at eight the next morning the train from the adirondacks arrived, and montague was awakened by his brother at the telephone. “have you seen this morning's despatch?” was oliver's first word.

“i haven't seen it,” said montague; “but i know what's in it.”

“about the trust company of the republic?” asked oliver.

“yes,” said the other. “i was told the story before i telegraphed you.”

“but my god, man,” cried oliver—“then why aren't you down town?”

“i'm going to let my money stay.”

“what?”

“i believe that the institution is sound; and i am not going to leave prentice in the lurch. i telegraphed you, so that you could do as you chose.”

it was a moment or two before oliver could find words to reply.

“thanks!” he said. “you might have done a little more—sent somebody down to keep a place in line for me. you're out of your mind, but there's no time to talk about it now. good-by.” and so he rang off.

montague dressed and had his breakfast; in the meantime he glanced over a copy of the despatch, where, in the account of the day's events, he found the fatal statements about the trust company of the republic. it was very interesting to montague to read these newspapers and see the picture of events which they presented to the public. they all told what they could not avoid telling—that is, the events which were public matters; but they never by any chance gave a hint of the reasons for the happenings—you would have supposed that all these upheavals in the banking world were so many thunderbolts which had fallen from the heavens above. and each day they gave more of their space to insisting that the previous day's misfortunes were the last—that by no chance could there be any more thunderbolts to fall.

when he went down town, he rode one station farther than usual in order to pass the trust company of the republic. he found a line of people extending halfway round the block, and in the minute that he stood watching there were a score or more added to it. police were patrolling up and down—it was not many hours later that they were compelled to adopt the expedient of issuing numbered tickets to those who waited in the line.

montague walked on toward the front, looking for his brother. but he had not gone very far before he gave an exclamation of amazement. he saw a short, stout, grey-haired figure, which he recognised, even by its back. “major venable!” he gasped.

the major whirled about. “montague!” he exclaimed. “my god, you are just in time to save my life!”

“what do you want?” asked the other.

“i want a chair!” gasped the major, whose purple features seemed about to burst with his unwonted exertions. “i've been standing here for two hours. in another minute more i should have sat down on the sidewalk.”

“where can i get a chair?” asked montague, biting his tongue in order to repress his amusement.

“over on broadway,” said the major. “go into one of the stores, and make somebody sell you one. pay anything—i don't care.”

so montague went back, and entered a leather-goods store, where he saw several cane-seated chairs. he was free to laugh then all he pleased; and he explained the situation to one of the clerks, who demurred at five dollars, but finally consented for ten dollars to take the risk of displeasing his employer. for fifty cents more montague found a boy to carry it, and he returned in triumph to his venerable friend.

“i never expected to see you in a position like this,” he remarked. “i thought you always knew things in advance.”

“by the lord, montague!” muttered the other, “i've got a quarter of a million in this place.”

“i've got about one-fourth as much myself,” said montague.

“what!” cried the major. “then what are you doing?”

“i'm going to leave it in,” said montague. “i have reason to know that that report in the despatch is simply a blunder, and that the institution is sound.”

“but, man, there'll be a run on it!” sputtered the old gentleman.

“there will, if everybody behaves like you. you don't need your quarter of a million to pay for your lunch, do you?”

the major was too much amazed to find a reply.

“you put your money in a trust company,” the other continued, “and you know that it only keeps five per cent reserve, and is liable to pay a hundred per cent of its deposits. how can you expect it to do that?”

“i don't expect it,” said the major, grimly; “i expect to be among the five per cent.” and he cast his eye up the line, and added, “i rather think i am.”

montague went on ahead, and found his brother, with only about a score of people ahead of him. apparently not many of the depositors of the trust company read their newspapers before eight o'clock in the morning.

“do you want a chair, too?” asked montague. “i just got one for the major.”

“is he here, too?” exclaimed oliver. “good heavens! no, i don't want a chair,” he added, “i'll get through early. but, allan, tell me—what in the world is the matter? do you really mean that your money is still in here?”

“it's here,” the other answered. “there's no use arguing about it—come over to the office when you get your money.”

“i got the train just by half a minute,” said oliver. “poor bertie stuyvesant didn't get up in time, and he's coming on a special—he's got about three hundred thousand in here. it was to pay for his new yacht.”

“i guess some of the yacht-makers won't be quite so busy from now on,” remarked the other, as he moved away.

that afternoon he heard the story of how general prentice, as a director of the gotham trust, had voted that the institution should not close its doors, and then, as president of the trust company of the republic, had sent over and cashed a check for a million dollars. none of the newspapers printed that story, but it ran from mouth to mouth, and was soon the jest of the whole city. men said that it was this act of treachery which had taken the heart out of the gotham trust company directors, and led to the closing of its doors.

such was the beginning of the panic as montague saw it. it had all worked out beautifully, according to the schedule. the stock market was falling to pieces—some of the leading stocks were falling several points between transactions, and wyman and hegan and the oil and steel people were hammering the market and getting ready for the killing. and at the same time, representatives of waterman in washington were interviewing the president, and setting before him the desperate plight of the mississippi steel company. already the structure of the country's finances was tottering; and here was one more big failure threatening. realising the desperate situation, the steel trust was willing to do its part to save the country—it would take over the mississippi steel company, provided only that the government would not interfere. the desired promise was given; and so that last of waterman's purposes was accomplished.

but there was one factor in the problem upon which few had reckoned, and that was the vast public which furnished all the money for the game—the people to whom dollars were not simply gamblers' chips, but to whom they stood for the necessities of life; business men who must have them to pay their clerks on saturday afternoon; working-men who needed them for rent and food; helpless widows and orphans to whom they meant safety from starvation. these unhappy people had no means of knowing that financial institutions, which were perfectly sound and able to pay their depositors, might be wrecked deliberately in a gamblers' game. when they heard that banks were tottering, and were being besieged for money, they concluded that there must be real danger—that the long-predicted crash must be at hand. they descended upon wall street in hordes—the whole financial district was packed with terrified crowds, and squads of policemen rode through upon horseback in order to keep open the streets.

“somebody asked for a dollar,” was the way one banker phrased it. wall street had been doing business with pieces of paper; and now someone asked for a dollar, and it was discovered that the dollar had been mislaid.

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.

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.

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.

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.

and bates shrugged his shoulders. “you see!” he said. “so it goes.”