The Whiskey Rebels (53 page)

Too, he discovered that my presence disarmed potential victims. I was a refined lady, and who would attempt chicanery in front of me? Only once did he ask me to participate in one of his ruses. Late in 1791, a man began to appear regularly at the City Tavern, a local landowner of some significance named Jacob Pearson.

Pearson would sit quietly during trading and then strike up conversations with other traders, explaining loudly that they had made terrible mistakes. He said he had observed the markets since their inception in this country and knew an error when he saw one—and a good trade as well. Yet he himself refrained from trading.

“Why do you think he behaves thus?” Duer asked me.

“Because he in fact knows nothing of the difference between a good trade and a bad one. He wishes to benefit from the markets but is too proud to admit knowing nothing.”

“Precisely,” Duer said. “He is quite perfect for our purposes.”

Duer sent the man a note, saying he wished to meet but that the meeting must be private, lest the world know of their business. Thus it was we arranged to meet in the back room of another tavern, where we could discuss these matters in private.

“Will he not be confused by my presence?” I asked Duer.

“That can only work to our advantage,” he said.

From a distance I’d found Mr. Pearson to be an unlikable person, loud and vain and pleased with himself to an unreasonable degree. In close conversation, I found him even more unpleasant, but because of, not despite, a kind of native charm. A man of a certain fading beauty, he displayed with Duer a self-confident expansiveness, but with me he used a predatory charm. It was the alluring gaze of a predator. I felt at once that Pearson was a dangerous creature—not to us, perhaps, but to those in his power. For myself, I did not fear him, but I did immediately despise him.

To this man, Duer explained that he needed someone to help him alter the market, someone who must buy and sell with his own money. When he profited, he would keep what he earned minus a small commission. When he lost, he would be reimbursed.

Some men, Duer had explained to me, reacted quite harshly to this suggestion, not liking the idea of behaving dishonorably to other traders, but that was what made Pearson so perfect. He was a stranger to the trading community and had no concerns about betraying his brothers. More to the point, he wished to learn the secrets of trade, yet he had nothing but contempt for those who had learned the secrets through the usual slow and persistent means. Duer offered him an opportunity to demonstrate his inherent superiority, wrapped in the protective cloak, so he would believe, of the undisputed master.

It began slowly. Duer had Pearson make a few trades he knew would prove sound, and these enticed Pearson’s appetite. While he profited, Duer also directed Pearson to lose a few thousand dollars on a single trade, and Duer did not hesitate to return the funds with all speed and cheer, demonstrating that he was as good as his word and Pearson had nothing to fear from his losses. Within six weeks, Pearson was making a name for himself on the Philadelphia floor as a canny investor. No one knew he was Duer’s puppet, and no one knew he was doomed.

P
art of the difficulty of attempting to corner a market is that it does not take long for buyers to recognize that someone, even if they don’t know who it is, consistently snaps up an issue when it comes to market. Thus, the prices of six percent securities began to rise, which made them more expensive and harder to obtain. Men who already held them understood an attempt at a corner was under way and so were understandably reluctant to sell.

The best way to bring more issues to market was to convince holders that they did not know all and that someone else knew more. Thus it was that Duer and Pearson executed a simple but effective deception. At the City Tavern, Duer arrived and announced he wished to sell six percents and buy four percents, rated less valuable for the simple reason that they yielded less interest. Yet the price of six percents was high, and the other speculators drew the obvious conclusion that Duer anticipated that six percents had peaked and that four percents were undervalued and poised for a sudden increase.

Pearson, per prior arrangement, accepted Duer’s offer to sell. It was a perfect deal, since Pearson would simply return the six percents back to Duer later in the day. Pearson, who had begun to attract some notice, then announced that he would buy four percents from anyone who would sell them, and that he no longer wished to purchase six percents. Within a few days, the price of four percents soared while six percents declined. Duer’s other agents, those acting with his money, snapped up the six percent issues now on the market. Pearson continued to buy four percents at a newly inflated rate, a rate they would likely never see again, but this rate kept the four percents high and the six percents low. It was for this reason, and no other, that Duer continued to drive Pearson, and anyone who would follow him, to keep buying. When it was all done, Pearson had committed himself to more than sixty thousand dollars of four percents, issues whose value was wildly overinflated and would crash without warning.

“I doubt the whole lot is worth more than forty thousand,” Duer said to me, “and that is under the most optimistic of circumstances. If Pearson tries to sell them in anything but the smallest increments, he shall drive the price even lower. Of course, much of this will depend on how the other buyer chooses to act.”

“What other buyer?” I inquired.

“I haven’t been able to determine his identity, but there is another trader attempting to obtain four percents. It hardly matters, though. If the price goes down a little or a lot—or even stays high—it is nothing to me.”

“But what of Pearson? Have you not ruined him for more purchases?” I asked.

“Not at all. He is like the drunkard who must have more wine. He has a taste of victory, and he will not let a little loss affect him. Indeed, he does not even know yet that he has lost. I believe I can extract another fifty or sixty thousand dollars of losses from him before he begins to grow suspicious, and by then it will be too late.”

While Duer delighted in his deception, I plotted mine. Duer now trusted me entirely, and soon it would be time for me to lead him to his own destruction.

After the phenomenal success of the initial opening of the Bank of the United States and the wild trade in scrip, a number of other banks began to make preparations to launch, and though they had no real means of sustaining themselves, they hoped that public enthusiasm for new banks would prop up what would be otherwise empty ventures and sustain operations until the banks could become self-sufficient.

The most unlikely of these ventures was something called the Million Bank, as much a political as an economic scheme launched by Hamilton’s old political enemy Melancton Smith, with the aid of New York governor George Clinton, a fellow Hamilton-hater. I would never find a bank launched for worse reasons by more inept men. Anyone involved would be likely to incur Hamilton’s anger, and I knew at once it was just the thing I required.

I saw Pearson as the perfect vehicle to lead Duer to the Million Bank, but I was not entirely certain how to convince him of my idea without incurring his suspicion, or perhaps his scorn. I therefore decided I would need to be more intimate with his family and arranged on several occasions to be introduced to Mrs. Pearson. I had anticipated a dour creature, someone cold either from a cruelty compatible with her husband’s or a weakness that made her subject to it, but it turned out that Mrs. Pearson was a pretty woman, with fair hair and blue eyes, lively and full of wit and good humor. Yes, there was an unmistakable sense of sadness in her. Given the nature of her husband, I could hardly be surprised.

Mrs. Pearson soon became my particular friend, and I enjoyed the times I spent with her. It had been a long time indeed since I’d had a close friendship with another woman, and Cynthia was for me the perfect companion: warm and intelligent, but streaked with a melancholy and cynicism that left her with no patience for the empty platitudes that pass for conversation in polite society. She had never known the hardship of the West, but she had known her own sort of hardship and seemed like a sister to me. Yet I lamented the connection, for while we grew ever more attached, I was searching for an opportunity to destroy her husband—an action that must also destroy her.

One afternoon, while we drank tea in her parlor, I observed that Mr. Pearson was at home, and I had the distinct impression that he was listening to our conversation. I pushed the talk toward private matters, in particular the happiness I had known with my late husband. “Is it not a wonderful thing,” I said, “to have a husband with whom you can enjoy so much likeness of mind? Above all things, it is necessary to contentment that one’s spouse be agreeable.”

At once Cynthia’s face clouded over and I heard a creak upon the floorboards of the adjoining room. Pearson crept closer, hoping to hear her response.

“I am sorry you lost your husband,” said Mrs. Pearson. “It sounds as though there were never two more compatible people.”

I had long since sensed that she and her husband were far from companionable, and so I did not press the issue. I had what I wanted—Pearson’s secret attention—and I meant to press the attack.

“I wish I could understand other men as well as I understood my husband,” I said to Mrs. Pearson. “It is on that score I wished your advice. You know I am friends with Mr. Duer?”

“The world knows it,” she said, her words containing more than what was spoken, though I know not what else. I flattered myself it was no more than curiosity.

I put my hand to my mouth. “I hope no one suggests anything improper.”

She shook her head. “One need only look upon the two of you. He regards you more like a daughter, I believe, than anything else.”

“I am glad to hear you say so. He is a clever man, and I have learned a great deal from him, but he is, I am afraid, rather dismissive of some of my ideas. You say he treats me like a daughter, but sometimes he treats me like a child. I wish to present a proposal to him, one I believe could make him a great deal of money, but I must suggest it in just the right way, lest he dismiss it out of hand.”

Mrs. Pearson began to offer up much sage advice on soothing male pride, but I only pretended to listen. My heart beat hard in my chest. I could only hope this scheme would work, because if it did not, I would have to take a much more direct approach, and the more Pearson believed the idea his and not mine, the greater my chance of success.

All this concern was for nothing. As I left the house, Pearson came after me, not precisely racing but walking in his slow, methodical, stiff manner. His chin was raised, his eyes heavy and vaguely sleepy. He clearly wished to appear seductive. In that moment, I hated him more than I hated Duer or Hamilton.

“You will forgive me, madam,” he said, “but inadvertently I overheard what you said to my wife. It is true that Duer may not take your proposal seriously, but you may be assured he will take it seriously from me. He has learned to trust me.”

“Indeed he has,” I said.

He placed one of his large hands on my elbow, perhaps because he had seen Duer touch me thus. I hated when Duer touched me, and yet I did not fear him the way I feared Pearson. Duer was merely a vile self-centered villain. Pearson, I was beginning to understand, was a beast.

“You must tell me what you have in mind,” he said, “and if I like it, I shall present the idea to Duer. If he wishes to implement it, we shall tell him whose idea it was.”

“Why, that is generous of you,” I said, offering him my most gracious smile. “Shall we return to the house and discuss it?”

“By all means.”

I looked up and there, at the window, was Mrs. Pearson peering down at us with concern in her eyes. At first I thought she suspected I had some evil design upon her husband, but then our eyes met, and I realized her concern was for me.

In my madness to destroy Duer and Hamilton, in my hatred for Pearson, I had refused to think of Mrs. Pearson, that lovely, intelligent, and oppressed creature. I had refused to consider her children. They too would be destroyed with Pearson; when Duer and Hamilton and the rest came undone, the innocents would be undone with them.

I had come much too far to turn away on such an account. I could not refuse to fight a war because there might be innocents harmed. Innocents were harmed during the Revolution, and no one would say the war was not worth fighting. Even so, at that moment I took a silent vow. I would break Hamilton and Duer, yes, and it was now a foregone conclusion that Pearson would be dashed upon the rocks as well, but I would protect Mrs. Pearson and her children from the worst of it. God help me, I would not become what I despised.

Ethan Saunders

A
new morning met me in New York. Leonidas and I breakfasted together, and I informed him we would waste no time in pressing forward. To that end, I said we would spend the day—unless something of greater interest revealed itself—in the Merchants’ Coffeehouse, which I knew from my time living in this city to be the financial center of New York. At the corner of Wall and Water streets, the Merchants’ was a handsome structure in the New York style, bold on the outside, spacious within. The taproom of this establishment was commodious and comfortable, with several fireplaces and a surplus of candles to keep the place well lit. It was filled by a wide variety of gentleman, most of whom appeared to me to be too old and too fat to warrant much respect.