The promises of princes are often warped by expediency, but the word of a banker must be his bond, for reputation is the tool of his trade. The proposals made by John Junius Lorimer to David Gregson in the January of 1878 had been unequivocal. If David - lonely in London during those three cold months - sometimes asked himself whether there was any means whereby those promises could without dishonour be left unfulfilled, it was more out of astonishment at his own prospects of good fortune and respect for the known subtlety of his employer’s mind, than because he had any good reason to fear disappointment. Margaret’s constancy he trusted absolutely, and all the rest depended on that.
The thought sustained him through the dullness of his social life. The gentleman to whom John Junius had sent him for training invited him once for dinner, to eat plain food with his plain wife and two plain daughters. Apart from that one evening, his helpfulness was confined to business hours. Within the walls of the banking house David found it easy to grasp the practical advice he was given, but less easy to become intimate with the members of the staff, for his status was too uncertain. He was no longer an accountant, but not yet a manager, and no one seemed prepared to invest time in developing a friendship with a stranger whose stay would be so brief. He ate alone in chop-houses, entertained himself occasionally with visits to music halls, but spent most of his evenings studying the notes he had made during the day or writing to Margaret and reading her replies, which told him that he had not been forgotten.
Constantly he assured himself that there was no reason why John Junius should change his mind, yet the letter which summoned him back to Bristol came almost as a surprise as well as a relief. He was to take up his new duties as general manager of Lorimer’s on May 1st, wrote John Junius. Mrs Lorimer would be pleased to receive him at Brinsley House on April 30th. It seemed that all his dreams were going to come true.
When the time came for his visit to Brinsley House, only a man too much in love to notice anyone other than his beloved could have deluded himself into thinking that Mrs Lorimer felt any pleasure at all in receiving him. Georgiana’s off-hand sulkiness was that of a woman to whom an intolerable arrangement had been presented as a fait accompli and who was required actively to endorse it. But David still took at face value Georgiana’s claim to invalid status and assumed her petulance to be caused by ill-health. All that mattered to him was the radiance on Margaret’s face as she greeted him. While he had been away he had told himself over and over again that she loved him, but he had forgotten how it felt to be so obviously adored.
The only way in which Georgiana could express her ill-temper was by ensuring that David and Margaret would never be left alone together. A maid or a coachman had been sufficient company when she had been able to believe that the meetings of her daughter with the bank’s accountant were on matters of business only, but if the two young people were considering marriage, the rules of chaperonage must be invoked. Ralph and Sophie were allotted this responsibility between them and resented it equally.
‘I have a surprise for you next Sunday,’ Margaret whispered when they had exchanged all the news of their separation.
‘Tell me now.’
‘It has to be shown, not told. Keep the afternoon free. Ralph has promised to come with us.’
David wondered what it was, but his mind was too fully occupied in the days which followed to give the matter any thought. His return to Margaret had confirmed an existing relationship; but his return to the bank was the beginning of many new ones.
This was not an easy period. It was necessary for him to be less familiar with those members of the staff whom he had known before his promotion, and at the same time more at ease with the bank’s customers, with whom he had previously had no direct contact. His time in London had been well spent, but nothing he had learned there could provide a short cut towards the assessment of each new proposition or request which was put to him. For this reason each day of his first week as manager left him tired and strained with the anxiety of taking no false steps. It was not until Friday, when the rest of the staff had gone home, that he felt able to spare the time to look back over the transactions which had taken place during his three-month absence.
What he found there appalled him. The bank’s financial year had ended in early April. The annual accounts had been drawn up by John Trinder, his successor as accountant. They had been signed by Mr Lynch, and adopted by the board of directors as a true statement of the bank’s situation. They bore no relationship at all to the state of affairs as David himself had left them.
It took him several hours of hard work to find out what had happened. By the time he went back to his lodgings that evening his eyes were swimming with strain and his head ached with anxiety. His first question the next morning concerned the previous manager. In as casual a way as possible he asked the chief clerk where Mr Lynch had gone. Even had he not been suspicious before, the answer would have raised doubts in his mind.
‘Mr Lynch has left England for Boston. Mr Lorimer asked him to go, to open a new branch of Lorimer’s. It was felt that many American gentlemen would find it a convenience to be able to use the same bank both in their own country and if they came to visit England.’
David made no comment on this. It was possible that it would indeed be a convenience for the American gentlemen, just as it was convenient for the chairman that the manager recently in charge of Lorimer’s day-to-day running should be out of the country. It could hardly have been seen by Mr Lynch as a desirable promotion: he was fifty years old or more, and not a pioneering type of man. As soon as the chairman arrived in his office, David sent in a request to speak to him.
He was expected, of course. John Junius made no pretence of being surprised either by the visit or by the grim expression on David’s face. Perhaps he had been amusing himself all week with speculations on how long it would take his new manager to appreciate the state of affairs.
‘I would like to discuss the accounts for the financial year which has just ended,’ said David. He set down on the wide mahogany desk the papers on which he had done his own calculations.
‘Yes.’ It was not a statement, not a question: merely a gesture of permission to proceed.
‘I will start by raising one point which in any other year would seem to be of major importance, although in the context of these accounts it seems a small amount. I observe that thirty thousand pounds have been lent to further Mr Crankshaw’s development of the new docks at Portishead. His company is already deeply indebted to us, and it appears that he was unable to offer any security for this new loan.’
‘You have been away from Bristol and are no doubt out of touch with local events,’ said the chairman. His voice was patient, as though accepting that the matter was a fair one to raise. ‘You will recall that the new docks were due to open this summer. Unfortunately, in the middle of March there was a collapse of one of the main walls. The money to rebuild it must be raised from somewhere, and there are few individuals in the present state of society who could be approached for such a sum. Since Lorimer’s would have more to lose than any other institution if the whole project were to be abandoned for the lack of a comparatively small sum, the directors felt it essential to increase the loan by this amount. Although no new security could be offered, the docks themselves, when they are completed, will be their own guarantee.’
‘But the completion date has presumably been delayed.’
‘Unfortunately, yes. However, the docks are expected to open in the Spring of next year.’
David did not press that point further. It was a trivial one compared to his main complaint.
‘During my absence,’ he said, choosing his words carefully, ‘there appear to have been substantial changes in some of the major items in the balance sheet. I have been unable to find any justification for these. Perhaps there have been other developments of which I am not aware.’
‘Perhaps,’ said John Junius. ‘If you will specify the points you have in mind, I shall no doubt be able to elucidate them.’
It was a complicated situation which David had discovered, in that part of the bank’s dealings which concerned its loans to local companies. The securities - mainly property - which had been offered to guarantee the loans had been frequently revalued upwards in the years succeeding the original arrangements. This had no doubt been justifiable in the early days but, as David himself had pointed out almost a year before, the values had been falling again since 1875; and in addition some of the companies which had borrowed on them had been equally affected by the economic situation and were no longer stable.
David had advised earlier that the securities should be revalued in the balance sheet, and this had now been done to such good purpose that four million pounds had been cut from the statement of the bank’s assets. In a sense this was a proper action, if somewhat abrupt, and one which he had attempted from his junior situation to recommend. But it should have revealed a deficit in the accounts. Instead of this the books were still balanced. He did his best to explain his uneasiness on this point.
‘You do not deny that you yourself thought various properties to be over-valued,’ said John Junius.
‘I do not. But as well as writing down the inflated assets, you have written down the loans which were made on the strength of them. You have cut four million pounds off the debit side to match the missing four million pounds of assets.’
‘Any prudent business must write off a bad debt,’ said John Junius.
‘Any prudent shareholder may expect that by examining the accounts he may see that four million pounds have been written off,’ David pointed out. ‘In this case the loss has been concealed by balancing real loans against paper securities, values which never in truth existed. The shareholders will be reassured in a situation which should not be reassuring at all.’
‘And what alternative do you suggest, Mr Gregson? The total money which we hold on behalf of our depositors - in other words, which we owe to them - is, as you have doubtless discovered in the course of your researches, in the region of five million pounds. If your prudent shareholder were to observe that the loans made by the bank are covered mainly by the amount held on deposit, your prudent depositor might be able to come to the same conclusion, especially as he is in many cases the same person. If he should seek to withdraw his deposit, and if his fellow-depositors should make the same decision at the same moment, the bank would be forced to call in its loans and overdrafts. You know as well as I do, Mr Gregson, that this would cause the ruin of several companies which are in fact likely to become highly profitable from the moment they complete their capital equipment and begin to earn with it. These are local companies and employ labour on a large scale. Their collapse would cause unemployment amongst the poorest members of the community. There would be no possibility then of full repayment of the loans, so at the same moment the collapse of the bank would cause suffering to the wealthier classes as well. We are talking about the ruin of a city, Mr Gregson.’
‘We are talking, sir, about the fraudulent concealment of the true state of affairs in this bank.’
‘I must remind you that we have had this conversation before, although then we discussed fewer details. The situation has not changed since then, except in one way. Because the unfortunate accident at Portishead is widely known, the need to maintain confidence has grown greater. It is only for a limited period of time that some subterfuge is needed. From the moment the Portishead docks open next Spring we may expect Crankshaws to pay off their debt from the profits of their berthing fees. I have already discussed with Mr Crankshaw a suggested timetable for this. His repayments will be on such a scale as to restore liquidity almost overnight. In addition to this, the new ship of the Lorimer Line is almost completed and will be ready for its sea trials in a few weeks. Mr William Lorimer has agreed that payment of interest on his loan, which was suspended during a difficult period, will be resumed from the moment the first voyage is completed. We are speaking of a period of a very few months only.’
‘A crime is no less a crime for being brief in its operation.’
‘A crime, Mr Gregson!’ John Junius in anger was not an easy man to face. Only because David felt sure of himself could he stand his ground without trembling. ‘If the small people of Bristol were to lose the five million pounds they have deposited with Lorimer’s Bank, would that not be a crime? If the shareholders of the bank were to be asked to pay those five million pounds out of their own pockets, would that not be a crime? I have already referred to the possibilities of bankruptcies amongst our debtors. If you were to force this state of affairs on an innocent community for the sake of your own conscience it would be my opinion that you, Mr Gregson, would be the criminal.’ He paused, perhaps feeling that he had gone too far. ‘You may even consider, on reflection, that this is none of your business. You were not the accountant who prepared the annual accounts. You were not the manager who signed them. You were not a member of the board which adopted them.’
David had no answer to this. His first thought had been that he had been sent to London in order that he should not know what was going on. It was just possible, he supposed, that he had been kept out of the way in order that he should bear no responsibility for what he still regarded as a fraudulent manipulation of the figures. The chairman might have been acting in the best interests of his future son-in-law as far as this detail was concerned, just as he claimed to be acting in the interest of the whole community in the larger matter. But David’s anxieties were not yet altogether allayed.
‘If the future prospects of the bank are as good as you have told me, would it not have maintained public confidence sufficiently if the board had made a full statement of the facts?’
‘The matter could certainly have been dealt with in that way. But there are always a few people who feel doubt for the first time when they hear that there is an answer to the questions they had not previously thought to ask. A far simpler way, although less direct, is to indicate the board’s own confidence in the state of affairs by maintaining the dividend. The directors will be asked, in fact, to raise it to twelve per cent.’
‘And you would expect my signature on that recommendation?’
‘I hope that I have by now convinced you of the value of such a move,’ said John Junius.
‘I see.’ David saw perfectly. By now he had discovered all he could hope to know about the situation. The chairman had stated a case and all that David himself could do was to decide whether or not to accept it. There was no possibility of persuading John Junius to change his mind by argument. ‘I feel sure you will appreciate, Mr Lorimer, that I need a little time to consider my position.’
‘Consider your position by all means, Mr Gregson. But if, having considered it, you find that you dislike it, I trust you will have the good sense to remove yourself both from Lorimer’s and from Bristol. The information you have acquired has been made available to you on a strictly confidential basis and in anticipation of your future status as a member of my family.’ Unexpectedly he smiled. ‘But if I did not trust your good sense and your financial ability, this situation would not have arisen in the first place. I feel sure that upon reflection you will consider that everything has been done for the best. I shall look forward to discussing the matter further with you on Monday.’
It was an ultimatum as well as a temporary dismissal, and not one to be taken lightly. David was thoughtful as he returned to his own desk.
But before Monday came, there was Sunday to be enjoyed. Margaret had promised to reveal her surprise on that day. She came down herself, accompanied by Ralph, to collect him in the carriage, and he noticed the excitement in her bearing at once. Perhaps her dress had a little to do with it, for instead of the demure bonnets or fur-trimmed hoods which she had worn on their previous outdoor expeditions she was wearing a jaunty hat perched on the top of her head with a cascade of feathers falling to the back. It did not precisely suit her, but it gave an impression of independence which aroused his curiosity about the purpose of their meeting.
When David found himself being driven up the long drive of the Croft House estate he assumed it was because the first beneficiaries of the Gentlewomen’s Aid Fund were already in residence, and he prepared to express admiration of the speed with which the charity had acted. He was surprised, however, to be taken directly to Lower Croft, and even more startled by the style in which it had been redecorated since his last visit, and by the richness of its curtains and carpets; no other furniture had yet been installed.
‘I feel it is just as well that I am no longer your treasurer,’ he said laughingly. ‘I could hardly approve of such lavishness. Do you think that such good quality furnishings were strictly necessary?’
‘If they were for yourself, would you approve them?’ asked Margaret, laughing in her turn as she hung on his arm.
‘Even for myself I would think them too luxurious,’ David said. ‘Although certainly I would covet them, for they are exactly to my taste.’ He noticed that even Ralph, who had embarked on his duties as a chaperon with considerable sulkiness, was smiling. David looked from one Lorimer to the other for an explanation of the joke.
‘Everything was chosen in the hope that it would be to your liking,’ said Ralph. ‘Margaret has been driving us all to distraction in these past weeks. “Do you think he will like that? Will he find this too bright, or too subdued?” As though we could guess if she could not.’
‘Papa has given me the house,’ said Margaret. ‘It is to be our home.’
David looked round again, seeing the room this time through different eyes. They were standing at this moment in the smallest of Lower Croft’s three reception rooms. It was panelled in oak and Margaret had provided it with a red Turkey carpet and curtains of red and cream brocade. The effect was warm and comfortable; it would make a most desirable study.
‘Your father has acted very generously,’ he said.
‘You should not sound as though this surprised you,’ said Margaret, teasing him a little.
‘You have to remember that I know him only as a man of business, not as a father.’
‘Yes, of course. I hope that soon you will come to know him and love him as I do. He is the kindest of men, and the most generous. You should see the jewels which he has given to my mother! And his purchase of Lower Croft is a kindness in more than one way, for our charity gains by the price. The house would not have been of direct use, but the money paid for it has helped us to furnish the larger premises completely. The first three women are already living in Croft House, and their seven children are in the old stable.’
David was less interested in the affairs of the charity than in the fact that Lower Croft was to be the home which he would share with Margaret. He asked to go all over the house again, so that he could look at it in this new light, and persuaded Ralph to explore the garden instead of accompanying them. This gave him his first opportunity to kiss Margaret since the engagement had been approved. It seemed right that this should happen in the place where he had first dared to declare his love. Lower Croft, it seemed, was destined to play a very happy part in his life.
Nevertheless, his contentment was invaded by doubt as he looked into one room after another. He found himself counting the fireplaces which would need to be supplied with coals, the stairs up which hot water would have to be carried. They would need to employ servants. Even a young maid would expect £10 a year: a cook would require £30. He found himself calculating what minimum would be required if Margaret were to live as the mistress of such a house should, and realized quickly that even on his new higher salary he could not support such an establishment himself.
John Junius would have come to that conclusion long ago. He had spoken of making a personal allowance to Margaret, and since he was the one responsible for the purchase of Lower Croft it seemed reasonable to wonder whether the allowance would be a more generous one than David had originally assumed. He frowned a little to himself. The picture of the loving and open-handed father which emerged more clearly with every day that passed did not, as Margaret had realized, square with his own impression of the chairman of Lorimer’s. It was something to be considered privately; but in the meantime Margaret had her own discovery to reveal.
‘You did not tell me that you had succeeded Mr Lynch as the manager of Lorimer’s.’
‘I thought the news would come better from your father. To tell the truth, I hardly believed it could happen until I found myself sitting at Mr Lynch’s desk.’
‘My father must have an extremely high opinion of your abilities. I am pleased that he has come so quickly to share my own view.’
‘I would like to think so,’ said David. ‘But I suspect that he has adopted your opinion out of affection for you. It’s possible that if I had been completely incapable I should have been turned away both from you and from Lorimer’s, but as it is I owe my promotion far more to you than to my merits as a manager.’
He was amused to see the uncertainty on Margaret’s face.
‘Is this right?’ she asked. ‘I see that it is convenient, but is it right?’
‘Was it right that your brother William should be given charge of a great shipping line when he was barely out of school?’ asked David in return. ‘If you accept the right of a family to own a business, you must accept also its right to value the family as highly as the business in the running of it. No one would be foolish enough to destroy his own livelihood by entrusting it to someone, even a son, who was obviously incompetent. Whether or not it is right for a place in the banking profession to be filled by nepotism, I assure you that it is entirely usual. I am the manager of Lorimer’s because the daughter of its chairman has agreed to marry me. The reason for my promotion does not worry me: my concern is to fill the post as though I had acquired it only on my own merits.’
‘I am sure you will do so,’ said Margaret.
‘Already you are behaving like a loyal wife,’ said David, laughing, and kissed her again. They moved to a discussion of domestic details and were decorously considering the cost of installing gas lighting - for the house was thirty years old and had not been modernized - when Ralph returned to join them.
It was the need, a little later, to choose a place for Margaret’s piano which reminded David of Luisa.
‘Are you still seeing Miss Reni so frequently?’ he asked Margaret.
She shook her head.
‘She has left her lodgings, as I believe you already know. I received a note from her to say that she had obtained a residential situation in which the baby would be better cared for. She did not come to say goodbye; nor did she give me her address. I was disappointed that she should break off our friendship in such a way.’
‘Well, I have another question to which I hope you can give me a happier answer,’ said David. ‘Is your father ready, do you think, to appoint a day for our marriage?’
As he had hoped, Margaret’s face brightened at once.
‘On July 13th the Prince of Wales is to come to Bristol,’ she said. ‘There will be a grand ball on the previous evening, and my parents will be giving one of the dinner parties before it. You are to be invited, and our engagement will be officially announced then.’
July seemed a long time to wait, and the wedding itself would not presumably be until several weeks later than that. But the choice of occasion suggested that the Lorimer family intended to put a good face on the situation instead of avoiding publicity for an unworthy alliance.
It was odd, David thought to himself when he was alone again in his lodgings that night, it was very odd how difficult he found it to take John Junius’s actions at their face value. From the moment when Margaret had first mentioned her attachment, everything that the old man had said and done indicated that he accepted the situation not merely in a neutral way but with positive generosity. It was presumably only his reputation as a hard man of business which tempted David to examine every gift as though beneath the sugar coating might be concealed a dose of poison.
Such suspicions could not be allowed to continue. Now was the moment when once and for all David must decide whether John Junius Lorimer, both as chairman of the bank and as a future father-in-law, deserved to have his gifts taken at face value. David would have had no doubts as far as domestic generosities were concerned if he had not become so perturbed by the state of affairs at the bank. Had he been appointed manager as a mark of favour on being admitted to a family relationship? Or had the relationship been allowed to develop in order that the bank might have an excuse for appointing a manager who could be relied on to be complaisant, not asking too many questions? And now that the questions had been asked, could the answers be believed? He must make up his mind on this point, so that it need never trouble him again. It was all a matter of trust. The whole business of banking was a matter of trust. If David was to rise in the profession he must learn when to doubt and when to be convinced.
It all depended, as he realized after anxious consideration that evening, on whether the chairman’s arguments could be believed. John Junius Lorimer was by far the largest shareholder in the bank. If it were to crash, he would find himself personally responsible for a high proportion of its debts. Lorimer’s had been founded long before the limited liability acts had been passed by Parliament to protect shareholders, and had not changed its structure to take advantage of them. Rich though he was, a demand for three million pounds would certainly bankrupt him, and would leave his daughter destitute.
So it was true that the chairman was speaking out of self-interest, but his interests ran with those of all the other shareholders. If he succeeded in maintaining the necessary confidence in the bank’s affairs until the end of the year, everyone else concerned would benefit as much as himself; he was not trying to preserve his own fortune at the expense of others. Indeed, the affair could be considered from an opposite aspect. As the man who knew most about the bank’s dangerous situation, John Junius could quietly both have withdrawn his deposits and reduced his shareholding. David decided to stake his trust on that one point.
As soon as he arrived at his office the next morning he sent for a considerable number of ledgers, in order that no one should suspect whose account he wished to check, nor at what date. The chairman’s deposit account showed a normal pattern of payments and receipts, except for one much larger withdrawal. David followed the transaction through and found that it represented the purchase of Lower Croft from the Gentlewomen’s Aid Fund.
He considered the entry, but not for very long. A twenty-first birthday present for a daughter could be thought of as normal expenditure, although non-recurring. There was nothing else to suggest that cash was being removed and stored elsewhere.
The same situation showed itself as far as the chairman’s large shareholding was concerned. Over a year before, he had sold a small block of shares to his family doctor, Dr Scott. But David remembered this transaction, and knew that it had been arranged as a favour to the doctor, at a time when an interest in the bank was much sought-after and difficult to procure. There had been no change since that date.
The situation was clear enough. The chairman of the bank, although recognizing the dangers of the situation, was prepared to back with his own fortune his confidence that they could be averted. There was a risk involved, but David no longer felt justified in regarding it as a crime. He wondered briefly whether he had allowed his judgement to be clouded by the memory of Margaret’s face as she greeted him on his return from London, or as she showed him the home which they would share together. But he was able to assure himself that the figures spoke for themselves. For a second time he sought an interview with the chairman.
Inside the large office, he apologized for the sentiments he had expressed at their previous meeting - apologized more fulsomely than was strictly necessary, for he intended to use the occasion to take one small step in the direction of greater solvency.
‘So I would like to assure you of my complete confidence in your handling of the situation,’ he concluded. John Junius gave the brief nod that he had come to know well.
‘I am very glad to hear it. My daughter will also be glad that your stay here is not to come to an untimely end.’
‘There is, however, one point which I would like to press.’
‘Yes?’
‘I hope you will not think me impertinent if I refer to the case of your son, Mr William Lorimer. He owns a considerable personal shareholding in the bank, from which he receives a substantial income. Yet the Lorimer Line has paid no interest on its loan for the past four years. You spoke of a resumption of payments in the new year, but there is no provision for the arrears to be paid off. At the moment we are relying almost wholly on new deposits to preserve our liquidity. I would like to suggest …’
When it came to the point, he was not sure what he dared to suggest. But John Junius reacted with none of the coldness which he had expected.
‘It would do my son no harm to be reminded of the principles on which a profitable business should be conducted. You have my permission to approach him directly with any proposals which you would suggest if he were not related to me. Subject to the proviso that he should not be pressed to take any steps damaging to the long-term interest of the Lorimer Line. In the interests of family harmony, I would prefer you not to tell me what you suggest. I have no doubt I shall hear soon enough from him if your behaviour is thought to be intolerable.’
‘Thank you, sir.’
‘And that is all, Mr Gregson? Then I will express my hope that our association may be a long and successful one.’
To David’s amazement, he found that he was being invited to shake hands. It was typical of the old man, that he should behave in almost every respect like a tyrant and yet be able by a brief relaxation of his intransigence to evoke something very near to affection. David could not have claimed that he understood Margaret’s father, but he was beginning to like him.