The first week after Christmas proved to be a revelation. Following John's careful execution of their investment plan, buying shares in the companies Michael had indicated for growth and shorting those he predicted would decline, the financial pages painted a delightful picture. By the week's end, their initial $5,000 investment had yielded a profit of $1,700. It was a substantial sum, further solidifying their belief in Michael's extraordinary ability. The family held another hushed discussion in their brownstone home on the Upper West Side, the weight of their potential fortune, and the ethical considerations it carried, heavy in the air.
"This… this is incredible," George stammered, tracing a finger down the profit column in his ledger.
"Michael's gift seems truly remarkable," Elizabeth added, her usual cautiousness tinged with awe.
John, however, remained grounded, though a flicker of excitement danced in his eyes. "It is promising, but we must remain prudent. One week's success does not guarantee future returns." Yet, the accuracy was too consistent to ignore. They talked long into the night, the allure of a better future, a chance to recover the losses from the Panic of 1893, a powerful motivator.
The next week, emboldened by their initial success and fueled by a growing conviction in Michael's predictions, they decided to take a significant leap of faith. John, with the support of Elizabeth and Mary, made the difficult decision to leverage their existing assets. The house in the Upper West Side was mortgaged, Elizabeth and Mary parted with their jewellery.
Mary had been John's steadfast partner from the very beginning of Kingston Inc. In the early days, she had managed the books, handled correspondence, and been the quiet force that ensured the business ran smoothly, her sharp mind for figures and her intuitive understanding of people proving invaluable to John's initial success.
Elizabeth, too, was a woman of intellect and ambition. An educated undergraduate, she had pursued studies with the aspiration of becoming a journalist, a field predominantly ruled by men during that era. Her university training had equipped her with a sharp analytical mind and a keen understanding of societal forces, allowing her to grasp the broader economic implications of their current venture.
They were all acutely aware of the gravity of their decision – mortgaging their home and relinquishing treasured possessions was a gamble of considerable magnitude, but the potential rewards, the chance to truly regain their footing after the devastating Panic of 1893, were too compelling to ignore.
John, swallowing his pride, also borrowed money from a few trusted acquaintances. In total, they managed to raise an additional $17,000, bringing their investment capital to $23,700, including the initial $5,000 and the first week's profit.
Michael, sensing the heightened seriousness of the situation and witnessing the hushed, earnest conversations in their Upper West Side home, approached John one evening, his small hand clutching the $1,021 he had won at the racetrack. "Uncle John," he said, his voice barely a whisper, "maybe this can help too." John knelt down, his heart swelling with a mixture of gratitude and concern. He accepted the money, promising Michael that it would be part of their venture, a testament to the family's collective hope.
The second week mirrored the first, albeit on a much larger scale. Michael's weekly predictions again proved accurate, and by the end of the week, they had accrued an impressive profit of $3,200. The family's cautious optimism was beginning to blossom into genuine hope. They were slowly, steadily, climbing out of the shadow of the 1893 panic.
Then came the whispers, the subtle tremors in the market that John, with his years of experience, recognized with a sinking feeling. One evening, gathered in their Upper West Side parlor, Michael noticed the serious expressions on his parents' and Uncle John's faces as they read the newspaper.
"Uncle John," Michael asked, tilting his head, "you look worried. Is everything alright with the horses... I mean, the stocks?"
John sighed, folding the newspaper. "Well, Michael, the 'horses' are getting a little skittish. There's some trouble brewing in the economy, something called a panic."
"A panic?" Michael repeated, his brow furrowing. "Like when someone gets scared of a mouse?"
George chuckled softly. "A little like that, but with money instead of mice. You see, Michael, people are starting to worry that the money they have might not be worth as much as it is now."
"It's rooted in the silver reserves, as I understand it," Mary interjected, her tone informed. "When John was first starting Kingston Inc., the debates around the gold and silver standards were quite prominent. The drop in silver now has created uncertainty about our currency, which is primarily backed by gold. It stirs up a lot of concern in the market."
Elizabeth, who had been listening intently, added, "It reminds me of some of the economic essays I studied. The instability caused by fluctuations in precious metal reserves can have a cascading effect on businesses and investments. People become fearful, and that fear itself can drive the market downwards."
"So, if people are scared, they try to sell their stocks, right?" Michael asked, remembering their lessons.
"Exactly," John confirmed. "And when everyone tries to sell at once, the prices go down, sometimes very quickly."
"Is this like the panic you told me about before, Uncle John?" Michael inquired, recalling the hushed conversations about 1893.
John nodded gravely. "It is, in some ways, Michael. The Panic of 1893 was a very difficult time for many people. That one was caused by a lot of different things, including some problems with the railroads and worries about the government's gold reserves because of the Sherman Silver Purchase Act, which required the government to buy a lot of silver. This one in 1896 is also tied to the silver issue, but the immediate trigger is the drop in our gold reserves, making people question the security of our financial system."
George added, "Think of it like this, Michael. Imagine everyone wants to trade their silver coins for gold coins, but there isn't enough gold to go around. People start to panic because they don't know if their silver will be accepted anymore. That makes the value of things go up and down in a scary way."
"So, the prices of some companies will go down a lot, like the 'losers' you told me about?" Michael asked.
John nodded. "That's right. And because you have a special way of seeing which companies might struggle during these times, we have been able to... well, we've been able to bet that their prices will go down." John chose his words carefully, not wanting to burden Michael with the full weight of their financial strategy.
"But is it… is it good to make money when other people are having trouble?" Michael asked, his innocent eyes filled with a genuine concern.
A shadow crossed John's face. "That's a very thoughtful question, Michael. And it's something your dad and I have talked about. It doesn't feel good, knowing that others might be suffering. But right now, we need to think about our family and rebuild what we lost before. My hope, Michael, is that if we are fortunate enough to do well during this time, someday we can use some of that money to help others who are struggling."
As the Panic of 1896 unfolded over several months, creating significant upheaval and economic hardship for many across the country, the Kingston family, guided by Michael's uncanny ability to foresee the market's movements, navigated the turmoil with surprising success. John continued to strategically short the stocks of companies Michael indicated would falter and cautiously bought shares in those predicted to remain stable or even grow.
By the late summer and early autumn of 1896, as the news of gold discoveries in the Klondike began to ease the financial anxieties, the stock market started to stabilize. The Kingston family, having weathered the storm, found their financial situation drastically improved.
By the time the crisp November air arrived again, settling over their Upper West Side home, their wealth had increased to an astonishing $420,000. It was a sum that dwarfed the losses John had suffered during the Panic of 1893. The brownstone they lived in, once a symbol of their comfortable but modest life, now felt like a stepping stone to a future filled with possibilities. Elizabeth no longer worried about every penny, and Mary's quiet generosity could extend beyond their immediate family. George looked forward to the new year with a sense of optimism he hadn't felt in years.
And young Michael, still dreaming his nightly dreams as Dean, the boy whose father taught economics, remained the quiet, unassuming center of their extraordinary fortune, a fortune built on a secret, a shared dream, and the unpredictable tides of the American economy.