our laws and the inequality with which they are administered.
"But in this case the chief witness has already admitted the innocence
of the defendant. There is nothing more to be said. The prosecution has
cried '_Peccavi!_' I leave my client in your hands."
He resumed his seat contentedly and wiped his forehead with his silk
handkerchief. The judge looked down at O'Brien with raised eyebrows.
"I will leave the case to the jury on Your Honor's charge," remarked
the latter carelessly.
"Gentlemen of the jury," began the judge, "the defendant is accused of
entering the house of Mr. Hepplewhite with the intent to commit a crime
therein--"
Mr. Hepplewhite sat, his head upon his breast, for what seemed to him
several hours. He had but one thought--to escape. His ordeal had been
far worse than he had anticipated. But he had made a discovery. He had
suddenly realized that one cannot avoid one's duties to one's fellows by
leaving one's affairs to others--not even to the police. He perceived
that he had lived with his head stuck in the sand. He had tried to
escape from his responsibilities as a citizen by hiding behind the thick
walls of his stone mansion on Fifth Avenue. He made up his mind that he
would do differently if he ever had the chance. Meanwhile, was not the
jury ever going to set the poor man free?
They had indeed remained out a surprisingly long time in order merely to
reach a verdict which was a mere formality. Ah! There they were! Mr.
Hepplewhite watched with palpitating heart while they straggled slowly
in. The clerk made the ordinary perfunctory inquiry as to what their
verdict was. Mr. Hepplewhite did not hear what the foreman said in
reply, but he saw both the Tutts and O'Brien start from their seats and
heard a loud murmur rise throughout the court room.
"What's that!" cried the clerk in astonished tones. "What did you say,
Mister Foreman?"
"I said that we find the defendant guilty," replied the foreman calmly.
Mr. Tutt stared incredulously at the twelve traitors who had betrayed
him.
"Never mind, Mr. Tutt," whispered Number Six confidentially. "You did
the best you could. Your argument was fine--grand--but nobody could ever
make us believe that your client went into that house for any purpose
except to steal whatever he could lay his hands on. Besides, it wasn't
Mr. Hepplewhite's fault. He means well. And anyhow a nut like that has
got to be protected against himself."
He might have enlightened Mr. Tutt further upon the psychology of the
situation had not the judge at that moment ordered the prisoner
arraigned at the bar.
"Have you ever been convicted before?" asked His Honor sharply.
"Sure," replied the Hepplewhite Tramp carelessly. "I've done three or
four bits, I'm a burglar. But you can't give me more than a year for
illegal entry."
"That is quite true," admitted His Honor stiffly. "And it isn't half
enough!" He hesitated. "Perhaps under the circumstances you'll tell us
what you were doing in Mr. Hepplewhite's bed?"
"Oh, I don't mind," returned the defendant with the superior air of one
who has put something over. "When I heard the guy in the knee breeches
coming up the stairs I just dove for the slats and played I was asleep."
Leaving the courthouse Mr. Tutt encountered Bonnie Doon.
"Young man," he remarked severely, "you assured me that fellow was only
a harmless tramp!"
"Well," answered Bonnie, "that's what he said."
"He says now he's a burglar," retorted Mr. Tutt wrathfully. "I don't
believe he knows what he is. Did you ever hear of such an outrageous
verdict? With not a scrap of evidence to support it?"
Bonnie lit a cigarette doubtfully.
"Oh, I don't know," he muttered. "The jury seems to have sized him up
rather better than we did."
"Jury!" growled Mr. Tutt, rolling his eyes heavenward. "'Sweet land of
liberty!'"
Lallapaloosa Limited
"Ethics: The doctrine of man's duty in respect to
himself and the rights of others."
--CENTURY DICTIONARY.
"I don't say that all these people couldn't be squared;
but it is right to tell you that I shouldn't be sufficiently
degraded in my own estimation unless I was insulted
with a very considerable bribe."
--POOH-BAH.
"I've been all over those securities," Miss Wiggin informed Mr. Tutt as
he entered the office one morning, "and not a single one of them is
listed on the Stock Exchange."
"What securities are those?" asked her employer, hanging his tall hat on
the antiquated mahogany coat tree in the corner opposite the screen that
ambushed the washing apparatus. "I don't remember any securities," he
remarked as he applied a match to the off end of a particularly green
and vicious-looking stogy.
"Why, of course you do, Mr. Tutt!" insisted Miss Wiggin. "Don't you
remember those great piles of bonds and stocks that Doctor Barrows left
here with you to keep for him?"
"Oh, those!" Mr. Tutt smiled inscrutably. "Mr. Barrows is not a
physician," he corrected her, running his eye over the General Sessions
calendar. "He's only a 'doc'--that is to say, one who doctors. You know
you can doctor a lot of things besides the human anatomy. No, I guess
they're not listed on the Stock Exchange or anywhere else."
"Well, here's a schedule I made of them--Miss Sondheim typed it--and
their total face value is seventeen million eight hundred thousand
dollars. I tried to find out all I could, but none of the firms on Wall
Street had ever heard of any of them--excepting of one that was traded
in on the curb up to within a few weeks. There's Great Lakes and
Canadian Southern Railway Company," she went on, "Chicago Water Front
and Terminal Company, Great Geyser Texan Petroleum and Llano Estacado
Land Company--dozens and dozens of them, and not one has an office or,
so far as I can find out, any tangible existence--but the one I spoke
of."
"Which is this great exception?" queried Mr. Tutt absently as he
searched through the _Law Journal_ for the case he was going to try that
afternoon. "You said one of them had been dealt in on the curb? You
astonish me!"
"It's got a funny name," she answered. "It almost sounds as if they
meant it for a joke--Horse's Neck Extension."
"I guess they meant it for a joke all right--on the public," chuckled
her employer. "How many shares are there?"
"A hundred thousand," she answered.
"Jumping Jehoshaphat!" ejaculated Mr. Tutt. "How on earth did old Doc
manage to get hold of them?"
"It sold for only ten cents a share!" replied Miss Wiggin. "That would
mean ten thousand dollars--"
"If Doc paid for it," supplemented Mr. Tutt. "Which he probably didn't.
What's it selling for now?"
"It isn't selling at all."
Mr. Tutt pressed the button that summoned Willie.
"When you haven't anything better to do," he said to her, "why don't you
go round and see what has become of--of--Horse's Neck Extension?"
"I will," assented Miss Wiggin. "It makes me feel rich just to talk
about such things. I just love it."
"Many a slick crook has taken advantage of just that kind of feeling,"
mused Mr. Tutt. "There are two things that women--particularly trained
nurses--seem to like better than anything else in the world--babies and
stock certificates."
Then upon the arrival of the recalcitrant William he gathered up his
papers and took down his hat from the tree.
"I wish you'd let me get your hat ironed, Mr. Tutt," remarked Miss
Wiggin. "It would cost you only fifty cents."
"That's all you know about it, my dear," he answered. "More likely it
would cost me a hundred thousand dollars."
* * * * *
Mr. Tobias Greenbaum, of Scherer, Hunn, Greenbaum & Beck, carefully
placed his cigar where it would not char his Italian Renaissance desk
and smoothed out the list which Mr. Elderberry, the secretary of The
Horse's Neck Extension Copper Mining Company, handed to him. The list
was typed on thin sheets; of foolscap and contained the names of
stockholders, but as it had lain rolled up in the bottom of Mr.
Elderberry's desk for five years without being disturbed it was inclined
to resist the gentle pressure of Mr. Greenbaum's fingers.
Mr. Greenbaum glanced sharply round the plate-glass lake that separated
him from the other directors of Horse's Neck, rather as if he had
detected his associates in a crime.
"Isaacs says," he announced in an arrogant, almost insulting tone,
though below the surface he was an entirely genial person, "that the new
vein in the Amphalula runs into the west drift of Horse's Neck almost to
where we quit work in Number Nine five years ago."
"If it does it will make it a bonanza property," emphatically declared
his partner, Mr. Scherer, a dolichocephalous person with very black hair
and thin bluish cheeks. "It's a pity we didn't buy it all in at ten
cents a share."
"We did!" retorted Greenbaum. "All that could be shaken out. We've got
all the stock that hasn't gravitated to the cemeteries."
"Even if the Amphalula vein doesn't run into it it will come near
enough to make Horse's Neck worth dollars per share. It's a
heads-I-win-tails-you-lose proposition," commented Mr. Hunn dryly. "Who
controls Amphalula?"
"We do," snapped Greenbaum.
"Then it's a cinch," returned Hunn mildly. "Shake out the sleepers,
reorganize, and sell or hold as seems most advisable later on."
Mr. Elderberry cleared his throat tentatively.
"If you gentlemen will pardon me--I have been considering this matter
for some little time," he hazarded. Mr. Elderberry was not only the
professional salaried secretary of Horse's Neck but was also treasurer
of the Amphalula, and general factotum, representative and interlocking
director for Scherer, Hunn, Greenbaum & Beck in their various mining
enterprises, combining in his person almost as many offices as, Pooh-Bah
in "The Mikado." Though he could not have claimed to serve as "First
Lord of the Treasury, Lord Chief Justice, Commander-in-Chief, Lord High
Admiral, Master of the Buck Hounds, Groom of the Back Stairs, Archbishop
of Titipu and Lord Mayor, both acting and elect, all rolled into one,"
he could with entire modesty have admitted the soft impeachment of being
simultaneously treasurer of Amphalula, vice-president of Hooligan Gulch
and Red Water, secretary of Horse's Neck, Holy Jo, Gargoyle Extension,
Cowhide Number Five, Consolidated Bimetallic, Nevada Mastodon, Leaping
Frog, Orelady Mine, Why Marry and Sol's Cliff Buttress, and president of
Blimp Consolidated.
All these various properties were either owned or controlled by Scherer,
Hunn, Greenbaum & Beck and had been acquired with the use of the same
original capital in various entirely legal ways, which at the present
moment are irrelevant. The firm was a strictly honorable business house,
from both their own point of view and that of the Street. Everything
they did was with and by the advice of counsel. Yet not one of these
active-minded gentlemen, including Mr. Greenbaum, the dolichocephalous
Scherer and the acephalous Hunn, had ever done a stroke of productive
work or contributed anything toward the common weal. In fact, distress
to somebody in some form, and usually to a large number of persons,
inevitably followed whatever deal they undertook, since their business
was speculating in mining properties and unloading the bad ones upon an
unsuspecting public which Scherer, Hunn, Greenbaum & Beck had permitted
to deceive itself.
Thus, when Greenbaum called upon Mr. Elderberry for advice, it savored
strongly of Koko's consulting Pooh-Bah and was sometimes almost as
confusing, for just as Pooh-Bah on these occasions was won't to reply,
"Certainly. In which of my capacities? As First Lord of the Treasury,
Lord Chamberlain, Attorney-General, Chancellor of the Exchequer, Privy
Purse or Private Secretary?" so the financial and corporate Elderberry
might equally well ask: "Exactly. But are you seeking my advice as
secretary of Horse's Neck, of Holy Jo, of Cowhide Number Five, or as
vice-president of Hooligan Gulch and Red Water, treasurer of Amphalula
or president of Blimp Consolidated?"
Just now it was, of course, obvious that he was addressing the company
in his capacity of secretary of Horse's Neck.
"It goes without saying, gentlemen, that this property is pretty nearly
down and out. You will recall that most of the insiders sold out on the
tail of the Goldfield Boom and waited for the market to sag until we
could buy in again. The mines are full of water, work was abandoned over
four years ago, and the property is practically defunct. The original
capitalization was ten million shares at one dollar a share. We own or
control at least four million shares, for which we paid ten to fifteen
cents, while we had sold our original holdings for one dollar sixty to
one dollar ninety-five a share. While Horse's Neck represents a handsome
profit--in my opinion"--he cleared his throat again as if deprecating
the vulgarity of his phrase--"it is good for another whirl."
"You say it's full of water?" inquired Hunn.
"It will cost about fifty thousand dollars to pump out the mines and a
hundred thousand to repair the machinery. Then there's quite an
indebtedness--about seventy-five thousand; and tax liens--another fifty.
Half a million dollars would put Horse's Neck on the map, and if the
Amphalula vein crosses the property it will be worth ten millions. If it
doesn't, the chance that it is going to will make a market for the
stock."
Mr. Elderberry swept with a bland inquiring eye the shore of the glassy
sea about which his associates were gathered.
"I've been over the ground," announced Greenbaum "and it's a good
gamble. We want Horse's Neck for ourselves--at any rate until we are
confident that it's a real lemon. Half a million will do it. I'll
personally put up a hundred thousand."
"How are you going to get rid of the fifty thousand other stockholders?"
asked Mr. Beck dubiously "We don't want them trailing along with us."
"I propose," answered Mr. Elderberry brightly, in his capacity as chief
conspirator for Scherer, Hunn, _et al._, "that we organize a new
corporation to be called 'Lallapaloosa Limited' and capitalize it at a
million dollars--one million shares at a dollar a share. Then we will
execute a contract between Horse's Neck and Lallapaloosa by the terms of
which the old bankrupt corporation will sell to the new corporation all
its assets for one hundred and twenty-five thousand dollars. We
underwrite the stock of Lallapaloosa at fifty cents a share, thus
supplying the new corporation with the funds with which to purchase the
properties of the old. In a word we shall get Horse's Neck for a hundred
and twenty-five thousand and have three hundred and seventy-five
thousand left out of what we subscribe to underwrite the stock to put
it on its feet."
"That's all right," debated Hunn. "But how about the other stockholders
in Horse's Neck that Beck referred to? Where do they come in?"
"I've thought of that," returned Elderberry. "Of course you can't just
squeeze 'em out entirely. That wouldn't be legal. They must be given the
chance to subscribe at par to the stock of the new corporation on the
basis of one share in the new for every ten they hold in the old; or, as
Horse's Neck is a Delaware corporation, to have their old stock
appraised under the laws of Delaware. In point of fact, they've all
written off their holdings in Horse's Neck as a total loss years ago and
you couldn't drag 'em into putting in any new money. They'll simply let
it go--forfeit their stock in Horse's Neck and be wiped out because they
were not willing to go in and reorganize the property with us."
"They would if they knew about Amphalula," remarked Beck.
"Well, they don't!" snapped Greenbaum, "and we're under no obligations
to tell 'em. They can infer what they like from the fact that Horse's
Neck has been selling for ten cents a share for the last three years."
"Is that right, Chippingham?" inquired Beck of the attorney who was in
attendance. "I mean--is it legal?"
"Perfectly legal," replied Mr. Chippingham conclusively. "A corporation
has a perfect right to dispose of its entire assets for a proper
consideration and if any minority stockholder feels aggrieved he can
take the matter to the Delaware courts and get his equity assessed.
Besides, everybody is treated alike--all the stockholders in Horse's
Neck can subscribe pro rata for Lallapaloosa."
"Only they won't," grinned Scherer.
"And so, as they are wiped out--the new corporation--that is us--in fact
gets their equity, just as much as if they had deeded it to us."
"That is, we get for nothing about one-half the value of the property,"
agreed Elderberry. "Now, I've been over the list and I don't think
you'll hear a peep from any of them."
"He's got 'em on the list--he's got 'em on the list;
And they'll none of 'em be missed--they'll none of 'em be missed!"
hummed Mr. Beck. "It looks good to me! I'll take a hundred thousand."
"Mr. Chippingham has the papers drawn already," continued Elderberry.
"Of course you've got to give the old stockholders notice, but we can
rush the thing through and before anybody wakes up the thing will be
done. Then they can holler all they want."
"Well, I'll come in," announced Hunn complacently.
"So will I," echoed Scherer. "And the firm can underwrite the last
hundred thousand, and that will clean it up."
"Is it all right for us to underwrite the stock ourselves at half
price?" inquired Mr. Beck. "I mean--is it legal?"
"Sure!" reiterated Mr. Chippingham. "Somebody's got to underwrite it;
why not us?"
"Move we adjourn," said Mr. Greenbaum. "Elderberry--the usual."
Mr. Elderberry removed from his change pocket five glittering gold
pieces and slid one across the glass sheet to each director.
"Second motion. Carried! All up--seventh inning!" smiled Mr. Scherer;
and the directors, pocketing their gold pieces, arose.
If, as it has been defined, ethics consists of a "system of principles
and rules concerning moral obligations and regard for the rights of
others," it may be interesting to speculate as to whether or not these
gentlemen had any or not, and, if so, what it may have been. But in
considering this somewhat nice question it should be borne in mind that
Messrs. Scherer, Hunn, Greenbaum & Beck were bankers of standing, and
were advised by a firm of attorneys of the highest reputation. On its
face, and as it was about to be represented to the stockholders of
Horse's Neck, the proposition appeared fair enough.
The circular, shortly after sent out to all the names upon the list,
stated succinctly that financial and labor conditions had been such that
it had been found impossible to operate the mine profitably for several
years, that it had depreciated greatly in value owing to the water which
had accumulated in its lower levels, that it had exhausted its surplus,
that a heavy indebtedness had accumulated, that the corporation's
outstanding notes had been protested and that the property would be sold
under foreclosure unless money was immediately raised to pay them, the
interest due and taxes; that half a million dollars was needed to put
the property in operation and that there was no way to secure it, as
nobody was willing to loan money to a bankrupt mining concern. That
under these circumstances no practical method had been proposed except
to organize a new corporation capitalized at one million instead of ten,
to the stock of which each shareholder in Horse's Neck might subscribe
in proportion to his holdings, at par, and to which the assets of the
old corporation should be transferred practically for its debts. That
this, in a word, was the only way to save the situation and possibly
make a go of a bad business, and that it was a gamble in which the old
stockholders had a right, up to a certain date, to participate if they
saw fit. Those that did not would find their stock in Horse's Neck
entirely valueless as it would have no assets left which had not been
transferred to Lallapaloosa. Stockholders who were dissatisfied could
protest against the enabling resolution to be offered at the annual
meeting of the stockholders of Horse's Neck to be held the following
week at Wilmington, Delaware, and could avail themselves of the right to
have their equity assessed under the laws of Delaware, but as the
liabilities practically equaled the present value of the property that
equity would naturally be highly problematical.
Now, as a matter of morals or of law the only thing that made the
proposed reorganization unethical or inequitable was the single trifling
fact that those responsible for it were the only ones who knew of the
existence and proximity of the Amphalula vein. When a mining company, a
railroad, an oil well or any other enterprise is down and out it is only
fair that the majority stockholders, who are obliged to protect their
investment, should have the right to call upon the rest to come forward
and do their share or else drop out. A minority stockholder cannot
appeal to any canon of fair play whereby he should be entitled to sit
back and let the majority take all the risks and then claim his share of
the profits.
The imponderable element of injustice in the situation consisted in the
suppression of a fact which the directors concealed but concerning
which, however, they made no representation, false or otherwise. They
were going to risk half a million dollars of their own money and they
wanted the whole gamble for themselves. They sincerely felt that nobody
else was entitled to take that risk with them. Once they had floated
Horse's Neck they had come to look upon it as their own private affair.
The minority had no rights which they, the majority, were bound to
respect. The minority were nothing but a lot of piking gamblers, anyway,
who bought or sold for a rise or fall of a few cents. They knew nothing
of the property and cared less for its real value. They were merely
traders and if they lost they forgot it or tried to. On the other hand
Scherer, Hunn, Greenbaum & Beck were promoters, who contributed
something to the economic advancement of the nation.
* * * * *
"Regarding my hat, which you suggested this morning should be pressed at
a cost of fifty cents," remarked Mr. Tutt to Miss Wiggin when he
returned to the office upon the adjournment of court in the afternoon
and replaced that ancient object in its accustomed resting-place
--"regarding that precious hat of mine"--he eyed it affectionately
--"I can only say that I would as soon send myself to a dry-cleaning
establishment as to permit its profanation by the iron of a
haberdasher."
Miss Wiggin laughed lightly.
"That doesn't explain your cryptic statement that it would probably cost
you a hundred thousand dollars," she replied. "Still--"
Mr. Tutt turned suddenly upon his heel and held her with an upraised
hand, the bony wrist of which was encircled, after an intervening space
of some five inches, by a frayed cuff confined with a black onyx button
the size of a quarter.
"Behold," he cried in the deep resonant voice that he used in addressing
juries at the climax of a peroration, "the integuments of my
personality--the ancient habiliments of an honorable profession--the
panoply of the legal warrior. Here, my corslet"--he touched his dingy
waistcoat with his left hand; "my greaves"--he brushed the baggy legs of
his pantaloons; "my halberd"--he raised his old mahogany cane with its
knot of yellow ivory; "my casque"--he indicated his ruffled stove-pipe
"Arrayed in these I am Mr. Ephraim Tutt, attorney and counselor at
law--the senior partner in Tutt & Tutt--a respected member of the bar
duly accredited and authorized to practise before the Supreme Court of
the State of New York, the Court of Appeals, the District Court of the
United States, the Circuit Court of Appeals, the Supreme Court of the
United States, the Court of Claims--"
"--the Police Court and the Coroner's Court," concluded Miss Wiggin,
making him a mock curtsy.