London (144 page)

Penny had attained some seniority in the firm now. Since the affair with the old Earl of St James, Meredith had entrusted him with a number of tasks needing discretion and he was used to confiding in him about the bank’s business.

“We’ve followed Baring’s and Rothschild’s,” Meredith said. The two leaders in the foreign loans market had utterly shunned the stock speculation. “Our own positions are pretty sound. But what I do fear,” he admitted, “is a general decline. It’s very hard for a small bank like ours to protect against that.” He shrugged. “It all depends on who goes down.”

The danger to Meredith’s Bank which Eugene had originally surmised was endemic to all such small operations. If some of those who owed Meredith money went under, he could be in peril. “But the real danger,” he went on, “is not so specific. It isn’t a bad investment or a shaky loan – it’s nothing you can even predict. It’s loss of confidence. That’s what can kill us.”

“I’ve never really seen that happen,” Eugene confessed.

“Pray,” said Meredith, “that you never do.”

Eugene saw Mary every week. There was no doubt, they felt, that they would marry; but how soon was another matter. Eugene’s salary had increased considerably; his position looked secure, but he had not yet reached a standing that would satisfy Mr Hamish Forsyth.

The trouble began in the autumn. “Batten down the hatches, Penny,” Meredith announced. “I think we’re in for a storm. The word is,” he explained, “that the Bank of England is tightening up.”

By October there were murmurs. By November there were cries. The markets began to falter, then to fall. “This can’t go on!” Meredith declared. “The Bank must loosen up or everyone’s going to panic.”

Early in December, the Bank of England did conclude that it had gone too far and, started granting credit. It was too late.

On Wednesday 7 December it was confirmed that Pole’s, a private bank closely linked with no less than thirty-eight provincial county banks, had been bailed out over the weekend by the Bank. On Thursday the 8th, a big Yorkshire bank called Wentworth’s suddenly went under. Over the next few days, gentlemen all over England were rushing to their local banks to take out their money. News came back to London with the stage-coaches from every county town. “Gold. They all want gold!”

That weekend, Pole’s stopped all payments. By Monday 16 December, in consequence, three dozen country banks had collapsed.

Fog had spread over the city before dawn that Monday. It made everything so quiet. At times, it almost seemed to Penny that the world might have come to an end as they waited in that yellow-lighted counting-house for someone to come and tell them it was all over.

The morning passed uneventfully. There was no trading to be done. From time to time one of the clerks would be sent out for news, vanishing into the oblivion and returning with reports: “The Exchange is full of people demanding money!” “Williams’s in Mincing Lane is besieged. Don’t know if they can hold out …”

Meredith’s own preparations had been thorough. During the last week he had seen almost all the bank’s major clients. “I think I’ve squared them all,” he told Eugene. “But if the panic really takes hold. . .” He shrugged. The fog, he suspected, was actually a help. “People will have to seek us out. They won’t just think of us as they pass in the street.” He had also laid in as much gold coin as he could. “Twenty thousand in sovereigns,” he announced. Though Penny noticed that when he remarked, “That should do it”, Meredith had muttered: “It’ll have to.”

Only a few people came to withdraw money in the morning. At noon, miraculously, a merchant came in and deposited a thousand pounds. “Took it out of Williams’s,” he explained. “Safer with you.” While news came of more banks in difficulty in the afternoon, the panic had still not spread to Meredith’s.

Just before closing time, a stout, elderly country gentleman, wrapped in a brown greatcoat, appeared in the misty doorway and asked, in some doubt, “Is this Meredith’s?” Being assured that it was, he advanced to the counter. “The name’s Grimsdyke,” he said. “From Cumberland. I’d like to make a withdrawal.”

“By God,” Meredith murmured, “that old gentleman was one of my first depositors! I’d almost forgotten what he looks like. He must have travelled all night.”

“Certainly, sir,” said the clerk obligingly. “How much?”

“Twenty thousand pounds.”

There was really no need to take out so much, Meredith had calmly assured him, the bank was perfectly sound. But the old gentleman had not come all the way from the north of England to change his mind now. He took it all, and made the clerks carry it to his carriage. When the door was closed Meredith called Eugene over. “Strike a balance, Mr Penny,” he said quietly, “and bring it to me in the parlour.”

“We can’t get through another day,” Meredith concluded as he and Eugene looked over the books. “These three” – he pointed to the names that had troubled Penny several years before – “all owe us too much, and any of them could go under. I truly don’t know if we’re solvent or not. As for withdrawals: I can get hold of another five thousand in cash, but some time tomorrow that will probably be gone and we’ll have to close our doors.”

“Would the Bank of England tide us over?”

“They’ve yet to show willing. We’re too small for them to bother about, anyway.” They were both silent.

“There’s the Earl of St James,” Eugene said at last.

“I can’t.” Meredith winced. “He’s done so much for me already. Besides, he already told me he’ll never bail me out.” He sighed. “I can’t go to him, Penny.”

“Let me go then,” said Eugene.

“Trust the old devil to be out of London,” Eugene muttered, as the coach bowled along that evening. The earl had gone down to Brighton. Accordingly Penny had hired a post-chaise and set out on the turnpike for the seaside resort, fifty miles away to the south. “At least,” he chuckled grimly, “it gets me out of the fog.” With luck, he estimated, he might get there before the earl had retired to bed. The only thing that embarrassed him a little was that he had had no time to change his clothes, and the person with whom the earl was staying in Brighton happened to be the king.

It was after ten o’clock when Eugene, after much explanation to doormen, lackeys and persons of importance, found himself alone in a gorgeously decorated ante-room with the Earl of St James. Although the old man had clearly drunk a number of glasses of champagne, it was remarkable how suddenly his eyes had become hard as Eugene explained his reason for being there.

“I said I wouldn’t bail him out. He knows that.”

“He does, my lord. I begged him to let me come.”

“You?” St James stared at him. “You’re one of his clerks, and you come to see
me
? Here?”

“Mr Meredith entrusts me with business.”

“You’ve certainly got a nerve,” St James said, without rancour.

“A steady nerve is all the bank needs,” Penny said quickly. “If you’d just tide us over.”

The old man paused. Then, suddenly, he turned his eyes fully on Penny, and they were as sharp as those of any bookmaker at the races. “Is the bank solvent?”

“Yes, my lord.” He looked him straight in the eye. He said it with total conviction although he knew it was a lie. But he was doing it for Meredith.

“I’ll lend him ten thousand at 10 per cent,” St James said abruptly. “I’ll come to London tomorrow. Will that do?”

Eugene Penny took the mail coach before dawn and was in the City by mid-morning. The fog had cleared. The streets were busy. When he told Meredith the news, the banker was so overcome he could only shake his hand. But, as soon as he found his voice, he had to explain. “I’m afraid though, it’s probably too late . . . We’ve two thousand left. Money’s been leaving at a thousand an hour. By noon, it’ll be over. I’ve tried everywhere but I can’t get another penny. I can’t just close the doors until late afternoon when St James’s money comes, because if I do that, there’ll be a real run that not even his ten thousand could stop. We need four hours at least, Penny. What the devil can I do?”

And it was then that Eugene had his most brilliant idea. “You’ve two thousand left? Take it round to the Bank at once! In a handcart,” he cried. “This is what to do!”

Half an hour later, the little crowd waiting to be paid in the counting-house was addressed by a now cool-as-cucumber Meredith. “Gentlemen, our apologies. We asked the Bank for sovereigns and they have sent us only change. But we have plenty of it. You shall all be paid. A little patience, please.”

The two clerks at the counter started slowly paying out in shillings, in sixpences, but mostly in pennies. By the time the small coins were carefully counted out, the money was flowing out at only three hundred pounds an hour – but it never ceased. The earl himself arrived just before closing with ten thousand in gold, to find all but the most panic-stricken depositors starting to drift away out of sheer boredom. From that day, for many years after, the City would say of Meredith’s: “They pay; but you only get pennies there.”

The great banking crisis of 1825 did not end on that Tuesday. On Wednesday, for many – though happily not for Meredith’s – it was worse. By Thursday the Bank of England, dropping all its severity, and backed in the cabinet by the iron Duke of Wellington himself, was bailing out every financial house in sight.

On Friday, the Bank of England ran out of bullion, too. In the evening it was saved by an infusion of gold gathered by the only man in England, or indeed the world, who could have done it: Nathan Rothschild. Rothschild was king of the City.

The winter Lucy was eight had been hard for the family. Her mother had been troubled by a hacking cough, though she had managed to get to work each day, but little Horatio had been more worrying. They had noticed that the boy’s legs were getting weaker. By the turn of the year, he sometimes had to stay at home while Lucy went to work for Carpenter. By the spring, he did seem to be better but sometimes, as she led him by the hand, Lucy would see that he was crying silently.

One warm summer evening, when all the family was feeling better, Lucy was surprised to see the burly form of Silas Dogget tramping up the street to their door. Uninvited, he entered the house, sat himself at the kitchen table and gruffly announced: “I need help. Got a proposition.”

“Never!” Lucy’s mother cried, as soon as she heard what it was.

“I’d pay you twenty-five shillings a week,” he continued. “Keep you out of the workhouse.”

“We aren’t in the workhouse.”

Silas said nothing for a moment. “You’re a fool like your husband,” he observed.

“Leave us alone! Take yourself off!” her mother shouted now, in a real rage.

Silas shrugged and slowly got up. As he paused in the doorway his eyes rested upon Lucy. “Your boy’s a weakling, but the girl looks strong. Maybe in a year or two she won’t be as proud as you.” He rested his heavy hand on Lucy’s shoulder. “Just you remember your Uncle Silas, girl,” he said in his deep voice. “I’ll be waiting.”

Lucy and Horatio had come back from their work at Carpenter’s one September afternoon, not expecting that their mother would have returned, when they heard a strange sound coming from the room where they all slept. Opening the door, they saw their mother lying on the bed. Her face was very pale and she was making a hoarse sound. As they approached her, though she turned to look at them, she seemed to be gasping for breath. Hustling her brother out of the room, Lucy ran to fetch a neighbour and waited anxiously while the woman helped her mother until the fit was past.

“What is it?” she asked the woman desperately. “Is my mother dying?”

“No,” the woman replied. “There are many people in this parish like that, Lucy. It is asthma.”

Lucy had heard of the complaint but had never seen it. “Is it dangerous?”

“I’ve known people choke and die,” the woman answered truthfully. “But though it makes them weak, most live with it.”

“How can I make it better?” Lucy cried.

“More rest. Less worry.” The woman shrugged. She gave the girl a kindly pat.

A month went by and, apart from a few small attacks, her mother carried on well enough. But then, one morning, she was struck again and could not go to work; and then Lucy raised the subject.

“Let me work for Uncle Silas, mother. He is kind,” she pointed out, “to offer so much.”

“Kind? Silas?” Her mother shook her head in disgust. “To think of you doing what he does . . .”

“I think I should not mind.”

“Never, Lucy, while I have breath,” her mother cried. “Do not even think of it again.”

Eugene Penny decided to bring matters to a conclusion in September of 1827. Meredith’s Bank had come out of the crisis rather well. Lord St James had been repaid his money and remembered the young clerk with some admiration. Meredith was in his debt. Word even filtered back to Hamish Forsyth that the twenty-five-year-old Penny was considered a fellow with a future. He had now nearly two thousand pounds of his own – a substantial amount when an ordinary Bank of England clerk made around a hundred a year. The time was approaching when other City firms might start approaching him with offers of a position, perhaps a lucrative one. But he also knew that the way to impress Hamish Forsyth was to show consistency.

One Monday morning he faced Meredith in the parlour. “I have good news,” he told him. “I am glad to tell you that I am to marry the only daughter of Mr Hamish Forsyth of Lloyd’s. She comes into his entire fortune, you know.”

“My dear Penny!” Meredith, genuinely delighted, was about to call his family in, but Eugene stopped him.

“There is something else, Meredith. I think you may agree that I have earned a junior partnership here. My position as Forsyth’s son-in-law also makes it appropriate. Indeed, if you don’t, I’m sure Forsyth will feel I should look elsewhere.”

“My dear Eugene!” It did not take Meredith long to calculate Forsyth’s probable fortune, nor to admit that Penny had indeed made himself valuable to the firm, “I was thinking just the very same thing,” the banker replied.

Penny had no sooner drunk the glass of sherry that Meredith pressed upon him than he walked straight across to Lloyd’s.