Tutt and Mr. Tutt

by Arthur Train

  Just now it was, of course, obvious that he was addressing the company in his capacity of secretary of Horse's Neck.

  “It goes without saying, gentlemen, that this property is pretty nearly down and out. You will recall that most of the insiders sold out on the tail of the Goldfield Boom and waited for the market to sag until we could buy in again. The mines are full of water, work was abandoned over four years ago, and the property is practically defunct. The original capitalization was ten million shares at one dollar a share. We own or control at least four million shares, for which we paid ten to fifteen cents, while we had sold our original holdings for one dollar sixty to one dollar ninety-five a share. While Horse's Neck represents a handsome profit-in my opinion”-he cleared his throat again as if deprecating the vulgarity of his phrase-“it is good for another whirl.”

  “You say it's full of water?” inquired Hunn.

  “It will cost about fifty thousand dollars to pump out the mines and a hundred thousand to repair the machinery. Then there's quite an indebtedness-about seventy-five thousand; and tax liens-another fifty. Half a million dollars would put Horse's Neck on the map, and if the Amphalula vein crosses the property it will be worth ten millions. If it doesn't, the chance that it is going to will make a market for the stock.”

  Mr. Elderberry swept with a bland inquiring eye the shore of the glassy sea about which his associates were gathered.

  “I've been over the ground,” announced Greenbaum “and it's a good gamble. We want Horse's Neck for ourselves-at any rate until we are confident that it's a real lemon. Half a million will do it. I'll personally put up a hundred thousand.”

  “How are you going to get rid of the fifty thousand other stockholders?” asked Mr. Beck dubiously “We don't want them trailing along with us.”

  “I propose,” answered Mr. Elderberry brightly, in his capacity as chief conspirator for Scherer, Hunn, et al., “that we organize a new corporation to be called 'Lallapaloosa Limited' and capitalize it at a million dollars-one million shares at a dollar a share. Then we will execute a contract between Horse's Neck and Lallapaloosa by the terms of which the old bankrupt corporation will sell to the new corporation all its assets for one hundred and twenty-five thousand dollars. We underwrite the stock of Lallapaloosa at fifty cents a share, thus supplying the new corporation with the funds with which to purchase the properties of the old. In a word we shall get Horse's Neck for a hundred and twenty-five thousand and have three hundred and seventy-five thousand left out of what we subscribe to underwrite the stock to put it on its feet.”

  “That's all right,” debated Hunn. “But how about the other stockholders in Horse's Neck that Beck referred to? Where do they come in?”

  “I've thought of that,” returned Elderberry. “Of course you can't just squeeze 'em out entirely. That wouldn't be legal. They must be given the chance to subscribe at par to the stock of the new corporation on the basis of one share in the new for every ten they hold in the old; or, as Horse's Neck is a Delaware corporation, to have their old stock appraised under the laws of Delaware. In point of fact, they've all written off their holdings in Horse's Neck as a total loss years ago and you couldn't drag 'em into putting in any new money. They'll simply let it go-forfeit their stock in Horse's Neck and be wiped out because they were not willing to go in and reorganize the property with us.”

  “They would if they knew about Amphalula,” remarked Beck.

  “Well, they don't!” snapped Greenbaum, “and we're under no obligations to tell 'em. They can infer what they like from the fact that Horse's Neck has been selling for ten cents a share for the last three years.”

  “Is that right, Chippingham?” inquired Beck of the attorney who was in attendance. “I mean-is it legal?”

  “Perfectly legal,” replied Mr. Chippingham conclusively. “A corporation has a perfect right to dispose of its entire assets for a proper consideration and if any minority stockholder feels aggrieved he can take the matter to the Delaware courts and get his equity assessed. Besides, everybody is treated alike-all the stockholders in Horse's Neck can subscribe pro rata for Lallapaloosa.”

  “Only they won't,” grinned Scherer.

  “And so, as they are wiped out-the new corporation-that is us-in fact gets their equity, just as much as if they had deeded it to us.”

  “That is, we get for nothing about one-half the value of the property,” agreed Elderberry. “Now, I've been over the list and I don't think you'll hear a peep from any of them.”

  “He's got 'em on the list-he's got 'em on the list;

  And they'll none of 'em be missed-they'll none of 'em be missed!”

  hummed Mr. Beck. “It looks good to me! I'll take a hundred thousand.”

  “Mr. Chippingham has the papers drawn already,” continued Elderberry. “Of course you've got to give the old stockholders notice, but we can rush the thing through and before anybody wakes up the thing will be done. Then they can holler all they want.”

  “Well, I'll come in,” announced Hunn complacently.

  “So will I,” echoed Scherer. “And the firm can underwrite the last hundred thousand, and that will clean it up.”

  “Is it all right for us to underwrite the stock ourselves at half price?” inquired Mr. Beck. “I mean-is it legal?”

  “Sure!” reiterated Mr. Chippingham. “Somebody's got to underwrite it; why not us?”

  “Move we adjourn,” said Mr. Greenbaum. “Elderberry-the usual.”

  Mr. Elderberry removed from his change pocket five glittering gold pieces and slid one across the glass sheet to each director.

  “Second motion. Carried! All up-seventh inning!” smiled Mr. Scherer; and the directors, pocketing their gold pieces, arose.

  If, as it has been defined, ethics consists of a “system of principles and rules concerning moral obligations and regard for the rights of others,” it may be interesting to speculate as to whether or not these gentlemen had any or not, and, if so, what it may have been. But in considering this somewhat nice question it should be borne in mind that Messrs. Scherer, Hunn, Greenbaum &Beck were bankers of standing, and were advised by a firm of attorneys of the highest reputation. On its face, and as it was about to be represented to the stockholders of Horse's Neck, the proposition appeared fair enough.

  The circular, shortly after sent out to all the names upon the list, stated succinctly that financial and labor conditions had been such that it had been found impossible to operate the mine profitably for several years, that it had depreciated greatly in value owing to the water which had accumulated in its lower levels, that it had exhausted its surplus, that a heavy indebtedness had accumulated, that the corporation's outstanding notes had been protested and that the property would be sold under foreclosure unless money was immediately raised to pay them, the interest due and taxes; that half a million dollars was needed to put the property in operation and that there was no way to secure it, as nobody was willing to loan money to a bankrupt mining concern. That under these circumstances no practical method had been proposed except to organize a new corporation capitalized at one million instead of ten, to the stock of which each shareholder in Horse's Neck might subscribe in proportion to his holdings, at par, and to which the assets of the old corporation should be transferred practically for its debts. That this, in a word, was the only way to save the situation and possibly make a go of a bad business, and that it was a gamble in which the old stockholders had a right, up to a certain date, to participate if they saw fit. Those that did not would find their stock in Horse's Neck entirely valueless as it would have no assets left which had not been transferred to Lallapaloosa. Stockholders who were dissatisfied could protest against the enabling resolution to be offered at the annual meeting of the stockholders of Horse's Neck to be held the following week at Wilmington, Delaware, and could avail themselves of the right to have their equity assessed under the laws of Delaware, but as the liabilities practically equaled the present value of the property that
equity would naturally be highly problematical.

  Now, as a matter of morals or of law the only thing that made the proposed reorganization unethical or inequitable was the single trifling fact that those responsible for it were the only ones who knew of the existence and proximity of the Amphalula vein. When a mining company, a railroad, an oil well or any other enterprise is down and out it is only fair that the majority stockholders, who are obliged to protect their investment, should have the right to call upon the rest to come forward and do their share or else drop out. A minority stockholder cannot appeal to any canon of fair play whereby he should be entitled to sit back and let the majority take all the risks and then claim his share of the profits.

  The imponderable element of injustice in the situation consisted in the suppression of a fact which the directors concealed but concerning which, however, they made no representation, false or otherwise. They were going to risk half a million dollars of their own money and they wanted the whole gamble for themselves. They sincerely felt that nobody else was entitled to take that risk with them. Once they had floated Horse's Neck they had come to look upon it as their own private affair. The minority had no rights which they, the majority, were bound to respect. The minority were nothing but a lot of piking gamblers, anyway, who bought or sold for a rise or fall of a few cents. They knew nothing of the property and cared less for its real value. They were merely traders and if they lost they forgot it or tried to. On the other hand Scherer, Hunn, Greenbaum &Beck were promoters, who contributed something to the economic advancement of the nation.

  * * * * *

  “Regarding my hat, which you suggested this morning should be pressed at a cost of fifty cents,” remarked Mr. Tutt to Miss Wiggin when he returned to the office upon the adjournment of court in the afternoon and replaced that ancient object in its accustomed resting-place -“regarding that precious hat of mine”-he eyed it affectionately -“I can only say that I would as soon send myself to a dry-cleaning establishment as to permit its profanation by the iron of a haberdasher.”

  Miss Wiggin laughed lightly.

  “That doesn't explain your cryptic statement that it would probably cost you a hundred thousand dollars,” she replied. “Still-”

  Mr. Tutt turned suddenly upon his heel and held her with an upraised hand, the bony wrist of which was encircled, after an intervening space of some five inches, by a frayed cuff confined with a black onyx button the size of a quarter.

  “Behold,” he cried in the deep resonant voice that he used in addressing juries at the climax of a peroration, “the integuments of my personality-the ancient habiliments of an honorable profession-the panoply of the legal warrior. Here, my corslet”-he touched his dingy waistcoat with his left hand; “my greaves”-he brushed the baggy legs of his pantaloons; “my halberd”-he raised his old mahogany cane with its knot of yellow ivory; “my casque”-he indicated his ruffled stove-pipe “Arrayed in these I am Mr. Ephraim Tutt, attorney and counselor at law-the senior partner in Tutt &Tutt-a respected member of the bar duly accredited and authorized to practise before the Supreme Court of the State of New York, the Court of Appeals, the District Court of the United States, the Circuit Court of Appeals, the Supreme Court of the United States, the Court of Claims-”

  “-the Police Court and the Coroner's Court,” concluded Miss Wiggin, making him a mock curtsy.

  “Without these indicia of my profession and my individuality I should be like David without his sling or Samson without his hair. I should be merely Tutt, a criminal lawyer-one of a multitude-regarded perhaps as a shyster. But in these robes of my high office I am a high priest of the law; just as you, my dear girl, are one of its many devoted and worthy priestesses. Can you imagine me going to court in a bowler hat or arguing to the jury in a cutaway coat or bobtail business suit? Can you picture Ephraim Tutt with his hair cut short or in an Ascot tie, any more than you can envisage him in riding breeches or wearing lilacs? No! There is but one Mr. Tutt, and these are his only garments. He who steals my hat may steal trash, but without it I should be like a disembodied spirit unable to return to my earthly dwelling-place.

  “A paltry hundred thousand?

  “Nay, without my hat-my helmet!-I should be valueless to myself and everybody else; so estimate my worth and you can assay the value of my hat. What am I worth in your opinion?”

  And then Miss Wiggin, having glanced cautiously if quickly round, made a most astonishing declaration.

  “Just about a million times more than anybody else in the whole world, you old dear!” she whispered and rising upon her toes she kissed his wrinkled cheek.

  “Dear me! You really mustn't do that!” gasped Mr. Tutt.

  “Well,” she retorted, “you can discharge me if you like. But first sit down, light a cigar and let me tell you something.”

  Mr. Tutt did as he was bid, chuckling.

  “Well,” said Miss Wiggin, “there is such a thing as Horse's Neck Extension after all!”

  “Um-you don't say?” he answered, struggling to make his stogy draw.

  “And it has an office with about a hundred other corporations of various kinds-most of them with names that sound like the zoo-Yellow Wildcat, Jumping Leapfrog, and that sort of thing. It seems Horse's Neck is played out and they are going to reorganize it-”

  “Who are?” demanded her employer, suddenly sitting erect.

  “Scherer, Hunn, Greenbaum &Beck.”

  “The dickens they are!” he ejaculated. “That bunch of pirates? Not if I know it!”

  “Why not?”

  “Reorganize! Reorganize? Reorganization is my middle name!” cried Mr. Tutt. “So Scherer, Hunn, Greenbaum &Beck are going to reorganize something, are they? Let 'em try! Not so long as I've got my hat!”

  “This is all very enigmatical to me,” replied Miss Wiggin. “But then, I'm only a woman. Aren't they all right? Why shouldn't they reorganize a mine if it's exhausted?”

  “If it's exhausted why do they want to reorganize it?” he demanded, climbing to his feet. “Let me tell you something, Minerva! All my life I've been fighting against tyranny-the tyranny of the law, the tyranny of power, the tyranny of money.”

  He drew fiercely on his stogy, which being desiccated flared like a Roman candle.

  “You don't need to tell me what this plan of reorganization is; because they wouldn't propose one unless it was going to benefit them in some way, and the only way it can be made to benefit them is at the expense of the other stockholders. Quod erat demonstrandum.”

  Mr. Tutt seemed to have become distended somehow and to have spread over the entire wall surface of his office like the genie which the fisherman innocently permitted to escape from the bottle.

  “There isn't one reorganization scheme in a hundred that isn't crooked somewhere.”

  “According to that, if a business is unsuccessful it ought to be allowed to go to pot for fear that somebody might make a profit in putting it on its feet,” she countered. “I think you're a violent, irascible, prejudiced old man!”

  “All the same,” he retorted, “show me a reorganization scheme and I'll show you a flimflam! What's this one? Bet you anything you like it's as crooked as a ram's horn. I don't have to hear about it. Don't want to read the plan. But I'll bust it-higher than Hades. See if I don't!”

  He spat the remaining filaments of his stogy from the window and fished out another.

  “How do we come into it, anyhow?” he demanded.

  “Doctor-I mean Mister Barrows,” replied Miss Wiggin.

  “Oh, yes. Of course. Well, you send for him to come down here and sign the papers.”

  “What papers?”

  “The complaint and order to show cause.”

  “But there isn't any.”

  “There will be, all right, by the time he gets here.”

  Miss Wiggin looked first puzzled and then pained.

  “I don't understand,” she said rather stiffly. “Do you mean that the firm of Tutt &Tutt is going to engag
e in the enterprise of trying to break up a plan of reorganization without knowing what it is? Won't you lay us all open to the accusation of being strikers?”

  Mr. Tutt's ordinarily brown complexion became slightly tinged with purple.

  “Let the court decide!” he cried hotly. “You say Scherer, Hunn, Greenbaum &Beck are proposing to reorganize a mining company? You admit we hold some of the stock? Well-as the natural-born and perennial champion of the outraged minority-I'm going to attack it, and bust it, and raise heck with it-on general principles. I'm going to throw that damned old hat of mine into the ring, my child, and play hell with everything.”

  And with a cluck Mr. Tutt leaned over, produced a dingy bottle wrapped in a coat of many colors and poured himself out a glass of malt extract.

  * * * * *

  When Mr. Greenbaum was summoned to the telephone and informed by Mr. Elderberry in disgruntled tones that somebody had just served upon him an order to show cause why the proposed reorganization of Horse's Neck should not be set aside and enjoined, he not only became instantly annoyed but highly excited.

  “What!” he almost screamed.

  “I'll read it to you, if you don't believe it!” said Mr. Elderberry.

  “'United States District Court, Southern District of New York, Edward V. Barrows, Complainant against Horse's Neck Extension Mining Company, Defendant.

  “'Upon the subpoena herein and the complaint duly verified the nineteenth day of February, 1919, and the affidavit of Ephraim Tutt and-'“

  “Who in hell is Tutt?” shouted Greenbaum, interrupting.

  “I don't know,” retorted Elderberry; “or Barrows either.”