He hung up the telephone, and turned to Elkins inquiringly. Jim was walking up and down on the rug, his hands clasped behind him.
“Since we’ve spread out into that string of banks,” said he, still keeping up his walk, “and made Mr. Hinckley the president of each of ’em, he’s reverting to his old banker’s timidity. Which consists, in all cases, in an aversion to any change in conditions. To suggest any change, even from an old, dangerous policy to a new safe one, startles a ‘conservative’ banker. If we had gone on a little longer with our talk about shutting off steam and taking the nigger off the safety-valve, you’d have seen him scared into a numbness. But, now that the question has been brought up, let’s talk it over. What’s your notion about it, anyhow, Al?”
“I’m seeking light,” said I. “The people are rushing in, and the town’s doing splendidly. But prices, there’s no denying it, are beginning to sort of strangle things. They prevent doing, any more, what we did at first. Kreuger Brothers’ failure yesterday was small; but it’s a clear case of a retailer’s being eaten up with fixed charges—or so Macdonald told me this morning; and I know that frontage on Main Street is demanding fully as much as the traffic will bear. And then our fright over Trescott’s gambling gave me some bad dreams over our securities. It has bothered me to see how to adjust our affairs to a stationary condition of things; that’s all.”
“Of course,” said Cornish, “we must keep boosting. Fortunately society here is now thoroughly organized on the principle of whooping it up for Lattimore. I could get up a successful lynching-party any time to attend to the case of any miscreant who should suggest that property is too high, or rents unreasonable, or anything but a steady up-grade before us. But I think we ought to stop buying—except among ourselves, and keep the transfers from falling off—and begin salting down.”
“If you can suggest any way to do that, and still take care of our paper,” said Jim, “I shall be with you.”
“I’ve never anticipated,” said Cornish, “that such a mass of business could be carried through without some losses. Investors can’t expect it.”
“The first loss in the East through our paper,” said Jim, “means a taking up of the Grain Belt securities everywhere, and no market for more. And you know what that spells.”
“It mustn’t be allowed to happen—yet awhile,” answered Cornish. “As I just now said, we must keep on boosting.”
“You know where the Grain Belt debentures and other obligations are mostly held, of course?” asked Mr. Elkins.
“When a bond or mortgage is sold,” was the answer, “my interest in it ceases. I conclusively presume that the purchaser himself personally looked to the security, or accepted the guaranty of the negotiating trust company. Caveat emptor is my rule.”