A QUESTION OF FINANCE
The three men were seated together in Gordon's tiny room in the hotel.
The shades were drawn, and the lamp on the table diffused at one and
the same time light, heat, and a reek of ill-smelling oil. A scattered
mass of papers, notes, jottings, memoranda, littered the room, and
from the midst of this disorder Gordon, flushed, perspiring, for once
lacking his usual calm, was seeking to bring about some semblance of
system and order. Seated at the table, coat and vest tossed aside, he
went through a regular routine, seizing on a paper and reading it
through, then either tearing it up and tossing it aside, or
transcribing its contents, his fingers flying furiously over the
typewriter's clicking keys. Steadily and rapidly he did his work, and
steadily the little heap of typewritten pages at his right hand
mounted higher and higher still.
Jim Mason, sprawled comfortably in the armchair, smoked in silence,
apparently waiting with calmness for the completion of the task. Jack
Harrison sat on the side of the bed, awkward and uncomfortable, his
troubled gaze shifting from Mason to Gordon and back again with the
air of one who wishes to see a puzzling silence brought to an end.
Finally Gordon cast the last discarded memorandum from him, whirled
the last sheet of copy from the typewriter, and with a heartfelt sigh
of relief pushed back his chair. "There," he cried, "that's out of the
way; and now let's see what we've got to show for it."
For a moment he sorted and arranged the typewritten sheets; then,
looking up at the others, he spoke eagerly, anxiously, almost with a
note of entreaty in his tone. "I hate to rush this thing through this
way," he said, "and under ordinary circumstances I wouldn't do it, but
you understand the situation as well as I do. This is the time you
want to give me a free hand on the stock market end of the deal, just
as later on, when you want all kinds of new-fangled machinery and all
that sort of thing, I shall have to let you get it, though I won't
know whether we need it or not. In other words, it's a mutual affair.
You don't know and don't care just the precise moment when the stock
ought to be listed, and I don't know and don't care about the
difference in the rock on the sixth level and the seventh, but you
want to let me run the incorporation and the market end, though you're
not especially interested in them, and I want to let you run
everything connected with the mine, though personally I don't care
half so much about all that part of it as you do."
He paused for a moment, then continued, more slowly, "The point in our
settling this thing up quick is right here. It's only about once in
every five or six years that there comes a time like this in coppers,
anyway. It takes a long time to get the pot boiling; then for a while
it boils like the very devil, and then--it boils over; there's a
busted boom, and people are left to sit down on their holdings for
five or six years more, calling themselves names and wondering how
they could ever have been such fools. At the end of that time, such a
wonderful thing is the human mind, they've forgotten the past, and
fairly tumble over themselves in their anxiety to repeat the process.
Right now is the beginning of the biggest copper boom this country's
ever seen, and it looks as if it would last for a good long time.
Still, you can't ever tell; there are so many things that can happen;
and what I want to do is to have the Ethel all incorporated and ready
to launch just at the exact moment when the people are so crazy over
coppers that they'll buy anything that's even named a mine, let alone
a genuine first-class proposition like ours. Then we'll be sure of the
mine's future, for we'll be able to make enough legitimate profit in
the market to set aside a sum big enough to look out for all the
development work we might ever be called upon to do. So the quicker we
can get the papers signed, and the quicker I can get back East and
have the company incorporated, the safer for all of us. There, that's
the whole story, and if there's anything about it that isn't on the
square, I want you to say so. How about it, Jim?"
Mason slowly removed his pipe from his mouth. "Sounds all right," he
said laconically.
Gordon turned to Harrison. "Any objection, Jack?" he queried.
Harrison shook his head. "Sounds all right," he echoed. "Maybe down on
the sixth level me and Jim could give you some pointers, but when it
comes to stocks and bonds I guess you're the doctor. I don't see
what's wrong with getting things fixed up right away."
Gordon nodded. "I'm glad you both think so," he said, his relief
showing in his tone. "And you'll find you won't regret it, either.
Now--" he reached for the typewritten papers, "here's the best I could
do on an agreement. It's a lawyer's job, but I guess what I've patched
together here will hold water, anyway. Stop me if there's anything you
don't understand, and if you want to ask any questions, just fire
away."
He tilted his chair back against the wall, glanced the papers through
for an instant, and began to read rapidly, skipping here and there.
"This agreement, entered into this blank day of blank, between said
Mason and said Gordon, witnesseth; said Mason, hereinafter styled the
party of the first part, in consideration of the sum of one dollar and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, to him paid--does hereby covenant and agree with said
party of the second part--"
He broke off suddenly, letting the papers fall from his hand, and
mopping his forehead with his handkerchief.
"Damn the language they use," he said, "it's too much to wade through
now. Boiled right down to plain common sense, I give you fifty
thousand dollars cash for a half interest in the mine, and you're
appointed superintendent for ten years at a salary of five thousand a
year, and Jack assistant for the same time at three thousand a year.
That's the gist of it, isn't it? and that's plain enough for any one."
Mason glanced a trifle doubtfully at the ten or twelve scattered
sheets. "What's all the rest of it?" he inquired.
Gordon slowly lit a cigar. "Well," he said at length, "you know all
the stuff that has to go into one of these things. There's nothing of
any real importance beyond what I've just said. The other clauses take
up provisions as to how the corporation's going to be formed, and all
that sort of thing. They don't amount to anything except to get us all
mixed up, though, if we start to go into them. Why don't we say that
I'll get the whole thing in final shape by to-morrow night. Then we
can sign it before a notary, and I can put for home and get things
underway without any delay at all. Or do you think of anything else?
You're all right as far as the board of directors goes. You'll both be
on the board, and any other Michigan man you think ought to go on. The
eastern men that I'm going to get are all first-class in every way,
and there's no doubt we'll have a strong board. Most of the other
things, as I say, are mere matters of detail, so I should think if you
could get around about this same time to-morrow night we could fix
things up then, and make our start."
There was a moment's silence. Then Jim Mason again removed his pipe
from his mouth. "About what," he said deliberately, "were you
calculatin' on for your capital stock?"
From Gordon's manner no one could have guessed that this was the one
subject he had feared and dreaded, that this was the one question he
had hoped and prayed no one would raise. Indeed, to all appearances,
he welcomed the topic with real pleasure.
"Well, where are my wits wandering to?" he cried. "Why, that was one
of the things I particularly meant to speak of, Jim, because I knew if
I didn't, you might have your breath taken away. You see, times have
changed in the stock market, altogether. Where once it was a rich
man's game, now everybody plays it. The clerk on his twelve dollars a
week reads the stock column with just as much care as the millionaire,
perhaps with more. The coachman the butler and the chauffeur, even the
maid and the milliner, keep their ears open, and when an employer
plunges, he carries a lot of people and a lot of money, of whom
and of which he is entirely unconscious, along with him. So a copper
stock, to be attractive to the general public to-day, has got to be a
low-priced one; and of course that means a larger capitalization. Ten
years ago, if you'd asked me the same question, I'd have said,
'Capitalize at ten thousand shares, at a par of a hundred,' and I
guess, for that time, that would have been about right. For that time,
you understand, but--"
Mason interrupted. "For that time, or for any time," he said
positively, "that would have been right then, and it's right to-day,
too. I'm agin' these big capitalizations, and that's just why I asked
you for the information. Ten thousand shares, and par a hundred
dollars. That's my ideas. What do you say, Jack?"
Harrison nodded, with, for him, unusual decision. "I guess that's
about the regular thing," he answered, "leastways, in this state.
That's what the Orono's in at, and the Hawkeye, and the Iroquois's
only got five thousand, but they're a smaller proposition than the
others. Yes, I guess for us ten thousand, and par a hundred, just
about hits things right."
Gordon shook his head vigorously. "No, no," he cried, "you're wrong,
both of you. But it's only because, as Jack just said a few moments
ago, you're not in touch with market conditions in just the same way
that I am. A big capitalization and a low par are the two things that
are going to benefit everybody. They're going to help us make money,
and that's going to help develop the mine, and, better than anything
else, it's going to give lots of poor devils a chance to get into a
really good thing at a moderate price, instead of wasting their good
money on the first wildcat scheme that comes along, some kind of a
fake mine that doesn't exist at all except on paper. Really, I hope
you'll be willing to take my judgment on this; I'm right; I'm sure of
it, or I wouldn't say so."
Both Mason and Harrison looked puzzled. There was a moment's silence.
Then Mason, asked abruptly, "Well, what do you call right, then?"
Gordon, as he answered, made an effort to speak in a perfectly casual
tone. "Why," he said easily, "as I say, I'd make the par very low, say
five dollars a share. Then, of course, to give everybody a show, you'd
have to have plenty of stock. I don't really care about the exact
amount. I haven't given that much thought; but I should say, off hand,
perhaps a million shares would be about right."
Mason stared at him in blank astonishment. "A million shares!" he
gasped. "You'd capitalize the Ethel at five million dollars. God, man,
you're crazy!"
Gordon flushed. "I guess one of us is crazy," he retorted, with some
heat, "and I don't think I'm the one. I keep telling you you'd do a
lot better to leave the whole market end of this thing to me. Why,
half the people that'll buy our stock won't know how many shares there
are, won't know what the par is, won't know a single identical thing
about the mine except what I tell 'em in my advertisements. What's
more, if we offered to tell 'em every single thing we know about the
mine, they wouldn't care to take the trouble to listen. They're not
buying shares in a copper mine. They're scraping together money enough
to take a little flier, on margin, of course, something they mean to
hold for a day or a week or maybe a month, and get out of at the first
decent chance. The whole damned market's nothing but a big gamble,
anyway, and everybody knows it, and what we're offering's a hundred
times more legitimate than most of the stock deals people frame up,
because, when all's said and done, we've got a genuine mine behind us.
Still, we're not taking all this trouble just for our health, and we
can use money just as well as anybody else. And the way to get the
money, as I'm now trying to drive into your heads for about the tenth
time, is to launch our mine with a big capitalization and a low par."
He stopped abruptly. Harrison, indeed, looked somewhat impressed, but
Mason shook his head. "No, sir," he said stubbornly, "I know just a
little mite about the market myself, and I don't say but what, if
anybody's goin' to get skun, I wouldn't rather kinder give ourselves
the benefit of the doubt, but five million dollars for the Ethel,"--he
straightened up in his chair in his excitement--"five million dollars!
Why, that's so damned unreasonable they're ain't no good tryin' to
argue about it. When do you expect to pay a dividend on your million
shares, I'd like to know?"
Gordon, to all appearances, looked thoughtful, as indeed he was.
"Well," he admitted at length, "not right away, I suppose, and I'll
own up there's some sense in the way you look at it, if the people
were going to buy the stock for a real investment. Why don't we do
this? Issue ten thousand shares of preferred stock, at a par of
twenty-five or fifty, for the kind of people that want to buy for
investment. We could really pay dividends on that, without the
slightest doubt. And then, for the crowd that only wants to take a
flier, and don't care a continental about the merits of the mine, or
its future, we'll issue a million shares of common stock, at a par of
five. Then we'll all be suited. How does that strike you?"
Mason snorted. "Oh, hell," he said forcibly, "what's the use of you
talking that way? I've lived pretty near seventy years without robbing
any one yet, and damned if I want to begin now. I'll wind up in the
poorhouse first. What say, Jack?"
Harrison shook his head helplessly. "I don't know," he said vaguely.
"Seems a pretty big lot of stock to me. Too big, I reckon."
Gordon laughed, with an attempt to pass the matter off lightly. "Oh,
well," he said, "I don't want to do anything that neither of you
approve of, of course. Why not let the whole matter of the capital
stock drop for the present, and let the full board of directors settle
it when we're organized?"
It was a last effort, and a futile one. Indeed, the moment the words
had left his mouth, Gordon saw his mistake. Mason laughed a little dry
laugh. "Yes," he said, with irony, "and four of the seven on the board
are easterners. How'd they settle it, I wonder?"
Gordon's expression was not a pleasant one. With a faint shrug of his
shoulders, he arose.
"Well, I'm sorry," he said, "but I don't see what I can do. If I do
say it, you're being treated as fair as any two men could ask. You're
looked out for in every possible way, and if you choose to spite
yourselves, and call everything off, because you can't trust me on one
of the minor details of the whole scheme, why, I can't see that it's
up to me. I'm sorry, though, sincerely sorry. I firmly believe the
mine has a great future."
Harrison's face lengthened perceptibly. The downfall of all his own
cherished plans was far from pleasant. Mason, however, got up from his
chair, his stern old face set in aggressive lines.
"Dick Gordon," he said, "I've liked you first-rate, up to now; I've
tried my best to use you right, an' I've gone further with you than I
ever went with any other man concernin' the mine, but I don't like
this part of your scheme, an' I never will. It ain't honest.
Capitalize her at a million dollars, an' we're with you up to the
neck, but if you're goin' to stick to any of these five million
schemes, why--you can go plumb to hell for all of me."
He walked slowly towards the door. Harrison rose and, awkwardly
enough, followed suit. There was a moment's tense silence. Then Gordon
stepped forward and laid his hand on Mason's arm.
"For God's sake, Jim," he cried, "don't let's part this way. We seem
to look at this thing differently, but we've been too good friends to
start quarreling over it now. Give me a week to think the whole
proposition over, and you take the same. Pretty nearly everything in
the world can be fixed up by some sort of a compromise. You're sure
you're right, and I'm sure I'm right, but I'm not going to quarrel
with you and Jack, if we never have a mine at all. And if we find we
can't come to terms, and there's anything else I can do, why, I'll be
ready, just the same, to help out any time in any way I can."
By good fortune he had struck the proper chord. Almost instantly
Mason's face cleared, and with, for him, unusual feeling, he extended
his hand. "That sounds more like it," he cried, "we'll sleep on it for
a while, anyway, and see what we can fix up." He paused a moment, then
added gruffly, "I guess maybe I spoke kind of hasty, too."
Gordon laughed. "Oh, that's all right," he said. "Maybe you're right,
and I'm wrong, after all. But let's make an honest try to get
together, anyway, and see if we don't come out better than we think.
Good night, Jim; good night, Jack; see you again in a day or two; good
night."
His tone was easy and pleasant, his expression fairness and cordiality
itself, yet scarcely had the door closed behind them when his whole
face suddenly darkened and distorted with rage.
"You fool," he muttered; "you damned straitlaced old fool. To have a
chance like that, and turn it down because you thought it wasn't
honest. Well, you've had your chance, and it won't come again--"
Just for a moment he paused, and then, his eyes gleaming with passion
under his frowning brows, he added, with savage, deliberate meaning,
"It won't come again, as long as you live."