Now we get some background on Balfour and how he came to be associated with a man named Alistair Lauderback, who was the Superintendent of Canterbury.
Balfour is a shipping agent, and one day Lauderback came to see him. It seems he had four ships (including the Godspeed, which is the boat Moody came in on), and he was looking to lease them to an established shipping company. Since Balfour's company needed a clipper, Balfour agreed to find a master for the Virtue and lease it.
A few months later, when the Godspeed came rolling into Hokitika, Balfour recognized the name from Lauderback's initial visit and went to introduce himself to its master, Francis Carver. They had friendly relations after that point, but apparently Balfour always thought he was kind of a shady character.
In 1865, Lauderback decided he was going to run for the Westland seat in Parliament, and enlisted Balfour's help in making sure he had everything he needed (e.g., lodgings) to make sure he could "appear as a Westland man."
Balfour was also supposed to help facilitate a shipment of Lauderback's things to Hokitika. While his stuff was traveling by sea, Lauderback was supposed ride to Hokitika through the mountains on horseback so he could appear more like a man of the people.
Being very devoted to Lauderback, Balfour did everything he was asked—and made sure the local paper (the West Coast Times) knew what Lauderback was planning so he could get some good press out of it.
Unfortunately for Lauderback, his arrival was more a series of misadventures than a blaze of glory.
First, when they stopped at the house of a hermit to ask for some refreshments, they found the hermit was dead. So they got themselves some tea and hit the road.
Then they had another misadventure when they got close to town when they found a woman lying in the middle of the road, basically unconscious. It seems she was a prominent prostitute in town.
So, Lauderback's first introductions in town were to the magistrate, the coroner, and the editor of the West Coast Times…and the death of the hermit and the discovery of the prostitute (who had apparently overdosed on opium) in the road kind of eclipsed Lauderback's big entrance in Hokitika.
That brings us up to the morning of the day the story starts—that is, the day Moody arrived in Hokitika and hightailed it to the Crown hotel.
That morning, Lauderback and Balfour had been having breakfast at the Palace Hotel.
It seems that Balfour was nervous, because a couple of weeks prior to that breakfast, Lauderback's crate had arrived in Hokitika (a couple of days in advance of Lauderback's actual arrival). Unfortunately, the crate then totally disappeared. Balfour was worried about telling Lauderback about the theft/disappearance …
In discussing various and sundry matters, Balfour brought up Gascoigne's piece in the paper about the woman Lauderback had found in the street. Apparently Balfour felt that the piece read like a reprimand of the entire town "on the girl's account." Balfour didn't appreciate that, and Lauderback agreed that Gascoigne is a "two-bit clerk."
Then they argued a bit about what the proper attitude toward Anna (the prostitute) and her crime (of trying to commit suicide) should be. Also, they talked about public welfare and its role in "civilization."
Eventually, Balfour changed the subject to the fact that he had seen the Godspeed in town over the past year.
Much to his surprise, instead of answering, Lauderback was strangely quiet and seemingly solemn.
Lauderback's aides, who were also present, tried to steer the subject away from the Godspeed, but Balfour wasn't getting the message that he should get off the topic …
Finally, Lauderback admitted he had sold the barque to the ship's master for some gold. Balfour identified the master as Carver, which surprised Lauderback—he had known the ship's captain as Wells. They figured out that they were definitely talking about the same man, but Lauderback insisted that Francis had used the last name "Wells" when they did up the paperwork.
Then Lauderback mentioned that he thought Crosbie Wells (the dead hermit Lauderback had encountered on his journey) and Frank Wells were brothers.
The men were puzzled by the inconsistency in their knowledge of Francis Carver (or, er, Wells), and Lauderback wondered if they were actually thinking of the same man. They talked about Crosbie Wells and whether he could be Frank's brother. They also talked about Lauderback and his men finding the body.
While they were chatting, Balfour let slip that Crosibe's wife, Lydia Wells, had turned up soon after Crosbie's death. No one had known Crosbie had had a wife …
At this news, Lauderback was completely shocked/blown away—apparently that name meant something to him.
After asking his aides to leave, Lauderback explained how he knew the name Lydia Wells. Apparently a woman with that same name was the mistress of a place called the House of Many Wishes, a gambling house in Dunedin (also in New Zealand) where Lauderback was a customer. It seems that Lauderback was, ahem, close with Lydia (but he assured Balfour that no money was exchanged). He would visit her whenever he was in Dunedin.
However, on one of his trips, he discovered that Lydia actually had a husband—one named Francis Wells. He had returned while Lauderback was away. Up to that point, Lauderback had had no idea she was married—she had used her maiden name, Greenway, at the gambling house.
Lauderback tried to make things right immediately by backing off from Lydia (oh, and we should mention that Lauderback had recently gotten married himself …).
He was pretty worried about his reputation, especially since he had just become Superintendent. Despite his efforts to clear the whole thing up honorably, things got complicated from there …
Rather than blackmailing Lauderback or even asking for anything right away, Carver had instead taken Lauderback into his confidence and admitted that he was a murderer—without offering any other details, of course. And he said he was being pursued for that crime.
Carver went on to say that Lauderback had been "marked as his mate," so any "avenger" would come after him as well.
Somehow, Carver had gotten Lauderback under his power. According to Lauderback, it was like Carver had a "twinkle" on him. "Twinkles" were reflective items that some gamblers (aka cheaters) stuck in the end of their cigars so they could look at other people's cards without them knowing and gain an advantage. According to Lauderback, Carver had somehow done something like that to him, but he claimed to have no idea what the "twinkle" could be—that is, the special insight or knowledge that gave Carver a leg up.
Again, though, for now Carver was not blackmailing Lauderback—he just wanted a position on the Godspeed.
Then Lauderback went back to Canterbury, hoping that Carver would meet some misfortune/accident that would take him out of the picture.
However, no such luck. A year later (and a year ago from when the book begins), he got a receipt in the mail for shipping a bunch of stuff …that he'd never actually shipped (or paid for).
He went to Dunedin to try to figure out what had happened, but the captain of the ship, Raxworthy, wasn't around to answer questions. Instead, he found Carver.
Carver explained that he himself had created the paper trail that Lauderback just got wind of (and a receipt for), which documented shipments of women's clothes. Apparently, he was trying to create the impression that Lauderback was sending Lydia Wells clothes. He pulled off the scheme with Lydia's help.
The most recent shipment contained a bunch of money that was undeclared, which meant Lauderback was legally in "breach of duty." Also, the money belonged to Carver, so if anyone ever investigated, it would look like Lauderback had been stealing money from his mistress's husband. If all this had been discovered and traced back to Lauderback (as Carver had intended), he'd be in deep trouble.
So, Lauderback asked Carver what he wanted, and he said he wanted the Godspeed. Lauderback, since he was totally in a corner, agreed.
Upon hearing this whole story, Balfour was convinced Lauderback wasn't telling him everything he knew.
Meanwhile, Lauderback had realized that if Carver forged his name, the sale of the ship was void—so now he had something over Carver, finally. Lauderback then admitted that he was out to expose Carver and take back his ship. Not publicly, since that would bring his misdeeds to light, but privately via blackmail.
Lauderback became super excited about the prospect of getting revenge on Carver. All he had to do is get his copy of the bill of sale for the ship out of the trunk of things he had shipped to Hokitika …
Naturally, Balfour was not as excited, since he knew the crate with that trunk was missing. He then lied to Lauderback about its whereabouts, saying the ship carrying it hadn't arrived.
They parted ways soon after, with Balfour promising to go down to the wharf to ask after Carver's whereabouts.
In their parting, Balfour suddenly realized somehow that Lauderback knew exactly what "twinkle" Carver had on him, even while he claimed he didn't.