “Perhaps you will tell me which
bonds you wish to buy?”
“Yes, sir; but before I tell you that, let me tell you this: I come
to you because I have absolute confidence in your wisdom and in the
integrity of your firm. I wish to buy a hundred millions of bonds,
on margin--a margin of fifty per cent or more. None must know of this
transaction excepting yourself and those of your partners who must, in
the nature of things, know it. I require no pledge but your word.”
“It is all the pledge we ever give, sir. It was unnecessary to speak
of it. Nevertheless, I thank you for your confidence in us. Will you be
good enough to proceed?”
He was looking at the young man steadily.
“I had on deposit at the Metropolitan National Bank this morning some
forty-six millions of dollars, of which I have drawn this £2,000,000.
Also with, other banks slightly more than six millions, of which those
are four.”
Mr. Herzog nodded. He said meditatively: “You are, then, the gentleman
to whom those institutions owe their remarkable gains in gold during the
past few weeks?”
“I don’t know whether I am or not.”
“You are, sir.”
“Then I must be.”
“Pray proceed.”
“Well, I propose to purchase one hundred millions of dollars par value
of bonds, carefully but steadily. Bonds are very cheap.”
“Owing to circumstances not yet known to the community, or possibly to a
misapprehension of certain facts, they are cheap. Huge blocks have been
thrown on the market this past week. Prices have been sacrificed; you
doubtless know by whom?” His eyes interrogated as well as his voice.
“I know nothing. I think the bonds are very cheap,” said Grinnell
impassively.
“I think so too, sir, _now_. I had begun to fear that they were not
cheap, at any price, a few minutes ago.”
“Indeed?” Grinnell was sincerely astonished.
“Yes, sir,” said Mr. Herzog calmly.
“I will give you a check or checks on the Metropolitan National
Bank--certified if you wish. Is fifty millions enough margin?”
“We do not take speculative orders.”
“Then, Mr. Herzog, I can only wish you good-morning, and request that
you mention this to no one,” and Grinnell rose.
“In this case,” said Mr. Herzog, waving his hand and pointing to
the chair from which the young man had risen, “you are conducting a
financial operation unparalleled in our history. If you care to have
us associated with you in this matter, to share proportionately in the
profits--”
“Thank you. We shall consider that later on. I should not be surprised
to see bonds rise to the level at which they were before they--ah--”
“Before the misapprehension to which I referred?” prompted Mr. Herzog
gravely, but with intention.
“Before they began to decline so inexplicably,” corrected Mr. Grinnell
with equal gravity. “Bonds are selling at par and under which should
command a great premium.”
“Will there be additional deposits of gold by you at the Metropolitan or
other banks?”
“I have not deposited any gold at any bank, Mr. Herzog.”
“I mean Assay Office checks, sir.”
“That is a matter, Mr. Herzog, which I must decline to discuss.”
“Excuse me, sir. I did not know.”
“But in justice to you, I will say that I have pledged myself not to
make any deposits whatever for a short time.”
“Ah, that was William Mellen,” said Mr. Herzog with a positiveness that
startled Grinnell.
“I mentioned no names, Mr. Herzog.”
“No. But I know how his mind works.”
“Now, what shall I do? Shall I give you a check on the Metropolitan
or--”
“By drawing bills of exchange on London,” said the old banker musingly,
“Mr. Dawson will not know for some days what you wish the money for.”
“Well, you have one there for £2,000,000 as a starter,” said the
young man calmly. Mr. Herzog looked at him searchingly; then he smiled
approvingly.
“Good! I see!”
“Well, sir?” asked Grinnell quietly.
“We will sell bills of exchange on London, Berlin, and Paris to Mr.
Dawson’s bank. They will presently buy from us, thinking the high rates
of exchange tempt us to sell them. This is enough for this week. There
are still the bonds of the friends and of the friend’s friends to be
sold, Mr.--” The old man paused. “I do not know your name sir; but I
know _you._”
“My name is Grinnell.”
“Thank you. Of course, it was on the checks. And, if I may ask, sir,
what is your business, besides that of a great financier?”
“I am a metallurgical chemist.”
“Chemist?” The old banker started. He looked at Grinnell intently.
The young man’s face was impassive; perhaps too impassive. Mr. Herzog
blinked his eyes; not dubiously, but as some men will when their
thoughts are racing at a furious rate. His head was bent slightly to one
side as his alert, intelligent eyes looked and looked at the young man
from under the thick, shaggy eyebrows that so heightened the patriarchal
aspect of his face. At length he straightened his little body up as
though he were on springs, and began to rub his hands briskly. It was
imagination--Oriental imagination, more vivid, more opulent in detail
than the Occidental.
“I see! I see! Good!” He arose and, unable to contain himself, extended
his hand and said: “Mr. Grinnell, I am certain you are a great man. I
am proud to have your confidence. Bye-and-bye, when it does no harm, you
will tell me all, and I shall see if I am right?”
“Some day we shall both see whether we are right or not,” said Grinnell
composedly.
“Yes, yes. Now answer me: Do you find that great wealth is also a great
temptation?”
“I do not,” answered Grinnell frankly.
“There are many things you would not do for money if you were penniless,
much less would you do them, having fifty or a hundred millions. Is it
not so?”
“There are many things I should like to do if I had a thousand
millions,” said Grinnell, very earnestly.
“Precisely. That’s what you told them. Ah, William Mellen! William
Mellen!” and the little old man shook his head and raised his hands
ceilingward, as though he saw the richest man in the world there and
were apostrophizing him. “You have imagination, but only one pair of
eyes. I see!”
“You know him?” Grinnell asked.
The Hebrew banker, at this question, instantly became merely a banker.
He said, briskly: “If bonds are too low, stocks are too high; much too
high. It would be well to sell some to those wise rich men who wish
to buy them; for the public is not buying stocks. Only the rich can
buy--and suffer, it may be, eh, Mr. Grinnell?”
“I shall be glad to join you in such an operation, Mr. Herzog.”
“Thank you, sir; thank you. You leave it to me?”
“Yes, sir.”
“Very well. It is possible you are rich; but it is certain your are
wise, Mr. Grinnell. First, we shall buy bonds for you. That is the
investment operation. For one hundred millions we may buy one hundred
and twenty millions par value, of the best bonds in the world. After
that will come the--ah--” He paused and looked at Grinnell. The young
man, his face still impassive, said:
“Yes, sir. If you wish any more money--”
“I will let you know, Mr. Grinnell. Come every morning at half after
nine. Please let me have your name and address. There is much I should
like to ask you; but bye-and-bye, you will tell me of your own accord.
And your lawyer is?”
“Col. Gordon McClintock. You know him?”
“Yes. I shall not need him. Come tomorrow morning. There is much to do.
Good-afternoon, Mr. Grinnell,” and Mr. Herzog shook hands warmly with
the young man.
It happened as Mr. Herzog had said. The friends of the Mellens’s were
told in the strictest confidence to sell bonds for good and sufficient
reasons. They told their friends, also in strict confidence; and their
friends told their friends, and their friends their friends, even unto
the fourth and fifth generations, until there came the panic of the
millionaires, for these men, in the nature of things, had no poor
friends. Their aggregate sales were torrential, appalling. The
professionals were too frightened to buy or sell anything, unless it was
life insurance policies without the suicide clause.
And the flood of fine investment issues rolled resistlessly over the
corpses of little speculators who bought them one day, thinking them
incredibly cheap, only to see them on the next day incredibly, fatally
cheaper, because the rich were selling! And the insane boom in stocks
waxed greater, madder, more stupendous! Because the Mellens were buying!
It could not continue much longer. The Secretary of the Treasury came
to New York twice that week to confer with the great financiers, who
listened intently--and suggested nothing. The country at large fixed
its eyes on Wall Street and endeavoured to see clearly. The tide _must_
turn. The public began to buy bonds outright--to buy a few bonds, pay
for them and then, frightened at its own temerity, doubtful of having
after all secured bargains, run breathlessly home and lock up its
purchase, and not look at the next day’s quotations for fear of finding
that the price of the same bonds had dropped farther.
Still the public _had_ begun to buy. But not before Wolff, Herzog & Co.
had purchased for $117,000,000 bonds which a month before could not have
been purchased for less than $148,000,000, all for account of Mr. George
K. Grinnell; and had sold short 250,000 shares of stocks at an average
price of $190 per share, stocks which four weeks previously could not
have been sold at $125 per share, these for account of “Account G,” which
included equally Mr. George K. Grinnell, Wolff, Herzog & Co., of New
York; I. Benjamin & Co., of London; Stetheim & Sons, of Frankfort and
Amsterdam, and Goldschmidt Freres, of Paris. And because of these
operations the bond-market steadied and the stock-market ceased to
advance, and people plucked up courage and bought bonds and sold stocks,
until bonds began actually to rise slowly and stocks to decline steadily
and greater courage gained thereby. And because the public, which is
everybody, is greater than anybody, greater even than the richest man in
the world, the Paradoxical Panic was checked.
There came a lull. After all, the public had but ceased to fear to buy
bonds. It must be made to fear not to buy them; for bonds still were
much too low and stocks very much too high. Wherefore, the Evening
Scold, which had been importuning Mr. Isaac L. Herzog for an expression
of his views, was at last able to publish an interview, double leaded,
in its front page, in which the great financier strongly urged investors
not to sell bonds but rather to buy. As for stocks, it was not wise
to buy them but rather to sell. Investors need not be anxious over
fundamental business conditions. Speculators, on the other hand, had
before them a highly dangerous stock-market.
It was the first and only interview any newspaper had ever been able to
obtain for publication from Mr. Herzog; and the _Evening Scold_ was so
uniformly ill-natured and impartially condemnatory that it was above
suspicion. It was ultra-Mugwump in politics, art, literature, finance,
and base-ball. The morning papers “verified” the interview and reprinted
it prominently on the next day. And into Wall Street poured hordes of
men, of all ages and political complexions--Jew and Gentile--of all
degrees of fortune, and of no fortune at all, but all of them men who
believed in Mr. Herzog’s integrity, and particularly in his sagacity.
There followed a Great Day. Mostly, the public bought bonds. The selling
pressure really was over by now, the enlightened millionaires being
practically bondless; so bonds rose quickly, unchecked. And stocks
declined, not so quickly, but every whit as steadily.
Mellen read the Herzog interview in Dawson’s office. When he was done
with them, he carefully folded the newspapers and piled them neatly on
the table. It was an unfailing habit of his--that and saving the twine
that came with parcels.
He arose, with a troubled expression on his face, and said to the
president:
“Herzog is a very able man. I don’t like this interview. He speaks too
confidently.” Into Mellen’s eyes came the puzzled, indecisive look which
Dawson had seen there so frequently in the last few weeks, and so seldom
in the previous twenty years.
“He has a considerable following,” admitted the president in a cheerful
voice, as though to keep his friend from dwelling too much on sorrow.
“They have been heavy buyers of bonds and heavy sellers of stocks.
That’s for Europe. They’ve sold us nearly all the sterling bills that
we needed for Grinnell’s drafts. Grinnell has practically drawn all his
money and sent it to London.”
“I don’t like it, Richard; I don’t like it a bit. Perhaps we’ve been too
hasty; and yet--” He stared at Dawson unseeingly. “Where did he get
it?” His lips were dry; he moistened them with the tip of his tongue and
pressed them together.
“William, every bullion dealer in the world has been interviewed.
Costello had twenty men in the West visiting the mines and smelters. We
have had reports from the Klondike, from the Transvaal, from Australia,
from mining engineers everywhere. We have even gone over the manifests
of vessels that have brought bullion here and to other ports this year.
Costello was twice in the laboratory. Since he promised to stop
depositing, Grinnell has been idle. The dynamo has not been running.”
“But there must be a mine.”
“I am certain the gold doesn’t come from any mine on this earth.”
“He may have accumulated it.” The richest man in the world said this
without conviction.
“Who gave him the money to pay for it?” asked Dawson, in an
intentionally controversial tone, because he vaguely feared his friend’s
doubts at this late hour. “And if somebody gave it to him, from whom did
the giver buy it? Not from any smelter, or mine or dealer in the last
five years. _That_ is certain too.”
“Yes, yes; that’s it,” said Mellen irritably, because the answer would
not come. “Is he under surveillance still?”
“Costello returned from the Pacific Coast Tuesday night, and I told him
not to lose sight of Grinnell for one instant.” The president approached
the ticker.
“Hm!” he said. “Quite a rally in bonds.” From force of habit the richest
man in the world drew near. He passed the tape through his fingers
slowly; then he told Dawson:
“I think we’d better help stocks go down.” Seeing a doubtful look in the
president’s eyes, he added: “Oh, we’ll get them back cheaper.”
The door opened and Costello entered--he had instructions to walk into
Mr. Dawson’s private office without being announced, no matter who might
be there with the president. Dawson merely looked inquiringly at the
detective but the richest man in the world walked up to him quickly and
asked: “What is it, Costello?”
“Did you see Mr. Grinnell’s marriage announcement in the _Herald_, sir?”
He looked first at Mellen, then at his chief. “It’s among the ads. in
the front page.”
“No,” answered Mellen, turning toward the table, but Dawson had already
picked up the Herald. He read aloud, Mellen looking over his shoulder:
_GRINNELL-ROBINSON.--On Tuesday, September 12, by the Rev. DeLancy
Williamson, at his residence, Margaret, daughter of Thomas M. Robinson,
to George Kitchell Grinnell. Middletown, N. Y., and Youngstown, O.,
papers please copy_.
“Robinson?” said Mellen quickly. He answered an unspoken question of his
own: “But he hasn’t so much.”
Dawson knew what he meant. He shook his head and said with a slight
frown: “I doubt if he has even ten millions. I know he sold out all his
Consolidated Steel during the boom but that couldn’t have been more than
five millions. I don’t think so.” He looked ill at ease.
“We must see Grinnell at once,” said the richest man in the world,
speaking quickly. “If Robinson knows what Grinnell is doing--” He
checked himself with a frown. A great anger filled his very soul to
overflowing: Always Grinnell came before him--an obstacle to plans,
enveloped by doubt-breeding mystery, surrounded by an uncertainty
which, by not openly revealing dangers, made the young man a ceaseless
menace.
“Mr. Grinnell is now at Wolff, Herzog’s office,” said Costello. “He’s
been going there every day for a week.”
“I knew it!” said the richest man in the world explosively. He sat down
in an armchair and leaned back, breathing quickly.
“We must make sure,” said Dawson. He sat down at his desk and took up
the telephone. Then he said to Costello: “Anything else?”
“No, sir. He went into Mr. Herzog’s private office. The door-keeper told
me he was a very rich man and that he came there every day.”
“Very well,” said Dawson, dismissingly. The detective left the room.
Mellen stretched his right hand toward Dawson and opened his mouth.
But he said nothing. His hand dropped and he stared intently at a paper
weight on the president’s desk.
Dawson took up the telephone.
“Let me have Mr. Herzog, at once,” he said sharply. A minute later he
said: “Herzog?--This is Dawson--Is Mr. Grinnell in your office?” Mellen
drew near and stood beside his friend.
“Hello?” went on Dawson, with a tinge of impatience. “Is Grinnell--”
He turned to Meilen and explained, spitefully: “He says to wait a
moment--Hello? Yes. I’d like to see him--”
“Tell him to wait for you there,” said Mellen, in a tone of command.
Dawson spoke into the telephone:
“Well, if he’ll wait for me at your office I’ll run over at once. Very
well. Good-bye.” Dawson rose and, putting on his hat, followed the
richest man in the world who had already started out of the office
briskly.
In Herzog’s office the old banker, at Dawson’s first question, carefully
placed his hand over the transmitter and said to Grinnell: “Dawson wants
to know if your are here.”
“I cannot tell a lie,” laughed Grinnell; “I am.”
A moment later Mr. Herzog said: “He says he will come over if you will
wait here for him.”
“Very well,” replied Grinnell. He added: “I think this will close the
incident.” But Herzog shook his head--he was listening to Dawson and
couldn’t hear the young man’s words.
The bank president and the richest man in the world walked more quickly
than was their wont, each busy with his own thoughts. The myopic
door-keeper at Wolff, Herzog & Co.’s, knew Mr. Dawson. He opened the
gate obsequiously and then hastened ahead and held open the door to Mr.
Herzog’s private office. They entered abreast.
Mr. Herzog rose quickly and, walking toward them, extended his hand
to Dawson. Then he shook Mellen’s. Grinnell arose from his chair near
Herzog’s desk and merely said, “Good-morning, gentlemen.”
Dawson bowed to him, and with his diplomat-at-a-reception smile,
replied:
“Good-morning, Mr. Grinnell.”
Mellen used the same words, and no smile.
“Be seated, gentlemen,” said Mr. Herzog with a polite wave of the hand.
“We came over to congratulate Mr. Grin-nell,” said Dawson. “We’ve just
seen the _Herald._”
“Yes,” said Mellen grimly.
“Oh, thanks,” returned Grinnell, very politely.
“Herzog,” said the richest man in the world abruptly, “you have been
buying a great many bonds.”
“We have bought some,” assented the banker, with much gravity.