"No," replied Mr. Osgood. "He has a small insurance fund—perhaps thirty or forty thousand dollars. He pays into this each year a part of what his insurance would cost him, and out of this fund is paid what losses the company sustains. And we must confess that so far the scheme has worked well. His losses have been much less than he would have paid in premiums to the companies."
"A fund—yes. That is all well and good, unless there is a great
congestion of value at some single point, or at a very few points.
Tell me, how much value is there in that main car barn on Pemberton
Street—the new one next to the power plant?"
"Probably over a half a million dollars—at night, when the cars are all there," said Cole.
"And with the power house almost a million, then?"
"Almost," Cole agreed.
Smith rose and walked over to the window; the others watched him in silence. "What kind of people hold the stock of the traction company?" he asked suddenly.
"I fancy Mr. Hurd himself swings a very big block," Cole answered. "And his directors have a good deal. It's easily carried—the banks up here will loan on it almost up to the market value."
Smith still looked thoughtfully out the window.
"And I presume the directors and other stockholders take advantage of that fact?" he inquired.
"Oh, yes," Mr. Osgood replied. "We have a lot of it as collateral for loans in the Charlestown Trust Company, of which I am a director."