The Treasure of Hidden Valley

by Willis George Emerson

Buell Hampton paused and all present clapped their hands gleefully, as if the Major was coming around to their way of thinking.

After silence was restored he proceeded: “Money is worth probably from five per cent, to six per cent, per annum on solid, non-hazardous investments and at least double these figures or more on mining investments which must be regarded as extremely hazardous. It is not, however, worth seventy-two per cent. per annum. Therefore, gentlemen, we will declare a dividend of six per cent, on the capital stock, which will require $30,000. We will then add the capital stock to the pay roll. The pay roll for the last year in round numbers is $1,100,000. The capital stock is $500,000 or a total of both of $1,600,000. We will then declare the remaining $330,000 of earnings into a dividend on the entire $1,600,000 of capital stock and annual pay roll combined, which amounts to a little over twenty per cent. This will give to the shareholders of our company’s stock a little more than a twenty-six per cent, dividend.”

The Major sat down. Consternation was apparent on every countenance.

“Major,” said one of the eastern directors, “may I ask you what would happen and what you would do in carrying out your altruistic dream if the earnings did not amount to even six per cent, on the money actually invested?”

The Major arose again and with great politeness replied: “Probably we would not declare a dividend. If we had but $30,000 that could be legitimately applied to dividend purposes, the amount would belong to the stockholders. But anything above this preferred dividend to the shareholders should be declared on the annual pay roll combined with and added to the capital stock of the company, both classes of investors participating in the surplus over and above six per cent, preferred dividend. The question with me,” added the Major, “is this? How many of you directors are in sympathy with the suggestion I have made?”

There came no answer, and he continued: “A while ago I expressed myself against your manager for a position on the directorate. I always have a reason for my decisions. It has come to me,” continued the Major, “that while the original cost of this plant may have been $500,000 yet by the wicked manipulation of the ‘system’ the original shareholders were completely frozen out—legally robbed if you please, of their investment and it is quite probable the Pennsylvania crowd, the present owners or at least those who were the owners before I purchased a control, paid very little in real money but much in duplicity and ripened experience in the ways of the fox and the jackal. I have learned on excellent authority that Mr. W. B. Grady, by stealth and cunning, secured the underlying bonds from one of the former builders of this great plant, and robbed him and left him penniless in his old age. Unless other means of restitution be devised, the reimbursing of those stolen sums out of my private purse will be one of my first duties and one of my greatest pleasures.”

Grady rose, his face flushed with passion. But Buell Hampton waved him down with his hand and calmly proceeded: “I will state another innovation. There are seven directors who control the destinies of this company. I now insist that the company’s attorney shall be instructed to have the by-laws so amended that the head of each department, beginning at the mine where we extract the ore, then the tramway which carries the ore to the smelter and all the various departments in the smelter including the converter—shall be elected annually by the workers themselves in each of the seven departments. In this way there will be seven foremen; and these seven foremen shall be officially recognized by the amended by-laws of this company as an advisory board of directors, entitled to sit and vote with the regular directors at each monthly meeting and likewise with the stockholders in their annual meeting.”

Had a bomb-shell been thrown into the stockholders’ meeting greater consternation could not have been evinced’. Finally Attorney Carlisle moved that an adjournment be taken until ten o’clock the next day, at which time the stockholders would re-assemble and further consider the unexpected and doubtless vital questions now under consideration. The motion prevailed.

Of course the entire matter hinged first of all upon the election of a directorate. During the adjournment Attorney Carlisle, peeved at Grady’s readiness to drop him from the directorate, called on Major Hampton and assured him he was in accord with the views he had expressed and that his every suggestion could be legally complied with by amending the by-laws.

Buell Hampton, however, did not take the hint implied. He was courteous but firm. The old régime had to go—the management must be changed, lock, stock and barrel. Therefore there could be no further utilization of Mr. Carlisle’s services as attorney for the company. Baffled and discomfited the lawyer withdrew. He was full of indignation, not against Major Hampton, but against Grady, for he had warned the latter against selling a certain block of stock to part with which had jeopardized control of the corporation. But Grady, in need of money, had replied that there was no risk, the buying being sporadic and the existing directorate in high favor with the stockholders because of its ability and readiness to vote big dividends.