Chapter XI

WHEREIN BLACKIE DAW PLAYS A BRIEF CHARACTER BIT

Andy Grout came into Doc Turner's office in a troubled mood, every down-drooping line in his acid countenance absolutely vertical.

"We've made a mistake," he squeaked. "This young Wallingford is a hustler, and he's doing some canvassing himself. In the past week he's taken at least forty members for his loan company, and every man Jack of them are old members of ours."

Doc Turner began rubbing his frosted hands together at a furious rate.

"Squinch has sold us out!" he charged. "He's let Wallingford copy that list on the sly!"

"No, I don't think so," said Grout, more lugubrious than ever. "I made some inquiries. You know, a lot of these fellows are customers of mine, and I find that he just happened to land on some of them in the first place. One recommends him to the others, just as we got them. If we don't sell him that list right away he won't need it."

Together they went to Squinch and explained the matter, very much to that gentleman's discomfiture and even agitation.

"What's his plan of operation, anyhow?" complained Squinch.

"I don't understand it," returned Andy. "I found out this much, though: the members all expect to get rich as soon as the company starts operating."

Mr. Squinch pounded his long finger-tips together for some time while he pondered the matter.

"It might be worth while to have a share or two of stock in his company, merely to find out his complete plan," he sagely concluded. "If he's getting members that easy it's quite evident there is some good money to be made on the inside."

This was the unanimous opinion of the entire five members of the board of directors, and as each member was in positive pain on the subject of "good money on the inside," they called a meeting that very afternoon in Mr. Squinch's office, inviting Mr. Wallingford to attend, which he did with inward alacrity but outward indifference.

"Mr. Wallingford," said Mr. Squinch, "we have about decided to accept your offer for our list, but before doing so we will have to ask you to explain to us the organization of your company."

"Very simple," Wallingford told them cheerfully. "It's incorporated for a hundred thousand dollars; a thousand shares of a hundred dollars each."

"All paid in?" Mr. Squinch wanted to know.

"All paid in," replied Mr. Wallingford calmly.

"Indeed!" commented Mr. Squinch. "Who owns the stock?"

"My four office assistants own one share each and I own the balance."

A smile pervaded the faces of all but one of the members of the board of directors of the defunct National Building and Loan Association. Even Tom Fester's immovable countenance presented a curiously strained appearance. Strange as it may seem, the dummy-director idea was no novelty in New Jersey.

"I take it, then, that the paid-in capitalization of the company is not represented in actual cash," said Mr. Squinch.

"No," admitted Wallingford cheerfully. "As a matter of fact, at our first meeting the directors paid me ninety-five thousand dollars for my plan of operation."

Again broad smiles illuminated the faces of the four, and this time Tom Fester actually accomplished a smile himself, though the graining might be eternally warped.

"Then you started in business," sagely deduced Mr. Squinch, with the joined finger-tip attitude of a triumphant cross-examiner, "having but a total cash capitalization of five thousand dollars."

"Exactly," admitted Wallingford, chuckling. There was no reservation whatever about Mr. Wallingford. He seemed to regard the matter as a very fair joke.

"You are a very bright young man," Mr. Squinch complimented him, and that opinion was reflected in the faces of the others. "And what is your plan of loans, Mr. Wallingford?"

"Also very simple," replied the bright young man. "The members are in loan groups, corresponding to the lodges of secret societies, and, in fact, their meetings are secret meetings. Each member pays in a dollar and a quarter a week, and the quarter goes into the expense fund."

The five individually and collectively nodded their heads.

"Expense fund," interpolated Doc Turner, his blue-tipped nose wrinkling with the enjoyment transmitted from his whetting palms, "meaning yourself."

"Exactly," agreed Wallingford. "The dollar per week goes into the loan fund, but at the start there will be no loans made until there is a thousand dollars in the fund. Ten per cent. of this will be taken out for loan investigations and the payment of loan officers."

"Meaning, again, yourself," squeaked Andy Grout, his vertical lines making obtuse bends.

"Exactly," again agreed Wallingford. "Twenty-five per cent. goes to the grand annual loan, and the balance will be distributed in loans as follows: One loan of two hundred and fifty dollars, one loan of one hundred, one of fifty, four of twenty-five and fifteen of ten dollars each. These loans will be granted without other security than an unindorsed note of hand, payable in four years, without interest, and the loans will be made at the discretion of the loan committee, meeting in secret session."

Mr. Squinch drew a long breath.

"A lottery!" he exclaimed.

"Hush!" said J. Rufus, chuckling. "Impossible. Every man gets his money back. Each member takes out a bond which matures in about four years, if he keeps up his steady payments of a dollar and a quarter a week without lapsation beyond four weeks, which four weeks may be made up on additional payment of a fine of twenty-five cents for each delinquent week, all fines, of course, going into the expense fund."

Doc Turner's palms were by this time quite red from the friction.

"And how, may I ask, are these bonds to be redeemed?" asked Mr. Squinch severely.

"In their numbered order," announced Mr. Wallingford calmly, "from returned loans. When bond number one, for instance, is fully paid up, its face value will be two hundred and fifty dollars. If there is two hundred and fifty dollars in the redemption fund at that time--which the company, upon the face of the bonds, definitely refuses to guarantee, not being responsible for the honesty of its bond-holders--bond number one gets paid; if not, bond number one waits until sufficient money has been returned to the fund, and number two--or number five, say, if two, three and four have lapsed--waits its redemption until number one has been paid."

A long and simultaneous sigh from five breasts attested the appreciation of his auditors for Mr. Wallingford's beautiful plan of operation.

"No," announced Mr. Squinch, placing his finger-tips ecstatically together, "your plan is not a lottery."

"Not by any means," agreed Doc Turner, rubbing his palms.

Jim Christmas, who never committed himself orally if he could help it, now chuckled thickly in his throat, and the scarlet network upon his face turned crimson.

"I think, Mr. Wallingford," said Mr. Squinch, "I think that we will accept your offer of two shares of stock each for our list."

Mr. Wallingford, having succeeded in giving these gentlemen a grasping personal interest in his profits, diplomatically withheld his smile for a private moment, and, turning over to each of the five gentlemen two shares of his own stock in the company, accepted the list. Afterward, in entering the item in his books, he purchased for the company, from himself, ten shares of stock for one thousand dollars, paying himself the cash, and charged the issue of stock to the expense fund. Then he sat back and waited for the next move.

It could not but strike such closely calculating gentlemen as the new members that here was a concern in which they ought to have more than a paltry two shares each of stock. Each gentleman, exercising his rights as a stock-holder, had insisted on poring carefully over the constitution and by-laws, the charter, the "bonds," and all the other forms and papers. Each, again in his capacity of stock-holder, had kept careful track of the progress of the business, of the agents that were presently put out, and of the long list of names rapidly piling up in the card-index; and each made hints to J. Rufus about the purchase of additional stock, becoming regretful, however, when they found that the shares were held strictly at par.

In this triumphant period Wallingford was aggravatingly jovial, even exasperating, in the crowing tone he took.

"How are we getting along? Fine!" he declared to each stock-holder in turn. "Inside of six months we'll have a membership of ten thousand!" And they were forced to believe him.

Probably none of the ex-members of the defunct loan association was so annoyed over the condition of affairs as Ebenezer Squinch, nor so nervously interested.

"I thought you intended to begin collecting your weekly payments when you had two hundred and fifty members," he protested to Wallingford, "but you have close to five hundred now."

"That's just the point," explained Wallingford. "I'm doing so much better than I thought that I don't intend to start the collections until I have a full thousand, which will let me have four thousand in the very first loan fund, making two hundred and fifty a week to the expense fund and a hundred a week for the loan committee, besides one thousand dollars toward the grand annual distribution. That will give me twenty-six hundred to be divided in one loan of a thousand, one of five hundred, one of two hundred and fifty, two of a hundred, four of fifty, ten of twenty-five, and twenty of ten dollars each; a grand distribution of thirty-nine loans in all. That keeps it from being a piker bet; and think what the first distribution and every distribution will do toward getting future membership! And they'll grow larger every month. I don't think it'll take me all that six months to get my ten thousand members."

Mr. Squinch, over his tightly pressed finger-tips, did a little rapid figuring. A membership of ten thousand would make a total income for the office, counting expense fund and loan committee fund, of three thousand five hundred per week, steadily, week in and week out, with endless possibilities of increase.

"And what did you say you would take for a half interest?" he asked.

"I didn't say," returned Wallingford, chuckling, "because I wouldn't sell a half interest under any consideration. I don't mind confessing to you, though, that I do need some money at once, so much so that I would part with four hundred and ninety-nine shares, right now, and for spot cash, for a lump sum of twenty-five thousand dollars."

"Bound to keep control himself," Mr. Squinch reported to his _confreres_, after having reluctantly confessed to himself that he could not take care of the proposition alone. "I don't blame him so much, either, for he's got a vast money-maker."

"Money without end," complained Andy Grout, his mouth stretching sourly down to the shape of a narrow croquet wicket; "and the longer we stay out of this thing the more money we're losing. It's better than any building-loan."

There was a curious hesitation in Andy Grout's voice as he spoke of the building-loan, for he had been heartbroken that they had been compelled to give up this lucrative business, and he was not over it yet.

Doc Turner rubbed his perpetually lifeless hands together quite slowly.

"I don't know whether we're losing money or not," he interjected. "There is no question but that Wallingford will make it, but I suppose you know why he won't sell a half interest."

"So he won't lose control," said Squinch, impatient that of so obvious a fact any explanation should be required.

"But why does he want to keep control?" persisted Doc Turner. "Why, so he can vote himself a big salary as manager. No matter how much he made we'd get practically no dividends."

It was shrewd Andy Grout whose high squeak broke the long silence following this palpable fact.

"It seems to me we're a lot of plumb idiots, anyhow," he shrilled. "He wants twenty-five thousand for less than fifty per cent. of the stock. That's five thousand apiece for us. I move we put in the five thousand dollars apiece, but start a company of our own."

Mr. Grout's suggestion was a revelation which saved Jim Christmas from bursting one of his red veins in baffled cupidity. Negotiations with Mr. Wallingford for any part of his stock suddenly ceased. Instead, within a very short time there appeared upon the door of the only vacant office left in the Turner block, the sign: "The People's Cooperative Bond and Loan Company."

Mr. Wallingford did not seem to be in the slightest degree put out by the competition. In fact, he was most friendly with the new concern, and offered Doc Turner, who had been nominated manager of the new company, his assistance in arranging his card-index system, or upon any other point upon which he might need help.

"There's room enough for all of us," he said cheerfully. "Of course, I think you fellows ought to pay me a royalty for using my plan, but there's no way for me to compel you to do it. There's one thing we ought to do, however, and that is to take steps to prevent a lot of other companies from jumping in and spoiling our field. I think I'll get right after that myself. I have a pretty strong pull in the state department."

They were holding this conversation three days after the sign went up, and Mr. Squinch, entering the office briskly to report a new agent that he had secured, frowned at finding Mr. Wallingford there. Business was business with Mr. Squinch, and social calls should be discouraged. Before he could frame his objection in words, however, another man entered the office, a stranger, a black-haired, black-eyed, black-mustached young man, of quite ministerial appearance indeed, as to mere clothing, who introduced himself to Doc Turner as one Mr. Clifford, and laid down before that gentleman a neatly folded parchment, at the same time displaying a beautiful little gold-plated badge.

"I am the state inspector of corporations," said Mr. Clifford, "and this paper contains my credentials. I have come to inspect your plan of operation, and to examine all printed forms, books and minutes."

Mr. Wallingford rose to go, but a very natural curiosity apparently led him to remain standing, while Doc Turner, with a troubled glance at Ebenezer Squinch, rose to collect samples of all the company's printed forms for the representative of the law.

Mr. Wallingford sat down again.

"I might just as well stay," he observed to Doc Turner, "because my interests are the same as yours."

Mr. Clifford looked up at him with a very sharp glance, as both Mr. Turner and Mr. Squinch took note. At once, however, Mr. Clifford went to work. In a remarkably short space of time, seeming, indeed, to have known just where to look for the flaw, he pointed out a phrase in the "bond," the phrase pertaining to the plan of redemption.

"Gentlemen," said he gravely, "I am very sorry to say that the state department can not permit you to do business with this bond, and that any attempt to do so will result in the revoking of your charter. I note that this is bond number one, and assume from this fact that you have not yet sold any of them. You are very lucky indeed not to have done so."

A total paralysis settled upon Messrs. Turner and Squinch, a paralysis which was only relieved by the counter-irritant of Wallingford's presence. To him Mr. Squinch made his first observation, and it was almost with a snarl.

"Seems to me this rather puts a spoke in your wheel, too, Wallingford," he observed.

"Is this Mr. Wallingford?" asked Mr. Clifford, suddenly rising with a cordial smile. "I am very glad indeed to meet you, Mr. Wallingford," he said as he shook hands with that gentleman. "They told me about you at the state department. As soon as I've finished here I'll drop in to look at your papers, just as a matter of form, you know."

"If you refuse to let us operate," interposed Mr. Squinch in his most severely legal tone, "you will be compelled to refuse Mr. Wallingford permission to operate also!"

"I am not so sure about that," replied Mr. Clifford suavely. "The slightest variation in forms of this sort can sometimes make a very great difference, and I have no doubt that I shall find such a divergence; no doubt whatever! By the way, Wallingford," he said, turning again to that highly pleased gentleman, "Jerrold sent his respects to you. He was telling me a good story about you that I'll have to go over with you by and by. I want you to take dinner with me to-night, anyhow."

Jerrold was the state auditor.

"I shall be very much pleased," said Wallingford. "I'll just drop into the office and get my papers laid out for you."

"All right," agreed Mr. Clifford carelessly. "I don't want to spend much time over them."

Other fatal flaws Mr. Clifford found in the Turner and Company plan of operation, and when he left the office of The People's Cooperative Bond and Loan Company, the gentlemen present representing that concern felt dismally sure that their doom was sealed.

"We're up against a pull again," said Doc Turner despondently. "It's the building-loan company experience all over again. You can't do anything any more in this country without a pull."

"And it won't do any good for us to go up to Trenton and try to get one," concluded Mr. Squinch with equal despondency. "We tried that with the building-loan company and failed."

In the office of The People's Mutual Bond and Loan Company there was no despondency whatever, for Mr. Wallingford and the dark-haired gentleman who had given his name as Mr. Clifford were shaking hands with much glee.

"They fell for it like kids for a hoky-poky cart, Blackie," exulted Wallingford. "They're in there right this minute talking about the cash value of a pull. That was the real ready-money tip of all the information I got from old Colonel Fox."

They had lit cigars and were still gleeful when a serious thought came to Mr. Clifford, erstwhile Mr. Daw.

"This is a dangerous proposition, though, J. Rufus," he objected. "Suppose they actually take this matter up with the state department? Suppose they even go there?"

"Well, they can't prove any connection between you and me, and you will be out of the road," said Wallingford. "I don't mind confessing that it's nearer an infraction of the law than I like, though, and hereafter I don't intend to come so close. It isn't necessary. But in this case there's nothing to fear. These lead-pipe artists are scared so stiff by their fall-down on the building-loan game that they'll take their medicine right here and now. They'll come to me before to-morrow night, now that I've got them, to collect their money in a wad in the new company. They might even start work to-night."

He rose from the table in his private office and went to the door.

"Oh, Billy!" he called.

A sharp-looking young fellow with a pen behind his ear came from the other room.

"Billy, here's a hundred dollars for you," said Wallingford.

"Thank you," said Billy. "Who's to be thugged?"

"Nobody," replied Wallingford, laughing. "It's just a good-will gift. By the way, if Doc Turner or any of that crowd back there makes any advances to you to buy your share of stock, sell it to them, and you're a rank sucker if you take less than two hundred for it. Also tell them that you can get three other shares from the office force at the same price."

Billy, with great deliberation, took a pin from the lapel of his coat and pinned his hundred-dollar bill inside his inside vest pocket, then he winked prodigiously, and without another word withdrew.

"He's a smart kid," said Blackie.