The Whiskey Rebel

Joan Maycott

Autumn 1791

Within a few months of our arrival in Philadelphia, even Jericho Richmond, the most cynical of our band, began to think success was likely, if not precisely assured. William Duer may have been intrigued initially by the mere novelty of a female speculator, but soon enough he came to regard me as a sage advisor as well. I should like to have been able to offer him advice on how to invest, and have that advice bear fruit, but I am no more prescient than any other mortal, and I had no abilities beyond those provided by keen observation and common sense. Accordingly, I did the next best thing. Already having one of Dalton ’s whiskey boys close to Duer, I could receive word on the speculator’s plans and then advise him to do what I knew he intended. If I could not predict the market, I could at least predict the investor, and he, hearing his own ideas parroted back, believed me brilliant, for I reflected back to him his belief in his own sagacity.

It was important that I also know the history of the investor. When I met with Duer I questioned him as closely as I dared. My interest would always have to be that of an adoring woman, not a counting-house clerk, and yet it was the details of the ledger book I craved. Indeed, Duer dropped a few hints of some past exploits I thought could be useful, and accordingly I visited the Library Company, that marvelous institution founded by Benjamin Franklin, and conducted some researches into old papers.

In reviewing the accounts of the old Board of Treasury, which functioned between the end of the war and the establishment of the Constitution, I learned that when William Duer had run the board he lent himself some $236,000, and only a careful review of the records, one conducted with knowledge of the cheat, made clear that the money had never been returned. Duer had stolen from his country, and apparently no one knew it.

I had found what I most sought, a key to Duer’s ruin. It was a primed pistol, ready for me to discharge when the time was right.

D uer was, as near as I could tell, quite dedicated to his wife, Lady Kitty, the daughter of William Alexander, the famous Lord Stirling, hero of the Revolution. Yet after our first meeting he asked me to meet him again the next day at the City Tavern, where we might discuss further my insights into speculation. I cared little for his reputation or the feelings of Lady Kitty, so I agreed immediately. As we were stepping out onto the street, however, we were joined again by Reynolds, who continued to eye me with suspicion.

“I’m certain I know you from somewheres,” he said to me.

“Mind how you speak to a lady, Reynolds,” said Duer.

“I’m not looking to be impertinent,” he said, “but I am to look after you, and I’m telling you I know her.”

I had to make a decision, for if I denied knowing them, my falsehood might later expose me. Thus I smiled at Duer. “You sold my husband a ground lease in the West some years ago.”

Reynolds colored. “By God, that’s it! You’re Maynard or Mayweather or something of that sort.”

“This is Mrs. Maycott,” said Duer. “Now, if you’re done-”

“That’s her! The one what Tindall said killed her own husband!” Reynolds shouted.

An expression of understanding crossed Duer’s face. I don’t know how much he had heard of the incident, but if he dealt with Tindall he would have had some notion of his perfidy.

He looked at me with a very contrite face. “I never did hear the full story, but my understanding was that Tindall treated your family unkindly and then attempted to lay the blame upon you.”

I bristled at his use of so limpid a euphemism for murder, but this was not the time to resolve such things. Instead, I said, “I suppose none of us could be surprised that Tindall dealt with himself so harshly, given the crimes upon his conscience.”

As it happened, accusations of murder had never surfaced in the Tindall affair. Perhaps Phineas ultimately lacked the resolve to deliver his confession, and the sheriff decided that a wound to the back of the head was consistent with a hanging. After Brackenridge had humiliated Tindall before the sheriff (a man who did not scruple to talk about his supposedly private conversations), it was widely rumored that Tindall had murdered both Andrew and his own man and, after attempting and failing to blame me, had taken his own life rather than face the humiliation of a trial.

I met his gaze. “Those events are in the past.”

Duer took my hand and held it softly. “For my own part in that wretched affair-”

I shook my head. I did not want to hear a meaningless apology from him. “You did no more than sell us a lease. You cannot be responsible for how Tindall behaved.”

“Of course not,” he said, “and yet some small part of the affair must be set before me.”

“No,” I said. “It is noble that you say so, but it is not true.”

“Wait one moment,” said Reynolds. He stepped close to me, crowding me with his massive form. I believed I could actually feel the heat emanating from him, and his smell, like that of a bull, filled my nostrils. “I don’t like this at all.”

Duer pushed him back. “Mind yourself, Reynolds.”

“I think I’d rather mind you and her. She always was a cagey one, this lady. You forget I rode out to Pittsburgh with her. She’s one of those women who must always have her own way.”

“Is there another kind? Ha-ha! You’ll forgive me, madam.”

I smiled in deference.

“You don’t think it a bit odd,” Reynolds said, “her appearing here, making nice with you after what you done-”

“That will be enough, Reynolds,” Duer barked. “Silence yourself-now!”

Reynolds took a step back as if struck, though his face showed no expression of pain, just puzzlement. He wished to know what I did with Duer, and I could see he did not believe for a moment that our meeting was by chance or that I was so quick to forget the injury the speculator had done me. Even then, I could see behind his dark eyes, so obvious in their brooding, that he searched not for a way to protect Duer but to turn my unlikely presence to his own advantage.

I began to meet with Mr. Duer at the City Tavern whenever he did business in Philadelphia, which amounted to at least one protracted visit every two weeks. Though men wondered at the nature of our friendship, no one wondered aloud in our presence.

As I repeated to Duer his own ideas, handily reported to me by my man in his service, the speculator began to grow increasingly sanguine about my opinions. Thus, after meeting with him for the better part of two months, I decided it was time to begin pushing him in the direction I so desired. Duer made it a point to introduce me to a number of his associates-perhaps he wished them to believe our relationship was of a more intimate nature than it was, or perhaps he wished to impress them with his marvelous pet, the thinking woman-and so I came to know a number of men in Duer’s circle.

The circle itself was a curious thing. His most important project that autumn was a loose confederation of traders he called the Six Percent Club. Its principal object, as all its members knew, was to establish control over those government issues yielding six percent interest. There was value in monopoly for its own sake, of course, but Duer’s scheme was more far-reaching. When the Bank of the United States launched, investors could only buy scrip, the ownership of which allowed them to make the four subsequent payments necessary to own actual bank shares. Not until those four payments were complete would the scrip holder actually be a shareholder. Two of those payments were to be made in specie, but two were to be made in six percent issues.

Hamilton ’s intention in doing this was actually quite clever. Create a demand for government securities in order to increase the trade and, consequently, the value. Duer’s plan was equally clever but far more diabolical. Control the flow of the six percents, make them impossible to obtain, and the original bank investors cannot hope to turn their scrip into actual shares. Their scrip becomes worthless, and they must sell it-to members of the Six Percent Club. It was his intention that by the end of the next year, his cartel would control both bank scrip and the six percent issues required to redeem it.

There was one added dimension, however. The Six Percent Club consisted of both agents whom Duer publicly acknowledged and those he did not. There were men who bought and sold with Duer’s money, and those who bought and sold with their own. Not all in the latter category, but certainly many of them, were nothing more than stooges, men Duer sacrificed to manipulate the market. If he wanted prices to go down, he would send the unwitting agents out to sell. If he wanted prices to go up, he would send them out to buy. That their investments would ruin them mattered nothing to him. He did not see himself as directing a skirmish but rather the final battle of a long war. When it was done, he might have ruined the markets, but he would own them. He might have ruined his reputation, but by then it would not matter.

Much of this I learned from our man in Duer’s employ in New York, and much I learned from my own observation. Duer liked to keep me on hand, as a kind of sign of his power, a charming woman with a considerable knowledge of finance. Never, not once, did he suggest he wished for a greater familiarity with me, though at times he might touch my arm when he spoke or place a hand upon my back. It was intimacy of a sort, certainly, and it took all my will not to recoil, but it was far less than I had feared he might demand.

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.