Alison gave a curt wave. “I doubt I would understand it even if you tried to explain. So I’m happy to have you skip over a more detailed explanation.”
Raven appeared about to protest, but a look from Charlotte warned him to stay silent.
“Never fear, lad,” murmured Wrexford. “You’ll have a chance to learn the details.”
“And now,” said Cordelia, “I’ll recount exactly how Jamie became involved in Argentum.”
“Credula est spes improba,” murmured the professor.
“He who lives on hope dances without music,” translated Charlotte. “Alas, very true.”
“Actually, it should be me who explains my folly,” said Woodbridge. “I foolishly talked among my friends about how brilliant and clever my sister is.” He darted a fond smile at Cordelia. “I’m proud of her intellect, and I mentioned her wondrous mathematical talent and her work on a revolutionary Computing Engine. Shortly after that, I was approached by a friend, who asked if I might be interested in working on a hush-hush enterprise created by the East India Company. He gave me some Canterbury tale about the need for secrecy. It had something to do with not letting a trading consortium on the Continent get wind of the idea.”
“And you naturally believed him,” mused Charlotte.
“Yes. One assumes one’s friends are telling the truth,” replied Woodbridge. “And the fact that I was guaranteed a large profit made me even more gullible.”
“But why you in particular?” asked the earl.
“Because they said they needed a titled gentleman to secure bank loans so no one would know the money was being raised for the East India Company.”
“But why did the East India Company need to raise outside money?” asked Charlotte. “From what I’ve heard, their coffers are overflowing.”
“I know, I know. I should have smelled a rat.” His voice took on a bitter edge. “Cordelia did, but the henchman—the Cobra—had another Canterbury tale to explain the reason.”
Wrexford was suddenly beginning to see the pieces of the puzzle and how they fit together. “Actually, I would venture to guess that the board of directors doesn’t know about this enterprise. The conspirators are operating a private business within the Company.”
“Yes, that’s my surmise, though I have to believe it’s being run by someone in a very senior position,” said Cordelia. “Whoever put together the idea is using Company assets, like ships and trading partners, as part of their illicit scheme. And they’ve set up fraudulent trading accounts on the Company’s ledgers to keep track of the profits and pay out the bribes to the various partners, making them appear to be legitimate Company business. Henry Peabody somehow stumbled across the truth and tried to stop the scheme by giving us copies of the ledgers.”
“Who is the friend who approached you?” Wrexford asked, finally feeling they were getting somewhere.
“The Honorable David Mather,” answered Woodbridge. “But my sense is they have some hold over him, too, and forced him to find a likely pigeon.”
“It seems the dastards have been very careful to shroud themselves in secrecy,” mused the earl. “And clever. They had Mather find a respectable aristocrat with lands to guarantee any loan. Only Mather and Hoare’s bank knew of Woodbridge’s financial troubles, and they keep mum about such things. There’s a code of silence and discretion within the banking world.”
Sheffield looked at Cordelia’s brother. “Which meant the other banks willing to do business with you also kept the information private. And with one hand not knowing what the other was doing, you were able to borrow far more than your actual assets should have allowed.”
Woodbridge’s grimace confirmed the surmise.
“So, now we know the background,” intoned the earl. “What went wrong?”
* * *
The echo of the words seemed to linger, reverberating again and again against the dark wood paneling.
Leaning forward, Woodbridge took his head in his hands.
Charlotte felt a surge of sympathy. Her late husband had fallen prey to the unscrupulous scheming of so-called friends. He had been too desperate for an easy way out of his troubles to see through the lies and fraud that had quickly ensnared him.
Until it had been too late.
“As you can imagine, the dastards aren’t telling us anything, so for much of this, I’m making guesses and conjectures.” Cordelia looked up. Her face was ashen, save for the bruise-dark hollows beneath her eyes. “Are you all familiar with the termarbitrage?”
Alison and Sheffield looked utterly mystified, but Wrexford’s eyes narrowed. “Hell’s teeth, so that’s what they’re up to.”
Charlotte had done a drawing some time ago on a scandal involving government bonds, so she grasped the basic concept of how such trading worked. But she couldn’t quite imagine....
“It would take hours, if not days, to explain the complexities of arbitrage,” announced the earl. “But for now, let’s just say that arbitrage is thesimultaneouspurchase and sale of an asset or related assets to profit from differentials in price.”
