Stone's Fall (41 page)

“Listen,” I said. “I am not joking. I think a storm is brewing. You must send a telegram to London, so they can prepare.”

He stared, with a particularly unappealing smile of incredulity on his face. “Warn them? Of what? Of a story heard by a journalist? You expect Lord Revelstoke to give up his weekend because of something you heard at some dowager’s party?”

“It’s somewhat more than that.”

“It doesn’t matter. No one can touch Barings. You should know that. And as for sending a telegram, I’ve never heard anything so absurd in my life. You stick to your actresses, Cort. Leave the serious stuff to people who know what they’re about.”

I shrugged. “Very well. I will do as you say. I heard this and I reported it to you. You can do as you wish with it. You are no doubt correct in your assessment. As you say, you are more experienced than I am.”

“Precisely,” he said with satisfaction. “And don’t think that I am ungrateful for your concern. It was good of you to come in. And if you hear any other titbits in future, don’t feel afraid to come and tell me, however ridiculous they are. And you must let me buy you a drink sometime, in payment for your efforts.”

At that moment, the delightful image of Barings sinking with all hands and Felstead being the first to drown swam before my eyes. I wished the French well.

“Excellent idea,” I said. “But not today. At the moment you would do me a greater service by letting me have a look at the Stock Exchange notices. I am trying to get something together on France’s attitude to dual convertibility. So I need some basic information.
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publishes it, but it would help to have it all in one place…”

Now he had established his superiority, Felstead was all grace. Fortunately, he did not clap me on the back as he led me to a desk before getting out the bank bulletins. Had he done so I might have spoiled it all by hitting him.

The Stock Exchange daily bulletins are the dreariest of all newspapers; the prices for dozens of government stocks, the prices of innumerable foreign stocks and utilities. The discount rates and interest rates applicable to hundreds of different instruments, in dozens of countries. News of new issues and dividend payments. By carefully considering all of these, a man of sense can make his fortune. So it is said; it was my great weakness as a banker that I never had the slightest interest in any of it. I had forced myself to understand it, but it never brought me the pleasure or satisfaction that it gave to many of my colleagues.

I tortured myself reading columns of numbers and prices and rates, hoping to find some hint of how the second stage of this adventure was going to play out. For there must be a second stage. M. Hubert was right: why do something which could scarcely hurt Barings, and could cost you a lot of money? But if banks across the Continent were indeed coordinating a response, something serious was taking place and it could be assumed that it was being organised by people of intelligence.

It took the better part of two hours, but then I had it. And even I was shocked. I had assumed I would find some sort of evidence of a secondary assault on Barings, but in fact it was much more serious than that. So much so that I didn’t even look at the relevant figures until late; it never occurred to me it would be important.

Barings wasn’t the target. They were aiming at the Bank of England itself.

The figures were clear, once I had noticed them. For the past two months, bullion had been draining out of the Bank. Money was withdrawn, new deposits were not made, or were delayed. The Bank of France, citing the need for gold to pay for a tax shortfall due to a poor harvest, had postponed depositing ten million sterling; the Bank of Russia had withdrawn fifteen million. Commercial banks which ordinarily would keep smaller but substantial quantities of gold on deposit in London had been pulling it out: £100,000 here, £200,000 there. In all—I settled down with pencil and paper and added it up going back six weeks—another seven million had been withdrawn in this way. According to my calculations, the Bank had probably less than four million in bullion in its vaults.

And next week, the most powerful bank in the world was going to get a shock which would send it reeling, causing panic throughout the London markets. When people panic, they want their money back. They want gold. And Barings would be wanting to borrow the same gold, to cover the holes in its positions. It had promised the Argentinian Water Company five million. It had to pay, and it wasn’t going to have enough money. Every stock listed on the Exchange would plummet in value. Banks and their customers would panic. A queue of bankers would form at the Bank of England and it wouldn’t have enough gold to satisfy demand. It would have to suspend convertibility, say it would no longer give gold for paper, and the reputation of the entire City of London would be in ruins, with Barings the first to fold. “I promise to pay the bearer on demand the sum of one pound.” On demand. In gold. Except that it would be revealed as a lie. Not worth the paper it was printed on, so that paper would rapidly become worthless.

It was breathtakingly audacious. And simple. And it was going to work. “A determined enemy would not waste his time and gold striking at the navy or invading the colonies. He would aim to destroy belief in the word of a handful of bankers in London.” That was what Netscher had said, and he was right. It was going to happen. And that idiot Felstead wouldn’t believe me.

The beauty of the scheme was that even telling someone would merely start the panic earlier, rather than calm it down. There was not enough gold in London, and nothing could change that.

I came to the conclusion that, even though it might already be too late, I must, at least, alert Mr. Wilkinson, and for that I needed the assistance of John Stone.
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could not help me, as we ordinarily sent our stories by the public telegraph, going down to the local post office and sending them off, word by word. This was not very private, and it was well known that the operators of the machines received a small stipend from the police to report anything of interest. Felstead would not help, but Stone certainly would, I thought. And I knew that his companies maintained their own private telegraph links, which might, perhaps, be intercepted but which were more likely to pass undetected.

Finding Stone, however, was not so simple. I knew that he had offices close to the Palais Royal, but these were closed—it was already so late that I went there just to be thorough, rather than with any real hope of success. I knew, also, that he stayed usually at the Hôtel du Louvre, but again he was out. It took a hefty inducement before I was allowed to go up and talk to his manservant.

“I’m afraid I do not know where Mr. Stone is, sir,” said this character, his face immobile as he looked me straight in the eye.

“Yes, you do,” I replied tartly. “And however commendable your lying may be under normal circumstances, it is not now. I have to see him, and as swiftly as possible. It is a matter of the highest urgency, and he will not thank you if you do not tell me where to find him.”

The servant hesitated for a few seconds, then said, with the greatest reluctance, “I believe he had an appointment for tea with the Countess von Futak. But I do not know where that might be…”

I grinned broadly at him. “But I do. Excellent man, thank you. I will make sure he is aware of your impeccable judgement.”

I didn’t quite run down the stairs, but I hurried, and I certainly pushed aside an old gentleman waiting to be handed into a cab outside the main door. He scowled, I made an apologetic gesture as I leaped in and gave directions.

It took fifteen minutes to get to Elizabeth’s house, and I battered on the door until I was let in and demanded to see both her and Stone. It then occurred to me that I might well be placing both of them in a position of considerable embarrassment. Elizabeth had told me that she was open to visitors only on certain days and at certain hours. For the rest she had her business to attend to. This was not an evening when she received anyone other than her shareholders. Did that mean that Stone had acquired a stake? Oddly, as I waited, I hoped very much not. But I did not have time to wonder why it mattered to me.

There was no embarrassment, fortunately. I was shown into the little salon, the one she kept for herself, rather than visitors, a charming room furnished to her tastes, not to the requirements of show. And there they were, sitting in two little chairs, side by side, just like a couple spending a few intimate moments together, talking about their day and enjoying each other’s company. The difference in her struck me immediately; she was relaxed, unguarded, and completely at ease. I didn’t think I had ever seen her quite like that before. Certainly she was never so when with me. Always I sensed a tension, as though she expected to have to defend herself. I felt jealous, although it did not hit me at the time.

But the moment I entered that watchfulness came back, and Stone rose to greet me and break up all impression of intimacy.

“Forgive me, both,” I said. “I would not be here uninvited if it was not a matter of importance. Mr. Stone, may I have a word in private, please.”

Elizabeth rose. “Stay here; I have matters to attend to upstairs. I will not disturb you.”

She left the room swiftly, and Stone eyed me with a mixture of curiosity and, I could tell, no small amount of annoyance.

“As I say, I apologise. However, I need to send a telegram to Wilkinson which will not be read by anyone else. I would like to use your telegraph system.”

“Well, certainly. I am happy to oblige,” he said. “Do I take it you want to send it now, this very minute?”

“This very minute,” I replied, “or at least as soon as possible. I do not think it can wait until tomorrow.”

“And are you able to tell me what this is about? I will of course assist you in any case, but you will understand that you have excited my curiosity.”

“I believe I can. In fact, I think it might be a good idea. To make sure that I am not making a fool of myself. It is about Barings.”

And so I settled down and told him about the statement by Steinberg at his dinner, my meeting with Hubert at the racecourse, and the conclusions I had drawn from studying the movements of bullion out of the Bank of England.

“So you believe this is a concerted attempt against London?”

“I believe it is, although of that I have no proof. Certainly it would be a remarkable coincidence if it is not. At the moment, it doesn’t matter. What does matter is that on Thursday it will become clear that the Barings bond issue has failed; people will wonder if it has enough money to cover its liabilities—correctly, as it certainly does not. There will be a run to gold, at Barings and at every other institution in the City. The Bank of England will be unable to supply the gold requested; Barings will collapse, and the Bank will have to suspend convertibility. I leave it to you to figure out the consequences.”

Stone stroked his chin, and considered. “That’s easy enough. Bank rates will rocket, institutions will founder, savers will be ruined, companies starved of funds, trade will be crippled. The possible effects could go on and on. Impressive.”

“I beg your pardon?”

“I was talking abstractly. One cannot help but admire a fine piece of work, well executed. But, as you say, it does not matter whether this is planned or not. The question is whether anything can be done to stop it. For example, what difference will it make if Wilkinson—and through him, I presume the Bank of England, the Government and Barings—knows what is about to take place?”

“If they are prepared, they can, at least, call in all the gold they can find from the other banks. That might be enough to stop the panic growing.”

Stone shook his head. “I very much doubt that. If you are correct, many foreign institutions in London will have their requests to withdraw bullion already written waiting to be delivered. To start the panic off with a vengeance. I mean, it is certainly worth a try, should the authorities so decide, but I doubt it will work. Hmm.”

“What?”

“I’m sorry,” he said with a faint smile. “I was just calculating my own exposure. What a pity you did not find this out yesterday. Then I could have exited the markets in time. Now, it seems, I will have to go down with everyone else; my fate tied to the demise of that fool Revelstoke. What a very great nuisance. Still, I suppose if I order my people to sell first thing on Monday morning…”

“But that will merely add to the panic,” I said, incredulously.

Stone looked at me in surprise. “Maybe so,” he said, “but I do not see why I should be ruined because of Lord Revelstoke’s overweening ambition and lack of judgement.”

I stared at him. I knew full well that Stone’s gentle manner merely disguised the activities of one of the more ruthless of operators. But I never expected him to be quite so unpatriotic.

“Do not concern yourself,” he said, as though he read my thoughts. “Self-preservation and patriotism are not entirely incompatible. I will not be ruined by this. On the other hand, I will render whatever assistance I can. I am more than aware—more than you, probably—how damaging all this might prove to be. It is not in my interest for the financial machinery of the Empire to be ruined. Quite the contrary. I depend on the markets for money, on shippers for orders, on the Government having healthy tax receipts for military commissions. And I depend on Britain’s reputation to give my companies the advantage in foreign markets. For these reasons, I will help, if I can.”

He stood up. “And we can begin by going to the offices and sending your telegram. I will have to come with you. Can you work a telegraph machine?”

I nodded. “I think so.”

“Good. It will go to my office in London, and will then have to be delivered by hand. Do not worry yourself; Bartoli, my man there, is entirely loyal and discreet, and I will instruct him that he is to deliver it himself and speak of it to no one. He will do as he is told.”

It would have to do. We walked out and called for our coats. As we were getting ready, Elizabeth came down the stairs.

“You are going?” she asked, with evident disappointment.