Squeezing the Short Interest
A Short Story by William
Walker Mines
(Copyright, ia, by William Walker MltiM (
ll AM sincerely sorry that you take
lyl I this view of the situation. Mr.
I I Murchmnnt," null the younger
I "rjr'l ,,M" ,w'' '" l"lv.it
" 11 office, "mul I beg ti remind you
that your daughter will he of nge In a few
week. She has promised t tin t she will
rniirry me then, whether you give ynr
Consent or not."
"In that iki', Mr. Heath," s;ild the ulilcr
man. "the matter will hvn passel le-yonl
my rontrol. I have nothing to urge im.Jin.st
yll isccpt th.it I lo lint consider yuii a
good btn-iiiess niHii ami I would wish m
mt-in-liiw to lie capable of inter. n thn
firm of Murchmnnt A Co. Yon are, I am
orry to say, too I m pul-il . mi l prom' to be
taken In. In Mhort, yon hit not nt nil thn
kin. I of a man I would pick out fur n mm-
in -In w.'
1i
Since you have been so flunk, Mr. March
mont, I trust that you will not think inn
discourteous when I state I hut you are not
at all I lie kind i.f n mini I would pick out
for n father-in-law."
The elder man was a filthier by Instlr.ct
nil training nml there wan an npeal l
Mm In the Khiirp reply of the young man
which ii softer answer wouhl noi have
carried. Ttie rather slight frame of the
young man wax not Indicative i.r a ureal
physical strength, but a glance ut hlx keen
gray eye and Manure cut Jaw reveuled
great nervous stimuli! anil ucutones.
"You beat ne pretty badly on tint wheat
denl hint spring," continued the young
man. "but I have got on my feel agiiti
anil mime line day I Imp,, to catch the hnun
of Murchmont A t'o. napping and gel back
otne of the hundred thousand dollars you
aiiueexed out of me."
The elder man laughed. That wheat ileal
whs a pleasant recollection.
"I xupiMise you think I wax skimming
pretty close to sharp practice when I niad.i
you settle on my own bawls, didn't you?"
he asked.
"Not at all." said Heath. "When a mm
Hells what be hadn't got lie has tv kick
coming when he is made to pay for his
folly. 1 think I not a hundred lliou-uind
dollars' worth of experience nut of that
deall"
"I wouldn't mind selling you n little more
exierlenoe at the same rate," raid Mnrch
mont. "What Hre you doing now?"
th. I am working on that Sun Uemo
Mining company propnxltlou. Think It Is a
pretty good thin. I ,avP organised a com
pany and believe we will be paying dlvl
dends Inside of a year."
"Humph! What a the rapltal Block?"
"Hundred thouaand."
"How much do you contiol?"
"Klft.v-one w-r cent. 510 shares."
"Who holda the real?"
"Jim lodNou haa Stu shares; John Folk,
aa attorney, holda lm) and the other 1HI are
held In scattering five and ten-share low."
What's the truth of the rumor 1 hear that
the inlnea are suffering from nn overtlow
of water?"
"Not much. When our pumps ar put In
place we will have that water out in a
month The atock la good. I believe It's
worth all of par. maybe more."
"Want to buy any?"
"I might take a few shares If you make
it nil object."
"I'll aell you 260."
"Didn't know you had any. It la danger
us business selling what you haven't got
to deliver." said Heath fllppanlly.
"I guess I ran deliver them all right. I
don't need any advice front you on the
Mibjet't. The trouble la with you that you
re afraid of the stock yourself." Kvhlenlly
old man Murchmont wax somewhat angry.
"Not on your life. I ll take 00 from you
at 5"
Miirrhmont made some- flumes on a slip
o( paper. "Well," he mm Id aggressively, "If
you will not acquire any atock in the mean
time, or have your friend acquire any. I
will deliver you m shares if ihis stock
within sixty days at 50."
The agreement to deliver was signed and
acknowledged, and then Marchmont said:
' I am making this deal Just to teach you
another lesxon. Jim nodsnu was In he-e
thin morning trying to sell me his 3ml at
any price, i believe that you will learn
sumctht-ig about business some day. and
then I'll be proud of you ax a soil-in law.
Meanwhile. I might aa well get your money
a anybody's."
Thanks for the good wishes an J the b.ul
compliment." said H.alh. will) a laugh.
"Now I know, ot rather believe, that the
San Hemo Is one of the best mining prop
erties in the world, and I think you are
golnij lo have more difticuliy In corralling
those tmi shh' than you anticipate.
sha.i t endeavor to acipiire a share direit'y
or Indirectly, as I premised, but If anyone
asks my advice as to selling I shall cer
tainly advise them to hold on to their stock
for a price considerably above par. And I
won't be lotting any money by taking !
or any other number of shares from you
nt ." Itut your agreement says ton. and
you can wager that I will hold you lo J isi
a strict an interpretation of the letter ot
th contract as you held me on the wheat
deal. So look, sharp." and Heath took luni
self out of the ottUv.
Once outside he la us lie J. laughed huig
nj ikmi lite iesa heartily because the
Uughier wjt inii-el s. "Four hundred
"i I ,l : : I
"YOf ONTK SAU IF 1 COl'I-D SHOW YOf MY .'. HII.ITT IN BfSINKSS YOU WOL'Ll) GIVE YOUK CONSENT TO OUR
MA Kill AUK."
shares nt 50! Got to be delivered! Talk
about wheut! Hut won't the old man
howl!"
There wax evidently something very en
joyable In the Idea, for he concluded to
drop business for the day and call on
Xlnrchmont's daughter Kmlly. his ftuncee.
He told her the whole history of the deal,
and, by a good deal of explaining, tlnally
nuide her understand the situation. She
knew more about business than most
women do and said:
"It is a little out of the way. but I am
willing to take your word for It that it is
perfectly honest. I know that it Ui nothing
more than pupa would do to you. 1 have
heard him say a thousand times that a
man who sells something he hasn't got de
serves to get siiueesed. That Is what he
said about you when you got the worst of
that wheat deal."
"I must confess," said Heath, "that It
comes a little nearer to sharp practice than
I would care to go under ordinary clrvum
stunccs, but you say you would like o hne
his consent before we are married, and this
la the only way I know of getting it. Then
I am doing no more to him than he did to
mo on the wheat deal, and we will have
to prorced on the supposition that the end
will justify the. means. And the money
wil' be all in the family, anyhow."
Kniily was sworn to presorve Hie most
Inviolate secrecy In regard to what she
knew of. the deal, mid Ai.tn tinionl went
away happy in the thought that be was
going to treat bis fatber-in-la w-lo be to a
very bad quarter of an hour or so.
Marchmont was not alarmed. He went
to wi.rk In his usual quiet and businesslike
way to accumulate the 4m shares of San
Henio. The stock was not listed on the ex
change, but the ' cui! sionc" agents of his
brokers managed to pick up a few sh.iros
at mound tidily, and he found no d'rhVully
in buying IVUxon's for the same price. As
a stockholder ho demanded and was readily
granted permission to examine the records
in the company's office and obtained a list
of the stock holders.
Having bought lWson's two hundred and
having picked up ulniut a hundred Ihro.igh
th - "curb'' market. Marchmont found that
lie must ell her get the 1HI hart-x which
stood in the name of John Folk, as a nol le),
cr pick up all the rest of the outstand
ings and secure ten shares of this 1 l lot.
He wrote to IVtlc. whom he knew slightly.
i.iTcrlng thirty lor ! Kluiros held in his
name, and .sent out a circular letter to th
ten or twelve smaller, stockholder whose
stock he had not yei secured, offering -them
th same price and enclosing newspaper
clippings which showed that the tian Kemo
property wm suffering from an' overflow
of water.
From the smaller holders he secured
enough stock to run his holdings up to 3)
shares, one man answering that he would
hold his ten shares for par.
This was encouraging progress, but a let
ter from Folk informed him that his client
did not cure to name a price on the stock,
preferring to keep It as an Investment.
Marchmont promptly wrote to the holder
of the ten-share lot and bought his shares
at the price asked, par He had now
bought :W) shares at an average price of 3i,
and ten shares at 100, his purchases having
cost him llittin. At 50, Heath would hava
to pay $20.0ii0 for 4o0 shares, so he could
pay an exorbitant price for the ten shares
of stock which he needed to make his con
tract good and still a profit.
He wiote to Folk again, and told him
that be was willing to pay any reasonable
price for ten shares, and received the reply
that his client was well satistied with the
prospects of the San Remo mine, but might
consider an offer to take the whole of the
loo-share lot.
This was putting another face on affairs.
The sixty days within which he had agreed
to muke delivery lacked only one week of
being up. and it began to dawn on March
mont that in some way Heath wax behind
this refusal of Folks' client to sell.
"Some old fogy who know nothing of
business and lelievos everything Heath says
about the future of the companv. no
doubt." said Marchmont to himself. 'I
must make an effort to see him or to get
Folk to explain the situation. It la wry
peculiar that he ibies not want his name
mentioned. That is Heath's work. I am
sure. Pon t want this unknown to hear the
truth about the state of affairs."
It was not now a piestion of getting out
with a profit that confronted Marchmont.
If he could see and talk with this person
who held the lmi shares, he could possibly
persuade him to sell the shares at a price
not so far aUne par but that he could
come out of the deal without a loss, but
there seemed to be tut prospect of this. On
the other hand, he could either go to Heath
and s. tlle at any pri.e Heath chose to ex
act or let Heath bring suit for nonfulfill
ment. It was not in accord with his nature
to own his defeat to anyone, much less to
I l.ai h. and a suit brought against him for
nonfulfillment ot contract might do the
"rm of Marchmont Co. an incalculable
amount of damage. He had often said, and
he realized the truth of the statement, that
the reputation of a banking firm was like
that of a woman, even a breath of scandal
nay do it an injury that nothing on earth
can ever reimir.
He resolved that the best plan was to
o to Folk and explain the whole ctse
to him. Folk was sympathetic. He un
derstood Marrhmont's position and re
gretted extremely that he should be so
embarrassed. Hut lie could do nothing.
The ethics of his profession forbade that
he should give any clue to his client's
identity, nor could he promise to arrange
a meeting. He would do his best to get
his client to nume a price for the stock.
He did not believe his client would con
sent to sell unless a very Jarge price waa
offered.
"I'll give a very large price." said
Marchmont. "I'll give L"00 per share. I
think It Is your duty as an attorney to
advise your client to accept."
Mr. Folk needed no instructions from Mr.
Marchmont as to his duties to a client.
Nor was he disposed to receive any.
Nevertheless, he would ask his client to
name a price.
Marchmont was to call at 10 o'clock
on the last morning of the sixty days.
Delivery- would have to be made by noon
of that day.
At 10 o'clock he entered Folk's office, a
little less color than usual in his cheeks,
but bearing no other testimony of the fact
that ho had not slept the night previous.
Folk met Marchmont in the outer office
and told him that his client was in the
inner office and did not wish to meet lilm
unless an agreement for the sale of the
stock should be ma.le. His client had
named a price, but it was so enormous;
Hint Folk hesitated to mention it.
"Name it, man. Name it. I must get
them at any price, and make the transfer
before noon. I told you I would pay m
I'll pay Doy if it is necessary, but I must
have them at any price. The credit of
my film is at stake, and I can not afford
to wait a moment."
"The price is tl.um) a share."
'Outrageous! Man alive. $hi,mK) for ten
shares! Hut I will pay it."
' The price is not named for ten shares.
You can have K-u shares at Jl.tmo a share,
or you may have ten shares at tlO.oon a
share."
' It s blackmail! ' said Marchmont. pacing
up and down the office. "By Heath I
behind this, and It ia nothing more or less
than blackmail! I won t pay it!"
' I will infirm my client of your decision."
said Folk, with quiet dignity, "and bid you
good morning."
"Stop a moment. Folk." said Marchmont.
"Give me time to think. I am in a trap
and I don t see any way out of it. If I
don't buy from your client I've got to buy
from Heath, and I haven't a doubt but
what he is dictating the price you named
to me. Give me a moment. Ill pay the
I lmi. I W. My check is good, i-su't It?"
"I'nqueaiionably so. I have the stock all
It
