Until this time the course of financial events in Benham since its
evolution from a sleepy country town began had been steadily prosperous.
There had been temporary recessions in prices, transient haltings in the
tendency of new local undertakings to double and quadruple in value. A
few rash individuals, indeed, had been forced to suspend payments and
compound with their creditors. But there had been no real set back to
commercial enthusiasm and speculative gusto. Those who desired to borrow
money for progressive enterprises had found the banks accommodating and
unsuspicious, and to Benham initiative it yet appeared that the
development of the resources of the neighborhood by the unwearying,
masterful energy of the citizens was still in its infancy.
But now, after a few months of inactivity, which holders of speculative
securities had spoken of as another healthy breathing spell, the
tendency of prices had changed. Had not merely halted, but showed a
radical tendency to shrink; even to tumble feverishly. Buyers were
scarce, and the once accommodating banks displayed a heartless
disposition to scrutinize collateral and to ask embarrassing questions
in regard to commercial paper. Rates of interest on loans were
ruthlessly advanced, and additional security demanded. A pall of
dejection hung over Benham. Evil days had come; days the fruit of a long
period of inflation. A dozen leading firms failed and carried down with
them diverse small people. Amid the general distrust and anxiety all
eyes were fixed on Wall street, the so-called money centre of the
country, the Gehenna where this cyclone had first manifested itself. The
newspapers, voicing Benham public opinion, cast vituperation at the
bankers and brokers of Wall street, whose unholy jugglings with fortune
had brought this commercial blight on the community. Wall street had
locked up money; consequently funds were tight in Benham, and the plans
of its honest burghers to promote enterprise and develop the lawful
industries of the country were interrupted. So spoke public opinion,
and, at the same time, hundreds of private letters were being despatched
through the Benham Post Office in response to requests for more margins
on stocks held for the honest burghers by the fraternity of Wall street
gamblers. There was private wailing and gnashing of teeth also, for in
the panic a few of these bankers and brokers had been submerged, and the
collateral of Benham's leading citizens had been swept away.
The panic itself was brief as panics always are, but it left behind it
everywhere a paralyzed community. So far as Benham was concerned, only a
few actually failed, but, in a host of instances, possessors of property
who had thought themselves wealthy a year before found that they were
face to face with the knotty problem of nursing their dwarfed resources
so as to avoid eventual insolvency. Everything had shrunk fifty--often
one hundred--per cent., for the basis of Benham's semi-fabulous
development had been borrowed money. Many of Benham's leading citizens
were down to hard pan, so to speak. Their inchoate enterprises were
being carried by the banks on the smallest margins consistent with the
solvency of those institutions, and clear-headed men knew that months of
recuperation must elapse before speculative properties would show life
again. Benham was consequently gloomy for once in despite of its native
buoyancy. It would have arisen from the ashes of a fire as strenuous as
a young lion. But, with everybody's stocks and merchandise pledged to
the money lenders, enterprise was gripped by the throat. In the pride of
its prosperity Benham had dreamed that it was a law unto itself, and
that even Wall street could not affect its rosy commercial destinies. It
appeared to pious owners of securities almost as though God had deserted
his chosen city of a chosen country.
Lyons was among those upon whom the harrow of this fall in prices and
subsequent hand-to-mouth struggle with the banks pressed with unpleasant
rigor. In business phraseology he was too much extended. Consequently,
as the margins of value of the securities on which he had borrowed
dropped away, he was kept on tenter-hooks as to the future. In case the
process of shrinkage went much further, he would be required to supply
more collateral; and, if the rate of money did not fall, the banks would
refuse to renew his notes as they became due, unless he could furnish
clear evidence of his solvency. He was owing over one hundred and fifty
thousand dollars on paper secured only by the stock and bonds of
brand-new enterprises, which had no market negotiability. From the money
which he had borrowed he had sent, from time to time, to Williams and
Van Horne an aggregate of forty thousand dollars to protect some two
thousand shares of railroad stocks. Williams had especially commended
the shares of the coal-carrying roads to his attention, and the drop in
prices had been uniformly severe in these properties. Instead of being
the possessor of a stable quarter of a million, which he considered to
be the value of his property at the time of his election to Congress,
Lyons suddenly realized that he was on the brink of a serious financial
collapse through which he might lose everything before he could
discharge his liabilities. It seemed cruel to him, for he believed that
all his ventures were sound, and that if he were not forced to sacrifice
his possessions, their future value would attest his sagacity. But at
present the securities of speculative enterprises were practically
worthless as procurers of ready money. The extreme circumstances had
come upon him with startling rapidity, so that he found himself in the
unpleasant predicament of having used for temporary relief some of the
bonds belonging to the Parsons estate which he held as executor. He had
forwarded these to Williams merely as a matter of convenience before he
had become anxious, expecting to be able to replace them with funds
coming to him within thirty days from a piece of real estate for which
he had received an offer. He had held off in the hope of obtaining a
higher price. The following week, when signs of danger were multiplying,
he had found the would-be purchaser unwilling to buy at any price.
Realizing the compromising position in which he had placed himself by
his action, he had cast about feverishly for the means to redeem the
hypothecated securities, but all his resources were taxed of a sudden by
the advent of the panic. It occurred to him to ask Selma to allow
substitution of the twenty thousand dollars, which had been apportioned,
to her as her legacy, for the bonds, but at first he had shrunk from the
mortification of disclosing his condition to her, and now that the
situation had developed, he feared that he might be obliged to borrow
this money from her for the protection of his other interests. It gave
him sore concern that he, a champion of moral ideas, a leading church
member, and a Representative of the Federal Government should be put in
such an equivocal position. Here again there was no opportunity for
conciliation, and dignified urbanity was of no avail. If the condition
of drooping prices and general distrust, a sort of commercial dry-rot,
which had succeeded the panic, continued much longer he would be driven
to the wall unless relief were forthcoming. Nor was it much consolation
that many others were on the verge of failure. Financial insolvency for
him would mean the probable loss of his seat in Congress, and the
serious interruption of his political career. From what source could he
hope for relief? The preparations for the autumn campaign were already
being considered, and there was likelihood of another close contest
between the two political parties. But for the worry occasioned by his
plight, he would have resumed the contest with hopeful ardor,
appreciating that the pecuniary distress of the community would be
likely to work to his advantage. His own nomination was assured; his
re-election appeared probable. But after it what could he expect but the
deluge?
One source of the effectiveness of Horace Elton was that he was wont to
exercise foresight, and make his plans in advance while other men were
slumbering. He had been prepared for the panic because he had been
expecting it for more than a year, and the ship of his financial
fortunes was close reefed to meet the fury of the overdue gale. Also he
was quick to recognize that the wide-spread depreciation of values would
inevitably be followed by a period of business inactivity which would
throw out of employment a large number of wage earners whose ballots as
a consequence would be cast against the political party in power. As far
back as the time when he made the acquaintance of Selma at Washington
and selected her as the wearer of his cameo pin, he had been incubating
on a scheme for the consolidation of the gas companies in the cities and
towns of the state into one large corporation. For this corporation he
required a liberal charter, which the next legislature would be invited
to grant. He expected to be able to procure this franchise from the
legislature, but he judged that the majority in favor of the bill would
not be large enough to pass it over the Governor's veto. Accordingly it
was of the first importance that the Governor should be friendly to the
measure.
This was the year of the Presidential election. Both political parties
were seeking to nominate their strongest candidates for the various
federal and state offices. A promoter of large business schemes was at a
disadvantage in a campaign where party feelings ran high and national
issues were involved, and Elton knew it. He commonly chose an off year
in politics for the consummation of his business deals. But he had
chosen to push his bill this year for the reason that he wished to be in
a position to buy out the sub-companies cheaply. The community was
pressed for ready money, and many men who would be slow in prosperous
times to extract gas shares from their tin boxes and stockings would be
glad to avail themselves of a reasonable cash offer. Elton was a
Republican on national issues. His experience had been that the
Republican Party was fundamentally friendly to corporations, in spite of
occasional pious ejaculations in party platforms to the contrary. He had
a Republican candidate for Governor in mind who would be faithful to his
interests; but this candidate was put aside in the convention in
deference to the sentiment that only a man of first-rate mental and
moral calibre could command the allegiance of independent voters, whose
co-operation seemed essential to party success. The Republican state
convention was held three weeks prior to the date fixed for that of
their opponents. Within twenty-four hours subsequent to the nomination
of Hon. John Patterson as the Republican candidate for Governor, while
the party organs were congratulating the public on his selection, and
the leaders of the party were endeavoring to suppress the murmurs of the
disappointed lower order of politicians who, in metaphorical phrase,
felt that they were sewed up in a sack for another two years by the
choice of this strong citizen, one of the most widely circulated
democratic newspapers announced in large type on its front page that
Hon. James O. Lyons was the only Democrat who could defeat him in the
gubernatorial contest. Behind the ledger sheet of this newspaper--which
was no other than the Benham _Sentinel_--lurked the keen intelligence of
Horace Elton. He knew that the candidate of his own party would never
consent to indicate in advance what his action on the gas bill would be,
and that he would only prejudice his chances of obtaining favorable
action when the time arrived by any attempt to forestall a decision.
This did not suit Horace Elton. He was accustomed to be able to obtain
an inkling before election that legislation in which he was interested
would not encounter a veto. His measures were never dishonest. That is,
he never sought to foist bogus or fraudulent undertakings upon the
community. He was seeking, to be sure, eventual emolument for himself,
but he believed that the franchise which he was anxious to obtain would
result in more progressive and more effectual public service. He had
never before felt obliged to refrain from asking direct or indirect
assurance that his plans would be respected by the Governor. Yet he had
foreseen the possibility of just such an occurrence. The one chance in a
hundred had happened and he was ready for it. He intended to contribute
to the Republican national campaign fund, but he did not feel that the
interests of his State would suffer if he used all the influences at his
command to secure a Governor who would be friendly to his scheme, and
Congressman Lyons appeared to him the most available man for his
purpose.
It had already occurred to Lyons that his nomination as Governor was a
possibility, for the leaders of the party were ostensibly looking about
for a desirable Democrat with whom to confront Patterson, and had shown
an intention to turn a cold shoulder on the ambition of several
aspirants for this honor who might have been encouraged in an ordinary
year as probable victors. He knew that his name was under consideration,
and he had made up his mind that he would accept the nomination if it
were offered to him. He would regret the interruption of his
Congressional career, but he felt that his election as Governor in a
presidential year after a close contest would make him the leader of the
party in the State, and, in case the candidate of his party were chosen
President, would entitle him to important recognition from the new
administration. Moreover, if he became Governor, his financial status
would be strengthened. The banks would be more likely to accommodate one
in such a powerful position, and he might be able to keep his head above
water until better times brought about a return of public confidence and
a recovery in prices. Yet he felt by no means sure that even as Governor
he could escape betraying his financial embarrassment, and his mind was
so oppressed by the predicament in which he found himself that he made
no effort on his own part to cause the party leaders to fix their choice
on him. Nor did he mention the possibility of his selection to Selma.
Mortification and self-reproach had made him for the moment inert as to
his political future, and reluctant to confide his troubles to her.
The clarion declaration of the Benham _Sentinel_ in favor of Lyons
evoked sympathetic echoes over the State, which promptly convinced the
political chieftains that he was the strongest candidate to pit against
Patterson. The enthusiasm caused by the suggestion of his name spread
rapidly, and at the end of a week his nomination at the convention was
regarded as certain.
The championship of the _Sentinel_ was a complete surprise to Selma. She
had assumed that her husband would return to Washington, and that
political promotion for the present was out of the question. When she
saw her husband's features looking out at her from a large cut on the
front page of the morning newspaper, and read the conspicuous heading
which accompanied it--"The _Sentinel_ nominates as Governor the Hon.
James O. Lyons of Benham, the most eloquent orator and most
public-spirited citizen of the State"--her heart gave a bound, and she
eagerly asked herself, "Why not?" That was just what they needed, what
she needed to secure her hold on the social evolution of Benham. As the
wife of the Governor of the State she would be able to ignore the people
who held aloof from her, and introduce the reforms in social behavior on
which her heart was set.
"James, have you seen this?" she asked, eagerly.
Lyons was watching her from across the breakfast table. He had seen it,
and had laid the newspaper within her reach.
"Yes, dear. It is very complimentary, isn't it?"
"But what does it mean? Are you to be Governor? Did you know of it,
James?"
"I knew that my name, with others, had been mentioned by those who were
looking for a candidate whom we can elect. But this nomination of the
_Sentinel_ comes from a clear sky. Would you like to have me Governor,
Selma?"
"Yes, indeed. If the chance is offered you, James, you will surely
accept it. It would please me immensely to see you Governor. We should
not be separated then part of the year, and--and I should be able here
in Benham to help you as your wife ought to help you. I know," she
added, "that you have been looking forward to the next session of
Congress, in the hope of distinguishing yourself, but isn't this a finer
opportunity? Doesn't it open the door to splendid possibilities?"
Lyons nodded. His wife's eager presentation of the case confirmed his
own conclusions. "It is an important decision to make," he said, with
gravity. "If I am not elected, I shall have lost my place in the
Congressional line, and may find difficulty in recovering it later. But
if the party needs me, if the State needs me, I must not think of that.
I cannot help being gratified, encouraged by the suggestion that my
fellow-citizens of my political faith are turning to me as their
standard-bearer at this time when great public issues are involved. If I
can serve God and my country in this way, and at the same time please
you, my wife, what can I ask better?"
He spoke with genuine feeling and reverence, for it was in keeping with
his religious tendencies to recognize in advance the solemn
responsibilities of high office, and to picture himself as the agent of
the heavenly powers. This attitude of mind always found Selma
sympathetic and harmonious. Her eyes kindled with enthusiasm, and she
replied:
"You view the matter as I would have you view it, James. If this trust
is committed to us by Providence, it is our duty to accept it as lovers
of our country and promoters of true progress."
"It would seem so. And in some ways," he said, as though he felt the
impulse to be reasonably frank toward Providence in his acceptance of
the trust, "my election as Governor would be advantageous to my
political and business interests. I have not sought the office," he
added with dignified unction, "but my knowledge of local conditions
leads me to believe that this action of the _Sentinel_ signifies that
certain powerful influences are working in my favor. I shall be able to
tell you more accurately in regard to this before long."
Lyons happened to know that the Benham _Sentinel_ had enlarged its plant
two years previous, and that Horace Elton was still the holder of its
notes for borrowed money. The transaction had passed through his bank,
and in the course of his mental search for reasons to account for the
sudden flat-footed stand of the newspaper, the thought came into his
mind and dwelt there that Elton was at the bottom of it. If so, what was
Elton's reason? Why should Elton, a Republican, desire his nomination?
Surely not to compass his defeat.
In this connection Elton's friendship and the prophecy made to Selma as
to his political future occurred to him and forbade an invidious
supposition. "Glamis thou art, and Cawdor, and thou shalt be what thou
art promised!" Lyons left Selma with the conviction that he would find
Elton to be mainly responsible for what had taken place. Shortly after
reaching his office he received a note from him asking for an
appointment. Punctually at twelve o'clock Elton arrived and was shown
into Lyons's private room. Lyons gave orders that he was not to be
disturbed, for he believed that the results of the interview were likely
to have a serious bearing on his career as a statesman.
Both men were of heavy physique, but as they sat facing each other an
observer would have remarked that Elton's visage possessed a clean-cut
compactness of expression despite its rotund contour. His closely
trimmed whiskers, his small, clear, penetrating eyes, and the effect of
neatness conveyed by his personal appearance were so many external
indications of his mental lucidity and precision.
In contrast Lyons's moon-shaped face, emphasized by its smooth-shaven
mobile mouth, below which his almost white chin beard hung pendent,
expressed a curious interplay of emotional sanctity, urbane shrewdness,
and solemn self-importance.
"Governor Lyons, at your service," said Elton, regarding him steadily.
"Do you think so?"
"I know so, if you desire it."
"The nomination, you mean?"
"The election by a comfortable majority."
Lyons breathed hard with satisfaction. "If the people of the State
choose to confide their interests to my custody, I shall not refuse to
serve them."
"So I supposed. You may be wondering, Lyons, why I, a Republican, should
be talking like this. I will tell you. Observation has led me to believe
that the people of this State will elect a Democratic Governor this
year. The hard times will hurt the administration. Consequently, as your
friend and my own friend, I have taken the liberty to indicate to the
managers of your party their strongest man. I am responsible for what
you saw on the front page of the _Sentinel_ this morning. There need not
be much difficulty," he added, significantly, "in securing emphatic
endorsement throughout the State of the _Sentinel's_ preference."
Lyons looked grave. "You must be aware that our views on public
questions--especially those which concern the relations of capital and
labor--are not the same."
"Certainly. I tell you frankly that while, from a humanitarian point of
view, I respect your desire to relieve the inequalities of modern
civilization, as a business man and a man of some property I do not
regard the remedies presented by your party platform as just or
adequate. I recognize that your opinions are hostile to corporate
interests, but I have gathered also that you are disposed to be
reasonable and conciliatory; that you are not inclined to regard all men
and all measures as dangerous, merely because they have means or are
introduced in the name of capital."
"It has always seemed to me that a conciliatory spirit secures the most
definite results for the public," assented Lyons.
"Precisely. See here, Lyons," Elton said, leaning forward across the
table at which they were sitting, "I wish to be entirely frank with you.
You know me well enough to understand that I have not offered you my
support in any philanthropic spirit. I could not have deceived you as to
this had I tried. I am a practical man, and have an axe to grind. I am
urging your election as Governor because I believe you to possess
intelligent capacity to discriminate between what is harmful to the
community and what is due to healthy, individual enterprise--the energy
which is the sap of American citizenship. We capitalists have no fear of
an honest man, provided he has the desire and the ability to protect
legitimate business acumen against the slander of mere demagogues. I
have a bill here," he added, drawing a printed document from his pocket,
"which I am desirous to see passed by the next legislature. It embodies
a charter authorizing the acquisition and merger in one corporation of
all the gas companies of this State, and an extension of corporate
powers so as to cover all forms of municipal lighting. Were your hands
not tied by your prospective election, I should be glad to offer you an
opportunity to become one of the incorporators, for I believe that the
undertaking will be lucrative. That, of course, is out of the question.
Now then, this is a perfectly honest bill. On its face, to be sure, it
secures a valuable franchise for the petitioners, and consequently may
encounter some opposition. But, on the other hand, no one who considers
the matter candidly and closely can fail to recognize that the great
public will secure cheaper gas and more efficient service as the result
of the consolidation. And there is where I felt that I could count on
your intelligence. You would not allow the plea that capitalists were
interested in obtaining a profitable franchise to obscure the more vital
consideration that the community will be the true gainers."
Lyons bowed graciously, and stroked his beard. "What is it you wish me
to do?" he asked.
"To read the bill in the first place; to convince yourself that what I
have told you is true; to satisfy yourself that the measure is
essentially harmless. The bill is not long. Read it now and let me hear
your objections. I have some papers here to look over which will occupy
me a quarter of an hour, if you can spare me the time."
Lyons acquiesced, and proceeded to peruse slowly the document. When he
had finished it he folded it solemnly and returned it to Elton. "It is a
bill framed in the interest of capital, but I cannot say that the public
will be prejudiced by it. On the contrary, I should judge that the price
of gas in our cities and towns would be lowered as a consequence of the
reduction in running expenses caused by the projected consolidation.
What is it that you wish me to do?"
"Agree to sign the bill as it now stands if it passes the legislature."
Lyons rested his head on his hand and his mouth moved tremulously. "If I
am elected governor," he said, "I wish to serve the people honestly and
fearlessly."
"I am sure of it. I ask you to point out to me in what manner this bill
trenches upon the rights of the people. You yourself have noted the
crucial consequence: It will lower the price of gas. If at the same time
I am benefited financially, why should I not reap the reasonable reward
of my foresight?"
"I will sign the bill, Elton, if it comes to me for signature. I may be
criticised at first, but the improved public service and reduction of
the gas bills will be my justification, and show that I have not been
unmindful of the interests of the great public whose burdens my party is
seeking to lighten."
"I shall count on you, then," said Elton, after a pause. "The failure of
the bill at the last stage when I was expecting its passage might affect
my affairs seriously."
"If the legislature does its part, I will do mine," responded Lyons,
augustly. "I will sign the bill if it comes to me in the present form."
"I thank you, Governor."
Lyons looked confused but happy at the appellation.
"By the way," said Elton, after he had returned the papers to his
pocket, "these are trying times for men with financial obligations. It
is my custom to be frank and not to mince matters where important
interests are concerned. A candidate for office in this campaign will
need the use of all his faculties if he is to be successful. I should be
very sorry for the sake of my bill to allow your mind to be distracted
by solicitude in regard to your private affairs. Some of the best and
most prudent of our business men are pressed to-day for ready money. I
am in a position to give you temporary assistance if you require it. In
justice to my interests you must not let delicacy stand in the way of
your accepting my offer."
Lyons's bosom swelled with the tide of returning happiness. He had
scarcely been able to believe his ears. Yet here was a definite,
spontaneous proposition to remove the incubus which weighed upon his
soul. Here was an opportunity to redeem the bonds of the Parsons estate
and to repair his damaged self-respect. It seemed to him as though the
clouds of adversity which had encompassed him had suddenly been swept
away, and that Providence was smiling down at him as her approved and
favorite son. His emotion choked his speech. His lip trembled and his
eyes looked as though they would fill with tears. After a brief pause he
articulated that he was somewhat pressed for ready money. Some
explanation of his affairs followed, the upshot of which was that Elton
agreed to indorse Lyons's promissory notes held by the banks to the
amount of $60,000, and to accept as collateral for a personal loan of
$40,000 certain securities of new local enterprises which had no present
marketable value. By this arrangement his property was amply protected
from sacrifice; he would be able to adjust his speculative account in
New York; and he could await with a tranquil soul the return of
commercial confidence. Lyons's heart was overflowing with satisfaction.
He pressed Elton's hand and endeavored to express his gratitude with
appropriate grandiloquence. But Elton disclaimed the obligation,
asserting that he had acted merely from self-interest to make the
election of his candidate more certain.
The loan of $40,000 was completed within forty-eight hours, and before
the end of another week Lyons had rescued the bonds of the Parsons
estate from pawn, and disposed of his line of stocks carried by Williams
& Van Horne. They were sold at a considerable loss, but he made up his
mind to free his soul for the time being from the toils and torment of
speculation and to nurse his dwarfed resources behind the bulwark of
Elton's relief fund until the financial situation cleared. He felt as
though he had grown ten years younger, and without confiding to Selma
the details of these transactions he informed her ecstatically that,
owing to certain important developments, due partly to the friendliness
of Horace Elton, the outlook for their future advancement had never been
so bright. When a month later he was nominated as Governor he threw
himself into the contest with the convincing ardor of sincere,
untrammelled faith in the reforms he was advocating. His speeches
reflected complete concentration of his powers on the issues of the
campaign and evoked enthusiasm throughout the State by their eloquent
arraignment of corporate rapacity at the expense of the sovereign
people. In several of his most telling addresses he accused the national
administration of pandering to the un-American gamblers who bought and
sold stocks in Wall street.