"We got along all right yesterday," said Chalk calmly. "Come, cheer up, Skamper, everything will be ALL right."

"I rather counted on beating the Scarecrow in that race this morning," muttered Skamperoo wistfully. "How can you run as fast as that tireless wooden creature who was magically brought to life?"

"Well, wasn't I magically brought to life?" The white horse shook his mane roguishly. "Come along, Kingaling, we'll not only win that race, but we'll have back our necklaces and chase Matiah out of Oz before we are through."

"I—I really believe you can do anything," sighed Skamperoo, getting almost cheerfully to his feet. "But just the same, I shall keep a sharp outlook for Matiah. He might start a revolution."

"He'll revolute pretty rapidly if I once get my heels on him," promised Chalk with a wicked grin. "Come on—heads up, and who's afraid?" However, in spite of the white horse's valiant attempts to comfort him, Skamperoo spent a troubled and uneasy day, casting fearful glances behind him when no one was looking, searching the happy holiday crowds with haggard glances for a glimpse of the long, thin face of Matiah the merchant. Even when Chalk beat the Sawhorse in their long, exciting race through the park, and the crowds cheered themselves hoarse with delight and approval, the victory was spoiled by the knowledge that somewhere in the Emerald City lurked his most dangerous and relentless foe.

Chalk, too, though he pretended to regard the matter lightly, was almost as worried as his Master and spent every free moment poking his head into doorways and peering down side streets and rearing up over walls. And while Skamperoo was having his afternoon nap, the white horse systematically searched the palace from top to bottom, even the cellar.

But in the cellar Chalk did not go quite far enough, for it was in a hollowed out chamber under the cellar that the merchant of Skampavia was really hidden. Here, with a goodly supply of food, stolen from the pantry, Matiah had seriously settled down to work out the problem of the emerald necklace. He had meant to conceal himself in the cellar itself, but when his foot brushed against an iron ring in the floor, he had lifted it up and discovered to his delight and satisfaction this still more secluded and safe retreat.

The tunnels and rocky chambers below the Palace had been constructed and used by Ruggedo, the old Gnome King, when he was plotting to capture the Emerald City. Ruggedo himself had been captured, but the underground caves and passageways had been left pretty much as they were. There were a number of chairs, a rough bed and table, and numerous candles and lamps. Altogether it made an ideal workshop for the merchant to try out his experiments. In the cellar he might easily have been discovered by any of the kitchen boys sent down for supplies, but in Ruggedo's old hideout he could be sure of complete privacy. Lighting the largest of the lamps that hung on its rusty chain over the table, Matiah seated himself on a rickety old chair and prepared to concentrate with all his will power on the glittering emeralds. In the sickly green light he made a strange and sinister figure as he bent over the table, mumbling and chattering to himself. But after a whole day, during which he tried every known formula and combination, touching each gem in succession as he made his wish and counted to a hundred, he was still no nearer the solution of the mystery than he had been in Skampavia. First he had tried the diamond clasp of the third necklace, sure that that was the key to their power. But nothing at all had happened and the trick of the magic emeralds continued to elude him. To have in his fingers the means to immense power and good fortune and still be unable to benefit was so infuriating, Matiah began to stamp, splutter, and beat his chest with rage and disappointment. Was it for this he had bribed a red eagle with the promise of three wishes to carry him across the Deadly Desert? Even now the mammoth bird was waiting impatiently on the edge of a little wood near the City ready to tear him to pieces if he failed to fulfill his part of the bargain. No daylight penetrated into the tunneled chamber, and hardly realizing that it was now midnight, Matiah from sheer weariness and exasperation finally gave up and fell asleep, his head on the table, his hands still clutching the provoking chains. Footsteps pattering overhead wakened him at last, and also told him someone had come to the cellar for supplies. Stretching wearily, he rose and, going over to the stone steps, cautiously ascended and lifted the trapdoor. Now thoroughly convinced that the necklaces would not work unless worn by someone else, he determined to seize the first person entering the cellar and compel him to help.