Young Wallingford

“All right,” assented Doc Turner, rising with alacrity and looking at his watch. “By the way, I have to see a man. I pretty near overlooked it.”

“That reminds me,” said Mr. Fester, heaving himself up ponderously and putting on the hat which should have been square, “I have to foreclose a mortgage this afternoon.”

Mr. Squinch also rose. It had occurred to all three of them simultaneously to go privately to the two remaining members and buy out their interest in the list for the least possible money.

J. Rufus found the full board in session, however, when he walked into Mr. Squinch’s office on the following afternoon. Mr. Grout was a loose-skinned man of endless down-drooping lines, the corners of his eyelids running down past his cheek-bones, the corners of his nose running down past his mouth, the corners of his mouth running down past his chin. Mr. Christmas had over-long, rusty-gray hair, bulbous red ears, and an appalling outburst of scarlet veins netted upon his copper-red countenance. Notwithstanding their vast physical differences, however, Wallingford reflected that he had never seen five men who, after all, looked more alike. And why not, since they were all of one mind?

By way of illustrating the point, Mr. Grout and Mr. Christmas, finding that the list in question had some value, and knowing well their former partners, had steadfastly refused to sell, and the five of them, meeting upon the common ground of self-interest, had agreed to one thing – that they would ask five thousand dollars for the list, and take what they could get.

When the price was named to him, Mr. Wallingford merely chuckled, and observed, as he turned toward the door:

“You are mistaken, gentlemen. I did not want to buy out your individual businesses. I am willing to give you one thousand dollars in stock of my company, which will be two shares each.”

The gentlemen could not think of that. It was preposterous. They would not consider any other than a cash offer to begin with, nor less than twenty-five hundred to end with.

“Very well, then,” said J. Rufus; “I can do without your list,” which was no matter for wonder, since he had a duplicate of it in his desk at that very moment.

Henry Smalzer was the first man on that defunct building and loan company list, and him Wallingford went to see. He found Mr. Smalzer in a little shoe repair shop, with a shoe upturned on his knee and held firmly in place by a strap passing under his foot. Mr. Smalzer had centrifugal whiskers, and long habit of looking up without rising from his work had given his eyes a coldly suspicious look. Moreover, socialistic argument, in red type, was hung violently upon the walls, and Mr. Wallingford, being a close student of the psychological moment and man, merely had a loose shoe-button tightened.

The next man on the list was a barber with his hair parted in the middle and hand-curled in front. In the shop was no literature but the Police Gazette, and in the showcase were six brands of stogies and one brand of five-cent cigars. Here Mr. Wallingford merely purchased a shave, reflecting that he could put a good germicide on his face when he returned to the hotel.

He began to grow impatient when he found that his third man kept a haberdashery, but, nevertheless, he went in. A clerk of the pale-eyed, lavender-tie type was gracing the front counter, but in the rear, at a little standing desk behind a neat railing, stood one who was unmistakably the proprietor, though he wore a derby hat cocked on his head and a big cigar cocked in the opposite corner of his mouth. Tossed on the back part of the desk was a race-track badge, and the man was studying a form sheet!

“Mr. Merrill, I believe,” said Wallingford confidently approaching that gentleman and carelessly laying his left hand – the one with the three-carat diamond upon the third finger – negligently upon the rail.

Mr. Merrill’s keen, dark-gray eyes rested first upon that three-carat ring, then upon the three-carat stone in Mr. Wallingford’s carmine cravat, then upon Mr. Wallingford’s jovial countenance with the multiplicity of smile wrinkles about the eyes, and Mr. Merrill himself smiled involuntarily.

“The same,” he admitted.

“Mr. Merrill,” propounded Wallingford, “how would you like to borrow from ten dollars to five thousand, for four years, without interest and without security?”

Mr. Merrill’s eyes narrowed, and the flesh upon his face became quite firm.

“Not if I have to pay money for it,” he announced, and the conversation would have ended right there had it not been for Wallingford’s engaging personality, a personality so large and comprehensive that it made Mr. Merrill reflect that, though this jovial stranger was undoubtedly engineering a “skin game,” he was quite evidently “no piker,” and was, therefore, entitled to courteous consideration.

“What you have to pay won’t break you,” said Wallingford, laughing, and presented a neatly engraved card conveying merely the name of The People’s Mutual Bond and Loan Company, the fact that it was incorporated for a hundred thousand dollars, and that the capital was all paid in. “A loan bond,” added Mr. Wallingford, “costs you one dollar, and the payments thereafter are a dollar and a quarter a week.”

Mr. Merrill nodded as he looked at the card.

“I see,” said he. “It’s one of those pleasant little games, I suppose, where the first man in gets the money of the next dozen, and the last five thousand hold the bag.”

“I knew you’d guess wrong,” said Wallingford cheerfully. “The plan’s entirely different. Everybody gets a chance. With every payment you sign a loan application and your receipt is numbered, giving you four numbered receipts in the month. Every month one-fourth of the loan fund is taken out for a grand annual distribution, and the balance is distributed in monthly loans.”

“Oh!” exclaimed Mr. Merrill, the firmness of his facial muscles relaxing and the cold look in his eyes softening. “A lottery? Now I’m listening.”

“Well,” replied Wallingford, smiling, “we can’t call it that, you know.”

“I’ll take a chance,” said Mr. Merrill.

Mr. Wallingford, with rare wisdom, promptly stopped argument and produced a beautifully printed “bond” from his pocket, which he made out in Mr. Merrill’s name.

“I might add,” said J. Rufus, after having taken another careful inspection of Mr. Merrill, “that you win the first prize, payable in the shape of food and drink. I’d like to have you take dinner with me at the hotel this evening.”

Mr. Merrill, from force of habit, looked at his watch, then looked at Mr. Wallingford speculatively.

“Don’t mind if I do,” said he, quite well satisfied that the dinner would be pleasant.

In his own carpenter-shop Wallingford found Mr. Albert Wright at a foot-power circular-saw, with his hair and his eyebrows and his mustache full of the same fine, white wood dust that covered his overalls and jumper; and up over the saw, against the wall, was tacked the time-yellowed placard of a long-since-eaten strawberry festival. With his eyes and his mind upon this placard, Mr. Wallingford explained his new boon to humanity: the great opportunity for a four-year loan, without interest or security, of from ten dollars to five thousand.

“But this is nothing more nor less than a lottery, under another name,” objected Mr. Wright, poising an accusing finger, his eyes, too, unconsciously straying to the strawberry festival placard.

“Not a bit of it,” denied Wallingford, shocked beyond measure. “It is merely a mutual benefit association, where a large number of people pool their small sums of money to make successive large ones. For instance, suppose that a hundred of you should band together to put in one dollar a week, the entire hundred dollars to go to a different member each week? Each one would be merely saving up a hundred dollars, but, in place of every one of the entire hundred of you having to wait a hundred weeks to save his hundred dollars, one of you would be saving it in one week, while the longest man in would only have to pay the hundred weeks. It is merely a device, Mr. Wright, for concentrating the savings of a large number of people.”

Mr. Wright was forcibly impressed with Wallingford’s illustration, but, being a very bright man, he put that waving, argumentative finger immediately upon a flaw.

“Half of that hundred people would not stay through to the end, and somebody would get left,” he objected, well pleased with himself.

“Precisely,” agreed Mr. Wallingford. “That is just what our company obviates. Every man who drops out helps the man who stays in, by not having any claim upon the redemption fund. The redemption fund saves us from being a lottery. When you have paid in two hundred and fifty dollars your bond matures and you get your money back.”

“Out of – ” hesitated Mr. Wright, greatly perplexed.

“The redemption fund. It is supplied from returned loans.”

Again the bright Mr. Wright saw a radical objection.

“Half of those people would not pay back their loans,” said he.

“We figure that a certain number would not pay,” admitted Wallingford, “but there would be a larger proportion than you think who would. For instance, you would pay back your loan at the end of four years, wouldn’t you, Mr. Wright?”

Mr. Wright was hastily sure of it, though he became thoughtful immediately thereafter.

“So would a large majority of the others,” Wallingford went on. “Honesty is more prevalent than you would imagine, sir. However, all our losses from this source will be made up by lapsation. Lapsation!”

Mr. Wallingford laid emphatic stress upon this vital principle and fixed Mr. Wright’s mild blue eyes with his own glittering ones.

“A man who drops a payment on his bond gets nothing back – that is a part of his contract – and the steady investor reaps the benefit, as he should. Suppose you hold bond number ten; suppose at the time of maturity, bonds number three, five, six, eight and nine have lapsed, after having paid in from one-fourth to three-fourths of their money; that leaves only bonds one, two, four, seven and ten to be paid from the redemption fund. I don’t suppose you understand how large a percentage of lapsation there is. Let me show you.”

From his pocket Mr. Wallingford produced a little red book, showing how in industrial and fraternal insurance the percentage of lapsation amounts to a staggering percentage, thus reducing by forfeited capital the cost of insurance in those organizations.

“So you see, Mr. Wright,” concluded Wallingford, snapping shut the book and putting it in his pocket, “this, in the end, is only a splendid device for saving money and for using it while you are saving it.”

On this ground, after much persuasion, he sold a bond to the careful Mr. Wright, and quit work for the day, well satisfied with his two dollars’ commission. At a fifteen-dollar dinner that evening Mr. Merrill found him a good fellow, and, being interested not only in Wallingford’s “lottery” but in Wallingford himself, gave him the names of a dozen likely members. Later he even went so far as to see some of them himself on behalf of the company.

Two days after that Mr. Wallingford called again on his careful carpenter, and from that gentleman secured a personal recommendation to a few friends of Mr. Wright’s particular kind.

CHAPTER XI

WHEREIN BLACKIE DAW PLAYS A BRIEF CHARACTER BIT

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 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 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 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.”

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.

“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 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 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.

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 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 the office, counting expense fund and loan committee fund, of three thousand five hundred per week, steadily, week in and week out, with endless possibilities of increase.

“And what did you say you would take for a half interest?” he asked.

“I didn’t say,” returned Wallingford, chuckling, “because I wouldn’t sell a half interest under any consideration. I don’t mind confessing to you, though, that I do need some money at once, so much so that I would part with four hundred and ninety-nine shares, right now, and for spot cash, for a lump sum of twenty-five thousand dollars.”

“Bound to keep control himself,” Mr. Squinch reported to his confrères, after having reluctantly confessed to himself that he could not take care of the proposition alone. “I don’t blame him so much, either, for he’s got a vast money-maker.”

“Money without end,” complained Andy Grout, his mouth stretching sourly down to the shape of a narrow croquet wicket; “and the longer we stay out of this thing the more money we’re losing. It’s better than any building-loan.”

There was a curious hesitation in Andy Grout’s voice as he spoke of the building-loan, for he had been heartbroken that they had been compelled to give up this lucrative business, and he was not over it yet.

Doc Turner rubbed his perpetually lifeless hands together quite slowly.

“I don’t know whether we’re losing money or not,” he interjected. “There is no question but that Wallingford will make it, but I suppose you know why he won’t sell a half interest.”

“So he won’t lose control,” said Squinch, impatient that of so obvious a fact any explanation should be required.

“But why does he want to keep control?” persisted Doc Turner. “Why, so he can vote himself a big salary as manager. No matter how much he made we’d get practically no dividends.”

It was shrewd Andy Grout whose high squeak broke the long silence following this palpable fact.

“It seems to me we’re a lot of plumb idiots, anyhow,” he shrilled. “He wants twenty-five thousand for less than fifty per cent. of the stock. That’s five thousand apiece for us. I move we put in the five thousand dollars apiece, but start a company of our own.”

Mr. Grout’s suggestion was a revelation which saved Jim Christmas from bursting one of his red veins in baffled cupidity. Negotiations with Mr. Wallingford for any part of his stock suddenly ceased. Instead, within a very short time there appeared upon the door of the only vacant office left in the Turner block, the sign: “The People’s Coöperative Bond and Loan Company.”

Mr. Wallingford did not seem to be in the slightest degree put out by the competition. In fact, he was most friendly with the new concern, and offered Doc Turner, who had been nominated manager of the new company, his assistance in arranging his card-index system, or upon any other point upon which he might need help.

“There’s room enough for all of us,” he said cheerfully. “Of course, I think you fellows ought to pay me a royalty for using my plan, but there’s no way for me to compel you to do it. There’s one thing we ought to do, however, and that is to take steps to prevent a lot of other companies from jumping in and spoiling our field. I think I’ll get right after that myself. I have a pretty strong pull in the state department.”