"In making this unusual innovation, and in introducing Mr. Ford, I desire to say that I have been actuated by that motive of prudence which, while it stands firmly upon its own feet, is willing to consider suggestions from without, even when these suggestions appear to be totally at variance with a policy of careful and judicious financiering.
"In presenting Mr. Ford as the son of an old friend, long since gone to his reward, I wish it distinctly understood that I am in no sense committed to his plan. The policy of this company under the present administration has been uniformly cautious and prudent: Mr. Ford would throw caution and prudence to the winds. Our best efforts have been directed toward the saving of the ultimate dollar of expense: Mr. Ford urges us to spend millions. We have been trying to dispose of some of our non-paying branches: Mr. Ford would have us acquire others and build new lines."
While Mr. Colbrith was speaking, Adair was rapidly characterizing the members for Ford, checking them off upon his fingers.
"The little man at Uncle Sidney"s right is Mackie, and the miserly looking one next to him is McVeigh," he whispered. "One of them will furnish your coffin, and the other will drive the nails into it. The big man with the beard is Brewster--a multimillionaire; and the one who looks like Senator Bailey is Magnus, president of the Mohican National.
Connolly, the fat Irishman, is a politician--wads of money, but not much interest in the game. The other three--"
But now the president had made an end and was beckoning to Ford.
The young engineer rose, feeling much as if a bucket of ice-water had been suddenly emptied down the back of his neck. But one of his saving qualities was the spring-like resilience which responds instantly to a shock. Spreading his papers on the table, he began with a little apology.
"I didn"t come here this morning prepared to make a promoter"s speech; and perhaps it is just as well, since my gift, if I have one, lies in doing things rather than in talking about them. But I can lay a few facts before you which you may deem worthy of consideration."
From this as a beginning he went on swiftly and incisively. The Pacific Southwestern, in its present condition, was a failure. It was an incomplete line, trying vainly to hold its own against great and powerful systems overlapping it at either end. The remedy lay in extension. The acquisition of a controlling interest in three short roads, which, pieced together, would bridge the gap between the Missouri River and Chicago, would place the Pacific Southwestern upon an equal footing with its compet.i.tors as a grain carrier. By standardizing the Plug Mountain narrow gauge and extending it to Salt Lake and beyond, the line would secure a western outlet, and would be in a position to demand its share of transcontinental business.
To finance these two extensions a capital of thirty-five million dollars would be needed; five million dollars for the purchase of the majority stock in the three short roads, and the remainder for the western outlet. These a.s.sertions were not guesses: by referring to exhibits marked "a" "b" and "f," his hearers would find accurate estimates of cost, not only of construction, but also of stock purchases.
As to the manner of providing the capital, he had only a suggestion to offer. The five million dollars necessary for the acquirement of a controlling interest in the three short roads would be a fair investment. It could be covered immediately by a reissue--share for share--of the reorganization stock of the P. S-W., which would amply secure the investors, since the stock of the most prosperous of the three local roads was listed at twenty-eight, ten points lower than the present market quotation of P. S-W.
The thirty million dollar extension fund might be raised by issuing second mortgage bonds upon the entire system, or the new line itself could be bonded mile for mile under a separate charter. Ford modestly disclaimed any intention of dictating the financial policy; this was not in his line. But again he would submit facts. The grain crop in the West was phenomenally large in prospect. With its own eastern terminal in Chicago, the Pacific Southwestern could control the grain shipments in its own territory. With the moving of the grain, the depressed P. S-W.
stock would inevitably recover, and on a rising market the new issue of bonds could doubtless be floated.
The enthusiast closed his argument with a hasty summing-up of the benefits which must, in the nature of things, accrue. From being an alien link in the great transcontinental chain, the Pacific Southwestern would rise at a bound to the dignity of a great railway system; a power to be reckoned with among the other great systems gridironing the West.
Its earnings would be enhanced at every point; cross lines which now fed its compet.i.tors would become its allies; the local lines to be welded into the eastern end of the system would share at once in the prosperity of a strong through line.
For the western extension he could speak from personal knowledge of the region to be penetrated. Apart from the new line"s prime object--that of providing an outlet for the system--there was a goodly heritage of local business awaiting the first railroad to reach the untapped territory.
Mines, valueless now for the lack of transportation facilities, would become abundant producers; and there were many fertile valleys and mesas to attract the ranchman, who would find on the western slopes of the mountains an unfailing water supply for his reservoirs and ditches. Ford did not hesitate to predict that within a short time the extension would earn more, mile for mile, than the grain-belt portion of the system.
When he sat down he felt that his cause was lost. There was no enthusiasm, no approval, in the faces of his auditors. After a short and informal discussion, in which the engineer was called on to explain his plans and estimates in detail to one and another of the members, Magnus, the bank president, sufficiently summed up the sense of the meeting when he said:
"There is no question about the ingenuity of your plan, Mr. Ford. You must have given a great deal of time and thought to it. But it is rather too large for us, I"m afraid, and there are too many contingencies. Your province, I understand, is the building and operating of railroads, and it is nothing to your discredit that you are unfamiliar with the difficulties of financing an undertaking as vast as this proposal of yours."
"I don"t deny the difficulties," said Ford. "But they wouldn"t seem to be insuperable."
"Not from your point of view," rejoined the banker suavely. "But you will admit that they are very considerable. The opposition on the part of the competing systems would be something tremendous. No stone would be left unturned in the effort to dismount us. To go no further into the matter than the proposed purchase of the majority stocks in the three short roads: at the first signal in that field you would find those stocks flying skyward in ten-point advances, and your five millions wouldn"t be a drop in the bucket. In view of the difficulties, I think I voice the conviction of the board when I say that the plan is too hazardous."
The nods of a.s.sent were too numerous to leave Ford any hope of turning the tide in his favor. He rose, gathered up his papers, and reached for his hat.
"It is very pointedly your own funeral, gentlemen," he said curtly.
""Nothing venture, nothing have" is an old proverb, but it is as true now as it was when it was coined. With P. S-W. stock at thirty-eight and steadily declining; with another dividend about to be pa.s.sed; and with the certainty that the July interest on the bonds will have to be defaulted unless some compromise can be effected with the bondholders--"
"What"s that you"re saying?" broke in Mackie, whose P. S-W. holdings were large.
Ford drew a folded paper from his pocket and laid it on the table.
"I was merely quoting from the auditor"s semiannual report, of which that is a summary," he said, indicating the folded paper. "The report itself will doubtless reach you in a day or two. It would seem to an unprejudiced observer that the present condition spells something like a receivership, unless you have the bondholders with you."
"One moment, Mr. Ford," interposed the banker member; but Ford was working up to his climax and refused to be side-tracked.
"Of course, as an officer of the company, I have felt in duty bound to bring my grist first to the company"s mill. But if you gentlemen don"t wish to grind it, it will be ground, notwithstanding. I could very easily have found a market for my proposal without coming to New York."
With which parting shot, and a word of apology for having taken the time of the board to no good purpose, he bowed himself out, closing the door upon a second attempt on the part of the banker member to renew the argument.
VI
THE AWAKENING OF CHARLES EDWARD
Ford went directly to his hotel from the meeting in the Broad Street board room, paid his bill, and had himself shot up to the fifth floor to prepare for a swift retreat from the scene of his humiliating defeat. It was hardly in keeping with his boast of persistence that he should suffer himself to be thus routed by a single reverse, however crushing.
But in a world where every problem contains its human factor, red wrath accounts for much that is otherwise unaccountable.
Ford was thoroughly and unreasoningly angry and disgusted when he began to fling his belongings into the small steamer trunk, and it was only natural that he should turn with a little brow-wrinkling of resentment when, a little later, Mr. Charles Edward Adair, following his card up to the fifth floor front, lounged good-naturedly into the room.
"Beg pardon, I"m sure," said the intruder easily. "Didn"t know you were busy. I thought maybe you"d like to know the effect of your little double-headed bombsh.e.l.l, and I couldn"t be sure Uncle Sidney would take the trouble to tell you."
Ford made no effort to conceal his contempt for the financial G.o.ds.
"I don"t imagine it will take you very long to tell it," he retorted.
"Nothing short of a combined earthquake and volcanic eruption would have any effect upon that crowd."
"Oh, but you"re wrong!" protested Adair. "That shot of yours with the semiannual summary for a projectile stirred "em up good. It seems that Uncle Sidney and Hertford and Morelock--they"re the executive committee, you know--have had the auditor"s figures for some days, but they hadn"t thought it necessary to harrow the feelings of the other members of the board with the cataclysmic details. So there was a jolly row. Magnus wanted to know, top-loftily, why a small official from the farther end of the system should be the first to bring the news; and Mackie was so wrathy that he inadvertently put the hot end of his cigar in his mouth.
Even Connolly woke up enough to say that it was blanked bad politics."
"But nothing came of it?" said Ford, hope rising in spite of the negative query.
"No; nothing but a general hand-out of pretty sharp talk. What was needed right then was a unifier--somebody who could take command and coax or bully the sc.r.a.pping factions into line. Magnus tried it, but he"s too smooth. Brewster was the man, but he has too many other and bigger irons in the fire to care much about P. S-W. Connolly could have done it if the sc.r.a.p had been a political split, but he was out of his element."
"Humph!" growled Ford. "It didn"t occur to me that there were any differences of opinion to be reconciled. The entire board sat on my proposition--as a unit."
Adair laughed with imperturbable good-humor.
"The factions were there, just the same. You see, it"s like this: Brewster and Magnus and two or three more are pretty well-to-do, and their holdings in P. S-W. don"t cut much of a figure with them, one way or another. The others have more stock in the company, and fewer millions. When the jangle came, Brewster and the heavy men said, "Oh, let it go; it isn"t worth bothering with." Naturally, the little fellows, with more to lose and less money-nerve, said, "No.""
"It spells the same word for me, in any event," Ford commented, and went on pitching things into his steamer trunk.
Adair got upon his feet and strolled away to the window.
When he turned again to face the beaten one he said:
"If I wasn"t so infernally lazy, Mr. Ford, I more than half believe that I could pull this thing off for you, myself. But that is the curse of being born with too much money. I can take a plunge into business now and then--I"ve done it. But my best friend couldn"t bet on me two days in succession."
Ford looked up quickly.
"Then don"t put your hand to this plow, Mr. Adair. I"ll be frank with you. I can fit the mechanical parts of this scheme of mine together, so that they will run true and do business. But I, or any man in my place, would have to have solid backing here in New York; a board that would be as aggressive as a handful of rebels fighting for life, and every man of it determined to win out or smash something. Mr. Magnus spoke of the opposition we should encounter from our compet.i.tors. He might have said more. What the Transcontinental, for example, wouldn"t do to obliterate us needn"t be catalogued. How do you suppose the present P. S-W. board would fare in such a fight?"