Part 7

So he took the financier in tow, with the idea of first showing him the source of supply of opium and of Chinamen. In the presence of Gard he got quotations on opium from Sing Foo and from Fun Ken at five dollars for a can the size of a pot of salmon. It was shown that there was opium to be had practically without end.

And the Chinamen themselves! He was told that there were always five hundred of them in Jamaica, ready to make the run into the States. When these were gone there were as many more on the way. In fact, there was all China to draw from. Every Chinaman who came was a member of an association. That membership was to cost him six hundred dollars. He need not pay in advance, as such men as Sing Foo stood back of the association and furnished the capital. Whenever a Chinaman got into the United States he went to work. He was able to earn at least twelve dollars a week. Half of this went to the association, until the six hundred dollar fee was paid. The association was willing to spend a total of four hundred dollars to get a Chinaman into the country. Its minimum profit was two hundred dollars a man. The stream flowed constantly. Were not Sing Foo and Fun Ken the richest Chinamen in the Caribbean?

The supposed financier declared himself satisfied of the abundance of the supply of these objects for profitable smuggling. But he wanted to see some of the money actually made. Whereupon Peterson and Flavot agreed that he should have a complete demonstration.

There was then a Norwegian bark in port, and her captain had agreed to take aboard twelve Orientals. He was bound for Norfolk. Peterson and Flavot had made arrangements with him, and Sing Foo was ready with his men. In the dead of night Gard accompanied the two Americans as they pushed off the well-laden boats from the foot of a deserted street in Kingston. He saw the men go aboard. He went deep into the bow of the ship with them and saw them nailed up in a nook behind a wall that seemed to be the end of the vessel. He saw a Chinaman who had come aboard as the representative of Sing Foo pass the captain eighteen American one hundred dollar bills. He went back to Chinatown with Peterson and Flavot and saw them draw their bonus of fifty dollars for each Chinaman that had thus been disposed of.

The capitalist declared himself convinced so far as the Chinamen were concerned. How could he be shown profits in opium?

"Opium," said Peterson, "is the one sure way of making easy money. If you are ready for a little run back to the States, I will show you all the details."

The special agent assured the smuggler that he would be as pleased in making a run back to the mainland as in loafing in the Hotel Myrtlebank, if there were amusement in it and a chance to make some money in an interesting way.

Two days later the three men were aboard a fruit and passenger steamer at Port Antonio, bound for Philadelphia. Beneath the mattress of each man's bunk were twenty cans of opium.

"All you have to do," elaborated the smuggler, "is to open up your baggage for inspection as you approach the port. The inspectors go through it, but never do such a thing as look beneath the mattress. When they have gone you take the opium out from its hiding place and put it into your baggage, which had already been inspected. Then it goes ashore."

"But," insisted the special agent, "is not your stuff examined again on the wharf?"

"This system would not work," Peterson explained, "if you were landing at New York. There the baggage is examined in the staterooms and again on the pier, as the passengers come ashore. But in Philadelphia there is but the one examination, which takes place in the stateroom."

"But is there not a pretty good chance that the inspector may sometime look under the mattress?" Gard asked.

"There is the barest possibility," assented the smuggler. "We have been taking it in this way for years, and it has never been found. But if it is discovered, we have but to look innocent. It cannot be proved that we are responsible for its presence. It might be the steward."

The three came into Philadelphia, and passed the customs officials as the smugglers had prophesied, without a hitch. They went to their hotel, and there found themselves each the possessor of twenty cans of opium, for which they had paid five dollars and for which, Peterson said, they were to receive $27.50. This was the part of the transaction that was yet to be demonstrated.

"We will do but a little business in Philadelphia," said Peterson, "just to show that it can be done."

They took ten cans of the opium to a Chinaman in Arch street, with whom Peterson was acquainted. Yes, this man would buy opium. The price for the same grade was the same as before, $27.50. He could use all he could get. He would be glad to take ten cans. The profit on these ten cans was $225.

"We could have sold him a hundred cans as easily, with ten times the profit," said Peterson.

In New York the smugglers called upon a Doctor Yen, in Pell Street, one of the important men in Chinatown. He stated that he was able to buy opium at $27.50. The smugglers insisted on $30. After much haggling 20 cans were sold at $28.50. Here was a profit of $470.

But Doctor Yen was to be counseled on a much more important matter. He was to be told of the proposal to purchase a boat for the opium traffic. He was to be asked to guarantee the purchase of large amounts of opium.

The old Chinaman became greatly excited. He ran to his safe and came back with $10,000 in currency. He was willing to put up this money for its value in opium at $27.50 a can as soon as delivered. When that was gone there would be other money. He alone would make the owners of the boat rich.

In Boston was the actual headquarters of Peterson and Flavot. A Jew by the name of Ferren was their financial backer. It was Ferren who had put them into the business. When Ferren was told of the proposed enterprise he would not at first listen to it. He would have to be shown that this Mr. Gard was on the level. There were too many eyes watching for opium.

Peterson told of the credentials, and finally succeeded in convincing him that Gard was what he purported to be and, gaining confidence as the plan developed, the Jew finally became enthusiastic. In the end he vied with Doctor Yen in his anxiety to purchase unlimited opium.

Gradually Gard granted that he was convinced of the feasibility of the scheme, if he were shown the possibility of getting the schooner into the States. It was at this point that he was introduced to one Captain Bailey, who had, some years before, figured in a very sensational attempt at the introduction of Chinamen from Canada and their landing at New Haven. Bailey had been caught, had served a term in prison, and, since his liberation, was running a fish stand in Boston market.

But Bailey knew all the coves in the Atlantic and the gulf into which a boat might put. He knew every dock where she might tie up, and the time that must pass thereafter before it would be safe to put his men ashore. Operating from Jamaica there was none of the danger into which he had run in bringing Orientals from Canada.

Eventually the papers were drawn, setting forth conditions under which all these men entered into a partnership in this smuggling venture. Gard, Ferren, Peterson, Flavot and Bailey had all signed, and Gard had gone to New York to get the signature of Doctor Yen. The district attorney's office in Boston was prepared for the arrests when the papers should finally be signed. When Doctor Yen affixed his signature Gard signaled an associate across the narrow street in Chinatown. He sent the flash to Boston and the trap was sprung.

So were all the inside facts of this most aggravating system of smuggling revealed. With these facts in hand, the Government had little difficulty in breaking up a system that had been causing a lot of trouble for a decade.

So, also, was one of the most complete and successful cases of "roping" that any of the Government agents had ever attempted carried to a successful termination.

VII

A BANK CASE FROM THE OUTSIDE

"It is astonishing," said Gard, the bookkeeper, "how few people know anything about their own business. Take bank accounts, for instance. Many people have money in the bank which lies there inactive. There is not one man in five, having such an account, who can tell the amount of it."

This statement was launched during the evening meal at Mrs. Hudson's very respectable boarding-house in the prosperous little town of New Beaufort, which slumbers in one of the valleys of central New York.

"I must take issue with you there," ventured the elderly rector of the Episcopal church who, being a widower, boarded with Mrs. Hudson. "I, for instance, have managed to save a little money for old age and I can tell the amount of it to a penny."

"And I know just how much I have on deposit," insisted Miss Dolan, the school-teacher.

"And I am quite sure of mine," asserted a buxom widow who had collected life insurance.

"As a test of my contention," said Gard, "I am willing to pledge a box of candy to each of the ladies and cigars to the gentlemen who will set down the exact amounts of their inactive accounts in the First National bank and then prove their figures correct by application to the cashier."

This proposal appealed to those who had been drawn into the incipient controversy. Next day they asked for the figures, and each had won his reward. Gard seemed chagrined that his theory should have thus gone to the winds, but he cheerfully stood treat.

For he had established a fact very important to him. The inactive accounts of the First National bank of New Beaufort were intact.

This was one of the first steps in an investigation of a financial institution which, while seemingly in the best of condition, was suspected of having been looted for hundreds of thousands of dollars. Special agents of the Department of Justice knew that an official of the bank had been trading heavily in Wall Street and that he had lost. Gard, a member of this new detective force of the Federal Government, had been sent to investigate. Representing himself as a bookkeeper he had secured a position with the leading grocer and had come to board with Mrs. Hudson.

He stayed three months. At the end of that time he reported the shortage, fixed the blame upon the man responsible for it, showed the methods used, cited the accounts from which the money had been stolen, told what accounts were still intact. Yet he had never been inside the bank, had seen none of its books, had consulted with nobody familiar with them, had received no confessions. The manner in which he accomplished these seemingly impossible ends illustrates most excellently the methods used by this new detective agency of the Government.

It was a strange conspiracy of circumstances that brought to New Beaufort detectives from three different services on the night, two months later, that Conrad Compton, the enterprising citizen and banker, was giving his big party.

There was McCord, a plain-clothes man from New York. McCord would not have been in New Beaufort but for the ramifications of the New York police department in keeping track of these middle class criminals who live through the trade of burglary--a calling that is sometimes refined to art. And the police department would not have come into possession of a certain tip if "Speck" Thompson had not done his bit up the river and returned to his old haunts so broken that he chose to become a stool pigeon because he was no longer up to second story work.

Speck had found that "Dutch" Shroder had arranged to crack a safe and that the scene of the cracking was New Beaufort. He had tipped the matter off to the police, and hence McCord's presence in a community that was far from metropolitan. He represented the first of the detective services.

The second such service was represented by Ogram Newton, a bank examiner in the service of the treasury department. His district was central New York. For three years he had been taking an occasional look into the books of the various national banks of his district, checking up assets and liabilities, inquiring into the value of the paper held by the banks. Two weeks before Conrad Compton gave his party Newton had been in New Beaufort and had gone thoroughly into the affairs of the bank. Its books were models of efficiency and there was no flaw to be found in any of its securities or loans. Newton had given the institution his O. K. and had passed on to other towns.

But there was a feeling of unrest that haunted the young examiner. It seemed that his subconscious mind was aware of an oversight that had been made by his working faculties. He was not able to sleep well of nights, and in his sleep the various accounts of the New Beaufort bank insisted on visualizing themselves. Finally the recurring accounts eliminated themselves with the exception of one which persisted. The loans and discounts account kept thrusting itself into his consciousness.

"By Jove!" he exclaimed suddenly to himself. "The entries in that account, the amounts of money that have been run through it, are out of all proportion to the other business of the institution. Something is wrong with loans and discounts."

So Newton hurried back to New Beaufort and was that night a guest at the party given by Conrad Compton, with whom he had built up a friendship through years of association in the line of his work. He was to take a further look at the loans and discounts on the morrow.

The Department of Justice is the prosecutor in cases of violations of the national banking law. Its work is entirely apart from that of the bank examiners of the treasury department. The New York office of this service, as a matter of daily routine, received the information that David Lorance, assistant cashier of the First National bank of New Beaufort, was regularly placing heavy buying and selling orders with a certain broker in Wall Street.

For this reason, Agent Gard got the assignment to come to New Beaufort, and was thus the representative of the third detective service. His windows at the grocery store looked out upon the side door of the bank opposite. He was bland and inconspicuous, but he was an expert accountant, had taken a degree in the law and worked three nights a week in the gymnasium in New York when he was in town.

The Compton home stood on a hill just back of the town. It was known as Stone Crest and was the most ambitious establishment thereabouts, being always pointed out with pride to visitors. The banker was a widower, but given to entertainment and to charity. The members of the board of aldermen often met at Stone Crest to discuss those matters that had to do with the well-being of the town. Teas were given there whenever its charitable women were inaugurating some new venture. The party to-night was a semipublic affair, for it was in commemoration of a centennial anniversary of that occasion when the first settlers had fought off attacking Indians from their stockade through a day and night.

Conrad Compton was a tall, graceful, nervous man, with a high forehead and a mass of wavy hair. His features were of a perfect regularity and the whole face was so small as to give it somewhat the appearance of that of a woman, an impression that was heightened by its absolute pallor.

Ogram Newton, the bank examiner, watched his host narrowly as he received his guests, as he directed their entertainment by a party of professionals who had been brought up from New York for the occasion, as the ices were served. He thought the banker was a bit paler than usual and his natural nervousness seemed somewhat accentuated. Once during the evening he had drifted into the library which happened to be empty of guests, and had found the host peering out of a window that commanded a view of the town.

"I trust you will pardon my preoccupation," said the banker, turning again to his guests, "I seem to have a way of feeling lonesomest when I have most company."

McCord, the plain-clothes man, had vacillated between his hotel, the railway station, and those streets that gave views of the alleys leading past the back ends of establishments that might contain safes worth raffling. Occasionally his eye fell upon the lights in the house of the banker on the hill, and wandered to the chief financial establishment of the town. Yet all was so serene in this eddy of the world that the hour of solitude that followed eleven o'clock seemed such an age that it drove him to bed.

As the time drew on toward twelve there was no sign of life in the village. The lights in the drug stores, the restaurants, the delicatessens where ice cream is served to the small town lovers, had one by one winked themselves out. The owl car of the trolley line that ran through the village had deposited its last late revelers at eleven-thirty. The swinging arc lights at the street intersections occasionally sputtered fitfully and glared again. A dynamo whirred distantly at the electric light plant.

Gard, the special agent of the Department of Justice, was one of the few men in the town who was awake except those who had been guests of the banker and who had lingered to an hour which was almost unprecedented in New Beaufort. They would have gone home at eleven, but the banker insisted that they remain for further entertainment on the part of his New York musicians. One song called forth another and the quality of the music proved so much more pleasing than that of their customary local talent that they forgot the passing of time. The special agent sat on a hill near the Compton home and smoked a pipe.

It was twelve o'clock before the party finally broke up. Those of the townspeople who had come in their automobiles were being tucked into the tonneaus, and those who had walked up the gray macadam drive were just setting out on foot when the clatter as of a bunch of giant fire crackers called their attention to the village below. From the bank building was seen suddenly to burst a cloud of smoke while, a moment later, a skylight was broken and a tongue of flame leaped forth.

"Fire! Fire!" came the shout from a dozen voices.

Gard had seen more than had the guests of the banker. As he smoked his pipe and watched the village below, the lights in the windows of Stone Crest, and the silent cottage of Lorance, the assistant cashier, he had seen an automobile, with no lamp showing, creep through the quiet back street, purr stealthily into the alley back of the bank and stop behind a small building that shut off his view. Half an hour passed and the darkened machine reappeared from behind the intervening building, turning into the thoroughfare leading to the southeast and disappeared in the distance at an ever increasing rate of speed.

When the exploding cartridges in the cashier's drawer at the bank gave the first warning of the fire, the clamor of the alarm followed and pandemonium broke out in the village. Of the dispersing group on the hill, every one ran for a nearer view of the fire. The musicians, the servants, the master of the house himself, all hurried into the village to make part of the excitement that prevailed. Stone Crest, the lights of its entertainment still glowing, was left deserted.

Gard, the special agent, again acted differently from his fellows by failing to do the thing which others did. He crossed over from the hill on which he had smoked and hastily entered the banker's house. Arriving, he seemed to know exactly what he wanted. He hurried through the rooms of the house, snapping on still more lights until he found that apartment which seemed to be the personal retreat of the owner.

Here he evidently had business. Standing in the middle of the floor he looked about. Thrown carelessly into a window seat he saw two heavy books of the appearance of ledgers. These he secured and placed on a table in the middle of the room without even examining them. Next he began further exploration. When he found the banker's bedroom he seemed satisfied. On the back of a chair was a coat, evidently that which Compton had worn until he dressed for the evening. Gard thrust his hand into the inside pocket of his coat and pulled out a batch of letters through which he ran rapidly. He selected two or three, thrust them into his pocket, returned for the ledgers, tucked these under his arm and left the house.

On the way to his lodgings he filed a telegram to the department at Washington which read as follows:

Compton, cashier in First National bank case, guilty. Lorance probably not implicated. Bank burned to-night by accomplices of Compton. Case complete.

GARD.

The manner in which these conclusions were reached are but typical of the methods of the sleuths of the Department of Justice. Gard had come to New Beaufort with but a suspicion that Lorance, the assistant cashier, was playing the market on the funds of the bank. Lorance was known to be placing orders with a Wall Street broker.

At the boarding house Gard learned that Lorance lived modestly in a cottage with his wife and babies, had not been seen to make any display of money, was of sturdy farmer stock. On the other hand the investigator immediately picked up the facts that the cashier, Compton, maintained an expensive establishment, entertained lavishly, was often absent from town, was nervous, highstrung, in bad health.

All these facts led him to watch the cashier rather than his assistant. They led him, also, to some experimental testing of the condition of the bank's accounts. He knew that a dishonest employee of a bank, in appropriating money, had to charge it to some account to make the books balance. The large, inactive accounts offer a most tempting opportunity of this sort; but these were found to be intact by his ruse of inducing the depositors to call for their balances.

It was to get a better line on the business of the community, and particularly upon the accounts of Compton, that the special agent secured a position of bookkeeper in Joy's grocery store. Here he found, in the first place, that the buying of the Compton home was profligate and evidently wasteful. He found, further, that the bills were always paid without question and by check. Knowing of an old trick that has brought many a cashier to ruin, Gard sought a way to test these personal checks to determine whether or not they actually found their way to the personal account of the cashier.

The cashier of a bank is usually the individual who opens the mail, and many of these have been known to cash personal checks and destroy them when they came in for collection, charging the amount to some account where it might temporarily be hidden. To determine whether or not these personal checks were being juggled by the cashier Gard, as the grocer's bookkeeper, found a pretext to send to the bank for a record of some personal checks of Compton's which he had handled a few days earlier. The call was made while Compton was out to lunch, and the checks could not be found. Through another dealer Gard succeeded in getting a second similar request made with the same results. He concluded that Compton was at least juggling his personal account and charging the amount of his personal checks to some other account, probably loans and discounts.