Chapter 1: Banking on It

Two men, different as cheese and chalk, sat facing one another across a handsome oak desk in the manager’s office of the Mercantile & Stockmen’s Bank of Grizewood, Montana. In one of the two customers’ chairs was Ezekiel Dawson. A slim-built man of medium height, he had been among the first of the homesteaders to arrive in the area. Where others had gone under, he’d survived, though by a hairsbreadth. Now, at thirty-nine, he was on the verge of going the way of so many of his kind in that part of the world. He cut a sorry figure in threadbare homespun clothing and worn-out work boots. His thin, prematurely lined face was twisted in a bitter expression.

At the other side of the desk was bank manager Harry Brewer. Grizewood was a community where not many had prospered, but he was one of that number. Twelve years Dawson’s senior, he was also of middle height, but that was the only common feature the pair had.

Brewer was undoubtedly the wealthiest man for many a mile around, and it showed. His affluence manifested itself not least in circumference, for he seemed to overflow his massive brown studded-leather chair. Now, pudgy hands clasped across his fashionably-wrapped paunch, he spoke as sonorously as his high-pitched voice allowed. The florid, purple-veined face – evidence, some said, of decades of heavy drinking – registered ill-concealed satisfaction as he gave his decision on the settler’s request for a loan. He leaned back, his original chin resting on the makings of a second.

Dawson spread his hands in resignation. “So what you’re saying is that you aren’t refusing the loan. You’re just making the conditions so hard that you know I can’t meet them. You’re nothing but a damned Shylock.”

The banker reached for a cedar wood box, pulling out a seven-inch imported cigar. Any largesse he may have had did not extend to offering one to his visitor. “You have to be realistic,” he said. “Anyway, just tell me again why you want so much?”

Dawson flapped his hands. “I thought I’d made it plain enough.” He had, but he knew that Brewer was enjoying his applicant’s discomfiture. “I need a cultivator. I can get one by mail order for seventy-five dollars. Carriage costs fifteen dollars. That’s ninety altogether.”

“And you wanted a hundred.”

“That’s right. I thought I might treat my wife to a little something, and I need a new pipe. Look at this.” He brandished an ancient blackened briar, reaching across the desk in an effort to shove it under Brewer’s nose. The mouthpiece was half chewed away, the stem held together in the middle by a ring of paper wrapped in button thread. “You’d hardly call that rich living, would you?” he snapped.

Brewer sniffed as though he’d been presented with a skunk. “No, I wouldn’t,” he said. “But I’ve given you my terms and you say you can’t comply with them.”

“Of course I can’t. If I get the machine, I’ll not see the benefit for a year, and there’s no way I can make payments in the meantime.”

Brewer, who knew that very well, puffed out smoke. “I’m sorry, Dawson,” he said. “The conditions I’ve offered are the best you’d get anywhere. One hundred dollars at ten per cent a year interest. That may seem high to you, but you have to consider that you’re a top-risk proposition.”

Dawson harrumphed his sarcasm. “I know, I know,” he said. “I heard that the first rule of banking is that you won’t lend anything to people who can’t prove twice over that they don’t need it. Anyway, you might like to know that you’re not the only one who can figure things out.”

“What do you mean?”

Dawson leaned forward. “All right, I’ll tell you. Now, I don’t single you out. Bankers are all the same. But, come the winter evenings, I get time to think about things and one matter I’ve thought about is how you do business. It’s a swindle from beginning to end.”

The complacent Brewer, having disposed of the main issue, condescended to hear out the homesteader. “Fascinating,” he said, smiling. “Tell me about banking.”

“Okay. Now look. You just told me that you’d lend me a hundred dollars at ten per cent a year interest, right?”

“Right.”

“And you said that a hundred dollars at ten per cent a year means repayment of a hundred and ten dollars. Right?”

“Also correct. So?”

“And you’d want me to make quarterly repayments at twenty-seven dollars, fifty cents a time?”

“That’s right. A hundred and ten dollars paid back. That’s your hundred dollars, plus ten per cent interest. What’s wrong with that?”

“I’ll tell you what’s wrong with it. It’s a hell of a lot more than ten per cent a year.”

“Well, well,” said Brewer. “A homesteader-mathematician. How do you make that out?”

“It’s simple enough, even for me,” Dawson answered. “What it amounts to is that you wouldn’t be lending me a hundred dollars for a year at all.”

“Go on. You interest me.” In fact, Brewer was a little disconcerted.

“Well,” said Dawson, “what you’d be doing would be supplying me with a hundred dollars for three months until the first repayment. After that, I’d have the rest for a further three months before paying again, then I’d have what was left for a three more months, until the third instalment was due. Then you’d be lending me the last bit for a further three months, until I settled at the year-end. That isn’t lending a hundred dollars for twelve months.”

“What is it, then?”

“I’m no scholar, but what it amounts to, more or less, is that I’d be borrowing four lots of twenty-five dollars each, for a total of thirty months – twelve, plus nine, plus six, plus three. That’s like a hundred dollars for seven and a half months, and that’s the same as sixty-two dollars and fifty cents for a year. And for that, you’re asking ten dollars interest. That’s sixteen per cent, not ten.”

“You can figure it any way you like, Dawson, but that’s standard banking practice,” retorted Brewer, though he was now feeling decidedly ruffled.

“Maybe it’s standard, but it isn’t right,” Dawson replied. “Anyway, I can see I’m not going to get anywhere with you, so I’ll go. I just wanted you to know that other people can work things out as well as you can. Thank you for your time.” Without waiting for a reply, he stood, wheeled and stamped out.

That left two men with a good deal to think about. Dawson started the four-mile walk back to his place. He knew he had made a valid point, but it hadn’t done him any good. He still wasn’t about to get a cultivator. He also knew what the next move would be. Brewer would let him sweat for a while, then call him in again and agree to lend the money, on condition that the loan would form a mortgage on Dawson’s homestead. As soon as Dawson defaulted on a payment – which seemed inevitable – Brewer would foreclose. That wouldn’t be the first time. It was by such methods that Grizewood’s banker had got his hands on half the land and businesses in the area. However, identifying the problem was one thing and dealing with it was another. Still, this was a rare slack period in the usually grinding round that faced the homesteader. He would have time to think, and as he had just demonstrated at the bank, Dawson was quite a thinker when circumstances permitted.

Back at the bank, Brewer was also pondering. Dawson’s words had struck a nerve. It was all very well for financiers to be aware of the misleading way their quoted loan interest rates related to the repayments demanded, but for a layman – and a hick farmer at that – to grasp the idea was dangerous. If such thinking were to spread, well, it just wouldn’t do.

Brewer, originally from the East, had started out in Montana as a hardware merchant, but had soon perceived that his talents lay in a different direction. Nevertheless, his sympathies were still with the ranchers. Over the years, he had – rarely and cautiously – loaned money to settlers, usually on the security of their land and property. Eventually, he had got his hands on a good deal of that real estate. True, it was mostly hardscrabble stuff, but Brewer had been as selective as possible. Most of the land he now owned was strategically placed. Soon, the railroads would come along, then he would sell out at a handsome profit, which he would invest in the other businesses he owned. It was a long-term proposition of the sort that only an already well-to-do man could entertain, but it was working out nicely.

Acquisition of Dawson’s land would be a handy step in the banker’s overall scheme. Had the sodbuster not approached him, Brewer would eventually have offered to buy the man out. He reasoned that, sooner or later, Dawson would come to grief, with or without his damned cultivator. After all, the homesteader was not entirely his own man. He had a wife and therefore responsibilities beyond himself – a complication in life that the self-serving Brewer had avoided. It would have suited the banker better if the Dawsons had had children, but Brewer accepted that a man had to work with what was available and Dawson’s situation was surely difficult enough.

The homesteaders’ position in the community was uncomfortable. There was little friendliness shown to them in Grizewood, where ranching interests were dominant. It might have been different if the farmers had been wealthier. As it was, they led frugal and largely self-sufficient lives. Only rarely was any of them seen spending much money in the town’s stores and saloons. Their contribution to the prosperity of the local businesses was therefore limited. It was nobody’s fault. The two ways of life were different. The cowpunchers – and less frequently their bosses – spent freely when in town. Consequently, sentiment in the commercial ranks ran against the homesteaders. After all, it was felt, the area would hardly be worse off without them. There was not much outright hostility. It was more a case of uneasy accommodation.

Dawson owned a buckboard, but he had not used it to drive into town. He had walked intentionally, to give himself time to burn off some of the feeling of frustration and humiliation that had been building inside him at the thought of finally having to ask for a loan. The rain, which had been threatening all day, came when he was still a mile from home. He didn’t much mind getting wet, as the downpour was welcome. By the time he reached the shack, he was well and truly soaked.

Removing his saturated clothing, Dawson told his wife what had happened at the bank. “It just isn’t right,” he concluded. “I was banking on that loan.” Then, struck by the unconscious irony of the remark, he managed a barking laugh.

Alice Dawson was a match for her husband in psychological strength and indomitability. “No use fretting about it,” she said. “There must be a way out. We’re not going to go down. What can we do?”

During his stolid march home, Dawson had been mulling over his predicament. There was no doubt that he and his wife were on their beam ends. Still, he’d had the glimmer of an idea, probably crazy but the sort of thing desperate circumstances engender at times. “Let’s just talk something through,” he said. “How many are we in all?”

“That’s easy. Eleven homesteads.”

“And how many are single men?”

“Four. Then there are three with just man and wife and four with parents and children.”

“Okay. Is everybody home now?”

Alice’s mind swept the area. “No,” she said. “Mr Bullman and Mr Swenson are away together, getting supplies at Mason’s Cross.”

“When will they be back?”

“Tomorrow, I suppose. They’re usually away for two days and they went yesterday.”

“All right. I’ll go round and see the others after we’ve eaten. We’ll have a meeting here tomorrow night. Can you cope?”

“Of course I can.”

The following afternoon, a Tuesday, all the men gathered at the Dawson place. They were keen to hear what their host had in mind, for when calling on them the previous evening, he had not thought his scheme through in detail. However, he had worked on it most of the night and all day. When he presented it, the idea caused a good deal of debate. At various times, five of the homesteaders had asked Harry Brewer for loans and all had been offered ruinous terms. They immediately endorsed Dawson’s idea. The others agreed, one by one. The consensus was that it seemed like a crackpot project, but that they had little more to lose. It was make or break for them. If they failed, they would have to leave, and none of them had any prospects elsewhere.

At nine o’clock on the Wednesday morning, Harry Brewer’s bank opened. The scene was one never before witnessed in Grizewood. Strung along the sidewalk from the bank’s door was a line of seventeen people – eleven men and six women. Alice Dawson had been excused to look after the homesteaders’ children.

Brewer had never needed more than one teller. The man, who had been with the bank since its opening, was a short crusty character of fifty-odd, accustomed to dealing with customers from his position of – as he saw it – social superiority. Like so many people attuned to a routine life, he was staggered by what confronted him when he opened the door. Shaking his head, he took up his position. Brewer, who no longer wished to sully himself by too much contact with day to day business, had entered by the back door and was in his office, oblivious of the developments out front.

First in line at the counter was Zeke Dawson. “I want to open an account,” he said.

The teller was puzzled. “You already have an account,” he said.

“I know that. I want to open another.”

The teller shrugged. “All right,” he said. “How much do you want to deposit?”

“One cent.”

The teller’s eyebrows rose. “That’s ridiculous,” he said. “We can’t open an account for one cent. It’s just not worth the paperwork.”

Dawson, apparently having all the time in the world, rested his elbows on the counter. “This is a bank, isn’t it?” he said.

“Of course it is.”

“Well then, what’s the problem?”

“It doesn’t make sense, that’s all. Why, if we were to open accounts for everybody who wanted to deposit one cent, we’d never get any other work done.”