ENTRY NO. XX
FAT EWES AND SHARP KNIVES
At last I have the spare time in which to bring this diary up to date, but where shall I begin?
One romance is ended. It was very pretty and interesting while it lasted, but all things must have an end, especially flirtations.
Miss Olive Lawrence has left Woodvale. The season has only started, but she confided to Miss Dangerfield that she was wearied with golf and Woodvale. So with a smile to all, and having settled in full with Wallace for a dozen or more lessons she left for the south with an assortment of trunks which tested the capacity of the baggage car.
I feel rather sorry for Wallace, though I give him credit for enough sense to have realised that her interest in him could amount to nothing more than a desire to amuse herself. It does not speak well for fascinating qualities for our Woodvale gallants that Miss Lawrence selected this unknown outsider even as a target on which to practise flirtation archery, but, in common with most men, it is beyond my ken to fathom the caprices of a pretty woman.
[Illustration: "She left for the South">[
Wallace says nothing, but I can see that he takes it to heart. He spends most of his spare time at Bishop's, but attends strictly to his business. He is the best professional we have ever had, and it is fortunate for the club that he did not gain the fair prize which many of us thought was within his grasp.
I have won the "Harding Trophy!"
Carter and I played for it last Thursday. I had absolute confidence that I should win, and when Miss Harding smilingly told me that she was "pulling for me," I had no more doubt that I could win than I had that I was alive. We had the largest gallery that ever has followed a match in Woodvale. The betting was two to one against me.
I beat Carter four up and three to play, and made a medal score of seventy-six, breaking the amateur record for the course. That statement is quite sufficient to tell the story of the game.
I gave a dinner in honour of my victory, and at its conclusion Miss Harding presented the "Bronze Gent," as Chilvers calls this beautiful statuette. She made a graceful speech and we cheered her wildly. How charming she looked as she stood beside the huge bulk of her proud father! I tried to say something in reply, but the light in her eyes seemed to hypnotise me, and after a few incoherent sentences Chilvers came to my relief by striking up our club song, to the tune of a familiar hymn:
"Oh, why can't I drive like other men do?
How on earth can you drive if you don't follow through?"
CHORUS
"Hallelulia; watch that shoulder
Hallelulia, my men;
Hallelulia; get your wrists in!
Must I tell you again?"
"Everybody come in strong on the second verse," ordered Chilvers, and we obeyed as best we could, also on the third. They run like this:
"I can't understand; understand it at all,
Why I can't keep my eye on that little white ball."
CHORUS
"Hallelulia; keep a-looking;
Hallelulia, my men;
Hallelulia; keep a-watching!
Must I tell you again?"
"Oh, why can't I hole out on each green in two?
Because we all find that a hard thing to do."
CHORUS
"Hallelulia; grasp your putter
Hallelulia, again,
Hallelulia; hit it harder!
Never up, never in!"
It was a great occasion, but I have things to narrate which are of much more import. The board of directors of the N.O. & G. railroad met on Friday!
Mr. Harding and I went to the city together. He was very busy looking over papers, and noticing his preoccupation I did not attempt to engage in conversation with him.
I had plenty to think of. This was the day big with my future. This was the day when the conspirators proposed to pass the dividend on the stock of the N.O. & G. Would they dare to do it? What would result if they did?
Knowing as I did that the earnings of the property had increased and that its prospects never were more favourable, I could not believe it possible that responsible officials would dare take so unwarranted a step for the purpose of influencing stock quotations. But while I kept my head and appeared outwardly calm, I was nervous, and I frankly confess it.
I was weighing the situation in its various lights when Mr. Harding spoke to me.
"Are you good at figures, Smith?" he asked.
"I can add, subtract, multiply and divide," I said with some confidence.
"Good!" he growled. "You've got nothing else to do, so you may as well help me on multiplication and addition. Multiply these by those and add 'em up—right quick, won't you?"
He passed to me a piece of paper containing the following memorandum:
500…………………………..68-1/2
1100…………………………..67-3/4
4000…………………………..67-1/2
300…………………………..66-7/8
600…………………………..66-1/2
1700…………………………..65-1/2
200…………………………..64
2300…………………………..63-1/2
1000…………………………..62-3/4
500…………………………..61-1/4
3000…………………………..60-1/2
1200…………………………..59
300…………………………..59-1/4
100…………………………..58-7/8
400…………………………..58-1/2
250…………………………..59
1000……. ……………………58-3/8
There were dates opposite the larger numerals, but these, of course, did not enter into the computation.
Harding handed me a blank pad and resumed his study of other papers which from time to time he produced from a large black-covered folio. It took me some time to finish this calculation, but at last my task was ended and I gave the slip to him.
"Sure that's right, Smith?" he asked, looking at the footing.
"Your 18,450 shares of N.O. & G. stock cost you exactly $1,174,815, Mr. Harding, not including the commissions to your brokers," I said, calmly as possible.
His big head swung quickly and he gazed at me with an expression of abject surprise.
"Well I'll be—well—say, Smith, how in thunder did you get the idea into your head that those figures stood for N.O. & G. stock?" he demanded, after glancing at the slip to make sure that it contained no tell-tale initials.
"Because the dates of purchase correspond with the quotations," I responded, enjoying his amazement and wondering to what it would lead. "I am only guessing that you bought, but of course it's possible you sold or went short. Please do not imagine I'm attempting to pry into your affairs, Mr. Harding," I added.
He sank back into his seat and for several seconds said nothing.
"Do you mind answering a few questions, Smith?" he said.
"That depends," I smiled. "Go ahead and ask them."
"Have you been dealing in N.O. & G.?"
"Yes."
"Buying or selling?"
"Buying."
"Outright or on margin?"
"On margin."
"How many shares have you an option on?"
I hesitated.
"Mr. Harding," I said, "in answering that question I assume that the information is confidential and that it will not be used to my disadvantage. Up to now it has been a secret known only to my brokers."
"You will lose nothing by telling me," Mr. Harding said, and I knew that promise was as good as his note at hand.
"My brokers have contracted for 45,000 shares of N.O. & G.," I said, handing him a list of my purchases with dates, amounts, and quotations.
He studied it for a while in silence.
"I thought you did nothing but play golf," he said. "Tell me; how did you happen to go into a deal of this magnitude?"
I gave him the details of the conspiracy as I had discovered them. It is not safe at this time to disclose them even in this diary. Mr. Harding listened with growing wonder on his face.
"My boy," he said, when I had ended, "if there is anyone in the country who should have discovered and taken advantage of the facts you have just told me, it is myself, but I never dreamed of them until you had purchased more than 30,000 shares of that stock. These dogs think I'm in Europe! They were told so. They think they have sold me out, and perhaps they have. I did not watch it as I should have done."
For a minute the train roared on past suburban stations, under viaducts, through echoing rows of freight cars, and over clattering switches. We were nearing the metropolis.
"Do you mind telling me if you are alone in this transaction?" he suddenly asked.
"I am."
"Do you wish to go in with me in this deal?"
"I do!" I replied without hesitation.
"Good!" he said, offering his hand. "We'll talk no more of this here.
It's not safe. Come with me to my office."
We reached his private office half an hour before the opening of the Stock Exchange. In five minutes the machinery of his wonderful system was in operation. Notes were dictated, messengers hurried away with them, men called, who listened to curt orders and vanished.
An hour passed and he gave orders that no one should be admitted until further notice.
"N.O. & G. is stationary around 59," he said, offering a cigar. "The directors meet at noon. They will pass the dividend. They think to shake out your 45,000 shares and a lot more in small holdings. In all I own 35,000 shares, so that together we control 80,000 out of 200,000. I now propose to show these honourable gentlemen a trick which will give them something to think about for several weeks to come. I know a gentleman who owns outright 25,000 shares. He is one of the heads of which you term "the conspiracy". It is not a conspiracy, Smith; it is business. He tried to sell me out and has failed as he will learn in a few minutes. He will then sell out the men who implicitly trust him, as they would sell him out if they could see a chance to make money out of it. Do not talk of conspiracies, Smith! These honourable business gentlemen down here are extremely sensitive, and you should be careful not to hurt their feelings."
We quickly came to an agreement by which our holdings were pooled. It was stipulated that he should have entire control of the operations from that time on, and after settling important details I suggested that I go to my broker's office and await developments.
"There's nothing you can do here," he said, as I arose. "Yes, there is, too," he added. "The folks are going to drop in here at about two o'clock. I'm going to be too busy to bother with them, and I foolishly promised to take them to the gallery of the Stock Exchange. You'll be worth more money then than you are now," he said with a grim smile. "Take them over and show them how a real sheep-killing looks when the ewes are fat and the knives sharp."
I promised to call for them at two o'clock, and then went to the office of my brokers.
Carelessly glancing at the quotation opposite the letters N.O. & G., I saw that it had dropped to 56. The head of the firm approached me and asked me to step into his private office.
[Illustration: "Business is business">[
"The rumour is strong that the dividend will be passed," he said.
"Which is preparatory to saying that you would like me to put up more margins, I presume?"
"Business is business, you know, Mr. Smith," he said, softly rubbing his hands.
"I have, anticipated your caution," I remarked. Mr. Harding had warned me that an unwarranted demand for margins would be made, but confident of the integrity of my brokers I had doubted it. "I presume an extra ten points will satisfy you?"
He seemed surprised but said it would. I gave him a certified check for $450,000.
"Thank you, Mr. Smith. You will excuse me for requesting this, but business is business."
"So I am learning," I coldly observed, and this closed our interview. I was convinced that "the conspirators" had gotten into communication with my brokers, but of course I could not prove it.
As the noon hour approached, N.O. & G. sagged off to 53 on comparatively heavy transactions. It stuck there until over the various mechanisms for sending information came this simple announcement, "The directors of the N.O. & G. have passed the regular semi-annual dividend."
The card boy of the stock board became busy. N.O. & G. dropped a point or more between sales, until it struck 47. I had small doubt of the outcome, but it is not pleasant to sit and watch the figures go up which hint at a loss of $45,000 every minute or so. I tried to look unconcerned, but doubt if I succeeded.
I knew that not far away a strong man was at the wheel, but the best of ships go down. What if his plans had miscarried? I dared not think of it!
"Two thousand N.O. & G. at 48," called the watcher at the ticker. "Five hundred at 47-1/2; 1,000 at 47; 2,000, 400, I,500, 3,000, at 47. Looks as if someone has pegged it at 47!"
The entire market was declining in sympathy with the disturbing news concerning this standard property. "Twelve hundred N.O. & G. at 47-1/4," called the man at the ticker. "Three thousand at 48; 1,500 at 49; 5,000 at 50! Someone's after that non-dividend paying stock!"
Like a man in a dream I watched that stock start on its dizzy climb. In five minutes it had reached 55, and by leaps and bounds it soared to 70. My brokers rushed to me with their congratulations. Did I wish to place any orders? Some strong interest undoubtedly was back of the rise?
I informed them I had purchased all I desired.
I am not indifferent in the matter of money. I am ambitious to possess it for the prestige it gives and the power it grants, but it is the simple truth to say that in those triumphant moments and in the subsequent hours the thought which held possession of me and which made me superlatively happy was the consciousness that so far as material assets were concerned I had a right to aspire to the hand of Grace Harding!
For some time the quotations vibrated nervously about the seventy mark. I was about to start for Mr. Harding's office when a man with a loud voice read a bulletin just received.
"One forty-five p.m.," he began. "Robert L. Harding authorises the announcement that in conjunction with John Henry Smith he has purchased a majority of the stock of the N.O. & G. railroad, and that it will be operated as a part of the system with which Mr. Harding is identified."
"Who in thunder is John Henry Smith?" asked a veteran stock gambler.
I hurriedly left the room.
In the inner offices of Mr. Harding's headquarters I found Mrs. and Miss
Harding.
"We have heard the news!" exclaimed Miss Harding. "Isn't it splendid? I congratulate you, Mr. Smith!"
Mr. Harding appeared at this moment, a broad smile on his face.
"Not so bad, eh Smith!" he said, shaking hands. The fierce light of battle was in his eyes. "They're headed for the tall timber, but we still have their range! Did you hear the last quotation?"
"The last figure I saw was seventy-three," I said.
"Seventy-three?" he laughed. "I just bought a thousand shares for ninety-one. Take the folks over to the visitor's gallery and let them watch the animals. I'm going to begin to feed them raw meat in about half an hour."
As we walked toward the Exchange, Mrs. Harding said to me: "I think it's perfectly wicked the way you men gamble!"
Bless her dear heart, so do I, but what could I say except to utter some commonplace?
The huge box of marble and gold where this gambling is done already was seething with maniacs who had reached a stage of delirium pitiful to those who witness such scenes for the first time. It was as if a thousand human rats had been hurled into a pit, with heaven and earth offered as prizes to those who survived.
The swaying forms, the tossing arms, the frantic uplifted faces of aged men, the football rush of impetuous youths, the shrieks, howlings and bellowings of the combatants, the tramp of feet on the paper-strewn floor, the clatter of innumerable instruments, the tinkle of myriads of bells; and through the opened windows God's pure sunlight illumining this hell on earth—such was the scene they looked down upon.
I knew the signs which told when Harding threw the first bits of "raw meat" into this gilded corral. I knew that he long since had cornered N.O. & G., and that he would whet the appetites of his victims as only he knew how, but I did not know that it was his day of reckoning for other "conspirators" equally as grasping as those with whom I had measured my puny sword.
As the hands of the clock slowly crawled to the hour of three the frenzy of the mob in the centre of the pit became maddening. I had no way of knowing from where we stood whether prices were moving up or down, but it was evident that Harding was "feeding the animals."
Then the gong boomed the signal that the session was ended. The tumult rose to one resounding crash, hesitated, subsided and died away. The struggling groups dissolved and partial sanity resumed its sway.
I was ushered into Mr. Harding's private office immediately on our return. The magnate was in his shirt sleeves. His mouth was set in stern lines and his dark hair tousled as if he had just emerged from deadly physical combat. As I entered the room his features relaxed and then he laughed. It was the roar of the lion who raises his head for a moment from his stricken quarry.
"We won this foursome, Smith, ten up and eight to play," he said. "Sit down and I'll tell you how we stand. I put the market up to 175. Could have put it to a thousand if it had been necessary, but what's the use? There is a short interest of 60,000 shares. Most of them are in the outer offices waiting to come in and settle. I'm going to let 'em off easy, Smith. Those who were extra dirty will settle at 200, and I've made a sliding scale down to 150, which is about what N.O. & G. is actually worth as an investment. Outside of your original 45,000 shares you have profits coming to you on about 20,000 shares which I bought for you at various figures on the way up. Roughly speaking it will net you somewhere between a million and a half and two millions, depending on how merciful we are to your 'conspirators.' How much will it cost you to take up your 45,000 shares?"
[Illustration: "Ten up and eight to play">[
I consulted the statement of my account with Morse & Davis, my brokers in these transactions.
"I have paid them $1,525,000, which margined it down to 30," I said. "In order to take the stock up I must pay them about $1,375,000 more, making my investment in N.O. & G. a total of $2,900,000."
"Tell you what I'll do, Smith," said Mr. Harding. "If you care to get out of this deal I'll take that block of 45,000 shares off your hands at $150 a share. That's $6,750,000," he concluded after making a rapid calculation.
"Thank you," I said, "but I've decided to hold it as an investment and go into the railroad business."
"Good for you, Smith!" he heartily exclaimed. "Mark my prediction; N.O. & G. will go to 200 before the first of the year. You've done fairly well for a beginner, my boy. Your investment and the contributions of the wicked 'conspirators' net you between five and six millions. That's better than sweating over that 'Bronze Gent,' now isn't it?"
The magnitude of my winnings nearly took my breath, and I fear that my expression and words showed it.
"You'll have to get out of here now, Smith," said Mr. Harding, glancing at his watch. "Take the folks for a ride or something to entertain them, and come back here at 5:30. Then we'll all go to dinner somewhere and take the nine o'clock train for Woodvale."