Though Buck Ogilvy was gone from Sequoia for a period of three weeks, he was by no means forgotten. His secretary proved to be an industrious press-agent who by mail, telegraph, and long-distance telephone managed daily to keep the editor of the Sequoia Sentinel fully apprised of all developments in the matter of the Northern California Oregon Railroad Company—including some that had not as yet developed! The result was copious and persistent publicity for the new railroad company, and the arousing in the public mind of a genuine interest in this railroad which was to do so much for the town of Sequoia.
Colonel Seth Pennington was among those who, skeptical at first and inclined to ridicule the project into an early grave, eventually found himself swayed by the publicity and gradually coerced into serious consideration of the results attendant upon the building of the road. The Colonel was naturally as suspicious as a rattlesnake in August; hence he had no sooner emerged from the ranks of the frank scoffers than his alert mind framed the question:
“How is this new road—improbable as I know it to be—going to affect the interests of the Laguna Grande Lumber Company, if the unexpected should happen and those bunco-steerers should actually build a road from Sequoia to Grant's Pass, Oregon, and thus construct a feeder to a transcontinental line?”
Five minutes of serious reflection sufficed to bring the Colonel to the verge of panic, notwithstanding the fact that he was ashamed of himself for yielding to fright despite his firm belief that there was no reason why he should be frightened. Similar considerations occur to a small boy who is walking home in the dark past a cemetery.
The vital aspects of his predicament dawned on the Colonel one night at dinner, midway between the soup and the fish. So forcibly did they occur to him, in fact, that for the nonce he forgot that his niece was seated opposite him.
“Confound them,” the Colonel murmured distinctly, “I must look into this immediately.”
“Look into what, Uncle dear?” Shirley asked innocently.
“This new railroad that man Ogilvy talks of building—which means, Shirley, that with Sequoia as his starting point, he is going to build a hundred and fifty miles north to connect with the main line of the Southern Pacific in Oregon.”
“But wouldn't that be the finest thing that could possibly happen to Humboldt County?” she demanded of him.
“Undoubtedly it would—to Humboldt County; but to the Laguna Grande Lumber Company, in which you have something more than a sentimental interest, my dear, it would be a blow. A large part of the estate left by your father is invested in Laguna Grande stock, and as you know, all of my efforts are devoted to appreciating that stock and to fighting against anything that has a tendency to depreciate it.”
“Which reminds me, Uncle Seth, that you never discuss with me any of the matters pertaining to my business interests,” she suggested.
He beamed upon her with his patronizing and indulgent smile. “There is no reason why you should puzzle that pretty head of yours with business affairs while I am alive and on the job,” he answered. “However, since you have expressed a desire to have this railroad situation explained to you, I will do so. I am not interested in seeing a feeder built from Sequoia north to Grant's Pass, and connecting with the Southern Pacific, but I am tremendously interested in seeing a feeder built south from Sequoia toward San Francisco, to connect with the Northwestern Pacific.”
“Why?”
“For cold, calculating business reasons, my dear.” He hesitated a moment and then resumed: “A few months ago I would not have told you the things I am about to tell you, Shirley, for the reason that a few months ago it seemed to me you were destined to become rather friendly with young Cardigan. When that fellow desires to be agreeable, he can be rather a likable boy—lovable, even. You are both young; with young people who have many things in common and are thrown together in a community like Sequoia, a lively friendship may develop into an ardent love; and it has been my experience that ardent love not infrequently leads to the altar.”
Shirley blushed, and her uncle chuckled good-naturedly. “Fortunately,” he continued, “Bryce Cardigan had the misfortune to show himself to you in his true colours, and you had the good sense to dismiss him. Consequently I see no reason why I should not explain to you now what I considered it the part of wisdom to withhold from you at that time—provided, of course, that all this does not bore you to extinction.”
“Do go on, Uncle Seth. I'm tremendously interested,” averred Shirley.
“Shortly after I launched the Laguna Grande Lumber Company—in which, as your guardian and executor of your father's estate, I deemed it wise to invest part of your inheritance—I found myself forced to seek further for sound investments for your surplus funds. Now, good timber, bought cheap, inevitably will be sold dear. At least, such has been my observation during a quarter of a century—and old John Cardigan had some twenty thousand acres of the finest redwood timber in the State—timber which had cost him an average price of less than fifty cents per thousand.
“Well, in this instance the old man had overreached himself, and finding it necessary to increase his working capital, he incorporated his holdings into the Cardigan Redwood Lumber Company and floated a bond-issue of a million dollars. They were twenty-year six per cent. certificates; the security was ample, and I invested for you three hundred thousand dollars in Cardigan bonds. I bought them at eighty, and they were worth two hundred; at least, they would have been worth two hundred under my management—”
“How did you manage to buy them so cheap?” she interrupted.
“Old Cardigan had had a long run of bad luck—due to bad management and bad judgment, my dear—and when a corporation is bonded, the bondholders have access to its financial statements. From time to time I discovered bondholders who needed money and hence unloaded at a sacrifice; but by far the majority of the bonds I purchased for your account were owned by local people who had lost confidence in John Cardigan and the future of the redwood lumber industry hereabouts. You understand, do you not?”
“I do not understand what all this has to do with a railroad.”
“Very well—I shall proceed to explain.” He held up his index finger. “Item one: For years old John Cardigan has rendered valueless, because inaccessible, twenty-five hundred acres of Laguna Grande timber on Squaw Creek. His absurd Valley of the Giants blocks the outlet, and of course he persisted in refusing me a right of way through that little dab of timber in order to discourage me and force me to sell him that Squaw Creek timber at his price.”
“Yes,” Shirley agreed, “I dare say that was his object. Was it reprehensible of him, Uncle Seth?”
“Not a bit, my dear. He was simply playing the cold game of business. I would have done the same thing to Cardigan had the situation been reversed. We played a game together—and I admit that he won, fairly and squarely.”
“Then why is it that you feel such resentment against him?”
“Oh, I don't resent the old fool, Shirley. He merely annoys me. I suppose I feel a certain natural chagrin at having been beaten, and in consequence cherish an equally natural desire to pay the old schemer back in his own coin. Under the rules as we play the game, such action on my part is perfectly permissible, is it not?”
“Yes,” she agreed frankly, “I think it is, Uncle Seth. Certainly, if he blocked you and rendered your timber valueless, there is no reason why, if you have the opportunity, you should not block him—and render his timber valueless.”
The Colonel banged the table with his fist so heartily that the silver fairly leaped. “Spoken like a man!” he declared. “I HAVE the opportunity and am proceeding to impress the Cardigans with the truth of the old saying that every dog must have his day. When Cardigan's contract with our road for the hauling of his logs expires by limitation next year, I am not going to renew it—at least not until I have forced him to make me the concessions I desire, and certainly not at the present ruinous freight-rate.”
“Then,” said Shirley eagerly, “if you got a right of way through his Valley of the Giants, you would renew the contract he has with you for the hauling of his logs, would you not?”
“I would have, before young Cardigan raised such Hades that day in the logging-camp, before old Cardigan sold his Valley of the Giants to another burglar—and before I had gathered indubitable evidence that neither of the Cardigans knows enough about managing a sawmill and selling lumber to guarantee a reasonable profit on the capital they have invested and still pay the interest on their bonded and floating indebtedness. Shirley, I bought those Cardigan bonds for you because I thought old Cardigan knew his business and would make the bonds valuable—make them worth par. Instead, the Cardigan Redwood Lumber Company is tottering on the verge of bankruptcy; the bonds I purchased for you are now worth less than I paid for them, and by next year the Cardigans will default on the interest.
“So I'm going to sit tight and decline to have any more business dealings with the Cardigans. When their hauling contract expires, I shall not renew it under any circumstances; that will prevent them from getting logs, and so they will automatically go out of the lumber business and into the hands of a receiver; and since you are the largest individual stockholder, I, representing you and a number of minor bondholders, will dominate the executive committee of the bondholders when they meet to consider what shall be done when the Cardigans default on their interest and the payment due the sinking fund. I shall then have myself appointed receiver for the Cardigan Redwood Lumber Company, investigate its affairs thoroughly, and see for myself whether or no there is a possibility of working it out of the jam it is in and saving you a loss on your bonds.
“I MUST pursue this course, my dear, in justice to you and the other bondholders. If, on the other hand, I find the situation hopeless or conclude that a period of several years must ensue before the Cardigans work out of debt, I shall recommend to the bank which holds the deed of trust and acts as trustee, that the property be sold at public auction to the highest bidder to reimburse the bondholders. Of course,” he hastened to add, “if the property sells for more than the corporation owes such excess will then in due course be turned over to the Cardigans.”
“Is it likely to sell at a price in excess of the indebtedness?” Shirley queried anxiously.
“It is possible, but scarcely probable,” he answered dryly. “I have in mind, under those circumstances, bidding the property in for the Laguna Grande Lumber Company and merging it with our holdings, paying part of the purchase-price of the Cardigan property in Cardigan bonds, and the remainder in cash.”
“But what will the Cardigans do then, Uncle Seth?”
“Well, long before the necessity for such a contingency arises, the old man will have been gathered to the bosom of Abraham; and after the Cardigan Redwood Lumber Company has ceased to exist, young Cardigan can go to work for a living.”
“Would you give him employment, Uncle Seth?”
“I would not. Do you think I'm crazy, Shirley? Remember, my dear, there is no sentiment in business. If there was, we wouldn't have any business.”
“I think I understand, Uncle Seth—with the exception of what effect the building of the N. C. O. has upon your plans.”
“Item two,” he challenged, and ticked it off on his middle finger. “The Cardigan Redwood Lumber Company owns two fine bodies of redwood timber widely separated—one to the south of Sequoia in the San Hedrin watershed and at present practically valueless because inaccessible, and the other to the north of Sequoia, immediately adjoining our holdings in Township Nine and valuable because of its accessibility.” He paused a moment and looked at her smilingly, “The logging railroad of our corporation, the Laguna Grande Lumber Company, makes it accessible. Now, while the building of the N.C.O. would be a grand thing for the county in general, we can get along without it because it doesn't help us out particularly. We already have a railroad running from our timber to tidewater, and we can reach the markets of the world with our ships.”
“I think I understand, Uncle Seth. When Cardigan's hauling contract with our road expires, his timber in Township Nine will depreciate in value because it will no longer be accessible, while our timber, being still accessible, retains its value.”
“Exactly. And to be perfectly frank with you, Shirley, I do not want Cardigan's timber in Township Nine given back its value through accessibility provided by the N.C.O. If that road is not built, Cardigan's timber in Township Nine will be valuable to us, but not to another living soul. Moreover, the Trinidad Redwood Timber Company has a raft of fine timber still farther north and adjoining the holdings of our company and Cardigan's, and if this infernal N.C.O. isn't built, we'll be enabled to buy that Trinidad timber pretty cheap one of these bright days, too.”
“All of which appears to me to constitute sound business logic, Uncle Seth.”
He nodded. “Item three,” he continued, and ticked it off on his third finger: “I want to see the feeder for a transcontinental line built into Sequoia from the south, for the reason that it will tap the Cardigan holdings in the San Hedrin watershed and give a tremendous value to timber which at the present time is rather a negative asset; consequently I would prefer to have that value created after Cardigan's San Hedrin timber has been merged with the assets of the Laguna Grande Lumber Company.”
“And so—”
“I must investigate this N.C.O. outfit and block it if possible—and it should be possible.”
“How, for instance?”
“I haven't considered the means, my dear. Those come later. For the present I am convinced that the N.C.O. is a corporate joke, sprung on the dear public by the Trinidad Redwood Timber Company to get the said dear public excited, create a real-estate boom, and boost timber-values. Before the boom collapses—a condition which will follow the collapse of the N.C.O.—the Trinidad people hope to sell their holdings and get from under.”
“Really,” said Shirley, demurely, “the more I see of business, the more fascinating I find it.”
“Shirley, it's the grandest game in the world.”
“And yet,” she added musingly, “old Mr. Cardigan is so blind and helpless.”
“They'll be saying that about me some day if I live to be as old as John Cardigan.”
“Nevertheless, I feel sorry for him, Uncle Seth.”
“Well, if you'll continue to waste your sympathy on him rather than on his son, I'll not object,” he retorted laughingly.
“Oh, Bryce Cardigan is able to take care of himself.”
“Yes, and mean enough.”
“He saved our lives, Uncle Seth.”
“He had to—in order to save his own. Don't forget that, my dear.” Carefully he dissected a sand-dab and removed the backbone. “I'd give a ripe peach to learn the identity of the scheming buttinsky who bought old Cardigan's Valley of the Giants,” he said presently. “I'll be hanged if that doesn't complicate matters a little.”
“You should have bought it when the opportunity offered,” she reminded him. “You could have had it then for fifty thousand dollars less than you would have paid for it a year ago—and I'm sure that should have been sufficient indication to you that the game you and the Cardigans had been playing so long had come to an end. He was beaten and acknowledged it, and I think you might have been a little more generous to your fallen enemy, Uncle Seth.”
“I dare say,” he admitted lightly. “However, I wasn't, and now I'm going to be punished for it, my dear: so don't roast me any more. By the way, that speckled hot-air fellow Ogilvy, who is promoting the Northern California Oregon Railroad, is back in town again. Somehow, I haven't much confidence in that fellow. I think I'll wire the San Francisco office to look him up in Dun's and Bradstreet's. Folks up this way are taking too much for granted on that fellow's mere say—so, but I for one intend to delve for facts—particularly with regard to the N.C.O. bank-roll and Ogilvy's associates. I'd sleep a whole lot more soundly to-night if I knew the answer to two very important questions.”
“What are they, Uncle Seth?”
“Well, I'd like to know whether the N.C.O. is genuine or a screen to hide the operations of the Trinidad Redwood Timber Company.”
“It might,” said Shirley, with one of those sudden flashes of intuition peculiar to women, “be a screen to hide the operations of Bryce Cardigan. Now that he knows you aren't going to renew his hauling contract, he may have decided to build his own logging railroad.”
After a pause the Colonel made answer: “No, I have no fear of that. It would cost five hundred thousand dollars to build that twelve-mile line and bridge Mad River, and the Cardigans haven't got that amount of money. What's more, they can't get it.”
“But suppose,” she persisted, “that the real builder of the road should prove to be Bryce Cardigan, after all. What would you do?”
Colonel Pennington's eyes twinkled. “I greatly fear, my dear, I should make a noise like something doing.”
“Suppose you lost the battle.”
“In that event the Laguna Grande Lumber Company wouldn't be any worse off than it is at present. The principal loser, as I view the situation, would be Miss Shirley Sumner, who has the misfortune to be loaded up with Cardigan bonds. And as for Bryce Cardigan—well, that young man would certainly know he'd been through a fight.”
“I wonder if he'll fight to the last, Uncle Seth.”
“Why, I believe he will,” Pennington replied soberly.
“I'd love to see you beat him.”
“Shirley! Why, my dear, you're growing ferocious.” Her uncle's tones were laden with banter, but his countenance could not conceal the pleasure her last remark had given him.
“Why not? I have something at stake, have I not?”
“Then you really want me to smash him?” The Colonel's voice proclaimed his incredulity.
“You got me into this fight by buying Cardigan bonds for me,” she replied meaningly, “and I look to you to save the investment or as much of it as possible; for certainly, if it should develop that the Cardigans are the real promoters of the N.C.O., to permit them to go another half-million dollars into debt in a forlorn hope of saving a company already top-heavy with indebtedness wouldn't savor of common business sense. Would it?”
The Colonel rose hastily, came around the table, and kissed her paternally. “My dear,” he murmured, “you're such a comfort to me. Upon my word, you are.”
“I'm so glad you have explained the situation to me, Uncle Seth.”
“I would have explained it long ago had I not cherished a sneaking suspicion that—er—well, that despite everything, young Cardigan might—er—influence you against your better judgment and—er—mine.”
“You silly man!”
He shrugged. “One must figure every angle of a possible situation, my dear, and I should hesitate to start something with the Cardigans, and have you, because of foolish sentiment, call off my dogs.”
Shirley thrust out her adorable chin aggressively. “Sick 'em. Tige!” she answered. “Shake 'em up, boy!”
“You bet I'll shake 'em up,” the Colonel declared joyously. He paused with a morsel of food on his fork and waved the fork at her aggressively. “You stimulate me into activity, Shirley. My mind has been singularly dull of late; I have worried unnecessarily, but now that I know you are with me, I am inspired. I'll tell you how we'll fix this new railroad, if it exhibits signs of being dangerous.” Again he smote the table. “We'll sew 'em up tighter than a new buttonhole.”
“Do tell me how,” she pleaded eagerly.
“I'll block them on their franchise to run over the city streets of Sequoia.”
“How?”
“By making the mayor and the city council see things my way,” he answered dryly. “Furthermore, in order to enter Sequoia, the N. C. O. will have to cross the tracks of the Laguna Grande Lumber Company's line on Water Street—make a jump-crossing—and I'll enjoin them and hold them up in the courts till the cows come home.”
“Uncle Seth, you're a wizard.”
“Well, at least I'm no slouch at looking after my own interests—and yours, Shirley. In the midst of peace we should be prepared for war. You've met Mayor Poundstone and his lady, haven't you?”
“I had tea at her house last week.”
“Good news. Suppose you invite her and Poundstone here for dinner some night this week. Just a quiet little family dinner, Shirley, and after dinner you can take Mrs. Poundstone upstairs, on some pretext or other, while I sound Poundstone out on his attitude toward the N. C. O. They haven't asked for a franchise yet; at least, the Sentinel hasn't printed a word about it;—but when they do, of course the franchise will be advertised for sale to the highest bidder. Naturally, I don't want to bid against them; they might run the price up on me and leave me with a franchise on my hands—something I do not want, because I have no use for the blamed thing myself. I feel certain, however, I can find some less expensive means of keeping them out of it—say by convincing Poundstone and a majority of the city council that the N. C. O. is not such a public asset as its promoters claim for it. Hence I think it wise to sound the situation out in advance, don't you, my dear?”
She nodded. “I shall attend to the matter, Uncle Seth.”
Five minutes after dinner was over, Shirley joined her uncle in the would be delighted to dine with them on the following Thursday night.
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