London has been treated to so many surprises in United States finance, that the events of the first six months of 1895 were at first received as merely fresh proof of the rule that it is the unexpected which always happens in American monetary affairs. The New York stock market is placed by most Londoners in the “city” in the same category with French politics. The safest prophecy in either field can be made by studying the situation with the greatest care, and then by forecasting in exactly the opposite direction to the dictates of one’s judgment. A booming stock market and cheap money in the face of industrial depression and commercial disaster were regarded with wonder and amazement by the Solons of Capel Court and Throgmorton Street. They could not account for the paradox, and they finally gave up trying.
London had been among the first to unload its American stocks during what was believed to be a temporary rise in the early winter. Now in midsummer following she was disgusted and even indignant when{203} she read quotations many points higher than the low prices at which she had closed her losing speculations. None of the rules of finance would fit the situation. All the laws of trade seemed defied. But London now was merely a spectator. She possessed none of the abnormally high-priced securities. She was quite sincere in saying she didn’t want any at prevailing quotations. She was more inclined to be tempted by new enterprises, industrials, railroads, and the like, which looked cheap. But all “Americans” were still under the ban. London had suffered too much in the past five years to forget, and London memories are longer than those of her transatlantic cousins.
Gold had been flowing eastward in a steady stream for six months, and Europe could not understand how America could endure the drain. Nearly $50,000,000 in bullion, it was calculated, had been received by the Bank of England and the Bank of France from New York, and practically none had gone in the opposite direction. Two years before, when the same thing happened on a somewhat smaller scale, America had suffered a veritable panic. Silver and its advocates had been held solely responsible for this panic, but it had not alone been America’s attempt to resist the world’s decree of monetary dethronement against the white metal which had driven away gold and brought domestic disaster.{204} But the usual penalties of national loss of gold were entirely absent now, and European financiers were more than puzzled by it.
The hoarding of gold in European war-chests was still going on. The Old Lady of Threadneedle Street found herself unable to retain in her coffers any large proportion of the extraordinary European supply. Paris and Berlin and St. Petersburg added to their enormous stores at every opportunity. The sinews of war were being accumulated with the utmost greediness, for everybody felt that the day was not far distant when a mighty tragedy of nations was again to darken the pages of history. So keenly did all the governments of Europe watch every feature of the situation, that it was not surprising that Russia should be credited with the intention to take advantage of the plethora of money in America by attempting to float a loan in that country. Nor was Russia the only government that was considering schemes for tempting away Yankee gold. Even bankrupt Italy hoped to offer inducements which might yield her the use of some portion of this New World wealth.
In August, 1895, therefore, the financial war which often precedes the drawing of the sword had reached an advanced and acute stage. The situation was peculiarly menacing to Great Britain. Lord Beacons{205}field once said to a friend who asked him, during a serious foreign crisis, what were England’s chances of success in the event of war:
“The key to that situation is in Threadneedle Street.”
The wisdom of the saying was never more appreciated than now. Disaster had followed disaster in financial, in commercial, and in industrial circles for five years. Losses which would have brought any but the richest nation in the world to the verge of ruin had been sustained one after another, until it seemed that not even English pluck could stand up against more such blows. Not only had foreign and colonial ventures swallowed up millions, but home institutions, paying the penalty of recklessness or dishonesty, had fallen and involved many thousand private fortunes in the wreck. American tariffs and foreign competition had seriously cut down British trade. Labor wars, the most disastrous in history, had impoverished the working classes. And still Great Britain was solvent, undiscouraged, proudly maintaining her position in the van of the nations of the earth.
England’s only danger lay in too great self-confidence. She did not deceive herself as to the nature of the peril which menaced her. For nearly two years it had been plainly apparent. Ever since the{206} dual alliance between France and Russia had been ratified, it had been clear to close observers that Great Britain had as much if not more to fear from this new league than had the central continental powers. French hatred of her insular neighbors had been fanned from the first by an Anglophobe press. Diplomatic maneuvers and the movements of Franco-Russian fleets had been almost openly hostile to English interests. The wonder was that real hostilities had been so long delayed.
The secret of the delay was in the financial condition of the nations. Both France and Russia had for years been acting strictly upon the line of policy suggested in Lord Beaconsfield’s remark. To put it in more direct language, Gold is the arbiter of war. It was belief in this principle which had impelled France to wage a relentless tariff and trade war against Italy for five years. It was this which had led Russia to cram her treasuries with gold far above her peaceful needs. For the last two years both nations, the one by a customs campaign and the other by financial operations, had been striving to weaken the monetary resources of Germany and Austria. Opinion was divided as to the immediate object of this policy. If England was to be the first victim of the dual hatred of the allies, then if possible the Triple Alliance must be so weakened that it would not voluntarily in{207}terfere in the quarrel with Great Britain. At all events, Italy had been impoverished and Germany and Austria had suffered considerably from the hostile policy of their opposite neighbors.
In attacking the financial position of England, the French and Russian bankers had not accomplished much. Financial England is never at the mercy of foreign bankers. Bad management, colonial losses, South American ventures, great domestic frauds, may spread distress throughout the country, but Great Britain never had cause to fear the plots of the political financiers of Paris, Berlin, Vienna, and St. Petersburg. The manipulations and scheming of the past few months had had no other effect in London than to accentuate somewhat the uneasiness over the prevailing hard times. The Bank of England had been reorganized in respect to some of its methods, by reason of public criticisms a few months before, and it was now stronger than ever. There was reason for believing that it had not been idle in the great scramble for gold in which all Europe was engaged. Its resources were, of course, unknown, for such information was guarded as a deep financial and state secret.
The government was co?perating energetically in the efforts to strengthen still more the monetary position of the country. At the same time naval con{208}struction was being pushed forward on a scale that betokened the very presence of war. And yet in the midst of the oppressive conviction of impending conflict, there was no word in the courts and parliaments of Europe save of peace. Guns were bought, ships were built, armies were equipped, practice maneuvers were executed, nations were impoverished, all for the preservation of peace. But the limit had been passed at last. War was cheaper than peace. So war it was to be, in everybody’s opinion. The absence of specific cause made no difference. It could be developed in a hundred ways at a few hours’ notice. There was at least the hope of a general disarmament and the real peace of recuperation after the cataclysm was over. Many people who believed in the inevitability of the long-threatened struggle were inclined to look upon the situation in the cold light of this philosophy.
About the middle of August, France began an energetic series of diplomatic protests against the continued occupation of Egypt by Great Britain. It was instantly surmised that this was the signal of the approaching crisis. Russia joined in the dissent, and the tone of the objections sent to the Court of St. James was distinctly aggressive. Europe made up its mind that there was to be an autumn campaign. It was the design of the aggressors apparently to make{209} the contest short and sharp. The approach of winter, which would greatly interfere with military operations on the Continent, might be an added influence to induce Germany and Austria to keep hands off until France and Russia had an opportunity to overthrow the naval supremacy of Great Britain. The issue of a conflict between England on the one hand and France and Russia on the other, would, of course, be decided principally upon the sea. The situation became extremely critical. Great Britain, avoiding the responsibility for provoking hostilities, took advantage at first of diplomatic red tape. Delay was sought, and the diplomatic agents of the protesting governments developed impatience. They showed signs of becoming peremptory in their demands, and there was vague talk of an ultimatum from France to England.
War was in the very air when an event happened. It was a very ordinary event, and apparently as far removed as possible from any influence upon the question of peace or war in Europe. It was merely the arrival late in the afternoon of Monday, the 2d of September, of a fine ship flying the American flag in the harbor of Southampton. She was apparently a steamship of about 3,000 tons. She was of yacht design, and her beautiful lines were the admiration at once of all nautical eyes. The only peculiarities{210} about her at first glance were that her single smoke-stack, rising slender and tall amidships, was quite out of proportion to the size of the ship, and that the vessel floated so high out of the water that her ballast must have been of the lightest. Only half a dozen persons besides her crew were visible when the ship came to anchor just below the new American Line dock. Two or three small boats, attracted by curiosity, put off to view the newcomer as soon as she stopped. Mystery was the name they read upon her stern.
The boats made a slow circuit of the beautiful ship, and the boatmen were exchanging comments upon her graceful lines when an unusual sound of rushing water came from on board. The noise came from forward, aft, and amidships all at once. The sound was a strange one, but the men in the boats paid little attention to it at first. They were admiring the nautical beauty of the big ship’s overhanging stern, and expressing surprise at the size of her twin propellers just below the surface. One of the self-appointed critics had observed that she must have an extraordinary draught when loaded, for the gauge showed more than twenty feet with apparently only light ballast on board. Suddenly the man started up in great excitement, stared at the rudder post, rubbed his eyes and looked again.{211}
“I say, boys, she’s sinking!” he exclaimed. “It was twenty feet a minute ago and now it’s twenty-one, and going deeper.”
The men in the other boat looked, too. Yes, the smooth water in which the ship lay was certainly climbing quite rapidly inch by inch up her steel sides. The men in both boats seized their oars and pulled rapidly alongside the vessel. No one was visible at the rail above. There was no commotion on board, but the men in the boats now recognized the strange sounds within the ship as the noise of water rushing into the hold. They rowed up opposite the bridge and shouted lustily. Their hail was not answered at first, but presently a naval cap, heavy with gold lace, appeared over the canvas shield at the end of the bridge, and the wearer inquired lazily:
“Well, what’s the matter below there?”
“Your ship is foundering; you’ll sink in a few minutes if you don’t stop the leak,” was the reply, shouted back with great excitement.
“Oh, I guess not,” was the still indifferent response.
“I tell you it’s so. You’ve settled two feet in five minutes. You can’t save her now. You’d better get your boats out or you’ll get wet. There’s no time to lose,” and the boatmen began to push off apprehensively.{212}
“How much water is there here?” asked the officer on the bridge, in the same tone he would have inquired what was the population of Southampton.
“About six and a half fathoms.”
“Oh, well, that will keep my feet dry. Guess we’ll let her sink,” and the gold lace cap disappeared.
The men in the boats were dumfounded. They pushed off at a safe distance, and then sat at their oars waiting for the catastrophe. The noise of in-rushing water continued, though not so distinctly, for some minutes longer, and the steamship settled steadily to a lower level. She was fully four feet deeper in the water than when the boatmen rowed out to her. They were now able to look over her low rail, and they saw half a dozen of the crew putting things to rights about the decks as unconcernedly as though the ship was safely at her dock. The rush of water was no longer heard. One of the boatmen hailed a friend in the other dory:
“I say, Ben, I believe she’s stopped filling. What kind of a craft is she? Some of her compartments must be full, and the others are keeping her afloat.”
“She beats me. Mind her smoke-stack, Jim. It’s no bigger nor a ferryboat’s, and not a whiff of smoke or steam has she shown since she came in.{213}”
Just then the ship lowered one of her small boats, and a couple of sailors rowed ashore a man in citizen’s clothes, who carried a package of papers. He was Captain Penniman of the private yacht Mystery, on a roving commission from New York, he told the official on duty at the custom-house as he handed in the ship’s papers.
“But there is something wrong with your papers, captain,” remarked the collector a moment later. “They have cleared you in New York last Thursday, only four days ago. Didn’t you notice the mistake?”
“Oh, it is quite right. We left New York at nine o’clock Thursday morning. Won’t you have a New York Herald of that day?” and the captain nonchalantly offered a newspaper to the customs officer.
“Crossed from New York to Southampton in four days? Impossible! It’s more than steam can do,” and Her Majesty’s customs representative looked at the captain in incredulous and rather resentful amazement.
“Just what we have done, nevertheless. But you are right about steam. The Mystery is not a steamship. We passed Sandy Hook Lightship at 10:31 last Thursday morning, and we reached the Needles at 4:38 this afternoon. Allowing for the difference in time, that makes our running time just four days, one hour, and seven minutes. The course we took{214} was three thousand one hundred and ten miles, so our speed averaged about twenty-nine knots, or thirty-two miles an hour. We ran as high as thirty-five miles an hour for several hours in succession. If you doubt my statement and the evidence of the papers, I’ll be pleased to furnish you with additional proof if you will come on board with me,” and Captain Penniman watched the growing astonishment on the Englishman’s face with some amusement.
“I cannot doubt your word, captain, but what you tell me is almost incredible,” spoke the collector after a long pause. He picked up the New York newspaper and examined the date-lines and dates of various news dispatches, as though still incredulous. “You know, captain, the speed record between the two ports is now six days, four hours, and some minutes. It was considered a great exploit when the new boats of the American Line cut the record down about seven hours recently. When you tell me you have reduced it by more than two days, you won’t blame me for being incredulous. You say the Mystery is not a steamship. What in the name of modern wonders is she, then?”
“We shall have to invent a new name for her, I reckon,” was the captain’s reply. “We use no steam, and carry no coal for her engines. She has no boilers in fact. Her motive power is liquified car{215}bonic acid gas. We carry it in steel cylinders, and its expansive power, which is equivalent to a pressure of about two thousand pounds to the inch, drives our engines. Yes, she’s the wonder of the world to-day,” concluded the captain, proudly.
“I never heard of such a thing. I thought you were going to say electricity. You Americans are doing everything by electricity now-a-days.”
“No, electricity may come to it some day, but it costs too much, and it cannot be stored as this can. You will never get much higher speed with steam, because of the enormous consumption of coal required. We can carry enough liquified carbonic acid to drive the Mystery three times around the world, and the cost is about twenty per cent that of coal. Come on board and look her over. We have kept her a profound secret on the other side, but now that we know what she can do, we are quite willing she shall have the fame she deserves. I guess the news of this trip will make a sensation in London, eh?” and the captain rubbed his hands softly and chuckled.
“It won’t be believed,” replied the collector sententiously. “I will go aboard with you at once with the greatest pleasure. Let me finish entering you first. You have no cargo, I suppose?”
“Yes, we have a small cargo.”
“What is it?” picking up a pen.{216}
“About two hundred tons of gold bullion or native gold, consigned to the Bank of England to the order of Munster & Thorp.”
The collector dropped his pen, stared speechlessly for a moment, and then flushed angrily.
“I’d have you know, sir,” he exclaimed in savage tones, “that I am not here to be made game of. What do you mean by coming here with such yarns? Give me your proper ship’s papers, enter your vessel in the regular way, and get you gone,” and outraged official dignity glared at the captain of the Mystery in righteous anger.
Captain Penniman did not seem offended, nor was he repentant. He rather sympathized with the other’s wrath, and yet was amused by it. He judged it would be hardly prudent to allow his amusement to become visible; so he preserved a serious cou............