“Certain things are inevitable, father.”
His parent, frowning and angry, growled at him as he made this remark, and muttered,
“Well, suppose they are.”
“Now, father,” replied his son, with great composure, “let us proceed calmly. Why should we pretend not to see what is perfectly plain? Business nowadays proceeds by credit. Credit is based upon something, or the show of something. It is represented by a bank-bill. Here now—” And he opened his purse leisurely and drew out a five-dollar note of the Bank of New York, “here is a promise to pay five dollars—in gold or silver, of course. Do you suppose that the Bank of New York has gold and silver enough to pay all those promises it has issued? Of course not.”
Abel knocked off the ash from his cigar, and took a long contemplative whiff, as if he were about making a plunge into views even more profound. Mr. Newt, half pleased with the show of philosophy, listened with less frowning brows.
“Well, now, if by some hocus-pocus the Bank of New York hadn’t a cent in coin at this moment, it could redeem the few claims that might be made upon it by borrowing, could it not?”
Mr. Newt shook his head affirmatively.
“And, in fine, if it were entirely bankrupt, it could still do a tremendous business for a very considerable time, could it not?”
Mr. Newt assented.
“And the managers, who knew it to be so, would have plenty of time to get off before an explosion, if they wanted to?”