Florence’s embezzlement and flight turns a long-standing business relationship into a company crisis: Lawyer Flense, trusted with broad authority over Duke Logging’s property dealings, disappears with a substantial portion of Duke & Breitsprecher’s funds, and Annag Duncan goes with him. The scandal exposes the danger of relying on personal trust where formal limits and safeguards are absent. It nearly brings the company to collapse, forces Lavinia to confront her own confidence in Flense, and leaves the pursuit of the two fugitives with unequal outcomes: Flense is eventually reported dead in Valparaiso, while Annag vanishes without trace.

Background and Opportunity

Flense’s authority had grown out of the company’s expansive way of doing business. The later audit found that he had extraordinary powers to acquire and sell property on Duke Logging’s behalf, with no contract restricting those powers. He was an employee rather than a partner or stockholder, but the accountants found no practical barrier to wrongdoing beyond moral responsibility. Lavinia had trusted him personally as well as professionally, and the two had conducted business by gentleman’s agreement rather than by tightly delimited contractual terms.

That trust belonged to a larger corporate culture shaped by fast acquisition and large ambitions. Earlier, when James Duke worried that rival buyers might get ahead of the company in Michigan, Lennart Vogel proposed buying on credit to speed up the purchases. Edward Duke resisted, insisting that Duke & Sons paid cash as a matter of custom. Later, under Lavinia’s leadership, the firm also used preemption and homestead laws to acquire extensive timberland through nominal settlers and brokers. These episodes are not the cause of Flense’s theft, but they establish a business accustomed to aggressive expansion and to arrangements whose actual operation could diverge from their public form. The accountants’ later finding makes the weakness in Flense’s own authority explicit: wide discretion, little written restraint, and trust standing in for oversight.

Discovery and Corporate Crisis

The flight first becomes known when Axel Cowes arrives to tell Lavinia and Dieter Breitsprecher that Flense has left the city and country for parts unknown with a large portion of Duke & Breitsprecher’s money. Cowes adds that Annag Duncan has gone with him. The news produces a stunned silence; Dieter immediately urges that they go to Lavinia, expecting her to take the betrayal hard.

The theft lands during an already difficult period. Miss Heinrich later recalls that the company was emerging from a depression in which construction had declined and lumber prices had fallen. Just as the timber business began to recover, Flense disappeared with Annag and the embezzled funds. Lavinia called in four special accountants to examine the books and board minutes, while the retired Pye was brought back to explain past decisions. The investigation thus turns a sudden absence into a reckoning with the company’s records and governance.

The accountants establish that Flense had made secret sales of company woodlands, lumber barges, and warehouse contents. Their conclusion is not merely that the company had been robbed: its authority had been structured so that an employee could act broadly on its behalf without a contract limiting his power to sell. They leave Duke & Breitsprecher with a skeleton staff and a lean future. The company staggers close to collapse amid a broader downturn in stocks, land values, and lumber markets, while labor conflict and strikes further strain businesses across the country.

Lavinia’s Response and the Search

For Lavinia, the discovery is also a personal betrayal. She says that she had believed Flense loyal to her and to the company, never doubting him, and had treated their dealings as a gentleman’s agreement, as her father had done. The audit’s findings overturn that confidence. She is especially hurt by Annag’s participation: Lavinia recalls giving her a job when she had nothing and cannot understand how she came to leave with Flense.

Dieter offers a possible explanation grounded in the attention Flense had shown Annag. He remembers that Flense praised her baking, brought her small bouquets, smiled at her, and drove her home after long meetings, while he and Lavinia had taken her work for granted. The text presents this as Dieter’s interpretation, not as a confirmed account of Annag’s motives or of the relationship. Lavinia, furious and wishing she could undo the years of trust, says she will hire Pinkerton’s to find the fugitives and seek their imprisonment.

The search produces rumors rather than a clear trail. Pinkerton reports possible sightings of Flense in Peru, Athens, Georgia, Glasgow, and Buenos Aires, but for months there is no hard evidence. Lavinia continues paying the substantial monthly detective bills and tells the investigators to keep looking. The eventual report places Flense in an alley behind the Mulo Rojo, a restaurant in Valparaiso, where he has been found dead after being stabbed and robbed. No further detail about his death or the circumstances of the attack is established in the account.

Aftermath and Significance

The outcome for Annag is different and remains open. Pinkerton has no confirmed news of her; the narrative says she has disappeared into the wilds of Scotland, where strangers do not venture. Flense’s reported death closes the pursuit of him, but it does not resolve what became of Annag or fully restore what the company lost.

In response to the scandal, Lavinia votes with the remaining board members to relinquish the company’s incorporation charter. She argues that incorporation had once been useful for raising capital to build logging railroads, acquire barges and steamboats, and construct roads, but that the company’s changed circumstances call for a return to sole proprietorship, even on a shoestring. The decision is both practical and expressive: she wants to rid herself and the company of everything associated with Flense, and the experience has made the company’s formal structure part of the problem under review.

Dieter reminds Lavinia that Flense took company assets, not her personal property: he did not sell her Chicago land holdings, which are now worth millions. Yet Lavinia experiences the loss as an assault on her inheritance and on the forests that had built her fortune. The distinction between personal and corporate property matters to the facts of the theft, but it does not lessen the force of the betrayal for her. The episode exposes a central tension in the company’s history: its reach depended on delegated authority and ambitious acquisition, while its reliance on personal loyalty left it exposed when the trusted agent acted for himself.