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It was an experience for which the captains of finance were not entirely prepared; they had forgotten the public. It was like some great convulsion of nature, which made mockery of all the powers of men, and left the beholder dazed and terrified. In Wall Street men stood as if in a valley, and saw far up above them the starting of an avalanche; they stood fascinated with horror, and watched it gathering headway; saw the clouds of dust rising up, and heard the roar of it swelling, and realised that it was a matter of only a second or two before it would be upon them and sweep them to destruction.

The lines of people before the Gotham Trust and the Trust Company of the Republic were now blocks in length; and every hour one heard of runs upon new institutions. There were women wringing their hands and crying in nervous excitement; there were old people, scarcely able to totter; there were people who had risen from sick-beds, and who stood all through the day and night, shivering in the keen October winds.

Runs had begun on the savings banks also; over on the East Side the alarm had reached the ignorant foreign population. It had spread with the speed of lightning all over the country; already there were reports of runs in other cities, and from thousands and tens of thousands of banks in East and South and West came demands upon the Metropolis for money. And there was no money anywhere.

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And so the masters of the Banking Trust realised to their annoyance that the monster which they had turned loose might get beyond their control. Runs were beginning upon institutions in which they themselves were concerned. In the face of madness such as this, even the twenty-five per cent reserves of the national banks would not be sufficient. The moving of the cotton and grain crops had taken hundreds of millions from New York; and there was no money to be got by any chance from abroad. Everywhere they turned, they faced this appalling scarcity of money; nothing could be sold, no money could be borrowed. The few who had succeeded in getting their cash were renting safe-deposit boxes and hiding the actual coin.

And so, all their purposes having been accomplished, the bankers set to work to stem the tide. Frantic telegrams were sent to Washington, and the Secretary of the Treasury deposited six million dollars in the national banks of the Metropolis, and then came on himself to consult.

Men turned to Dan Waterman, who was everywhere recognised as the master of the banking world. The rivalry of the different factions ceased in the presence of this peril; and Waterman became suddenly a king, with practically absolute control of the resources of every bank in the city. Even the Government placed itself in his hands; the Secretary of the Treasury became one of his clerks, and bank presidents and financiers came crowding into his office like panic-stricken children. Even the proudest and most defiant men, like Wyman and Hegan, took his orders and listened humbly to his tirades.

All these events were public history, and one might follow them day by day in the newspapers. Waterman's earlier acts had been planned and carried out in darkness. No one knew, no one had the faintest suspicion. But now newspaper reporters attended the conferences and trailed Waterman about wherever he went, and the public was invited to the wonderful spectacle of this battle-worn veteran, rousing himself for one last desperate campaign and saving the honour and credit of the country.

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The public hung upon his lightest word, praying for his success. The Secretary of the Treasury sat in the Sub-Treasury building near his office, and poured out the funds of the Government under his direction. Thirty-two million dollars in all were thus placed with the national banks; and from all these institutions Waterman drew the funds which he poured into the vaults of the imperilled banks and trust companies. It was a time when one man's peril was every man's, and none might stand alone. And Waterman was a despot, imperious and terrible. “I have taken care of my bank,” said one president; “and I intend to shut myself up in it and wait until the storm is over.” “If you do,” Waterman retorted, “I will build a wall around you, and you will never get out of it again!” And so the banker contributed the necessary number of millions.

The fight centred around the imperilled Trust Company of the Republic. It was recognised by everyone that if Prentice's institution went down, it would mean defeat. Longer and longer grew the line of waiting depositors; the vaults were nearly empty. The cashiers adopted the expedient of paying very slowly—they would take half an hour or more to investigate a single check; and thus they kept going until more money arrived. The savings banks of the city agreed unanimously to close their doors, availing themselves of their legal right to demand sixty days before paying. The national banks resorted to the expedient of paying with clearing-house certificates. The newspapers preached confidence and cheered the public—even the newsboys were silenced, so that their shrill cries might no longer increase the public excitement. Groups of mounted policemen swept up and down the streets, keeping the crowds upon the move.

And so at last came the fateful Thursday, the climax of the panic. A pall seemed to have fallen upon Wall Street. Men ran here and there, bareheaded and pale with fright. Upon the floor of the Stock Exchange men held their breath. The market was falling to pieces. All sales had stopped; one might quote any price one chose, for it was impossible to borrow a dollar. Interest rates had gone to one hundred and fifty per cent to two hundred per cent; a man might have offered a thousand per cent for a large sum and not obtained it. The brokers stood about, gazing at each other in utter despair. Such an hour had never before been known.

All this time the funds of the Government had been withheld from the Exchange. The Government must not help the gamblers, everyone insisted. But now had come the moment when it seemed that the Exchange must be closed. Thousands of firms would be ruined, the business of the country would be paralysed. There came word that the Pittsburg Exchange had closed. So once more the terrified magnates crowded into Waterman's office. Once more the funds of the Government were poured into the banks; and from the banks they came to Waterman; and within a few minutes after the crisis had developed, the announcement was made that Dan Waterman would lend twenty-five million dollars at ten per cent.

So the peril was averted. Brokers upon the floor wept for joy, and cheers rang through all the Street. A mob of men gathered in front of Waterman's office, singing a chorus of adulation.

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All these events Montague followed day by day. He was passing through Wall Street that Thursday afternoon, and he heard the crowds singing. He turned away, bitter and sick at heart. Could a more tragic piece of irony have been imagined than this—that the man, who of all men had been responsible for this terrible calamity, should be heralded before the whole country as the one who averted it! Could there have been a more appalling illustration of the way in which the masters of the Metropolis were wont to hoodwink its blind and helpless population?

There was only one man to whom Montague could vent his feelings; only one man besides himself who knew the real truth. Montague got the habit, when he left his work, of stopping at the Express building, and listening for a few minutes to the grumbling of Bates.

Bates would have each day's news fresh from the inside; not only the things which would be printed on the morrow, but the things which would never be printed anywhere. And he and Montague would feed the fires of each other's rage. One day it would be one of the Express's own editorials, in which it was pointed out that the intemperate speeches and reckless policies of the President were now bearing their natural fruit; another day it would be a letter from a prominent clergyman, naming Waterman as the President's successor.

Men were beside themselves with wonder at the generosity of Waterman in lending twenty-five millions at ten per cent. But it was not his own money—it was the money of the national banks which he was lending; and this was money which the national banks had got from the Government, and for which they paid the Government no interest at all. There was never any graft in the world so easy as the national bank graft, declared Bates. These smooth gentlemen got the people's money to build their institutions. They got the Government to deposit money with them, and they paid the Government nothing, and charged the people interest for it. They had the privilege of issuing a few hundred millions of bank-notes, and they charged interest for these and paid the Government nothing. And then, to cap the climax, they used their profits to buy up the Government! They filled the Treasury Department with their people, and when they got into trouble, the Sub-Treasury was emptied into their vaults. And in the face of all this, the people agitated for postal savings banks, and couldn't get them. In other countries the people had banks where they could put their money with absolute certainty; for no one had ever known such a thing as a run upon a postal bank.

“Sometimes,” said Bates, “it seems almost as if our people were hypnotised. You saw all this life insurance scandal, Mr. Montague; and there's one simple and obvious remedy for all the evils—if we had Government life insurance, it could never fail, and there'd be no surplus for Wall Street gamblers. It sounds almost incredible—but do you know, I followed that agitation as I don't believe any other man in this country followed it—and from first to last I don't believe that one single suggestion of that remedy was ever made in print!”

A startled look had come upon Montague's face as he listened. “I don't believe I ever thought of it myself!” he exclaimed.