Boston a novel
Rupert became morose under the strain. His pink and purple bulges,
which had seemed to be radiating geniality, now took on the aspect
of a threatened explosion. He fell to grumbling about human nature.
Nobody cared about anything but money; friendship, family pride, honor,
all were gone. He would carry his burden of sorrow for days, and
suddenly it would become too heavy, and he would dump it in some quite
unsuitable place. An elderly widow, a friend of Cornelia’s, sought him
as adviser about the purchase of bonds, and the great and busy head of
the Pilgrim National Bank kept the astonished lady for half an hour
while he impressed upon her the solemn duty of guarding her property.
“Hold on to it! You have nothing else--absolutely nothing! When it is
gone you will discover that nobody respects you, your friends have no
use for you. Nothing counts to-day but money!” The widow-lady might
have had her feelings hurt, but she understood that it was impersonal,
a revelation of the banker-soul.
But for the most part Rupert kept his pessimistic thoughts to pour out
upon his spouse in the privacy of their chamber, after the lights were
out, and they lay in the chaste retirement of their twin beds, under
brocaded blue silk counterpanes. He would expatiate upon the abnormal
greediness of this one and that, and after he had begun to snore,
Deborah would lie still and petition the Lord to soften the hearts
of the greedy ones, and spare her good and noble husband, who was
sacrificing his very life to preserve sound and conservative banking in
New England--which meant, of course, banking under the control of the
Pilgrim National group.
XII
There are some whose claims were not to be questioned. Unthinkable
that any Thornwell should go to the wall, or any one who could claim
kinship, even by marriage. Those huge Thornwell Mills had to have
many millions of credit, to enable them to store their manufactured
products, and turn off their operatives to starve. And of course they
got it; you have only to imagine the hysterics that Clara Thornwell
Scatterbridge would have had in the boudoir of Deborah Thornwell Alvin,
if Rupert had dreamed of refusing! John Quincy Thornwell needed a small
fortune, for a shipping deal he had been putting through on the side;
and he got it from Rupert’s bank. Rupert also needed a fortune, for
some of those subsidiary plants which he and Henry Cabot Winters had
taken away from Jerry Walker, and had kept all to themselves. Rupert
got this money from the Fifth National Bank, of which John Quincy
Thornwell was president. So these big fellows shifted millions about
from their right-hand pockets to their left-hand pockets, and shrewd
lawyers like Henry Cabot Winters were there to tell them exactly how to
do it, so they need never worry if some spy told on them, and caused a
government bank-examiner to drop in.
They knew that their rivals had spies on them, because they had spies
on their rivals. And when these spies would bring in reports of what
was going on, Henry Cabot Winters and the other legal spiders would
be called in to consider how to meet the rivals’ moves. If it was
discovered that some little fellow, having less expensive legal
talent, had slipped up somewhere, and done something which the law did
not allow, then was the time to use your pull with the bank-examiner,
whom you had caused to be appointed a few years ago, and whom you were
going to make into a bank-president in the course of another year or
two--after he had completed the job of putting your rivals out of
business.
That was the way the blue-bloods kept the banking industry a strictly
blue-blooded affair. The foreigners, and especially the Jews, had
got into everything else. For decades they had been boycotted as
department-store owners, but now several of the biggest and most
successful stores were in the hands of Jews. They had got clothing and
wool and leather; they had the theaters, and were breaking into law and
medicine--but they were never going to get the banking-business, not if
Rupert Alvin and the rest of the “high hats” could prevent it. And they
could!
At this time there was a Jewish banker who had broken into the reserve.
Simon Swig was his name--which in itself was enough to demonstrate
the impropriety of allowing a Jew to become directing head of a bank!
He had come into the country as a common immigrant, and now had got
hold of the Tremont Trust Company, an honorable institution, and was
running it on bargain-day principles--paying five and a half per cent
on savings accounts, and advertising the fact, which was unethical,
but brought in the business. He was a rascal, so the blue-bloods
said, and doubtless it was true, but you had to remember that in high
finance rascality is a question of degree. The respectable bankers were
breaking any number of laws, but having the banking authorities in
their clubs, they were not punished. Neither were they exposed, because
they had the newspapers, and their “news bureaus,” run by large stout
subsidized “experts”--whose expertness lay in making the public believe
whatever Rupert Alvin and men of his sort desired.
In the course of that chain of troubles, the state bank-examiners
swooped down one morning and tacked a notice on the door of the Tremont
Trust Company, to the effect that it was closed and forbidden to do
business. And that was all there was to it--the Tremont Trust stayed
closed, and it didn’t do any business. If it had been a “blue-blood”
bank, it would have been “tided over”; instead of which it was turned
over to a “blue-blood” receiver, and paid its savings depositors a
hundred cents on the dollar--which seemed rather to justify the claim
of Simon Swig that it had been sound all along.
XIII
What started the trouble that summer was the problem of Charles Ponzi.
An Italian immigrant who had come to America about the same time as
Vanzetti, and with even less money in his pocket, Ponzi, too, had
washed dishes for a living; but he had not wasted his time dreaming
about “joostice”--no, he was the sort of immigrant America wants, he
had dreamed of making a million dollars in a week, and he had done it.
He discovered a curious situation in international exchange, so he
said; it was possible to buy postal coupons in Vienna, and sell them
at a higher rate in Switzerland, and thus you could turn a thousand
dollars into twenty-five thousand. It made good advertising copy, and
was no more false than what the big bankers were telling the public
about their Federal Reserve System. Anyhow, Ponzi opened a dingy little
office in School Street, quite in the correct Boston tradition--for
many of the big New England corporations had dingy little offices in
some of those two-hundred-year-old houses in dark and narrow streets
which had been laid out by cows.
Charles Ponzi advertised that he would sell you a forty-five-day
certificate, which you were free to redeem at any time, but if you
would wait till the end of the forty-five days, you would get fifty
per cent interest. The tidings spread among the million inhabitants
of Boston, and all those persons who cherished the dream of getting
rich without working came to buy certificates--which meant that Ponzi
had approximately a million customers. Such a mob of people tried to
get into his dingy office all at once that the police reserves had
to be called out to keep them from being crushed to death. In that
suffocating room you saw rich ladies in silks and jewels, newsboys,
street peddlers, workingwomen with babies in their arms, scrubwomen
clutching in their hands the earnings of half a lifetime on their
knees. They all wanted to give it to Ponzi, and he took it, and
fulfilled the immigrant’s dream by buying himself a palace in the
country, with the most expensive custom-built limousine in Boston to
bring him to town.
Ponzi was imperiling the savings banks by causing the public to draw
out all their money; he was buying into the big trust companies, and in
danger of becoming a real banker. Worse yet, he was filling the public
mind with unrest, talking recklessly to the newspapers. He kept saying
that in making a hundred per cent profit in three months he was merely
doing what many big bankers were doing--the difference being that he
was giving the public fifty percent, whereas the big bankers gave only
five percent. If any one were to say how near to the truth that was,
the person would not be believed, so it would be useless to say it.
The bank-examiners and district attorneys got busy, and filled the
papers with rumors that Ponzi was about to be arrested. It was
difficult to take action because the ex-dishwasher was now worth about
twelve million dollars, and actually had five millions cash in Boston
banks, and nobody so rich had ever been arrested in New England.
Moreover, he had hired a very able lawyer, who was later on disbarred
as a “fixer”; he paid that lawyer a million dollars before he got
through, and would undoubtedly have got off, had not Rupert and his
crowd been so determined to get him out of the way.
As often occurs with financial storms, this one got out of control,
and brought down several institutions: the Cosmopolitan Trust,
the Prudential Trust, the Fidelity Trust--it was a rollcall of
respectability. It so happened that the Commonwealth of Massachusetts
had several hundred thousand dollars in these banks, and several
counties had as much. The city of Cambridge, the home of Harvard
University, just across the river, was stuck for half a million--the
greater part having been got by a trick played upon the city treasurer
a few months before the crash. All this caused a terrific scandal, and
a long train of consequences most distressing to Rupert Alvin and his
friends. For the examinations of the banks disclosed that many of the
state legislators had been borrowing money without any security, and
had used this money to buy stocks in public utilities, while passing a
bill to triple their value.
Not so long ago the Pilgrim National crowd had driven the Boston
Elevated Railway onto the financial rocks, and taken it over; then,
in order to put it back on its feet, they had jammed through the
legislature a so-called Public Control bill, whereby the Commonwealth
guaranteed dividends to the Elevated stockholders, which made necessary
a ten-cent fare. So here was the blue-blooded and high-hatted and
in all ways ineffable Rupert Alvin playing Santa Claus and angel to
the politicians and legislators of his Commonwealth! The disclosure
was half a year in the future, but that only meant the prolonging of
Rupert’s worry; for of course he knew what was in the records of the
banks, and he knew that when the public has lost a lot of money and
become furiously angry, it is much harder to keep news out of the
papers.
XIV
Another trouble looming, if possible even more serious! Jerry Walker
had come back from his nervous breakdown, and had found out some
details of the intrigue by which Rupert and Henry Cabot Winters had
persuaded the other bankers to join in taking his ten-million-dollar
properties. Jerry had consulted lawyers, and made a deal with one
of them, a bristling little bull-dog of a man who had taken many a
million away from big bankers on previous occasions. Now, under the
law, Jerry had a right to put questions to Rupert, as to what Rupert
had done to him, and Rupert was compelled to answer, under penalty
of being considered to have admitted his guilt! So there would come
to the Pilgrim National crowd and their lawyers long letters full
of questions, agonizingly direct and to the point; and there would
be conferences of great financial and legal personages, and private
conferences in Rupert’s study late at night, in which Rupert and his