City of Dreams (25 page)

He led them down the hall to the library. The heavy drapes were drawn tight, blocking the view, darkening the room, muffling the voices. He had installed UV-filtering glass. “But I still keep the illumination low to protect the treasures.”

He flipped the switches by the door. Spotlights hit framed certificates on the walls, items in glass cases, notebooks on the shelves.

Peter and Evangeline scanned the room but said nothing.

Arsenault, however, liked to talk about himself. “I may be the world’s most prominent scripophilist, which means I collect old money—stock certificates, bonds, currency—not for their face value but for their historic and artistic importance.”

And in the next few minutes, Arsenault introduced them to a new way of seeing American history: not as a string of events or inventions or political decisions, but as a series of financial investments in the future. It was all there: a 1782 French debit note for 500,000 livres, signed by Benjamin Franklin in Paris . . . an 1893 share of General Electric, the only stock of the original Dow Thirty still trading today . . . a 9½ percent Enron bond, face value
10,000, worth a bit more than three hundred bucks to a collector.

“The march of a great nation,” said Arsenault, “mirrored in the instruments of capitalism . . . the expansions, the collapses, the dreamers, the scoundrels, the Bulls charging from one coast to the other, the hibernating Bears living off their belly fat—”

“Or someone else’s,” said Owen T. Magee.

“Always better to live off someone else’s belly fat,” said Peter.

“A lesson that brokers and lawyers learned early,” cracked Evangeline.

Arsenault gave her a look. “Watch out for her, Owen T. She’s the sarcastic one.”

Evangeline sipped her wine. “Peter can be sarcastic, too. We’re a tag team.”

“Allow me to impress the sarcasm right out of you.” Arsenault pulled down a leather-backed ring binder with the dates 1775–1783 on the spine. He laid it on a table and flipped it open to reveal archive-quality plastic sleeves containing bills, bonds, certificates, and primitive scrip. “Some people collect swords and pistols from the Revolution, but these were the
real
weapons of American independence.”

He unsnapped the binder and took out one of the sleeves.

Inside was a bearer bond, issued in 1780. It did not look like much, about half the size of a modern dollar bill, rudely printed on thin paper.

“Picture a fledgling nation at war, a nation with no industry, no trade, a treasury in name only. They start printing money, but there’s nothing to back it up. No gold, no revenue, no promise of taxation. So it inflates faster than a dead horse in the hot sun. By 1780, a man needs forty dollars to buy what he bought with a buck in 1776. So Congress tries to get all that old currency off the market and replace it with a fresh issue.”

“The New Emission Bonds,” said Peter.

“We call them bonds today,” said Arsenault, “because in essence, that’s what they were. They had fixed rates of interest and dates of maturity.”

“But in Hamilton’s time,” said Owen T. Magee, “the term ‘bond’ referred specifically to bail and to notes put up by men handling public money.”

“Hence the term New Emission Money. But you can call them bonds.” Arsenault slipped one from its sleeve and placed it on the table. Then he swung a magnifying lamp over it and invited them to have a look.

Across the top were the words “State of New York,” the number of the bill, handwritten by the clerk who had sold it, and the words, “The Possessor of this Bill shall be paid One Hundred Spanish Milled Dollars by the Thirty-first Day of December One Thousand Seven Hundred and Eighty-five, with
INTEREST
in like money at the rate of five per centum per Annum, by the State of New York.” At the bottom, in handwriting as graceful as calligraphy, an ancient signature attesting to the purchase.

“Each state issued bonds as needed,” said Arsenault, “but here’s the cool part—”

With tweezers, he turned the bond over to reveal more engraving, the words “The United States” in black ink, blocked with red, and this: “The
UNITED STATES
ensure the payment of the within
BILL
and will draw Bills of Exchange for the interest annually, if demanded, according to the Resolution of
CONGRESS
of the 18th of March, 1780.”

“The bonds were backed,” said Owen T. Magee, “by the full faith and credit of the United States government.”

“A government operating under the Articles of Confederation. Look here”—Arsenault picked up the bond and held it above the light, to show them the watermark, the word “Confed—eration,” in two lines.

“And you’re suing the government to collect on these bonds?” said Peter.

“Under Article Six of the Constitution,” said Owen T., “which says that even the debts of the Confederation Congress will be honored by the new government.”

“If we win on all counts,” said Arsenault, “one hundred dollars from 1780 will render seven-point-four million. And I have two of these bonds.”

Peter whistled softly.

Arsenault turned to Evangeline. “He’s impressed. What about you?”

“You had me at Chassagne-Montrachet.”

Arsenault looked at her, as if deciding whether to be annoyed or amused. He chose amused. “Good answer.”

“Why are these bonds still uncashed?” asked Peter.

“Because Hamilton settled most federal obligations when he recapitalized the debts of the Revolution,” said Owen T. Magee. “But the New Emission Bonds had been issued by the states, and they issued them at different times, for different purposes and different funds, which caused confusion and not a little controversy.”

“So some states honored the bonds,” said Arsenault, “but some only honored them if you lived in the state. Some, like Rhode Island, wouldn’t honor any. That’s one of the reasons that the other states called it
Rogue
Island.”

The lawyer leaned close, so that the perspiration on his upper lip glistened politely in the light from the magnifying lamp. “Some states sent the bondholders to the federal government for redemption. And the feds sent them back to the states.”

“A literal case of buck-passing.” Arsenault returned the bond to its envelope. “Nevertheless, Hamilton called these bonds a debt of honor in his
Report on Public Credit
. But he put off the fight over them to win other points in 1790. When he brought up the subject again in 1796, Congress had other things to do. So the bonds fell between the cracks. Messy. Very messy.”

“Why hasn’t anybody fought this case before?” asked Evangeline.

“People have. But the government always stonewalls, saying that they determine who can sue them and who can’t.”

“Sovereign immunity?” said Peter.

“Correct,” said Arsenault. “But none of them ever had Owen T. Magee.”

The lawyer flashed a quick smile. Nixonian, thought Evangeline.

“We believe that these bonds have a prior claim on the credit of the United States,” said Owen T. Magee. “While we lost in the lower courts, we have an originalist Supreme Court, and my argument about Article Six struck a note with them. So, too, did our position on compound interest.”

“Yes,” said Arsenault. “While the bonds have five-year maturities, the bearers were denied the opportunity to reinvest and hence lost the use of the money for all those years. So the interest should be compounded.”

“It’s the same position that the IRS takes when they penalize you,” added Magee. “We expect that when the decision is rendered on Friday, we will win.”

“Which brings us,” said Austin Arsenault, “to the subject of yourself . . . or yourselves. We want you to help us find as many of these bonds as possible.”

And luncheon was served.

S
O THEY SAT
in the dining room, in shafts of sunlight that reflected off the mirrored walls. They ate Dover sole flown in from Arsenault’s English supplier and washed it down with more Chassagne-Montrachet ’06.

Peter thought the mirrors were appropriate, considering what Kathy Flynn had said about Arsenault. But there was something genuine about his enthusiasm. Owning two bonds worth seven and half million dollars each would make anyone enthusiastic.

Evangeline tasted the fish and said it was as good as the wine.

Arsenault accepted the compliment as if he had caught and cooked it himself.

Peter let the small talk fade, then he dove back in. “So, you want me to find as many bonds as possible? Aren’t there a lot of other people looking for them, too?”

“Most of the bonds are held by institutions like your Massachusetts Historical Society,” said Owen T. Magee. “They’ve kept them for their historical value. Until our suit, these bonds retailed as historical paper for fifteen hundred to three thousand apiece. But everything that’s on the market has been snapped up.”

“Then why are we here?” asked Evangeline.

“Or more directly,” asked Peter, “why didn’t you contact me earlier?”

“For starters”—Arsenault took a taste of fish—“New Yorkers usually don’t turn to Boston for help. We have a lot of good rare document people right here in the city.”

“But I’m the best at it,” said Peter.

“We were working with Oscar Delancey,” said Owen T. Magee. “How could we not, with a great old New York name like that?”

“Oscar Delancey is Jewish,” said Peter. “His ancestors came from Poland three generations ago. They just thought it was a good name if you wanted to get by in the big town. Have either of you seen him recently, by the way?”

Arsenault and Magee exchanged glances.

Peter and Evangeline did, too.

“Wherever he is or whatever he’s up to,” said Arsenault, “he’s not giving us much help at the moment, which means he’s doing America a disservice”—Arsenault set down his knife and fork—“because we aren’t in this for the money.”

“Not in it for the money?” said Evangeline, with the I-don’t-believe-a-word-you’re-saying deadpan that Peter loved.

“Then why
are
you in it?” asked Peter.

“I believe I told you,” said Arsenault. “To save America.”

“How,” said Evangeline, still deadpanning, “are you going to do
that
?”

Arsenault laughed, though it did not sound genuine. It was more like one of the repertoire of sounds that a man of stature makes to express an opinion without words. This one sounded—what—amused? Condescending? Condescendingly amused? “By spreading the alarm about the deficit, of course. What do you think the Paul Revere Foundation has been doing?”

“Hamilton spoke of a national debt being a national asset, if properly managed,” said Owen T. Magee. “We stopped managing our debt in the Reagan years.”

“I thought all you rich Wall Street types were Republicans,” said Evangeline, “and you’re criticizing the rightie Jesus?”

“History will be kind to Reagan,” said Owen T. Magee. “He pulled us out of a recession and raised the standard of living for a generation. The supply-siders told him he could cut taxes and increase military spending and with a few bumps along the way, we’d still have thirty years of prosperity.”

“He only got twenty-eight,” said Peter.

“In American politics, twenty-eight years is like an ice age, a temperate period, and a century of global warming, too. By the 2008 meltdown, it was somebody else’s problem. Now our grandchildren are up to their eyeballs in debt before they’re born. You heard me say all this on CNBC yesterday. And I’m told that you heard Kathy Flynn’s condensation-to-evaporation-to-rain speech this morning.”

What Peter heard was the sound of Evangeline’s fork hitting the plate. Though the Dover sole was nicely filleted, he suddenly felt as if he had a bone in his throat.

He saw the eyes of Arsenault and Magee shifting to Evangeline, then to her fork.

So he made only the briefest eye contact with her. A clanging fork, a tightening of her features . . . but she was not the sort to show anything to outsiders. She simply put her fork back to work on the fish and acted as though it had just slipped from her hand.

After another mouthful, she recovered and said, “Most people aren’t paying attention to stuff like this.”

“True,” said Arsenault. “They’re too busy voting for the next American Idol. We need to shock them, wake them up with a tangible symbol of the national debt.”

“The two bonds.”

“Not two bonds,” said Arsenault. “A
box
of bonds.”

“A box?” said Peter. “Nobody said anything about a box of bonds.”

“A box of two hundred,” said Arsenault, “worth twenty thousand dollars in 1780, now worth one-point-four billion. The unretired debt of the American Revolution. What better symbol could there be of the consequences of kicking your troubles down the road? How many stories would that spawn on cable news, in newspapers, in books?”

“And of course, you’re planning to redeem them,” said Peter.

“If we find them, we cash one a week, and we keep the story going for years,” said Owen T. Magee.

“That’s what it’s going to take,” said Arsenault, “to get people thinking.”

“To save America from itself,” said Owen T. Magee.

Evangeline said, “If you really cared about, that you wouldn’t cash them at all.”