It looked as though someone was ‘wise’. Were the brokers with whom Shelby was dealing straight? I said as much to Kennedy, but he merely shook his head and plunged into work deeper.
One after another blocks of stock appeared for sale. There could be no doubt now that there was a carefully planned quick assault being made at the very opening of trading to take people by surprise at the suddenness of the bear raid.
More and more frenzied became the selling and buying. I could imagine the strain that it placed on Shelby, miles away, forced to take only the reports that his brokers sent him, and to fling back other and larger orders to buy.
As the trading progressed it became evident that the offerings of stock were coming with more surprising regularity. The more I observed the more I was convinced that there was some collusion here. It was not chance. Someone was informed of each move of Shelby’s even before it could be executed, was enabled to prepare for it, to meet it with a decided advantage. It was a game being played for high stakes, but as far as Shelby was concerned, the cards were stacked and marked.
Our telephone rang insistently and Kennedy answered it. It was from Dexter. They were feeling shaky and worried.
Our door opened and a clerk from the Merrill and Moore firm entered. He was suave and polite. But back of it all could be discovered the eagerness to stand from under a possible crash.
‘You will readily understand,’ the broker hinted, ‘that under the circumstances we cannot continue to take Mr Maddox’s orders over the telephone indefinitely. Suppose he should repudiate some of them? Where would we find ourselves?’
Kennedy glanced at the two telephone men, one of whom had straightened up and was watching the other.
‘I understand,’ he said simply, a grim smile flickering about his mouth. ‘Just a moment, sir. Walter—keep Dexter on this wire.’
Below on the street I could hear the babel of voices. I knew what it meant. At both ends of Shelby’s telephone line were traitors. A panic in the stock was not only threatened. It was here.
Maddox Munitions was on the verge of collapse!
CHAPTER XXIV
THE PHANTOM CIRCUIT
I LOOKED at Kennedy in despair. He was not even perturbed. It was for just this moment that he had hurried to New York and had worked so intensely.
Over the telephone that I was holding, Dexter himself politely informed us that he had reached a point where orders from Mr Maddox to be filled must have some more binding force than word of mouth over the telephone.
‘Tell him to wait just a moment,’ directed Kennedy, turning to the other broker who had come to us. ‘Will you, sir, tell Mr Merrill to step down to the office of Mr Dexter? I shall be there in a moment myself. Walter,’ he added calmly, ‘ring Dexter off. Get Shelby Maddox and tell him to use the new wire connections.’
I did as I was told. Even over the telephone I could feel that the strain was telling on Shelby’s shattered strength. His voice was shaky as he inquired thickly for news. I shouted something encouraging back, and urged him to get on the other wire, at which, at our end, Kennedy was already impatiently waiting.
A moment later I heard Kennedy and Shelby exchange a few words. Shelby was evidently much alarmed over the sudden turn of events.
As I waited, I saw Kennedy jam the receiver down on the little metal base. The three prongs, reaching upward, engaged the receiver tightly, fitting closely about it. Then he took the small disc receiver from its hook and placed it to his ear instead of the regular one.
I wondered what it all meant. Craig’s face showed that, whatever it was, it was most important.
‘Yes,’ I heard him call back, ‘give whatever orders you want now to me. I will see that they are delivered. Pay no attention to the other telephone. Let it ring—until I tell you. Go ahead.’
Evidently Shelby was giving orders for stock up to the limit of his resources that were available.
For a moment there evidently came a pause in what was being said over the telephone at the Westport end, and Kennedy gazed impatiently about the room.
‘What good will that do?’ I objected, seeing that Kennedy was not occupied. ‘Don’t you suppose they’ll hear what is said over this line, too? We know they’ve cut in on the two trunk lines at the Harbour House, and there is every reason to suppose that someone taps the brokers’ wires here—unless the brokers are crooks, too. They’ll know what Shelby is going to do.’
Kennedy shook his head. ‘No,’ he replied calmly, ‘no outsider knows a thing about this. You see, I’m not using any ordinary means to prepare against the expert who has brought this situation about. The messages that I am receiving are coming over what we call the “phantom circuit”.’
‘“The phantom circuit?”’ I repeated, mystified.
‘Yes. It seems fantastic at first, I suppose,’ he pursued, ‘but, after all, it is in accordance with the laws of electricity. They know nothing and they cannot cut us off or interfere. You see, I am taking advantage of the fact that additional telephones or so-called phantom lines can be superposed on existing physical lines. It is possible to obtain a third circuit from two similar metallic circuits by using for each side of this third circuit the two wires of each of the other circuits in multiple. All three circuits are independent, too.’
He was growing more and more impatient. Apparently there was some delay at the other end.
‘The third telephone current,’ he went on hurriedly, covering up his nervousness by talking about his machine, ‘enters the wires of the first circuit, as it were, and returns along the wires of the second circuit. There are several ways of doing it. One is to use retardation or choke-coils, bridged across the two metallic circuits at both ends, with taps taken from the middle points of each. But the better method, I think, is the the one you have seen me install. I have introduced repeating coils into the circuits at both ends. Technically, the third circuit is then taken off from the midpoints of the secondaries or line windings of these repeating coils. I don’t know what’s the matter,’ he added, calling vainly for Shelby Maddox. ‘Oh, all right. Yes. I’ll wait. But hurry, please.’
I could appreciate Kennedy’s eagerness, for below on the street the tumult was rising.
‘It’s working all right,’ he reassured. ‘I suppose you know that the current on a long-distance line is alternating in character, and it passes readily through a repeating coil. The only effect it has on the transmission is slightly reducing the volume. The current passes into the repeating coil, then divides and passes through the two line wires. At the other end, the halves balance, so to speak. Thus currents passing over a phantom circuit don’t set up currents in the terminal apparatus of the side circuits. Consequently, a conversation carried on over the phantom circuit will not be heard on either side circuit, nor does a conversation on one side circuit affect the phantom. You get three messages at once on two sets of wires. We can all talk at once without interfering with one another.’
At any other time I should have been more than interested, but just now the delay was galling. ‘What’s the trouble?’ I inquired.
Kennedy shook his head. ‘Shelby is talking to Winifred about something. I can hear only a word now and then. But he said it was important and asked me to hold the wire. Evidently she wants to do something he doesn’t want her to do. Yes—hallo—yes, this is Kennedy. Say, you’ll have to— Oh, good morning, Miss Walcott. Yes, fine. What? Why—certainly—if he says so, you may. That’s right. Go right ahead. I am attending to everything at this end now.’
A moment later when Craig restored the telephone to its normal condition he looked at me with a smile.
‘Winifred Walcott is a trump!’ he exclaimed, jumping up.
Just then our other telephone rang, and I answered it. ‘I’m down here in Mr Dexter’s office,’ called a voice which I took to be that of the other broker. ‘We have been talking the situation over. Of course, if Mr Maddox were here himself, you know,’ he went on apologetically, ‘it might be
different. We could have him sign his name to orders, but—really—well, you understand, under the circumstances—we feel, both Mr Dexter and myself, that we have gone about far enough. It’s not that we question Mr Maddox’s intentions in any way, you understand, but—perhaps if he were on the ground, he might protect us from loss, which he may not be able to do over the telephone. We’re sorry, but—’
‘Tell them I’ll be right down,’ interjected Kennedy, sensing from my look the tenor of what was being said.
I interrupted the broker at the first opportunity, then turned to Kennedy. He had pulled from a compartment of the metal base a little wax cylinder and dropped it into his pocket carefully.
‘Come on,’ he cried, dashing for the door and taking the stairs, not even waiting for the elevator to come up.
A moment later we burst into the board room of the broker. Customers were standing about in a high state of excitement, while the boys at the board scurried about, replacing the figures on little bits of green cardboard which fitted under the abbreviated names of the active stocks listed on the board at one end of the room. Others were gathered about the ticker, reading the words that the printed tape was pushing forth. All seemed talking at once.
Kennedy did not pause, however, but walked unceremoniously into the private office of Dexter. There already were several men representing the two brokerage houses. Evidently they had been having a hasty conference on what they should do in view of the situation in Maddox Munitions.
I felt a sort of frigidity in the air as we entered. It was not that anything was either said or done, but I have felt the same thing several times when as a reporter it was my duty to be present at some event that marked the freezing out of some person financially.
‘Maddox Munitions,’ began Dexter, clearing his throat with dignity, ‘seems to have occasioned somewhat of a flurry on the market today in which it is the chief sufferer itself. Our latest quotation shows that it has declined steadily—two points, for instance since the quotation before, and twenty-five under the opening of the market. I think you will readily appreciate, Mr Kennedy, our position in the matter.’
Before Kennedy could reply, however, another took up the conversation. ‘Yes,’ he remarked, ‘we have been observing the trend of events for the last few days. Of course, we can readily appreciate the feeling of Mr Maddox in the matter, and, indeed, I must say that at the beginning I thought that all that was necessary was a good strong show of buying and that the run would end. Now, however, it begins to look as though there were other factors entering in. You know the newspapers have given a great deal of unpleasant notoriety to the Maddox family and Maddox Munitions. Perhaps the general public does not like it. At least it begins to seem as though even Mr Shelby Maddox might not have the resources to stem the tide.’
‘This is Mr Merrill, of Merrill and Moore, I believe?’ asked Craig quietly, reminding them that in their suave haste they had forgotten to introduce him.
‘Yes,’ returned Merrill, flushing a bit, for he was a great stickler for punctilious etiquette, and his failure had betrayed the anxiety he sought to conceal.
It was a ticklish situation and the brokers, always conservative, were making it worse. Nor could one blame them. The case for the stock looked at its darkest, verging rapidly on panic.
Kennedy knew it all just as well as they did. But he kept his coolness admirably and never betrayed that he was doing a thing more than to drive a bargain, whereas another might have given them an impression of merely stalling for time.
As the downward trend continued, I saw that Craig was indeed calculating how far he would let it go, as though one were letting himself down a hill and testing just how little he needed to apply the brakes not to have the car run away from him.
It seemed to nettle the brokers. They wanted to close the whole matter up brusquely. Yet Kennedy’s commanding personality checked them. I felt sure that they would even have ridden rough-shod over Shelby. Kennedy was another matter.
Dexter rose decisively. ‘This must stop,’ he frowned.
‘I have orders from Mr Maddox to buy shares—well, I shall not say what it totals, but the first order is for ten thousand,’ cut in Kennedy quietly.
There was a moment of silence during which the brokers looked at each other, waiting for one to take the initiative.
‘That is just the point,’ began Merrill finally. ‘You see, we have been buying steadily for Mr Maddox. If he had authorised us by letter—or if he had handed us a cheque, certified—’
‘But he could not well have foreseen this raid this morning,’ temporised Kennedy.
‘True, no doubt. But it does not protect us. For example, where is your authority, something, anything, that may be binding on him for this new order of ten thousand shares?’
There was an air of triumph about the way he said the words. It was evidently intended to be a poser, to leave Kennedy floored and flat.
‘Authority?’ repeated Craig quietly, looking about. ‘I wonder whether you have one of those dictating machines, a dictaphone, in the office? Perhaps someone in the building has one.’
‘We have one,’ returned Dexter, still coldly. ‘I do not see how anything you might dictate to it and which a stenographer might transcribe would have any bearing on the question.’
‘It would not,’ agreed Kennedy, blithely. ‘That was not what I intended to do. There is another use I wished to put it to. Ah—I see. May I use this transcribing apparatus? Or better yet, would you gentlemen be so kind as to listen to what I have here?’
He deliberately drew from his pocket the cylinder I had seen him detach from the instrument upstairs and slid it on in the proper place in the new machine.
As it began to revolve I studied the faces about me, intent on listening to what would be said.
‘Is that good enough?’ queried Kennedy. ‘It is a record on an instrument devised for just this purpose with you brokers who wish to hold your customers to an agreement over the telephone.’
The needle of the machine sputtered a bit as Craig added, ‘It is the telescribe—a recent invention of Edison which records on a specially prepared phonograph cylinder all that is said—both ways—over a telephone wire. As nearly as I can make out someone—unknown—has been playing animated telescribe in this case. Let us see now whether your utmost demands for safety and security cannot be satisfied in this modern way.’
Not a word was said. The novelty of the turn of events seemed to leave them no objection.
In Shelby’s own voice came, clear and distinct, the order to buy ten thousand shares of Maddox Munitions. Then Kennedy stopped the machine.
‘Let us see how that works before we go any further,’ he said significantly. ‘His buying orders seemed forestalled by selling orders when they were given over the regular telephone. Before the next is given perhaps we may find we have stopped part of the leak.’
Kennedy’s calm assurance seemed to have completely changed their attitude. They were not convinced, but at least silent.
Out on the Curb we could hear the shouting as brokers with stock to sell crowded about the man with the order to buy.
Whoever was back of it, it was a well-planned raid. The order for ten thousand scarcely stemmed the flood. Quickly Kennedy let the little cylinder revolve. Another order was placed, and another.
I could not help noticing, however, that each succeeding order was smaller than the rest and it was hard to escape the implication that Shelby was really reaching the limit of his available resources.
Anxiously I listened to the turmoil on the Curb. Now it would abate, only to start up again. I glanced at Craig. What would he do?
Just then word was passed up that another block of stock had suddenly been hurled on the market. The brokers looked sceptically at Kennedy. Would Shelby be able to meet this final assault?
Craig released the revolving cylinder again. I gasped as I listened, remembering the pause over the wire upstairs, the apparent reluctance of Shelb
y over something, and Craig’s remark that followed.
Winifred Walcott was placing orders—two of them—one to Dexter, the other to Merrill and Moore. They were large orders, too, a great deal larger than the selling order which had last bombarded the market. I glanced at Kennedy. Not for a moment did he betray the anxiety I know he now felt. For the orders must have involved a large part of Miss Walcott’s own private fortune.
In his abstraction Kennedy had forgotten to stop the telescribe and I heard over it another voice that sounded like Burke’s.
‘Oh, say,’ he announced. ‘I’ve got a clue on that store-room in the cellar. I—’
‘Never mind now, Burke,’ I heard Kennedy answer over the telescribe. ‘That will keep. Just now there isn’t a minute to spare.’
I heard no more, for Kennedy realised what he was doing and shut the reproducer off, pulling off the recording cylinder
Would Miss Walcott’s order be enough to turn the scale? The stock was down. Her money would purchase more shares than before. If it did and the stock rose, she stood to win. If it went lower she might lose all.
I jumped to the window again.
The news of the order, two orders, in fact, and large ones, came like a bombshell on the overwrought market. Was the supporting power of Maddox unlimited? One could feel the air tingle with the question. I saw some speculators hold a hasty conference. Though I did not know it at the time, they decided that an interest that could weather such an assault could weather anything, that someone had been buying all the way down, to boost back the stock far above the old high mark. They wanted to share in the upward turn, and were ready to take a gambler’s chance. Others caught the spirit, for if the Curb is anything it is a driven herd.
Slowly the stock began to climb. The speculative public were in it now. Selling orders almost fell off. Up jumped the price.
Kennedy drew a long breath as he pulled a Westport time-table from his pocket, to cover his revulsion of feeling.
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