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Title: A Bubble Burst
Author: Fred M. White
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Language: English
Date first posted: July 2006
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A Bubble Burst: How a Stock Exchange Scare Dislocated the Life of the
Empire For Two Days
Fred M. White

The era of peace which seemed to be well-begun in 1906 was naturally
marked by an extraordinary commercial and financial activity; an
amount of world-wide speculations never equalled in intensity, even in
the mad times of the South Sea Bubble, or when Hudson, the Railway
King, flourished. The countless millions piled up in English banks
earning a 2? per cent. interest were lavishly withdrawn, new mines had
been started, everybody was going to be rich. On the face of it people
had good grounds for their sanguine expectations. The Rand with its
forty square miles of of rich gold-bearing reefs containing an untold
number of immense fortunes--the richest region on earth--was properly
administered for the first time. From the highest to the lowest
everybody was investing their savings in South Africa.

In other words, there was a tremendous "boom." Nothing like it had
ever been seen in the history of commerce. It was the golden hour of
the promoter. Yet, for the most part, the schemes promised well. There
was, however, an enormous amount of rubbish ion the market. Some of
the more thoughtful financiers scented danger ahead, but they were not
listened to. The roar of the Kaffir circus resounded in men's ears and
made them mad. Park Lane would never be able to hold the new

All England was in the grip of the mania. Bona fide speculation and
business had become gambling pure and simple. London thought of
nothing else. The City was crammed with excited buyers and operators,
the little outside broker of yesterday came down to his office behind
a pair of blood horses, and his diamonds were a solid sign of his new

A busy day was drawing to a close. Carl Ericsson sat in his office
smoking a cigarette. Ericsson yesterday had been waiter in an
unimportant restaurant. Today he had a fine set of offices and a small
mansion at Hampstead. He had "arrived" on the crest of the wave as
many far less astute adventurers had done. There was a peculiarly
uneasy grin on his dark features, a curious twitching of the lips, and
he had the tired eyes of the sleepless.

His partner sat opposite him behind a big cigar. He was a fat man with
a big jaw and a merciless mouth. Six months before Eli Smith had been
a fairly well-to-do suburban butcher. Now he was E. Asherton-Smith,
the big financial agent. He boasted, with truth, that he could sign a
cheque for 40,000 and be none the worse for it. In the area of the
City it would have been difficult to find two choicer specimens of
rascality than the partners in Ericsson & Co.

"Got a big card to play, eh?" Asherton-Smith asked.

Ericsson grinned nervously. His lithe little body was quivering with
excitement. There was a furtive look in his drooping eyes.

"The ace of trumps," he gurgled; "the coup of the century. Eli, my
boy, how much money could we make if we could scare South Africans
down five or six points for a week?"

Mr. Asherton-Smith's diamonds heaved with emotion.

"Millions," he said. "Just as many millions as we could stagger under.
Makes my mouth like sawdust to think of it. But pass out a bottle of

Ericsson did so, rose from his seat and peeped into the outer office;
the clerks had all gone home for the day. He closed the door gently.

"I'm going to tell you," he said. "If I don't tell someopdy I shall go
mad. I can't sleep at nights for thinking of it. When I do doze off
I'm sleeping in a river of sovereigns. With a bit of luck, it's a

"Get on, Carlo. You're just playing with my feelings."

"Well, it's just this way."--Ericsson's voice dropped to a whisper.
"There are two lines of cable by which South Africa can communicate
with the outside world--the East and West Africa cables. The West
Coast line isn't to be relied upon; it breaks down at least once a
week. At a time like this a breakdown is a serious matter. The
directors have taken the bull by the horns, so at the present moment
the West Coast line is out of our calculations. It's under repair, and
it's likely to remain so for some time to come. I've ascertained that
communication with South Africa by the Western line is impossible. For
the next fortnight no message can come or go by that route. This
leaves us only the Eastern line to grapple with. If that kindly breaks
down for four-and-twenty hours, our fortunes are safe."

"Is it likely?" Asherton-Smith asked.

"Why, yes. It has happened three times during this year. I tell you I
have followed this thing pretty keenly. It's more than on the cards.
Suppose the breakdown did come, Eli, and we had the last message
through? Look at this."

Ericsson took from a safe a sheet of paper--a cablegram message, in
fact, sent out from the office of the East Africa company. It was a
genuine document enough, with the date and the hour showing that it
had been dispatched from Cape Town on the afternoon of the same day.
There were words upon it to the effect that "Bertha has lost her aunt,
and the water has been packed in the matchbox."

"That isn't our cypher," Asherton-Smith said.

"Quite right; it's the cypher used by The Messenger. The Messenger, my
boy, enjoys as high a reputation as The Times. If a cablegram appeared
in The Messenger tomorrow saying that there had been an earthquake on
the Rand, and that the Johannesburg water-works had overflowed into
the deep levels everybody could take it for gospel. That's why I
managed to get hold of and learn The Messenger cypher.

"On the off-chance of the Eastern cable breaking down, I've had a
cable sent to me every day from a friend in South Africa saying that
there has been an earthquake in Johannesburg, and that the mines are
flooded out. The cable comes to me in the cypher used by The Messenger
people. That's what all that gibberish about Bertha and the water and
the matchbox means.

"Suppose you were to walk into the office and say the Eastern line of
cable had broken down. As the Western line is under repair that tells
me that communication with South Africa is impossible for a day or
more. Probably the lines would be unavailable for nearly a week. I've
got a spare envelope or two used by the Eastern Company for their
messages; I put this flimsy inside and alter my own address 'Bonan' to
'Bonanza'--which is the registered cable address of The Messenger--by
the addition of two letters, and there you are. That's why I thought
of 'Bonan' and that little office of mine in Long Lane, where I am
known as James Jones.

"I've had this scheme in my mind for years. A boy drops into The
Messenger office and hands over the cablegram, and there you are. The
thing looks perfectly in order; it is the private cypher of the big
newspaper, and, moreover, it is quite up-to-date. If the cable breaks
down no questions can be asked, and the thing goes into the paper.
We've only got to get the same message sent to me every day, and
sooner or later our chance comes."

Asherton-Smith was breathing heavily. The prospect was dazzling.
Somebody was tapping at the outer door. A large man in a big fur coat

"What are you beggars conspiring about?" he asked. "Got something
extra special from down below? Egad, I'd give something for a private
wire of my own! We'll get a rest for a day or two. The East Africa
cable is bust up south of Mauritius."

The intruder helped himself to a glass of champagne that he obviously
didn't want, and drifted out again. The partners glanced at one
another without speaking. Perhaps they were just a little frightened.

* * * * *

The thing appeared to be absolutely certain. So far as they could see,
the story would be believed implicitly, for The Messenger was
absolutely reliable.

The great beauty of the scheme was its conclusiveness. There had never
been an earthquake on the Rand, but there was no reason why there
shouldn't be. And an earthquake would assuredly destroy the
Johannesburg water-works, which would mean the washing away of half
the place and the flooding of some of the richest mines below the

The West Coast cable was under repair and incapable of use. But that
frequently happened, as most people interested in South Africa knew.
There was no chance of the truth trickling back to London via
Australia or New York. And now the Eastern line had broken down also,
as all deep sea cables do on occasion.

"Upon my word, I can't see a flaw anywhere," Ericsson remarked, in a
voice that trembled. "If the Eastern line is repaired by morning we
shall be none the worse off. Our coup will have miscarried, a few
enquiries will be made, and James Jones will never be seen in Long
Lane again."

Asherton-Smith went home and dined and drank; but sleep was not for
his pillow that night. The papers were late in the morning, and that
did not lessen his irritability. The breakfast stood untouched, beyond
a little dry toast, and some brandy and soda water. Just for the
moment the prosperous Asherton-Smith regretted the day when he had
been the oily and irresponsible Eli Smith, butcher.

The papers came at last--a whole pile of them; but Asherton-Smith only
desired to see The Messenger. He fluttered it open with fingers that
trembled. There it was--the news that he sought. He drew a deep

Usually The Messenger avoided sensation; but here was a "scoop" that
no human editor could possibly resist. The headlines danced before the
reader's eyes.

"Earthquake at Johannesburg. Destruction of the Water Works and the
Flooding of the Mines. Great loss of life and property." The
Messenger, alone of all the papers, contained this news.

A map of Johannesburg, right away from the water-works to the five-
mile belt, where the world-renowned mines lay, only served to make the
story more convincing. The water would have swept over the city, from
the aristocratic suburb of Dorfontein to the auriferous belt that held
the wealthy mines.

There were hundreds of millions of money invested here. The news of
the disaster would have a depressing estate upon the Stock Exchange.
Weak holders would be pretty certain to lose their heads, and the
markets would be flooded with shares. Asherton-Smith trembled as he
thought of his forthcoming fortune.

A little after ten o'clock he was in the City. In the train and in the
streets people were talking about nothing but the great disaster in
South Africa. Nobody doubted the story, although only The Messenger
contained it. Unfortunately the Eastern line had broken down at a
crucial moment, and no details were forthcoming for the time being.
The Messenger's cable had been the last to come through.

* * * * *

"Going all right, eh?" Asherton-Smith asked. His teeth were
chattering, but not with cold. "Pretty satisfied, eh?"

Ericsson nodded and grinned. He looked white and uneasy.

"I've started the machinery," he said. "When prices have dropped five
or six points we are going to buy quietly. Mind you, I'm going to make
no secret of it. I'm going to pose as the saviour of the market, the
one man who refuses to bow to the panic--shall swagger about the stuff
being there in spite of a dozen earthquakes.. I shall boast that at
bed rock prices we can afford to buy to hold. That line will avert
suspicion from us when the cat is out of the bag and our fortunes
made. And you'll have to back me up on this. What a row there will be
when the truth comes to be told!"

Ericsson and his partner pushed their way past inquisitive spectators
who had nothing to lose, and therefore enjoyed the strange scene; they
elbowed wealthy-looking men in all the garb of prosperity whose
haggard faces gave the lie to their outer air.

Everybody was constrained and alert. The big financiers who usually
controlled the markets were getting frightened. They assumed that
there must be no panic, they desired that nothing should be done till
the full magnitude of the disaster could be verified.

But people believed in the integrity of The Messenger which had never
played them false yet. The great men of the exchanges and the marts
had forgotten their human nature for the moment. They were asking poor
humanity to put aside greed and self interest and love of money, the
father to forget his savings, and the widow to ignore her dividends..
They might just as well have appealed to the common sense of a flood
tide swept by the gale.

Two of the big men were penned on the pavement on Cornhill. Their
names were good on "'change" for any amount in reason; they reckoned
themselves rich and comfortable. But the strain of the situation was
getting on their nerves.

"I'd give 50,000 to have my way here for a few hours, Henderson,"
said one.

"I'd give twice that to feel that I had what I deemed myself to
possess yesterday," said Sir James Henderson. "What would you like to
do, Kingsely?"

"Clear the streets," the great bullion broker replied. "Get some
troops and Maxims, and declare the City in a state of siege for eight
and-forty hours. Pass a short Act of Parliament prohibiting people
from dealing in stocks and shares for a week. By that time the panic
would have allayed itself and folks regained their sanity. As it is,
thousands are going to be ruined. Every share in the South African
market is absurdly inflated, and, even if the disaster is small,
prices must keep low. But there is worse coming than that, my friend."

Already rumours were spreading far and wide as to the fall of certain
shares. Mines that yesterday stood high in the estimation of the
public were publicly offered at a reduction of from eight to ten
points; even the gilt-edged securities were suffering.

The feeling grew that nothing was safe. It is the easiest thing in the
world to shake public assurance where money is concerned. With one
accord the thousands of large and small speculators had set out for
the City to get rid of their liability on the earliest possible
occasion. They asked for no profits, they demanded no margin--they
would have been content to get out at a loss.

It never occurred to the individual that the same brilliant idea might
strike a million brains simultaneously. With one accord they rushed to
the line of action that might be the ruin of one-third of them. Just
for the time purchases by a few bold speculators stopped the rush; but
presently they got filled up or frightened so that by two o'clock some
of the best paper in the market was begging at a few shillings the 1
share. When the fact struck New York and reacted on the London market,
nobody knew what might happen.

It was fortunate that sellers could not unload at once. Sheaves of
telegrams tumbled into brokers' offices, the floors were littered with
orange envelopes, the City was musical with the tinkle of telephones.
The heads of firms, half mad with worry and anxiety, were offering the
girls in the telephone exchange large sums to connect them with this
office and the other. The usually sane City of London was as mad now
as it had been in the days of the South Sea Bubble.

By three o'clock, however, business on the Stock Exchange had
practically come to a standstill. It was useless to deal with waste
paper. To-morrow the crowd would doubtless be augmented by thousands
of provincial speculators. Already the foreign Bourses were suffering
under the strain. Early in the afternoon there were rumours and signs
of an excited struggle in Lothbury.

What had happened now? People were straining their ears to listen. The
news came in presently. There was a run on the South African
Industrial Bank!

When the crowd began to clamour at the doors of the South African
Industrial, the manager slipped out by a side entrance and made the
best pace he could in the direction of the Bank of England. Once
there, all his self-possession deserted him. He asked wildly to see
the chief cashier, the general manager, the governors, anybody who
might help him for the moment.

But the officials had other things to occupy their attention. From all
parts of the country intelligence had arrived to the effect that the
panic was at its height. It was only now that the big financiers
realised what a large amount of fanatical gambling there had been in
South Africans. Everybody had been going to make their fortunes, from
humble clerks up to the needy aristocrats. Every penny that could be
raked together had gone that way.

And now the country had taken it into its head that the Rand was lost.
Wild appeals had been made to the Eastern Cable Company to do
something, but they could only reply that their line had broken down
somewhere beyond Mauritius, and that, until it could be fished up and
spliced, South Africa might as well be in the moon. People were acting
as if the Rand had been swallowed up altogether.

The Bank of England was full of great financiers at their wits' ends
for some means of allaying the panic and restoring public confidence.
The great houses, Rothschild, and Coutts, and the rest, were
represented in the governor's parlour.

The presiding genius of the South African Industrial found his way
into the meeting. He was sorry to trouble them; he would not have come
unless he had been absolutely bound to. But there was a run on his
bank, and he wanted 2,000,000 immediately. As to security---

One of the grave financiers laughed aloud. It seemed an awful thing to
do in that solemn and decorous parlour, but nobody seemed to notice.
But there was a general concensus of opinion that the money must be
forthcoming. If one sound bank was allowed to topple over, goodness
only knew where the catastrophe might end.

"You will have to do with 500,000 for the present," the chairman
said. "There are sure to be other applications. You must be
diplomatic; festina lente, you know."

"If I could keep open straight away until---"

"Madness. Keep to your regulations. Close at four o'clock. Delay is

The manager of the South African Industrial fought his way back to the
offices with a little comfort at the back of his mind.

There was a lull as he appeared. He took advantage of it. His courage
had come back to him now.

"Close the doors," he said sharply. "It is past four o'clock."

The mob yelled its protest. A big man climbed over the trellis along
the counter. Just for a moment it looked like a lawless riot, but a
cashier whipped a revolver out from a drawer, and as the big man
looked down the blue bore his courage failed him. There was no further
rush, but at the same time there was disposition on the part of the
crowd to retire.

"We are closed for the day," the manager said with considerable
coolness. "You can't expect me to stay here all night merely because
you have taken it into your heads to want your money all at once. Come
tomorrow and you shall all be paid."

A derisive howl followed, The manager whispered something to one of
the clerks and the latter slipped out. Presently there was a commotion
at the doors, and half-a-dozen helmets topped the crowd. There was a
swaying movement till the long counter creaked again, an oath or two,
uplifted sticks and the smashing of a policeman's helmet.

For the next few minutes there was something in the nature of a free
fight;' blows were freely exchanged, and more than one face bore
traces of blood. But there is always something besides physical force
behind law and order, and gradually the mob turned back. Gradually the
counting-house was cleared and the iron shutters let down.

But the city did not clear. The wildest rumours were in the air. Other
banks, doing a more or less large business in the way of withdrawals,
had followed the example of the South African Industrial, and this had
not tended to restore public confidence. It was pretty clear that
every house would have to face a similar run on the morrow.

At eight o'clock the streets were still crowded. It was fairly warm;
there was little or no traffic after dusk, and it became evident that
thousands of people had all tacitly resolved to do the same thing--
remain in the streets all night outside their particular offices or
business houses, and wait so that they might have the first chance in
the morning. People sat on the paths and in the roadway. Every City
house of refreshment had been depleted of food long since.

Under the big electric lamps people reclined, reading the evening
papers. It was a gigantic picnic, with tragedy to crown the feast.
There was no laughter, nothing but grim determination of purpose.

The papers were full of bad news from the provinces. Everywhere public
credit was shaken to breaking point. There had been runs on scores of
local banks.

In the West-End there was only one topic of conversation. But the
theatres and restaurants were open, and life was going on much the
same. In a private room at the Savoy Ericsson and his partner in guilt
were dining. The waiters had gone, the wine and cigars stood on the

There was a subdued look about both of them, a furtive cast of the
eyes and just a suggestion of slackness in their hands not due
entirely to the champagne. It was a long time before either of them

"Pretty warm day, Eli," Ericsson suggested.

Asherton-Smith wiped his red damp forehead.

"Rather," he said. "I'm not so sharp as you, I know, but I'd forfeit a
few thousands to be well out of this."

"Ericsson was not so contemptuous of his thick-witted partner as

"I should like to know what you are driving at," he muttered.

"Well, we've been too sharp. We've played the game too far. Shares
were only to drop a few points, and we were to buy for the rise. And
what have we got? Some hundreds of thousands of shares a few points
below par? Not a bit of it. If this panic waits two days longer we
shall have exchanged all our own cash and our own credit for a ton or
two of waste paper."

"It will all come back again." Ericsson said uneasily.

"Ah, but when? The bogey has been too big for the public. We've given
them a scare that they will not get over in a hurry for many a day.
We've shown them what might happen. And they tumble to the fact that
things are far too inflated. The fall of a few points would have put
millions into our pockets. As it is, we shall have to hold on perhaps
for months. And we're not strong enough to do that."

"If the cable works again to-morrow." Ericsson said hoarsely after a
pause "it--"

"Yes, and if it doesn't? And if the thing goes on, what then? And if
there should be a run to-morrow on the Bank of England!"

Ericsson and Asherton-Smith were still sipping their brandy, but they
were no longer gloating over their prey with shining eyes--they no
longer counted their prospective millions. Like the greedy fox they
had dropped the substance for the shadow. They were going to be ruined
with their victims.

With moody, furtive, bloodshot eyes they looked at each other.

"I suppose we can't drop a hint," Ericsson suggested.

"Drop a hint," Asherton-Smith sneered. "You're a clever chap, you
are--too clever by half. But if that's all the idea you've got you'd
better shut up. Perhaps you'd like to go and tell the story to the
Lord Mayor?"

Ericsson's fine turn for repartee seemed to have deserted him.

"Who could have anticipated anything like this?" he groaned. "And the
worst of it is that we dare not say a word. The merest hint would
invite suspicion, and you may be pretty sure that they would make the
punishment fit the crime. We'll just have to grin and bear it."

Asherton-Smith shook his fist in the speaker's face.

"You miserable swindler!" he yelled. "But for you I should have been a
rich man to-day. And now I am ruined--ruined!"

Ericsson bent his head meekly with never a word to say.

* * * * *

The City was awake earlier than usual next morning; indeed, for once,
it had not slept. By nine o'clock in the morning the streets were
packed. The haggard-eyed, sleepless ones gained nothing by their
tenacity, for they were pushed from pillar to post by others fresh for
the fray.

The provincial trains from an early hour had commenced to pour fresh
forces into London. A great many business men had slept as best they
could in their offices, feeling pretty sure that it was the only way
to be on the spot in the morning. They looked tired and worn out.

It was a quiet, persistent grim crowd. There was no hustling or horse-
play, or anything of that kind; even the ubiquitous humourist was
absent. They pushed on persistently, a denser crowd round the large
banks. As soon as the shutters were down and the doors opened the
human tide streamed in.

The run on the banks had set in grimly. Clerks and cashiers from
distant branches had been brought up to meet the pressure.

There was a confidence in the way they bustled about and handled and
paid out the money that was not without its effect. More than one man
eyed the pile of notes in his hand and passed them back over the
counter again. Here and there people were bewailing the loss of their

It was the golden hour of the light-fingered fraternity. They were
absolutely covered by the dense crowd so that they could pursue their
vocation with impunity. They had only to mark down some rich prize and
plunder. Individuals shrieked that they had been robbed, but nobody
took any notice.

A burley, red-faced farmer yelled that he had been robbed of 800 in
Bank of England notes. Someone by him retorted that it was no loss,
seeing that there was a run on the great National bank.

It was the thrilling moment of the day! A run on the Bank of England!
And yet it seemed in the light of new circumstances to be the most
natural thing in the world. Would the bank be able to cash its own
notes? If not--well, if not--nobody could foresee the end.

There were thousands of curious people in the crowd who had no
business there whatever. Not that there was any business properly so
called done in London that day. There was a surging rush in the
direction of Threadneedle Street. It would be something in after life
to say that one had seen a run on the Bank of England.

Inside the paying departments huge piles of gold and silver glittered
in the sunshine. It was a curious and thrilling contrast between the
grave decorum of the clerks and the wild, fierce rush of the public.

The piles of gold and the easy unconcern of the officials satisfied a
good many people who pushed to the counters and then fell back again
muttering uncomfortably; but, in real truth, the bank managers were
becoming a little anxious.

Lord Fairchild, the great capitalist, with his houses in every big
city of the world, contrived at length to reach the bank parlour.
There was a full meeting of the chairman and governors. A cheerful
tone prevailed.

"I sincerely hope we may weather the storm," the chairman said
anxiously. "We have had no signal of distress from anyone; but I shall
be glad when it is over."

Everybody looked tired and worn out. One or two of the governors had
fallen asleep in their chairs. There was a litter of lunch on the
table. But very few of those assembled there seemed to care anything
for food.

"I calculate that we can last another day," Lord Fairchild said. "By
to-morrow I hope we shall have contact with Cape Town again."

Every effort was being made to bring about this desirable
consummation. The broken line might be repaired at any moment. News
had come from the Mauritius that the broken cable had been fished up,
but there was no further information since midnight. Possibly, when
contact could be made again, the disaster would prove to be much less
than the last message had forecasted.

"It must come soon," one of the governors sighed, "It must come soon,
or Parliament will have to deal with this question. Another two

"I prefer not to think of another two days," Lord Fairchild replied.
"If the worse comes to the worst, Government must guarantee our paper.
We shall have to issue Treasury bills to make up our deficit. We--"

An excited individual burst without ceremony into the room. His hat
was off; his smart frock coat was torn to ribands.

"I am from the office of the East Cable Company," he gasped "I was
told to come here at once. My lord, I have the most extraordinary
news. The great disaster at Johannesburg is---is---is---"

"Get on man; we are all impatience."

"Is---is no disaster at all. We have verified it. Our agent at Cape
Town says he has heard nothing of it. Johannesburg stands where it
did. There are four messages through and--well, there has been a cruel
fraud, and we are doing our best to get to the bottom of it."

A rousing cheer echoed through the bank parlour. The governors yelled
and shook each other by the hand like school-boys. Probably the
decorum of that room had never been so grossly violated before.

Lord Fairchild passed into the great office where the public were
still pushing and struggling. He stood on a table, his spare and
striking figure standing out conspicuously. There were hundreds
present who recognised that noble figure.

"Gentlemen," Lord Fairchild cried. "I have just received the most
authentic information that Johannesburg stands intact to-day. There
has been trickery somewhere, but, thank Heaven, the panic is over."

A perfect yell followed. Men went frantic with delight. When Lord
Fairchild said a thing it was accepted as gospel. Hats went high in
the air, people shook hands with perfect strangers, there was a rush
to pay gold back and take notes instead.

The news spread in the marvellous magnetic way common to the ear of a
huge multitude. It ran with lightning speed through the streets.
Everybody seemed to know like magic that Lord Fairchild had made a
short speech in the Bank of England to the effect that the scare was
over. In less than ten minutes the various bank officials were deeply
engaged in taking back again the piles of gold they had so recently
paid out. The mob roared out patriotic songs, there was a rush in all
directions. For the next hour or so the telegraph lines fairly hummed
with messages. Within an hour the City had regained much of its usual
busy decorum, save for the long stream of people who were getting rid
of their gold once more.

With a view to prevent any further exploiting and financial uneasiness
on the part of the speculating fraternity the commitee of the Stock
Exchange met and formally closed the House till Monday. Under the
circumstances the step was an exceedingly wise one.

In the seclusion of the bank parlour Lord Fairchild was closeted with
the editor of The Messenger. He had come down post haste to the City
to vindicate his character. The famous cablegram lay on the table.

"I need not say, my lord," he began, "that I---"

"You need not say anything about yourself," Lord Fairchild said kindly
"We are quite convinced that you have been made a victim. But how?"

"I can only theorise at present," the Messenger editor replied. "And
you, gentlemen, will understand, a great newspaper like ours has
correspondants everywhere. We also have a special cypher known only to
ourselves. Our man at the Cape is absolutely reliable. Now somebody
must havestolen our cypher or possessed himself of the key. Cables
come to us adressed to 'Bonanza.' Such was the cable that reached us
on the day that the Eastern line broke down. Seeing that it was
absolutely in order and apparently delivered in the usual way, we used
it, under the impression that we had a great piece of news and one
that possibly our rivals did not possess."

"There was nothing in the appearance of the cablegram to excite our
suspicions, but since the news of its falseness has come through I
have had it examined by an expert who reports that the original
telegram had been directed to 'Bonan,' and not to 'Bonanza.' The last
two letters had been cleverly forged, but under a very strong glass
the forgery is clear. Now you can see the trap. I have been to the
office of the Cable Company, and, as I expected, I find that a message
was sent on the day in question from Cape Town to a registered
'Bonan'. This 'Bonan' turns out to be one James Jones who has an
office in Long Lane. Of course that office was taken for the express
purpose of getting that message, so that in case the Eastern line
broke down the paper could be forced upon us. Unfortunately it was
forced upon us with dire results. We find that the message was
repeated day by day in the hopes of a breakdown.

"Now, lots of big houses down South cable quotations, lists of prices,
finds of gold-dust and the like every day. All these are in cypher,
and perhaps a fortnight might pass without any fluctuations, which
would mean practically the receipt of an identical message for days.
Nothing but a close search of the records could have aroused
suspicion. Besides, the line had broken down, and all the energies of
the company were devoted to that.

"If any of you gentlemen like to call at the Cable Company's offices
and see the scores of duplicate cypher messages, all more or less
alike, you will be convinced that the employees there are not in the
least at fault. We have been the victims of a clever conspiracy. We
can safely leave the rest to the police."

The City was becoming normal again. By four o'clock it was practically
deserted. The offices of the various banks were bursting with the
repaid gold. Many clerks were closing up the books and looking forward
to a good night's rest.

It was almost impossible to believe that these were the same streets
of a few hours before.

Meantime, Ericsson and his partner in the inner room of their offices
were gloating over a bewildering array of figures; their gains from
the gigantic hoax they had played on the public promised to run into

Rejoicing in the sudden turn in affairs, the two guilty men were
building castles in the air with their ill-gotten wealth, when heavy
footsteps came up from the office stairs; there was a knocking at the
door The two men started up. Their nerves were humming still from the
strain of the past day and night.

"Come in," Asherton-Smith cried unsteadily.

A couple of men entered. One of them had a paper in his hand.

"Mr. Asherton-Smith and Mr. Carl Ericsson, alias James Jones," he
said, "I have a warrant for your arrest which I will read to you
presently. I warn you not to say too much. Your accomplice, Jacob
Peters, has been arrestcd at Cape Town and I am instructed by cable
that he has made a full confession."

The snarling oath died away on Ericsson's lips.

"It's all up," he said hoarsely, "but it was a chance. Curse Peters
for a white-livered fool. But for him I should be worth fifty


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