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 [Pg 127]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 [Pg 128]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 [Pg 129]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.”

[Pg 130]

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.

[Pg 131]

“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 [Pg 132]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 [Pg 133]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.

[Pg 134]

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 [Pg 135]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 ............