“It’s a queer fight,” he commented. “I never heard of anything just like it before. Of course, we all know what it means: the Transcontinental needs our five-hundred-odd miles of Nevada Short Line to put in with its Jack’s Canyon branch for a short cut to the southern coast. Ordinarily, those things are fought out on the floor of the Stock Exchange, and the people who are operating the railroad never know what hits them until they’re safely dead. If the big fellows want the Short Line so bad, why the dickens don’t they go in and buy it up decently?”
The large man who had played such a successful game of golf winked one eye solemnly.
“You wouldn’t expect a Government chemist to find you the answer to any such conundrum as that, would you?” he asked, in cheerful irony.
“I’ll bet you know, just the same,” asserted Stillings confidently.
“I do happen to know, Robert,” was the even-toned reply. “A financial transaction entered into in the early summer by the Ford management—a transaction having nothing whatever to do with the fight—makes a break in prices absolutely necessary before the control can be acquired. What the Ford people did was to build a solid wall of protection around themselves without knowing it or intending to. They deposited something like sixty per cent of the Short Line stock with a syndicate of New York and Boston banks as collateral for a loan to be used in double-tracking.”
“Still, I don’t see,” objected the lawyer.
“Don’t you? That sixty per cent of the stock—which is the control—can’t be touched by any fireworks business on the Exchange. The big-money people have played the market up and down with the forty per cent which is not pooled, and nothing has happened. The loaning banks have merely sat tight in the boat, knowing that they held the joint control of a good paying property, and that no amount of sky-rocketing on the Street could make any difference, any real difference, in the value of their collateral so long as the property itself was earning dividends.”
“That is good as far as it goes,” said Stillings, with a frown of perplexity. “But it doesn’t explain why the big-money crowd, or somebody, has been turning heaven and earth upside down all summer to wreck, not the stock, but the property itself. You know that is what has been done. No stone has been left unturned, from demoralizing Maxwell’s force to dynamiting tunnels and planning forty-mile washouts. If big business wants the road, why is it trying to wreck it physically?”
The big man who was fond of insisting that he was first, last, and all the time a Government chemist grinned amiably.
“It doesn’t agree with your mentality to get beaten at golf, does it, Robert?” he said jokingly. “It is plain enough, when you get hold of the right end of it. Big money’s play is to throw a real scare, not into the stockholders, but into these loaning bankers, don’t you see? If the road’s earnings fall off and it has bad luck enough to make these creditor-bankers really nervous about the value of their collateral, the trick will be turned. The Ford people will immediately be asked to make good or pay up; and there you are.”