A FINANCIAL EXPEDIENT.
When our branch was established at Whittingham there had been an
arrangement made between ourselves and the Government, by the terms of
which we were to have the Government business, and to occupy, in fact,
much that quasi-official position enjoyed by the Bank of England at
home. As a _quid pro quo_, the bank was to lend to the Republic the
sum of five hundred thousand dollars, at six per cent. The President
was at the time floating a loan of one million dollars for the purpose
of works at the harbor of Whittingham. This astute ruler had, it
seemed, hit on the plan of instituting public works on a large scale
as a corrective to popular discontent, hoping thereby not only to
develop trade, but also to give employment to many persons who,
if unoccupied, became centers of agitation. Such at least was the
official account of his policy; whether it was the true one I saw
reason to doubt later on. As regards this loan, my office was purely
ministerial. The arrangements were duly made, the proper guarantees
given, and in June, 1880, I had the pleasure of handing over to the
President the five hundred thousand dollars. I learned from him on
that occasion that, to his great gratification, the balance of the
loan had been taken up.
"We shall make a start at once, sir," said the President, in his usual
confident but quiet way. "In two years Whittingham harbor will walk
over the world. Don't be afraid about your interest. Your directors
never made a better investment."
I thanked his Excellency, accepted a cigar, and withdrew with a
peaceful mind. I had no responsibility in the matter, and cared
nothing whether the directors got their interest or not. I was,
however, somewhat curious to know who had taken up the rest of the
loan, a curiosity which was not destined to be satisfied for some
time.
The works were begun and the interest was paid, but I cannot say that
the harbor progressed rapidly; in fact, I doubt if more than one
hundred thousand dollars ever found their way into the pockets of
contractors or workmen over the job. The President had some holes dug
and some walls built; having reached that point, about two years after
the interview above recorded he suddenly drew off the few laborers
still employed, and matters came to a dead stop.
It was shortly after this occurrence that I was honored with an
invitation to dine at the Golden House. It was in the month of July,
1882. Needless to say, I accepted the invitation, not only because it
was in the nature of a command, but also because the President gave
uncommonly good dinners, and, although a bachelor (in Aureataland, at
all events), had as well ordered a household as I have ever known.
My gratification was greatly increased when, on my arrival, I found
myself the only guest, and realized that the President considered my
society in itself enough for an evening's entertainment. It did cross
my mind that this might mean business, and I thought it none the worse
for that.
We dined in the famous veranda, the scene of so many brilliant
Whittingham functions. The dinner was beyond reproach, the wines
perfection. The President was a charming companion. Though not, as I
have hinted, a man of much education, he had had a wide experience of
life, and had picked up a manner at once quiet and cordial, which set
me completely at my ease. Moreover, he paid me the compliment,
always so sweet to youth, of treating me as a man of the world. With
condescending confidence he told me many tales of his earlier days;
and as he had been everywhere and done everything where and which
a man ought not to be and do, his conversation was naturally most
interesting.
"I am not holding myself up as an example," he said, after one of his
most unusual anecdotes. "I can only hope that my public services will
be allowed to weigh in the balance against my private frailties."
He said this with some emotion.
"Even your Excellency," said I, "may be content to claim in that
respect the same indulgence as Caesar and Henri Quatre."
"Quite so," said the President. "I suppose they were not exactly--eh?"
"I believe not," I answered, admiring the President's readiness, for
he certainly had a very dim notion who either of them was.
Dinner was over and the table cleared before the President seemed
inclined for serious conversation. Then he called for cigars, and
pushing them toward me said:
"Take one, and fill your glass. Don't believe people who tell you not
to drink and smoke at the same time. Wine is better without smoke,
and smoke is better without wine, but the combination is better than
either separately."
I obeyed his commands, and we sat smoking and sipping in silence for
some moments. Then the President said, suddenly:
"Mr. Martin, this country is in a perilous condition."
"Good God, your Excellency!" said I, "do you refer to the earthquake?"
(There had been a slight shock a few days before.)
"No, sir," he replied, "to the finances. The harbor works have
proved far more expensive than I anticipated. I hold in my hand the
engineer's certificate that nine hundred and three thousand dollars
have been actually expended on them, and they are not finished--not by
any means finished."
They certainly were not; they were hardly begun.
"Dear me," I ventured to say, "that seems a good deal of money,
considering what there is to show for it."
"You cannot doubt the certificate, Mr. Martin," said the President.
I did doubt the certificate, and should have liked to ask what fee the
engineer had received. But I hastily said it was, of course, beyond
suspicion.
"Yes," said he steadily, "quite beyond suspicion. You see, Mr. Martin,
in my position I am compelled to be liberal. The Government cannot
set other employers the example of grinding men down by low wages.
However, reasons apart, there is the fact. We cannot go on without
more money; and I may tell you, in confidence, that the political
situation makes it imperative we should go on. Not only is my personal
honor pledged, but the Opposition, Mr. Martin, led by the colonel, is
making itself obnoxious--yes, I may say very obnoxious."
"The colonel, sir," said I, with a freedom engendered of dining, "is a
beast."
"Well," said the President, with a tolerant smile, "the colonel,
unhappily for the country, is no true patriot. But he is powerful;
he is rich; he is, under myself alone, in command of the army. And,
moreover, I believe he stands well with the signorina. The situation,
in fact, is desperate. I must have money, Mr. Martin. Will your
directors make me a new loan?"
I knew very well the fate that would attend any such application.
The directors were already decidedly uneasy about their first loan;
shareholders had asked awkward questions, and the chairman had found
no small difficulty in showing that the investment was likely to prove
either safe or remunerative. Again, only a fortnight before, the
Government had made a formal application to me on the same subject. I
cabled the directors, and received a prompt reply in the single word
"Tootsums," which in our code meant, "Must absolutely and finally
decline to entertain any applications." I communicated the contents
of the cable to Señor Don Antonio de la Casabianca, the Minister
of Finance, who had, of course, communicated them in turn to the
President.
I ventured to remind his Excellency of these facts. He heard me with
silent attention.
"I fear," I concluded, "therefore, that it is impossible for me to be
of any assistance to your Excellency."
He nodded, and gave a slight sigh. Then, with an air of closing the
subject, he said:
"I suppose the directors are past reason. Help yourself to a brandy
and soda."
"Allow me to mix one for you, sir," I answered.
While I was preparing our beverages he remained silent. When I had sat
down again he said:
"You occupy a very responsible position here for so young a man, Mr.
Martin--not beyond your merits, I am sure."
I bowed.
"They leave you a pretty free hand, don't they?"
I replied that as far as routine business went I did much as seemed
good in my own eyes.
"Routine business? including investments, for instance?" he asked.
"Yes," said I; "investments in the ordinary course of
business--discounting bills and putting money out on loan and mortgage
over here. I place the money, and merely notify the people at home of
what I have done."
"A most proper confidence to repose in you," the President was good
enough say. "Confidence is the life of business; you must trust a man.
It would be absurd to make you send home the bills, and deeds, and
certificate, and what not. Of course they wouldn't do that."
Though this was a statement, somehow it also sounded like a question,
so I answered:
"As a rule they do me the compliment of taking my word. The fact is,
they are, as your Excellency says, obliged to trust somebody."
"Exactly as I thought. And you sometimes have large sums to place?"
At this point, notwithstanding my respect for the President, I began
to smell a rat.
"Oh, no, sir," I replied, "usually very small. Our business is not so
extensive as we could wish."
"Whatever," said the President, looking me straight in the face,
"whatever may be usual, at this moment you have a large sum--a very
respectable sum--of money in your safe at the bank, waiting for
investment."
"How the devil do you know that?" I cried.
"Mr. Martin! It is no doubt my fault; I am too prone to ignore
etiquette; but you forget yourself."
I hastened to apologize, although I was pretty certain the President
was contemplating a queer transaction, if not flat burglary.
"Ten thousand pardons, your Excellency, for my most unbecoming tone,
but may I ask how you became possessed of this information?"
"Jones told me," he said simply.
As it would not have been polite to express the surprise I felt at
Jones' simplicity in choosing such a _confidant_, I held my peace.
"Yes," continued the President, "owing to the recent sales of your
real property in this country (sales due, I fear, to a want of
confidence in my administration), you have at this moment a sum of
three hundred thousand dollars in the bank safe. Now (don't interrupt
me, please), the experience of a busy life teaches me that commercial
reputation and probity depend on results, not on methods. Your
directors have a prejudice against me and my Government. That
prejudice you, with your superior opportunities for judgment, cannot
share. You will serve your employers best by doing for them what they
haven't the sense and courage to do for themselves. I propose that
you should assume the responsibility of lending me this money. The
transaction will redound to the profit of the bank. It shall also," he
added slowly, "redound to your profit."
I began to see my way. But there were difficulties.
"What am I to tell the directors?" I asked.
"You will make the usual return of investments and debts outstanding,
mortgages, loans on approved security--but you know better than I do."
"False returns, your Excellency means?"
"They will no doubt be formally inaccurate," the President admitted.
"What if they ask for proofs?" said I.
"Sufficient unto the day," said the President.
"You have rather surprised me, sir," I said, "but I am most anxious
to oblige you, and to forward the welfare of Aureataland. There are,
however, two points which occur to me. First, how am I to be insured
against not getting my interest? That I must have."
"Quite so," he interrupted. "And the second point I can anticipate.
It is, what token of my gratitude for your timely assistance can I
prevail on you to accept?"
"Your Excellency's knowledge of human nature is surprising."
"Kindly give me your attention, Mr. Martin, and I will try to satisfy
both your very reasonable requirements. You have $300,000; those you
will hand over to me, receiving in return Government six per cent.
bonds for that amount, I will then hand back to you $65,000; 45,000
you will retain as security for your interest. In the event of any
failure on the part of Aureataland to meet her obligations honorably,
you will pay the interest on the whole 300,000 out of that sum. That
secures you for more than two years against absolute failure of
interest, which in reality you need not fear. Till the money is wanted
you will have the use of it. The remaining 20,000 I shall beg of you
to accept as your commission, or rather as a token of my esteem.
Two hundred thousand absolutely--45,000 as long as Aureataland pays
interest! You must admit I deal with you as one gentleman with
another, Mr. Martin. In the result, your directors get their interest,
I get my loan, you get your bonus. We are all benefited; no one is
hurt! All this is affected at the cost of a harmless stratagem."
I was full of admiration. The scheme was very neat, and, as far as the
President and myself were concerned, he had been no more than just in
pointing out its advantages. As for the directors, they would probably
get their interest; anyhow, they would get it for two years. There was
risk, of course; a demand for evidence of my alleged investments, or a
sudden order to realize a heavy sum at short notice, would bring the
house about my ears. But I did not anticipate this _contretemps_, and
at the worst I had my twenty thousand dollars and could make myself
scarce therewith. These calculations were quite correct at the moment,
but I upset them afterward by spending the dollars and by contracting
a tie which made flight from Aureataland a distasteful alternative.
"Well, Mr. Martin," said the President, "do you agree?"
I still hesitated. Was it a moral scruple? Probably not, unless,
indeed, prudence and morality are the same thing.
The President rose and put his hand on my shoulder.
"Better say yes. I might take it, you know, and cause you to
disappear--believe me, with reluctance, Mr. Martin. It is true I
shouldn't like this course. It would perhaps make my position
here untenable. But not having the money would certainly make it
untenable."
I saw the force of this argument, and gulping down my brandy and soda,
I said:
"I can refuse your Excellency nothing."
"Then take your hat and come along to the bank," said he.
This was sharp work.
"Your Excellency does not mean to take the money now--to-night?" I
exclaimed.
"Not to take, Mr. Martin--to receive it from you. We have made our
bargain. What is the objection to carrying it out promptly?"
"But I must have the bonds. They must be prepared, sir."
"They are here," he said, taking a bundle from the drawer of a
writing-table. "Three hundred thousand dollars, six per cent. stock,
signed by myself, and countersigned by Don Antonio. Take your hat and
come along."
I did as I was bid.