said life in a great hotel while looking for a flat had taught her that even quite old ladies who went out evenings without an iron hand to guide them smoked and everything.

Once I pulled mother through a year of female smoking in London while I had a teacher at home instead of going to school. The arraignment made it possible for me to fix the culprit at all hours with my eye until she dared not so much as strike a match without telling me first it was to light the gas. But the arraignment was not so successful as you might think, however, owing to it turning out that the teacher had once hunger struck, and her example kept mother's spirrit alive.

But now with school and basketball the arraignment was very bad for keeping mother straight. On top of everything my own life grew interesting owing to our class deciding to give a dance in the gym, and Clay not asking me could he have the pleasure for a whole day after we decided.

Thus all in all nothing could be done but hope for the best, and mother kept on missing father, which was food for thought. But the whole whited sepulcher fell one night when, while studying Cicero after dinner, I heard her telephone for a taxi. Vainly I kept silence to show my disapproval, for in ten minutes she left in best spangled evening dress. "Night, sweetheart," said she, braking the silence. some hours later by opening my door and looking in to find me still awake.

"Where have you been?" was all the comfort she got out of me.

"Want your other window open?" asked she to evade the issue, and crossed the room. Stiffly alert, I rose in bed and sniffed.

"Who's

said I.

"Nobody.

night."

here?"

Good

"Is father home?"

"No, dear, of course not. Now go sleepy bye-its eleven o'clock."

"Come here."

First she fixed the curtain and then she hung my clothes over a chair for an object lesson which always makes me mad. After that she came, and putting an arm up I dragged her down. Yessir! Clinging in her hair! I guess I know smoke when I smell it!!

"Dont sniffle, honey. Here's my hanky," said she, while I wanted to cry out did she think I was blind not to smell that smoke, but blew instead with a braking heart and only asked: "What's in your hair?"

"Something the girl at Lathrops uses to shampoo. Like it?"

Like it! If the

of her without thinking of that perfume, which is like the best churches, only fresher and makes me want to be Christian and forgiving to the whole world. So now I had to grit my teeth as I undid snaps to remember there was a disagreeable job to be done.

"All this," said I. "Meetings, going down to the capital-out nights. What do you suppose solid Southerners like the Wares would think if they knew I didn't have a mother home nights?"

"The Wares think very well of your family." "Its because they haven't found out yet. They are innocent of all except that father has some distinction, and that before things got so bad you knew just how much mint the senator liked in his glass. Only to look at Clay's mother is to see that she is so delicate a breath would blow her away."

"Yes-that's what makes her so amusing-looking that way."

"Mother! All I ask is that you do not cast aspershuns on my friends. Cant you understand that I am trying to tell you that it is a girl's family which counts. If you would try to be the right kind of a family to me, I would never need to worry about my own actions, as all would be overlooked on your account. Family is everything, and I have a life to lead."

"Well, but-" said she, twisting so I could get at

next day in school I folded a paper in the back of my Latin Comp and wrote to father.

"You are needed at home," I cried in pencil, as pens attract more attention from the authorities. "Mother is leading her own life. Address me at school."

Then sticking down the envelope, I spent ten cents of my lunch money on a special-delivery stamp and hoped for the best.

That evening mother spent at home wearing an innocent expression. I was not deceived, but continued to thrill with hope every time the elevator came up lest it was father arriving with an iron hand.

He did not come. But clinging to the last straw, I kept my faith until the third period in school next day, when a special delivery arrived and was handed to me, which aroused astonishment and envy in all. "Appalled by the picture presented," read I. "But having no influence with party named, spare my own feelings by remaining away. Enclosed find unlucky two-dollar bill to be wasted judiciously. Suggest that, by way of cooperation, you send me part of the next issue of fudge as I feel that Proverbs 21:14 is not a one-way signpost."

Levity! So that was that! I had no father!! After spending the two-dollar bill the future looked even darker than before, and I was pre

girl at Lathrops shampoos much with that stuff, the camels'll get her.

"Mother," said I, making my voice throb with pain, "how long is this going on?"

"What going on? Can you unhook me up the back, dear-it's so hard without father."

And with childish innocence she turned around for the task.

the shoulder. "Look out for the spangles, they come

off. Well, but I have a life to lead too. And with father away and my baby all grown up-"

She reached her hanky back from under my pillow, and hope sprang eternal, as once you get her to crying she is putty to the hands.

"There, there," said I. "Just be sensible and look the thing in the face with courage. You wont mind after you get used to it."

"I was just reaching for my handkerchief because its my best one and I dont want you carrying it off to school in the morning," said she and sailed callusly off with her dress nicely undone.

She was not putty to my hands! I had no mother!!

However, there was one last ditch left to burn, and

pared for any measure, however radical.

Thus the happy day arrived when our class was to give its dance. We found that balloons for decorating were far, far cheaper bought flat by the dozen than singly from the balloon man blown up. So not being sure how much we would make on the dance, and having promised it to the French orphans anyhow, we economized by blowing our own balloons by hand until we were so tired we thought our jaws would drop. And thus it was that I came home late from school to get dressed and have my dinner.

M there!

OTHER was not
If you
have never come

into our flat when

mother is not there,
you dont know how
odd and lonely it
seems. And now, when
I needed comfort and
assistance into my
pink taffeta, she was
nowhere to be found!

A note and fifty cents reposed on my dressing table. The fifty cents was bribery thrown out for French pastry, and the note said to ask Daffny to stay and hook me up. Daffny is our oldfashioned Southern darky whose mother resides in North Carolina with twenty-three children and two boarders. From the way Daffny took the news about hooking up, I feared her mother would have all her children about her in North Carolina soon again. But the blame rested with mother, which was a blessing. So grasping the fifty cents firmly in my palm I dashed after Napoleons-only to learn it was a Jewish holiday and all the French pastry shops were closed. Imbittered, I returned.

We had a prize dance toward the end of the party in the gym that night. But the judge being Dr. Harker, our principal, the dancing was judged by how far they held each other away. Thus nobody had the ghost of a chance except Hester and her brother, who had that together owing to a mix-up in programs, and were deeply resentful. (Continued on page 19)

blamed the Federal Reserve Board instead of attempting to review the whole situation. The Federal Reserve Board excuse gave the customer something to get his teeth into; something tangible to be angry about. And it is better to have a man entirely angry at something than vaguely afraid of the unknown. Reaction and readjustment were inevitable. Reserve Board has not winced at being blamed for things that it did not or could not do--and if blaming it helps to ease the general situation, it will bear unmerited censure cheerfully.

The

Of

We all agree that the country should begin to work back to normal. No one knows quite what normal is. We now regard the year 1913 as normal, although at the time very few would have agreed to it. We were not doing a notable volume of business in 1913. But all agree now that 1919 and 1920 were not normal. The best definition that I know of normaland it is a relative and not an absolute term-is a period when the general community has become accustomed to conditions and accepts them without any more than the usual degree of dissatisfaction. course it was the war that upset us. In 1915 the Allies began to look upon the United States as a storehouse. They had some money and a great deal of credit-enough of both to put buying power into an insistent demand and to get quick deliveries with little regard to price. During 1915 and 1916 we received in part payment for our goods more than a billion dollars in gold, which greatly broadened our credit base. Then we entered the war, and about that time the Federal Reserve Act was amended so that the lawful reserves of the member banks, instead of as heretofore being carried in part in gold or lawful money in their own vaults, had to be carried as a credit upon the books of the Federal Reserve banks. The increased lending power of the Reserve banks which thus resulted made possible the extension of the necessary credit to enable our Government to float its vast issues of war-time obligations. Conditions were abnormal during the war, but we accepted them as a matter of course-as a part of the war. We ceased speaking of a million dollars with awe. People began to talk glibly in billions.

When the World Went Credit Mad

THEN

HEN came the armistice. That ended the war from a military standpoint, but it did not end the war in a financial sense, because our troops had to be brought back and demobilized, and the liabilities of the Government had to be ascertained and provision made for their settlement. Immediately after the armistice there was a lull in business-a period of hesitation and uncertainty. The world took stock. Then all at once the world found that it needed many things which could be had only, or to the best advantage, in the United States. Prices and wages bounded up, bank loans and, consequently, bank deposits increased, and speculation became rampant. The removal of war-time restrictions gave full rein to the exercise of individual judgment -or lack of judgment. Warnings were given scant attention, for, after the war tenseness and uncertainty, victory-optimism ran rampant. We were in for a new order of things, and to some the sky was the limit. Every man in his sober senses admitted that reaction must some time come, but many felt that it would affect others rather than themselves. Business was done largely on credit and, after a while, without regard to old standards of value. The word was passed along that we were on a new level of values. This was true in a way. It is not likely that we can, with so much credit afloat in the world, go back permanently in the immediate future to the prewar prices. But this "new level" was interpreted as an ever-rising price scale. This, of course, could not be; prices cannot rise forever. The European nations, anxious for goods and food after their long trial, and plentifully supplied with at least the evidences of credit, bought lavishly from us and without particular regard to price. They were not paying balances in cash; for a while they, too, had large credits with us, and they bought whatever we would sell and at high prices-provided the trade balance did not have to be paid in gold. A large part of the world went credit mad, and shortly made what it thought was a new discovery-that credit would take the place of work. It was seen that great fortunes might be made out of buying and selling. Men changed from being producers to brokers. There was much talk about speculators and profiteers; but those who were neither speculators nor profiteers, nor both, were too often only those who had not the opportunity.

If all of this trading had increased production

very high, and the value of a farm depends upon the crop income. With high prices for crops the traders started to mark up farm land upon the theory that prices would never fall. The farmers justly complained of the prices they had to pay, but many thought that some special providence would protect the prices of their products. Instead of putting by against a rainy day the surplus from the sale of their crops, many spent their money for luxuries and others bought more land. Down in a Southern State I know of a man who had a large plantation; he sold his cotton at forty cents. That gave him a comfortable surplus. He bought an adjoining plantation for $200,000-which was about double its normal value. It could be made to pay only if cotton remained around forty cents. He paid $50,000 down and gave three notes of $50,000 each, payable a year apart. Now cotton is very far from forty centsso far that he cannot meet the second note. The seller discounted the notes and spent his "handsome profit"-his paper profit-and he has to find immediate money to meet his liability as indorser. There are many similar cases.

The West had a boom. In one State it has been estimated that the people "invested" many millions of dollars in new promotions, but the big profits left them enough money to indulge in land speculation as well. This started in 1919. Some farms have since then changed hands half a dozen times, each

sale being at a higher price. And it was nearly all on credit; the cash payments were small. As an example: A man in Chicago received a wire from a farm broker suggesting the purchase of a tract of land upon his guaranty to resell it within ten days at an advance of at least $5,000. The sale required $15,000 cash-partly for the salesman's commission. The Chicago man put up the money and bought the farm. Within ten days came the resale as agreed, and at $90,000, which gave the promised net profit of $5,000. But when the papers were ready to be signed the "investor" found that he had sold for a cash payment of $1,000; the balance in notes secured by a third or fourth mortgage. At present prices of corn and hogs, the land is not worth nearly the amount that he made himself liable for. This "investment" has netted him a farm that does not pay its fixed charges. His only consolation is that many others are in the same boat. They cannot be said to have gambled; one cannot have gambling without the element of chance. There was no chance that prices would stay at the high level of the spring of 1920. Without too free a use of credit these transactions could not have taken place.

HE Federal Reserve banks do not lend to indi

Tvidual borrowers, nor do they control the lending

policies of the member banks. Every individual bank has a supply of credit depending upon its reserves; within legal limitations it can employ that as it sees fit. The Federal Reserve Bank can only say to member banks that it will or will not rediscount. It can rediscount only short-time paper, defined in the Federal Reserve Act as "eligible"-and has no dealings with nonmember banks.

Easy credits invited speculation, and the impairment of the railway service prevented the paying off of loans by the sale of goods in market. Credits were "frozen" all over the country. Ordinarily banking credit flows like a stream; it is here to-day to move cotton, there to-morrow for wheat, and so on through the various processes. If this flow is stopped anywhere, credit is dammed up that will be needed shortly by some other business. The holding of commodities, either through inability to transport or as an investment, tied up a vast amount of credit; land speculation tied up more, and then with the marking up of prices more and more money became needed in business. The credit structure began to tower; it became top-heavy and threatened to rock. There was ample credit for all legitimate businessthere has never been a lack of credit for that. But there was not enough to provide for every form of speculation, promotions of all sorts, and an orgy of extravagance.

There was an important conference held last May with a number of Federal Reserve bankers from all sections of the country. There was a full discussion of the credit situation. It was decided that no drastic steps should be taken, but that all banks should be urged to use greater discretion in extending credit, and to give preference to loans for essential purposes, the banks themselves to be the judges of essen-tiality. At about that time the Reserve banks raised their rates of rediscount. There was no rationing of credit-no autocratic or bureaucratic interference, but the more democratic policy of self-determination.. The step was taken in time. The rapid expansion of credit was checked, and the readjustments, which were world-wide in their scope, and brought disaster in other countries where the expansion of credit and currency was most pronounced, proceeded in this country without bringing on a money panic and with far less distress than would have been the case had attempts been made to maintain the rate of expansion.

There has been much complaint of "constant and drastic deflation." This is alleged to have been the cause of the depression, but from the periodical reports of the national banks and the weekly reports of the Federal Reserve banks it is evident that the deflation which took place during 1920 was not a deflation of credit or currency. The banks of the country have, generally speaking, responded to the urgent needs of those dependent upon them for credit accommodation, and, while exercising care and discretion in making new loans, have not resorted to precipitate or drastic means of forcing collections. The member banks have received ample accommodations at the Federal Reserve banks, which have in turn extended accommodations to each other. There has been no deflation for the sake of deflation. But expansion was and had to be checked. From September, 1919, to January, 1920, a period of scarcely more than four months, (Continued on page 27)

12

Fire-Tongue

By Sax Rohmer

Illustrated by J. C. Coll

Paul Harley has heard his death sentence pronounced. He is a prisoner in the hands of the mysterious Fire-Tongue. The adventures which have had their climax in his capture began when, bending over the body of Sir Charles Abingdon, Harley picked up a trail that led him from twentieth century London around the corner into the ageless, tireless workings of an Oriental secret society. He meets Nicol Brinn, American millionaire and adventurer, and Phyllis Abingdon, Sir Charles's daughter. Their salvation depends on Harley's intelligence and courage. In this chapter he is about to meet his greatest test

Ο

IX.-Behind the Screen of Gold

N the following morning the card of his excellency Ormuz Khan was brought to Phyllis Abingdon in the charming little room which Mrs. McMurdoch had allotted to her for a private sanctum during the period of her stay under this hospitable roof. "Oh," she exclaimed, and looked at the maid in a startled way.

"I suppose

I must see him. Will you ask him to come in, please?"

A few moments later Ormuz Khan entered. He wore faultless morning dress, too faultless; so devoid of any flaw or crease as to have lost its masculine character. In his buttonhole was a hyacinth, and in one slender ivory hand he carried a huge bunch of pink roses, which, bowing deeply, he presented to the embarrassed girl.

"Dare I venture," he said in his musical voice, bending deeply over her extended hand, "to ask you to accept these flowers? It would honor me. Pray do not refuse."

"Your excellency is very kind," she replied, pain"It is more fully conscious of acute nervousness. than good of you."

"It is good of you to grant me so much pleasure," he returned, sinking gracefully upon a settee, as Phil Abingdon resumed her seat. "Condolences are meaningless. Why should I offer them to one of your acute perceptions? But you know-" The long, magnetic eyes regarded her fixedly: "You know what is in my heart."

Phil Abingdon bit her lip, merely nodding in reply. "Let us then try to forget, if only for a while," said Ormuz Khan. "I can show you so easily, if you would consent to allow me, that those we love never leave us."

The spell of his haunting voice was beginning to have its effect. Phil Abingdon found herself fighting against something which at once repelled and attracted her. She had experienced this unusual attraction before, and this was not the first time that she had combated it. But whereas formerly she had more or less resigned herself to the strange magic which lay in the voice and in the eyes of Ormuz Khan, this morning there was something within her which rebelled fiercely against the Oriental seductiveness of his manner.

HE recognized that a hot flush had covered her

Sehere noe the image of Paul Harley, bronzed,

gray-eyed, and reproachful, had appeared before her mind's eye, and she knew why her resentment of the Persian's charm of manner had suddenly grown

so intense. Yet she was not wholly immune from it. "Does your excellency really mean that?" she whispered.

A smile appeared upon his face, an alluring smile, but rather that of a beautiful woman than of a

man.

"As you of the West," he said, "have advanced step by step, ever upward in the mechanical sciences, we of the East have advanced also step by step in other and greater sciences."

"Certainly," she admitted, "you have spoken of such things before."

"I speak of things which I know. From that hour when you entered upon your first karma, back in the dawn of time, until now, those within the evermoving cycle which bears you on through the ages have been beside you, at times unseen by the world, at times unseen by you, veiled by the mist which men call death, but which is no more than a curtain behind which we sometimes step for a while. In the East we have learned to raise that curtain; in the West are triflers who make like claims, but whose knowledge of the secret of the veil is-" He snapped his fingers contemptuously.

The strange personality of the man was having its effect. Phil Abingdon's eyes were widely open, and she was hanging upon his words. Underneath the soft effeminate exterior lay a masterful spirit-a spirit which had known few obstacles. The world of womanhood could have produced no more difficult subject than Phil Abingdon. Yet she realized, and became conscious of a sense of helplessness, that under certain conditions she would be as a child in the hands of this Persian mystic, whose weird eyes appeared to be watching not her body, nor even her mind, but her soul, whose voice touched unfamiliar chords within her-chords which had never responded to any other human voice.

It was thrilling, vaguely pleasurable, but deep terror underlay it.

"Your excellency almost frightens me," she whispered. "Yet I do not doubt that you speak of what you know."

"It is so," he returned gravely. "At any hour, day or night, if you care to make the request, I shall be happy to prove my words. But," he lowered his dark

"Oh! tell me, tell me!"

"I am here to tell you, Miss Abingdon. Mr. Harley feels that his absence may have distressed you." "Yes, yes," she said eagerly.

"But in pursuit of a certain matter, which is known to you, he has found it necessary in the interests of his safety to remain out of London for a while."

"Oh," Phil Abingdon heaved a great sigh. "Oh, your excellency, how glad I am to hear that he is safe."

The long, dark eyes regarded her intently, unemotionally, noting that the flush had faded from her face, leaving it very pale, and noting also the expression of gladness in her eyes, the quivering of her sweet lips.

"He is my guest," continued Ormuz Khan, "my honored guest.'

"He is with you?" exclaimed Phil, almost incredulously.

"With me, at my home in Surrey. In me he found a natural ally, since my concern was as great as his own. I do not conceal from you, Miss Abingdon, that he is in danger."

"In danger?" she whispered.

"It is true, but beneath my roof he is safe. There is a matter of vital urgency, however, in which you can assist him."

hand gracefully. "I beg you, do not misunderstand me. In the first place, would Mr. Harley have asked you to visit him at my home, if he had not been well assured that you could do so with propriety? In the second place, should I, who respect you more deeply than any woman in the world, consent to your coming unchaperoned? Miss Abingdon, you know me better. I beg of you, in Mr. Harley's name and in my own, prevail upon Mrs. McMurdoch to accept the invitation which I bring to lunch with me at Hillside, my Surrey home."

He spoke with the deep respect of a courtier addressing his queen. His low, musical voice held a note that was almost a note of adoration. Phil Abingdon withdrew her gaze from the handsome ivory face and strove for mental composure before replying.

Subtly, insidiously, the man had cast his spell upon her. Of this she was well aware. In other words, the thoughts were not entirely her own, but in a measure were promptings from that powerful will.

Indeed, her heart was beating wildly at the mere thought that she was to see Paul Harley again that very day. She had counted the hours since their last meeting, and knew exactly how many had elapsed. Because each one had seemed like twelve, she had ceased to rebel against this sweet weakness, which, for the first time in her life, had robbed her of some of her individuality, and had taught her that she was a woman to whom mastery by man is exquisite slavery. Suddenly she spoke.

"Of course I will come, your excellency," she said. "I will see Mrs, McMurdoch at once, but I know she will not refuse."

"Naturally she will not refuse, Miss Abingdon," he returned in a grave voice. "The happiness of so many people is involved."

"It is so good of you," she said, standing up. "I shall never forget your kindness."

He rose, bowing deeply-from a European standpoint, too deeply. "Kindness is a spiritual invest

ment," he said, "which returns us interest tenfold. If I can be sure of Mrs. McMurdoch's acceptance, I will request permission to take my leave now, for I have an urgent business appointment to keep, after which I will call for you. Can you be ready by noon?" "Yes, we shall be ready."

Phil Abingdon held out her hand in a curiously hesitant manner. The image of Paul Harley had become more real, more insistent. Her mind was in a strangely chaotic state, so that when the hand of Ormuz Khan touched her own, she repressed a start and laughed in an embarrassed way.

She knew that her heart was singing, but under the song lay something cold, and when Ormuz Khan had bowed himself from the room, she found herself thinking, not of the newly departed visitor, nor even of Paul Harley, but of her dead father. In spite of the sunshine which flooded the room her flesh turned cold, and she wondered if the uncanny Persian possessed some strange power.

Clearly as though he had stood beside her, she seemed to hear the beloved voice of her father. It was imagination, of course, she knew this; but it was uncannily real.

She thought that he was calling her, urgently, beseechingly. "Phil . . . Phil . . ."

PAUL

AUL HARLEY raised his aching head and looked wearily about him. Slowly, painfully, memory reasserted itself, and he realized that he had been rendered unconscious by the blow of a sandbag or some similar weapon while telephoning from the station master's office at Lower Claybury. How long a time had elapsed since that moment he was unable to judge, for investigation brought to light the fact that his watch had been removed from his pocket. He stared about him with a sort of fearful interest. He lay in a small, barely furnished room, having white distempered walls, wholly undecorated. Its few appointments were Oriental, and the only win

dow which it boasted was set so high in the wall as to be well out of reach. Moreover, it was ironbarred, and at the moment admitted no light, whether because it did not communicate with the outer world, or because night was fallen, he was unable to tell. There were two doors in the room, one of very massive construction, and the other a smaller one. The place was dimly lighted by a brass lantern which hung from the ceiling. Harley stood up, staggered slightly, and then sat down again. "My God," he groaned and raised his hand to his head. For a few moments he remained seated, victim of a deadly nausea. Then, clenching his jaws grimly, again he stood up, and this time succeeded in reaching the heavy door.

As he had supposed, it was firmly locked, and a glance was sufficient to show him that his unaided effort could never force it. He turned his attention to the smaller door, which opened at his touch, revealing a sleeping apartment not unlike a monk's cell, adjoining which was a tiny bathroom. Neither room boasted windows, both being lighted by brass lanterns.

Harley examined them and their appointments with the utmost care, and then returned again to the outer room, one feature of which, and quite the most remarkable, he had reserved for special investigation.

This was a massive screen of gilded iron scroll work, which occupied nearly the whole of one end of the room. Beyond the screen hung a violet-colored curtain of Oriental fabric, but so closely woven was the metal design that, although he could touch this curtain with his finger at certain points, it proved impossible for him to move it aside in any way.

He noted that its lower fringe did not quite touch the floor. By stooping down, he could see a few feet into some room beyond. It was in darkness, however, and beyond the fact (Continued on page 20)