Chapter 1

The first undeniable sign of the coming troubles occurred on Monday, February 20, 1893.

On that day, the Philadelphia and Reading Railway, commonly known as the Reading Railroad, the biggest railroad and, arguably, the biggest business of any kind in the country, went into receivership.

But the roots could be traced back through the eighteen eighties and the unbridled European and American speculation in those markets and economies displaying the highest potential for rapid growth throughout the world: North America, South America, South Africa, India, China, and Australia all witnessed an aggressive flood of investment capital.

In the U.S., the collapse was aided and abetted by the Sherman Silver Purchase Act of 1890. That law, ostensibly intended to increase the demand for silver, instead overvalued the federal government’s silver purchase price. Speculators, trading silver bullion for the inflated U’S. silver notes, which were payable in silver or gold from the U.S. Treasury, began to threaten the country’s gold reserves.

That year, eighteen ninety, was heavy with portents of the coming crisis.

Argentina, one of the most popular investment arenas, especially for British speculators, saw its wheat crop fail in eighteen ninety. This was followed by a coup, which toppled the government that had catered to the foreign investors.

Worried about the situation in Argentina, by the following year investors had become increasingly uneasy over the seeming instability of other South American governments. Before long, that, that unease had spread to other volatile markets.

Within another eighteen months, investing began to fall off sharply world-wide and speculators switched to selling off their holdings -- everywhere. Those who could, converted payment into the overvalued U.S. silver notes, which they promptly exchanged for U.S. Treasury gold, a great deal of which was then deposited in British banks.

Much of the funding for the speculative expansion of railroads and other businesses in the U.S. had been based on the international sales of American commodities, wheat in particular. In eighteen ninety-three, with worldwide financing increasingly uncertain, the bottom fell out of the wheat market. Prices plunged, and many American railroads lost a significant part of their freight business.

The Reading, one of the most overextended of railroads, was the first large road to fail. It would not be the last. At first, it was the smaller roads and short lines that began to falter, but even the largest roads would not be immune.

With commodity prices dropping and lenders demanding immediate payments, with more railroads going to receivers or simply being sold as scrap, commodity middlemen went out of business, and ocean and Great Lakes shipping companies collapsed in debt. Farmers, grocers, butchers, brewers, bakers, builders, distributors, and businesses of all sorts and sizes became entangled in the widening ripples of financial collapse. The price of stocks and other securities tumbled.

The growing list of business failures eventually threatened the banks as they were paid only pennies on the dollar for the loans they had made. Fearing for the deposits in their bank accounts, people began to withdraw their money; the rush to do so was known as a “run on the bank,” with the demand soon outstripping the available cash, which had been lost to bad loans. Then the banks began to fail.

In eighteen ninety-three, newly re-elected President Grover Cleveland saw to the repeal of the Sherman Silver Purchase Act, but, while it mitigated the problems of the federal gold reserve, it did virtually nothing to head off the economic depression into which the country, and much of the world, was plummeting.

Wednesday, January 6, 1892

However, a year earlier Malik had been in the midst of a five-day review of the Fort Birney Division, one of his monthly Division assessments, part informal audit, part goodwill tour. His attention on this survey, however, was chiefly devoted to the K&ASR’s business partners in the area. To that end, he had hosted a half-day business conference at the Dorado Springs Hacienda and Spa for nearly four dozen business and government leaders from Sonora, Jackson, and Independence Counties, one of three such luncheons he presided over that week. The major topic was a description of the Kanzona’s preparatory moves in anticipation of a major financial collapse in the near future, likely within two years, as first predicted by the K&ASR’s General Superintendent, Raul Castillo.

The main speaker at this gathering was Judah Deering, on loan from the Isabella Valley Home Savings Association, an outgrowth of the earlier Jackson County Home Mutual Association. He was contracted to help the Kanzona in its attempt to organize the railroad’s shippers and the associated businesses to prepare for a troubled future.

Deering was smart, articulate, and well-versed in his topic. As a speaker, he was personable and he knew enough tricks to keep his audience not just awake, but interested. These he had learned from his father, Dean Phillip Deering, Professor of Law at La Paz University, Malik’s alma mater.

After lunch, while Deering remained to discuss matters in more detail with those who wanted to participate in the K&ASR’s plans and programs, Malik approached Father Ignacio Ramos, the headmaster of the Jesuit mission school, who had attended the luncheon.

“Are you headed back to the school, Padre?”

“I am, Mister Malik. Did you wish to speak with me?”

“I do. May I walk with you?”

“Of course. I welcome your company.”

The two men left the Hacienda and set out across the broad plaza.

“I wanted to bring you up to date on the plans for the junior colleges.”

“I will be happy to hear what you are doing, Mister Malik, but first, I have a confession.”

“Ah, a confession from a priest. This will be novel.”

“Indeed, and you may see it as a personal offense. As regards the progress of the junior colleges, I may have inside information.”

“Go ahead, my son,” Malik quipped

With a wry smile, Ramos continued. “Last month, I happened to be visiting the schools in Waypoint, both the new parochial school and the Endowment School. While I was at the Endowment School, I spoke with Sara Lewin, your business partner’s wife. She approached me after I mentioned the junior colleges. She was quite enthused about the project, and told me the current plans, as she had heard them from her husband. Among other things, she told me that your family was providing all of the capital expenses and initial funding.

“First, may I say how incredibly generous that is. It is a most admirable act on the part of you and your ladies.

“Second, I beg you to believe that it was never my expectation, nor even imagined, that you would oblige yourself, personally, to the colleges in that fashion. Now that I reflect on it, though, I should have been more cognizant. You had already been instrumental in starting or supporting several schools in Jackson County and providing boarding and transportation so that children from Independence County could attend school. I obviously underestimated your commitment to education.

“Finally, I want to apologize. I feel I may have taken advantage of Missus Lewin’s exuberance when I pressed for information that might have been confidential.”

Malik replied, “You hardly owe me an apology, Father. The college planning has not been a secret. It’s not like we’re worried someone will see the wealth to be gained in the college business and attempt to steal a march on us; hardly that. It is quite the opposite. We want the information to disseminate.

“As to our financial contributions, we see them not as any sort of sacrifice, but rather as an investment in our children’s future. We can’t think of a better use for our family’s capital.

“Speaking of supporting education, Padre, I wanted to inquire if you would be interested in an endowment of well-established municipal bonds that should bring the mission school at least one hundred dollars a month for the next ten years?”

Ramos stopped and looked speculatively at Malik. Malik paused with him. Ramos said. “The fact that you asked if I would be interested, makes it sound more like a temptation than an outright gift, which leads me to think this offer comes with conditions.”

“Very astute, Father.”

“And what are those conditions?”

“That you be replaced as headmaster of the Jesuit School.”

“Uh, well, ah...” Ramos was, quite literally, speechless.

“Because I have a job offer for you,” a grinning Malik said, letting the priest off the hook.

“Mister Malik,” Ramos said, in relieved good humor, “may I remind you that I am not merely a priest, but a Jesuit priest. We not only have close connections to the Almighty through our favored status with the Pope, but we are rumored also to have direct access to the Devil, himself. You do not want to test my humor.”

“Even with all the money you’ve cost me, Padre?”

“I admit to being only marginally involved. However, you invoking my guilt makes me concerned, once more. What is it you want to hire me to do?”

“To assume the duties of Chancellor of our junior colleges.”

(Wednesday, January 6, 1892)

Thursday, February 18, 1892

Emmet Quincy was explaining the situation to the Executive Committee. “There was a major storm out there on February first. Serious blizzard conditions. So I took three crews to do a snow survey, you know, to help us decide where we’ll need to install snow fence for the Denver extension. This was the fourth snow survey and the findings have been pretty consistent. We’ll probably need about nineteen miles of fence, twenty-seven, if we can do double coverage in a few places.

“While we were out there, however, it appears someone got curious about why a bunch of grown men were floundering around in the snow with transit levels and measuring chains. This news article was in the Fort Wardell weekly Clarion on Friday.” Quincy placed a clipped newspaper column on the table. “Somebody put two and two together and came up with three and nine-tenths.”

Malik picked up the cutout and read aloud:

IS THERE A TRAIN IN OUR FUTURE?

Railroad surveyors pick worst storm of the year to find new rail route.

Local merchants opposed to noise.

A party of four men, equipped with the accouterments of the land surveyor, spent several days, this week...

After a brief pause, Malik finished with, “ ... and, uh, so forth and so on.” He set the clipping down.

Castillo pointed to it. “What’s that about merchants being opposed?” he asked.

Quincy answered, “There are half a dozen businesses in Fort Wardell which have encroached on our right-of-way. Most of them are just a few feet over and, if it were my choice, I’d just sell them the strips cheap, after they sign a waiver of future damages. But there’s a lumber yard with a plant nursery that has appropriated about sixty feet of the full width of the right-of-way for its nursery plants and for lumber storage. I have no idea why they felt they could arrogate land they didn’t own, but there you have it.”

Quincy went on, “The man who owns the lumberyard, and his wife, who owns a sewing notions shop next door, are the leaders of the opposition. They’ve enlisted the others who have trespassed, as well as several more, and the Methodist minister, too.”

Malik asked, “Is the wife’s shop on the right-of-way, too?”

“Yes. By eight inches.

“There are also quite a few farmers, along the entire route, who have been planting or grazing the right-of-way. But we have signed agreements with all but a few of the newer farmers regarding their use. And none of the more recent arrivals have been on our land long enough to make an adverse possession claim.”

“What about the merchants in Fort Wardell? Can they claim adverse possession?” Malik asked.

“Only the sewing notions lady. The lumber yard opened only two years ago. The rest are eight years or less.”

“How did we miss that they were on the right-of-way?” Castillo demanded.

Quincy replied, “My research found that the adjoining land was sold to a developer by a farmer. We had an agreement with that farmer, which was supposed to be noted on the deed restrictions, and so carry through any subsequent sale. But by the time the developer had subdivided and platted the lots, streets, alleys, and such, the restriction was not included on the new deeds. Still, everyone on the right-of-way should have been aware they were building beyond their property lines, especially as they are required by the township to have an eight-foot setback on the back property line for an access and utility easement.”

“Did you talk to any of those people?” Castillo asked.

“You mean this opposition group? No. I got all my information from the new county clerk, who thinks his predecessor was a screw-up.”

Dixie Yeats said, “We could always sue them.”

“Naah,” Malik said. “Let’s you and I go talk to them. It’ll be more fun than a courtroom.”

Arnie Yeats said to his daughter, “What he means is, we don’t want look like a bully or, for that matter, actually be one.”

“Yeah, I know. I was just looking forward to rubbing their noses in it.”

Malik looked at his watch. “If we catch the forty-one, we can be in Brush in the morning. Peng can be your chaperone.”

“Oh. Okay.”

An hour later, Dixie knocked on Malik’s door frame.

“Emil, about the trip...”

“What can I do for you, Dixie?”

“Shouldn’t we have security?”

“Didn’t you hear me say that Peng is going?”

“Yes, Emil, but she’s your personal security.”

“She can -- oh. I see. You want some personal security, too?”

“I think it would be best.”

“Yeah,” Malik scoffed.

“Please. Please, Uncle Emil.”

“Fine, but there is a condition. After we’re done in Fort Wardell, we go from Colorado to Ranch Home. if you’re in a hurry to get back here, you two can ride back here by Santa Fe coach.”

“Or Pullman sleeper.”

Malik shook his head. “Is there any point to me trying to protect your reputation?”

“You may not have to, much longer.”

“Oh, really? Is Frank ready to get down on one knee?”

“Maybe.” She glanced at the clock on his wall. “But, right now, I need to run out and get a few things. When do you want to leave?”

“Right after lunch. The arrangements are made.”

“See you then.”

(Thursday, February 18, 1892)

Friday, February 19, 1892

At 10 o’clock that morning, Malik and Dixie Yeats stepped into a shop lined with bolts of fabric, rows of button cards and knitting needles, skeins of yarn, spools of thread, catalogs of patterns, and a selection of sewing machines, both treadle and electric. A tall, thin, attractive woman, in her mid-thirties, nicely dressed, came from a back room in response to the jangling of the bells hung above the door.

“How may I help you folks?” she asked, in pleasant tones.

“Are you Missus Holland?” Malik inquired.

“I’m Iris Holland. And you are...?”

“Good morning, Missus Holland. My name is Emil Malik. This is Dixie Yeats. We work for the Kansas and Arizona Southern Railroad. I wonder if we could talk, for a few minutes?”

“Ah, Mister Malik. I’m honored. I didn’t expect the Chairman of the Board to be the negotiator.”

“Nonetheless, here I stand. Miss Yeats is also on our Board of Directors and is our general counsel.”

“How do you do, Miss Yeats?” Holland said, with a slight nod of her head.

Yeats said, “Good morning, ma’am,” returning the gesture.

“I have some stools, by the back counter. We can sit there, if you’d like.”

“Whatever you, prefer, Missus Holland,” Malik said.

“Right this way, then.” She led them to the back of the showroom, where a broad, flat-toppred, polished wooden counter was neatly inlaid with a metal yardstick. Several tall stools were clustered nearby. Holland brought three to the counter. She took one behind the counter, where she sat, the picture of prim repose, smiling with the satisfaction of a cat with canary feather tickling its tonsils.

“Please, Mister Malik, tell me why you have come here.”

Dixie began taking notes.

“Very well. Are you aware that this structure, your shop, encroaches on our railroad right-of-way by eight inches?”