Page 35 of Murder at Somerset House (A Wrexford & Sloane Mystery #9)
“I dressed as quickly as I could once my maid brought in the early morning post!” Alison hurried into the parlor, one diamond earbob not quite properly fastened in her right lobe. “Good heavens, what a surprise!”
“That is putting it mildly.” Charlotte pushed back from her desk and put down her pen. “I am composing a number of lists for all that needs to be done—a complete wardrobe appropriate for an aristocratic young lady, sundries, books, pigeons—”
“Pigeons?” exclaimed the dowager. “Is that some sort of new-fangled euphemism for a feminine product like skin cream for wrinkles?”
“No, I am speaking of the actual bird, specifically messenger pigeons. Wrex is taking Eddy to select some squabs for her to raise and train here on the roof.”
“What an unconventional hobby for a girl.” Alison smiled. “She should fit right in here.”
“I hope so.” Charlotte looked pensive. “Eddy seems awfully composed for her age—she’s only twelve years old, though she will turn thirteen in several months. I confess, it’s hard to know what she is thinking.”
“Give it time,” counseled the dowager. “She’s been here less than twenty-four hours.”
Charlotte closed her eyes for a moment, knowing it was unreasonable to feel a spurt of panic. “You’re right, of course. I will be depending on you for advice over the coming days.”
“And you shall have it.” Another smile. “Perhaps more often than you might wish.”
Charlotte looked back to her lists and made a wry face. “I’m sure these will keep growing.”
“Don’t look so apprehensive, You’ve dealt with three independent-minded boys.”
“Yes, but girls are different and create a whole different set of complications.” She sighed. “I ought to know.”
Alison took a seat on the sofa by the hearth and gestured for Charlotte to join her.
“Bring your lists, and I’ll have a look at them.
And then, when Eddy returns, let us take her to Gunter’s before the whirlwind of practical tasks begin.
There’s nothing like their iced confections to make all the troubles of the world seem to melt away. ”
Cordelia looked up from the sheet of equations and half-dozen open books spread out on the dining room table. “Oh, forgive me, Raven! I didn’t hear you come in. You need not stand in the shadows. You are always welcome to enter and make your presence known whenever you come to visit.”
She put down her pencil with an expectant look.
“Besides, I am all agog to hear more about the newest member of your family. M’lady sent me a note about the unexpected arrival of Eddylina, but I wish to give them both some time to settle in to this momentous change in life before Kit and I rush over to make her acquaintance. ”
Raven sidestepped the request for information by simply ignoring it. He moved closer and craned his neck to see the string of numbers and symbols written on the paper. “What are you working on?”
“We’ll get to mathematics in a moment.” Cordelia gave him a quizzical look. “Is there a reason you don’t wish to talk about Wrex’s half-sister?”
“There isn’t much to say. She’s a hair taller than me, has dark copper-tinged curls, and sings exotic songs to animals.”
Cordelia waited, but when it became evident that nothing more was forthcoming, she raised her brows. “Why is it that I sense you’ve not mentioned everything?”
Another sliver of silence.
“And she has a razor for a tongue,” he blurted out in a rush.
She gestured for him to take the chair next to hers. “I gather your first impressions were not overly favorable.”
Raven fisted his hands in his lap after slipping into his seat. “Doesn’t matter what I think,” he muttered. “Like it or not, we’re stuck with her. She has nowhere else to go.”
Repressing a sigh, Cordelia took her time in composing a response. Change did not come without growing pains for adolescents, but she wished to offer more than such a well-worn platitude.
“Have you considered that perhaps Eddylina—”
“Eddy,” he interrupted. “She prefers to be called Eddy.”
“Perhaps Eddy is very aware of the fact that she’s alone in the world, and it makes her feel scared and vulnerable,” suggested Cordelia. “And so she acts tough and aggressive to hide her fears.”
“Perhaps,” he conceded.
“I’m just saying that you might consider giving her a chance. A great many of us don’t show to advantage in a first encounter.”
“Like me, for example,” announced Sheffield as he crossed into the room from the corridor. He dropped his hat on the corner of the table and shrugged out of his overcoat. “Cordelia thought I was an utter lackwit when we met.”
“You exaggerate,” she said.
“Not by much.” Sheffield winked at Raven before adding, “Whom are we discussing?”
“Wrex’s half-sister,” intoned Raven.
Sheffield’s face went through a series of odd little contortions. “S-Since when does Wrex have a half-sister?”
“Since yesterday evening,” said Cordelia. “Charlotte’s note arrived this morning just after you left for your meeting with David Ricardo.” She went on to explain what she knew, embellished by a few grudging details from Raven.
Sheffield looked about to probe more into the matter, but a warning look from his wife speared him to silence.
“I have some information to report as well, but as I’m famished, I’m going to have Cook fix me a cold collation in the kitchen.
I’ll rejoin you in a bit.” A pause. “Once I’ve digested both my food and this momentous news. ”
After slanting a look at Raven’s still-grim expression, Cordelia pulled several of the books closer. “I’m working on some formulas to model the effects of ‘selling short.’ Do you remember from our last tutoring session what that is?”
“I think so,” Raven said, scanning the mathematical expressions on the page. “Short selling is when an investor wants to bet on a security declining in value—and making a profit if the price of the security drops.”
“Correct,” said Cordelia. “Do you remember how it works in practice?”
“I think so,” said Raven, his scowl softening.
“An investor borrows a security, usually from a stockjobber or broker who owns it, and sells that borrowed security to a buyer at the current price. But since the security doesn’t have to be delivered to the buyer for a set number of days—that number varies a lot—the investor is betting that the security price will decline so that he can purchase it at a cost lower than that for which he sold it.
He then returns the borrowed security to the jobber or the broker, paying only interest or a commission to the lender and pocketing the rest of the difference between the two prices as profit. ”
“Exactly right,” said Cordelia. “Now there are other costs and charges involved in actual practice which have to be captured in the mathematics, and the risks to the investor are effectively unlimited if he loses his bet and the stock price rises rather than falls. I’m also trying to work that into the mathematics here. ”
The last vestige of Raven’s brooding was quickly banished by the mathematical challenge. “Oiy, I see what you’re aiming for.” He plucked a sharpened pencil from the pile of extras and helped himself to some blank sheets of paper.
“Hmm, what if …”
The two of them worked in companionable silence, punctuated by the scratch of their scribbling and whispery flutter of turning pages.
Sheffield soon reappeared, dusting the lingering crumbs of a jam tart from his fingers.
“You’re making me feel like a sloth,” he intoned, observing the growing pile of equations. “Though in truth, I haven’t been entirely idle today.”
Cordelia didn’t miss the edge in his voice. She paused and pushed back from the table. “What is it that you and Ricardo were discussing?”
“To begin with, I have been learning a great deal more about the type of securities called Consolidated Annuities and their importance to our nation. I must admit, I never understood their true significance.”
“Yes, I’ve learned from Ricardo that they are a key to our country’s economic strength,” said Cordelia.
“How so?” asked Raven.
“First, a quick history lesson,” she replied with a smile.
“They were the brainchild of Sampson Gideon, who in 1750 convinced our prime minister that almost all of our government debt going forward should be issued in the form of 3 percent ‘Consolidated Annuities’—which quickly became known as consols for short.”
“As I understand it, consols are perpetual bonds,” responded Sheffield.
“That is, they have no maturity, but keep on paying ￡3 of yearly interest for each ￡100 of face value of the bond forever. The government has the right to redeem a bond from the holder at 100 percent of face value at any time, but other than that, a consol goes on paying indefinitely.”
Raven frowned. “Why is that so brilliant? Don’t interest rates fluctuate, especially in times of war or other turmoil?”
“You’ve asked a key question! And the answer is why Mr. Ricardo considers Mr. Gideon a genius,” replied Cordelia.
“The government discounts the price of consols when interest rates rise, as they do in times of war or economic troubles, like bad harvests. For example, if interest rates generally rise to 6 percent, the government will sell a 3 percent consol with a ￡100 face value for ￡50.”
“And that makes consols a very attractive buy for investors,” mused Sheffield.
“When the country settles back into better times, interest rates return to their lower, non-crisis levels, and investors who purchased discounted consols may make large capital gains. Even after the American War for Independence, for example, which didn’t work out as the king and his ministers planned, the consols issued to pay for our army rose over 30 percent after the war ended, and numerous investors made fortunes. ”
Raven nodded in understanding. “Because if they have purchased a consol with a ￡100 face value for ￡50, they are suddenly much wealthier when interest rates return to their normal range and their consols accordingly trade at much higher values than the discounted rate at which they were purchased.”
“Precisely,” said Cordelia. “So, let me summarize, without getting lost in the mathematical details. The consol’s low annual interest charges for the government and the fact that the country never has to repay the principal unless it voluntarily chooses to redeem the debt have allowed Great Britain to afford large armies, navies, and colonial administrations around the world.
At the same time, the capital gains from consols have created significant private wealth, which, along with the economic boost from increased government spending, have provided a huge part of the financing for our innovations in technology and industrialization. ”
“Other nations would love to copy this model of financing, but only our country has been able to implement it, thanks to our unique record of political stability and sound management of the national debt,” Sheffield pointed out.
“As one of our top stockjobbers, Mr. Ricardo functions as a middleman to ensure a smooth and constant market on which to buy and sell these vital bonds.”
“Our mathematical calculations can be of enormous help to him in setting his prices and running these trades quickly and profitably,” said Cordelia.
“Then let us get back to work,” said Raven
“Before you do so, I have some other information to report.” Sheffield altered his stance, his demeanor turning more serious.
“Ricardo has close contacts with many of the prominent traders and bankers who do business internationally, and he gets constant updates on what is going on across the Channel.”
His lips pressed together for a moment. “I have just learned from him that when Napoleon reached Grenoble, he walked unarmed toward the soldiers assigned to arrest him and bared his breast, telling them to shoot him if they thought he was the enemy. Instead, the soldiers threw their allegiance to him and joined his march on Paris.”
Cordelia swore under her breath.
“The next day, Napoleon and his troops encountered Marshal Ney, who had been dispatched by the French king with a force of six thousand men to arrest the former emperor and bring him to Paris in an iron cage,” continued Sheffield. “Ney mutinied, as did his troops.”
“You must be sure to visit Charlotte later today and tell her these details. She may wish to use them in creating her next drawing,” said Cordelia. After a fraught pause, she added, “Do you think Napoleon will march into Paris unopposed?”
“I think it quite likely. As does Ricardo.” Sheffield blew out his breath. “My most important news is that he told me the government is already making discreet inquiries about financing a much larger loan than anticipated for this year.”
“Because causing countless deaths and the devastation of a continent does not come cheaply,” intoned Cordelia with bitter irony. “Heaven help us.”
“I am loath to count on divine intervention,” said Sheffield. “If utter disaster is to be avoided, I think the task is going to fall to us mere mortals.”