Tutt and Mr. Tutt

by Arthur Cheney Train

"You say it's full of water?" inquired Hunn.

"It will cost about fifty thousand dollars to pump out the mines and a hundred thousand to repair the machinery. Then there's quite an indebtedness—about seventy-five thousand; and tax liens—another fifty. Half a million dollars would put Horse's Neck on the map, and if the Amphalula vein crosses the property it will be worth ten millions. If it doesn't, the chance that it is going to will make a market for the stock."

Mr. Elderberry swept with a bland inquiring eye the shore of the glassy sea about which his associates were gathered.

"I've been over the ground," announced Greenbaum "and it's a good gamble. We want Horse's Neck for ourselves—at any rate until we are confident that it's a real lemon. Half a million will do it. I'll personally put up a hundred thousand."

"How are you going to get rid of the fifty thousand other stockholders?" asked Mr. Beck dubiously "We don't want them trailing along with us."

"I propose," answered Mr. Elderberry brightly, in his capacity as chief conspirator for Scherer, Hunn, et al., "that we organize a new corporation to be called 'Lallapaloosa Limited' and capitalize it at a million dollars—one million shares at a dollar a share. Then we will execute a contract between Horse's Neck and Lallapaloosa by the terms of which the old bankrupt corporation will sell to the new corporation all its assets for one hundred and twenty-five thousand dollars. We underwrite the stock of Lallapaloosa at fifty cents a share, thus supplying the new corporation with the funds with which to purchase the properties of the old. In a word we shall get Horse's Neck for a hundred and twenty-five thousand and have three hundred and seventy-five thousand left out of what we subscribe to underwrite the stock to put it on its feet."

"That's all right," debated Hunn. "But how about the other stockholders in Horse's Neck that Beck referred to? Where do they come in?"

"I've thought of that," returned Elderberry. "Of course you can't just squeeze 'em out entirely. That wouldn't be legal. They must be given the chance to subscribe at par to the stock of the new corporation on the basis of one share in the new for every ten they hold in the old; or, as Horse's Neck is a Delaware corporation, to have their old stock appraised under the laws of Delaware. In point of fact, they've all written off their holdings in Horse's Neck as a total loss years ago and you couldn't drag 'em into putting in any new money. They'll simply let it go—forfeit their stock in Horse's Neck and be wiped out because they were not willing to go in and reorganize the property with us."

"They would if they knew about Amphalula," remarked Beck.

"Well, they don't!" snapped Greenbaum, "and we're under no obligations to tell 'em. They can infer what they like from the fact that Horse's Neck has been selling for ten cents a share for the last three years."