If Gray cherished any lingering doubts as to the loyalty of Mallow,
erstwhile victim of his ruthlessness, or of McWade and Stoner, the
wildcat promoters, those doubts vanished during the next day or two. As
a matter of fact, the readiness, nay, the enthusiasm with which they
fell in with his schemes convinced him that he had acted wisely in
yielding to an impulse to trust them. At first, when he divulged his
enemy's identity, they were thunderstruck; mere mention of Henry
Nelson's name rendered them speechless and caused them to regard their
employer as a harmless madman, but as he unfolded his plans in greater
detail they listened with growing respect. The idea seized them
finally. In the first place, it was sufficiently fantastic to appeal to
their imaginations, for they saw in Gray a lone wolf with the courage
and the ferocity to single out and pull down the leader of the herd,
and, what was more, they scented profit to themselves in trailing with
him. Then, too, the enterprise promised to afford free scope for their
ingenuity, their cunning, their devious business methods, and that
could be nothing less than pleasing to men of their type.
But early enough he made it plain that he intended and would tolerate
no actual dishonesty; crooked methods were both dangerous and
unsatisfactory, he told them, hence the fight must be fair even though
merciless. To annoy, to harass, to injure, and if possible actually to
ruin the banker, that was his intention; to accomplish those ends he
was willing to employ any legitimate device, however shrewd, however
smart. His entire fortune--and his associates, of course, greatly
exaggerated its size--would be available for the purpose, and when he
sketched out the measures he had in mind the trio of rogues realized
that here indeed was a field wide enough for the exercise of their
peculiar gifts. They acknowledged, too, a certain pleasure in the
comfortable assurance that they would involve themselves in no illegal
consequences.
At their first council of war Gray gave each of them a number of
definite things to do or to have done, the while he sought certain
facts; when they assembled for a second time, it was to compare, to
tabulate, and to consider an amount of information concerning the
activities of Henry Nelson that would have greatly surprised that
gentleman had he been present to hear it.
For one thing, there had been prepared a comprehensive list of the
Nelson holdings, together with maps showing their acreage and
production, the location of drilling wells, the ownership of adjoining
properties, and the like. There was also a considerable amount of data
concerning the terms of the Nelson leases, renewal dates, and such
matters. Gray was forced reluctantly to admit that his enemy was more
strongly intrenched than he had supposed; careful study of the data
showed that the Nelson acreage had been well selected and that it was
scientifically "checkerboarded" throughout the various fields. What was
more significant was the amount of proven or semiproven stuff.
"It took work and money to get together that group of leases," Brick
Stoner declared, after he had checked them off. "That's one of the best
layouts in Texas, and they're shaped up to put over a big deal if they
want to."
"They lack production," said Gray.
"Sure! But they'll have it before long. Lookit the wells they're
putting down and that's going down around 'em."
The former speaker chewed his cigar thoughtfully for a while, then: "I
don't believe they contemplate a big deal. They're not that sort. Henry
Nelson is selfish and suspicious, and I'm told that Bell wouldn't trust
anybody. I'm informed also that every dollar they have made has gone
back into new leases and wells and that they intend to hold everything
for themselves. It is rumored, quietly, that they are overextended."
"I wouldn't care how thin I was stretched if I had their gamble,"
McWade asserted. "All they have to do is to sit tight. The law of
average will pull them out. What do you intend to do?"
"To begin with, I intend to stretch them even thinner--so thin they'll
break, if that is possible."
"You can't load them up with more property."
"Certainly not, but I can make them drill more wells."
"Offsets, eh?" Stoner studied the map a bit doubtfully. "You can't make
'em offset dry holes, and if they strike oil in their wells the other
fellers will have to do the offsetting."
"True. I can, of course, prevent them from extending their renewals. I
can cost them a pretty penny just by forcing them to a rigid adherence
to the terms of their leases and agreements and--"
"What do you mean, 'offsets'?" Mallow inquired. "How you going to break
a man by bringing in wells alongside of his property? That'll make him
rich."
"Can you beat that?" Stoner inquired. "Mallow's been selling oil stock
and experting wells for us with the Marvelous Magnetic Finder and he
don't know an offset from a headache post."
"Certainly, I know--"
"Why, Professor! Is it possible we have been deceived in you? An offset
is the thing that sets off to one side of the crown block and it's a
light blue, the same as a formation. It's the shape of a syncline, only
bigger."
"Don't get funny. You drill an offset well to keep a man from sucking
all the oil out from under your land."
"Right!" said Gray. "Wells, as you know, are drilled as close to the
side lines as the law allows. When oil is found, the adjoining
landowner can compel his lessee to put down a well to offset every one
that threatens to draw oil from beneath his property." "That's what
I've just been telling you."
"Many an operator has gone broke offsetting wells in order to protect
his leases, especially if he has a number of neighbors who all start
drilling promptly. That is one of the many production troubles--and
there's a saying that trouble begins when the oil starts."
"You said it. But to offset the Nelsons so's to cripple 'em--" Brick
Stoner shook his head. "It ain't hard to borrow money for good offsets.
'Most any bank will lend."
"It is hard for anybody who is overextended to borrow. Possibly my plan
won't work, but to annoy, to harass, to embarrass, to stretch them
thin--it's all a part of the game. People are never as well off as we
think they are. The Nelsons are close to the sand in a number of
places. I want to procure the adjoining acreage. For every well they
make, I'll force them to drill six more. The day they strike oil I'll
have a string of derricks every two hundred feet along their side
lines."
It was Mallow who spoke next. "That will cost you dollar for dollar,
boss. Have you got chips enough to match their stack?"
"I don't have to invest dollar for dollar. My money will go for leases,
and I'll let drilling contracts, fifty-fifty, sixty-forty,
seventy-thirty--anything to get quick action. Other people's money will
do the work for me. Remember, I'm not after oil, I'm after a man."
"I'll say you are!" Stoner looked up from a frowning contemplation of
the maps. "And if you'll take a chance I'll show you how you can drill
one well and cost them three--that is, provided you hit." As the others
leaned over his shoulder he explained: "Here's a square block of four
twenties--separate leases, all of 'em--and the Nelsons own three. You
can cop the fourth twenty, drill right at the inside corner, where all
the lines cross. If you pull a duster, you'll be out and injured, maybe
twenty-five thousand, but if it comes wet they'll have to protect those
three leases with three offsets. It ain't a bad-looking piece of
ground; you'll have about a one-to-three chance of making a well."
"How many companies have you gentlemen promoted?" Gray inquired.
"Twenty-two. And from a shoestring. Every well went down, or is going
down, and every dollar we got right here on the street."
"And all of them are dry, are they not?"
McWade spoke up, defensively: "Sure. They were all wildcats of the
wildest kind. But we don't deal in oil, we sell stock. Every issue
we've put out has gone above par at some time or other, and that's
playing the game square with our customers, ain't it? We see that they
have a chance to get out with a profit; if they hang on it's their own
fault. That's how we've built up a clienteel."
"It wouldn't hurt your reputation to bring in a wet well for a change,
would it?" Both partners agreed that it would not. "I'll buy this
twenty-acre lease, and you can promote a company to drill ten of it,
Stoner says it's a one-to-three shot."
McWade blazed with enthusiasm at the suggestion. "Take a piece of the
stock yourself, Mr. Gray, and we'll put it over in a day. With your
name at the top of the list it will bally-hoo itself."
"Not a share. Your amiable proposition brings me directly to another
point which has a bearing upon our main campaign. Law is a dry subject,
but I must bore you with a brief dissertation upon a provision of one
statute which has doubtless escaped your notice. It has escaped the
notice of most people, even of Henry Nelson, I believe. You realize
that all but a few Texas oil companies are not organized as
corporations, but as joint stock associations--in effect declarations
of trust."
"We oughta know it," Stoner said. "It saves paying a big corporation
tax and lets you sell all the full-paid, nonassessable stock you want
to issue, regardless of what the property is worth. Oh, we got wise to
that, _muy pronto!_ Why, these here Texas laws are the bunk! Them
fellows at Austin, if they had their way, would make it impossible to
promote a legitimate enterprise--on a paying basis. They'd make you
turn in cash or property the equivocal thereto every time you
organized. Wouldn't that be sweet? This joint-stock arrangement is the
only way to beat the game. It's a shrewd device, and my hat's off to
the guy that invented it."
"Very true. Very well expressed. But in the statute governing the
procedure there is wrapped up a bundle of bad news, for it is provided
that any officer or stockholder may become personally liable for the
entire debt of the association. There is going to be a lot of sleep
lost over that fact when the truth becomes known."
"You mean if I got stock in a company that's blowed up, and I'm living
in Oshkosh, all pretty, that I can be hooked for the debts some crook
runs up here in Texas?"
"Precisely."
This intelligence brought no consternation to the partners; on the
contrary, McWade, the optimist, grinned widely. "Goes to show you we
have been playing the game along safe and legitimate lines," said he.
"We don't own a share in any of our own enterprises, and if we have to
pick up a few now and then to boost the market, we drop them again as
if they were hot. It's a pretty thought, though. Why, I can see years
of activity ahead of Brick and me, buying up the debts of defunct oil
companies and collecting in full from prosperous strangers hither and
yon. For Heaven's sake, don't let it get out!"
"I won't, at least until after I have accumulated a number of potential
judgments against Henry Nelson. He has had his share of cats and dogs,
of course, and some day I hope to lead them back to his doorstep. If
they return at the right moment, they may prove an embarrassment. Who
knows?"
"Got anything else up your sleeve?" Behind Mallow's dark glasses his
eyes could be dimly seen, and they were active with curiosity.
"Plenty. But we have enough here to start on. First, I want these
various leases, then I want a company promoted and a well started on
that twenty we talked about."
For some time longer the conspirators busied themselves over the
details of their plans, and Gray was beginning to feel some
satisfaction at his rate of progress when an interruption occurred that
threatened to delay action and even to rob him of the services of the
two partners. That interruption took the form of a call from a group of
highly excited and indignant purchasers of stock in the Desert Scorpion
Company, that promotion in which Professor Mallow had assisted on the
morning of Gray's arrival. These stockholders swarmed into the office,
bringing with them an air of angry menace; they were noisy; they all
talked at once.
From out of the confusion it soon became apparent that they had a real
grievance, and one which called for immediate satisfaction; moreover,
it was made plain that the callers cared little what form that
satisfaction took, whether tar and feathers or a rope and a lamp-post.
They had been sold, victimized, flimflammed, skinned; the scorpion had
stung them and the poison was boiling in their veins. Briefly, the
swindle was this: investigation had shown that the land owned by the
Desert Scorpion was not where it had been represented to be, but more
than a mile distant therefrom. Chance alone had brought forth the
truth; the hour of vengeance had struck.
Calvin Gray withdrew quietly from the hubbub and asked Mallow, "Can
that be true?"
The eminent scientist shrugged; out of the corner of his mouth he
murmured: "Why not? It all looks alike."
McWade and Stoner were not in the least dismayed by this amazing
intelligence; as a matter of fact, the former assumed an air of even
greater geniality than usual and nodded a careless agreement to every
accusation hurled against him. "Right you are, men! Absolutely right.
We were victimized, but we're tickled to death to rectify the error.
Mighty fortunate mistake, as a matter of fact. Brick, out with the old
check book and give these birds back their money." With alacrity Mr.
Stoner cleared off his desk and seated himself, pen in hand. "Step up
and get a dollar a share--just what you paid. Fair enough, I calls it.
The banks are open and the checks are good."
Immediately the repurchase of stock began, but anger and suspicion
still smoldered; there were dissatisfied mutterings. One investor, a
field man in greasy overalls, spoke out:
"We'll get ours, all right. Don't worry. But how about the other
suckers? There's fifty thousand shares out. What you going to do about
that?"
"Buy it back. Know where you can get any more?"
"Maybe."
"We'll pay a dollar and a half a share for all you can get, to-morrow."
"What?"
"You heard me. Breast up, boys, and get your money back. Our offer
stands--a dollar a share to-day, a dollar and a half to-morrow."
There was a stir among the indignant speculators; the man for whom
Stoner was writing a check inquired: "What's the idea? Why not a dollar
and a half now?"
Stoner and McWade exchanged a meaning glance--it was not lost upon
their attentive audience--but the latter shrugged and smiled
provocatively. "That's our business," he declared, lightly. "You ghost
dancers want your money back and we're giving it to you. You're letting
up a holler that you were robbed, so come and get it. The faster you
come the better it'll suit us. Scorpion stock will close at a dollar
and a half or better to-morrow night."
"Bluff!" somebody growled.
Stoner finished his signature with a nourish, blotted it, then he
hesitated. He flung down his pen and turned defiantly upon his partner,
crying:
"This ain't fair to these men, Mac. They're customers of ours and we
owe 'em the chance to make a killing. It's up to us to tell 'em the
truth."
McWade was angry. His indignation flamed. Vigorously he denied the
charge of unfairness. A spirited argument ensued, with Stoner asserting
that the firm was morally obligated to protect its clients to a greater
extent than merely by returning their money, and with McWade as stoutly
maintaining that all obligations, moral and legal, were canceled with
the repurchase of the stock.
Meanwhile it became evident that the alarming rumor about Desert
Scorpion was rapidly spreading, for other investors were climbing the
stairs now, and the office was becoming crowded. The later arrivals
were in time to witness McWade finally defer to his partner and to hear
him announce that a rare stroke of fortune had favored purchasers of
this particular issue of stock, for the land which really belonged to
the company had turned out to be much better than that which it owned.
Certain information from the field had arrived that very day which was
bound to send the stock to two dollars. If anybody wanted to sell, the
promoters would be glad to buy, and they would advance their price on
the morrow, as McWade had promised, so here was a chance for those
present to turn a pretty penny by getting busy at once. Frankly,
however, he advised his hearers to hang on and make a real clean-up.
The information, which was not yet public, had nothing to do with the
fact that Doctor Mallow had experted both properties with his
scientific device and pronounced the new acreage much richer than the
old--this latter was merely corroborative evidence, and in view of the
fact that some people put no credence in so-called "doodle bugs," he
merely offered the record of the tester for what it was worth. His
original bet of ten to one still held, by the way, and once again he
repeated that those who wished to sell out would be accommodated with
the greatest alacrity. Only they mustn't return later and squawk.
McWade confessed that he was neither angry nor offended at the recent
attitude of suspicion--he was merely amused. It made him laugh. The
idea of his firm turning a crooked trick, when it was an established
institution as strong as Gibraltar and as conservative as a national
bank, was ridiculous. He and Stoner could point with pride to an
unbroken record of successes and to a list of satisfied investors as
long as a Santa Fe time-table. Desert Scorpion stock would go to two
dollars, and five would get you ten if you didn't think so. Now then,
step lively!
The refunding of money halted; there was a deal of noisy argument. Some
of the disgruntled investors still insisted upon selling out; others
decided to hold on; even a few asked to repurchase the stock they had
turned in, and this they were reluctantly permitted to do at an advance
of fifty per cent.
When the last caller had disappeared, Gray inquired, curiously: "How
are you going to make good on your assertion that the stock will rise?"
"Easy!" said Stoner. "I'll change into my old clothes, put four mud
chains on my car, and drive up, to the exchange in a hurry, then give
some gabby guy a tip to grab Desert Scorpion for me at a dollar and a
half--all he can get. After that I'll shoot out of town on high, with
the cut-out open. There will be a string of cars after me inside of
half an hour, and the stock will be up before I can get back."
"We'll make good, all right," McWade asserted. "Those customers are in
luck dealing with a house like us. All they expect is a chance to get
out with a profit and sting the next fellow. They don't want oil; they
want a run for their money and a quick turn. We give it to them."
"And do they always buy your issues?"
"I ain't saying they do. Sometimes they're cold until you put on the
Indian sign. But all you have to do when stock don't sell is to raise
the price. Oh, if you know how, it ain't hard to make an honest dollar
in the oil business!" Mr. McWade smiled with conscious satisfaction.
"I'm sure of it," Gray said, heartily. "There is so little competition."