“You are,” responded the gray-haired president, in a wheezy voice. “I must state, however, that the estimates proved that these extravagances would be repaid eventually—”
BURSTS of indignation came from stockholders. Warlock slumped pitifully in his chair. Accusing voices sounded in his ears. It was Darring who silenced them with a powerful rap upon the end of the table.
“One moment, gentlemen!” roared Darring. “This is no time for spitefulness. Accept Mr. Warlock’s statement at its true value. He admits extravagances, but” — Darring’s tone eased as his eyes moved about the silenced group — “he also states a fact when he declares that the heavy expenditures would have been absorbed by the completion of the project.
“In a nut-shell, gentlemen, Mr. Warlock is free from condemnation. His were errors of omission, not of commission. He believed — he still believes — that his expenditures would have been justified. We can not take issue on that point.”
Warlock smiled gratefully as he heard these statements. Antagonism faded as the stockholders were swung by Darring’s persuasion. Though their faces remained glum, they gradually began to coincide with Darring’s assertions.
“The real failure of Centralized Power,” resumed the executive secretary, “lies in the matter of riparian rights. As I said a moment ago, Mr. Warlock’s error was one of omission. He neglected to obtain full information on a subject that was vital to the success of Centralized Power.
“A few months ago, certain directors of this company became alarmed by the high expenditures that Mr. Warlock had instituted. They urged my appointment to the position of executive secretary. I went into all matters in detail I must say, gentlemen, that Mr. Warlock spared no effort to aid me in my investigation, even though it was a reflection upon his handling of the company management.”
Warlock nodded approvingly. Stockholders, toned down by Darring, looked sympathetically toward the president. They recalled that Warlock, himself, was a heavy stockholder in the company. He, too, was losing a fortune.
“Thanks to Mr. Warlock’s cooperation,” declared Darring, “I was able to make a thorough study of matters as they stood. Aided by my experience as receiver for certain defunct power companies, I went deeply into the entire affair. In fact, I started from the beginning. I wanted to learn about the water supply that the great Centralized dam was to hold.
“Every one else — Mr. Warlock included — had taken the riparian rights for granted. I took nothing for granted. Almost at the start of my survey, I uncovered the astounding fact that all the streams from which Centralized Power expected to store up water were controlled by other interests.
“There we had it. A huge dam, half built. Contracts calling for equipment. New property options to be exercised. All for a project that was doomed to failure because the one needed element, water, was not obtainable. There was but one course to take. Empowered as executive secretary, I suspended further construction of the dam.
“Since then, I have been actively engaged in my investigation. I find that we are confronted by an absolute dilemma. We must either abandon our entire enterprise, calling it a complete loss, or we must buy out all the companies that hold riparian rights. That would mean a cost that could never be absorbed.”
THE truth of Darring’s statements seemed obvious. Haggard-faced, the stockholders looked from one to another and shook their heads.
There was only one who seemed unperturbed by the situation. This was a tall, silent personage who was seated midway at the table. Turning toward Darring, he spoke.
“Let me introduce myself,” he said, in a quiet tone. “My name is Lamont Cranston. I have but recently returned from abroad, to find that my broker had purchased shares of Centralized Power securities.
Though my holdings are not proportionately large, I am as interested as any one present regarding the ultimate fate of this corporation. What do you propose, Mr. Darring, as the best solution?”
Darring faced the speaker. He observed a keen, chiseled countenance that was almost masklike in appearance. An aquiline nose, steady, burning eyes— these were the predominating features of Lamont Cranston’s visage. Marryat Darring recognized that he was dealing with a person of importance. He spoke frankly.
“There is no exact solution,” admitted the executive secretary. “But of the two courses that I have mentioned, I should suggest the first. A petition for bankruptcy would be our method to abandon the enterprise.”
“No! No!” exclaimed Warlock, coming to his feet. “We must raise more money, gentlemen! Enough to buy out the other interests—”
“And to burden ourselves,” put in Darring, “with expenditures that would certainly result in even greater loss.”
Warlock subsided. Cranston again took up the matter with Darring.
“The newspaper reports,” stated Cranston, “mention the names of three promoters who profited heavily through the formation of the Centralized Power Corporation. Suppose, Mr. Darring, you give us a statement of their present status.”
“I shall,” responded Darring. “The three men in question are Nathaniel Hildon, Peters Amboy and Wallace Norgan. They are the ones who sold property to Mr. Warlock. They also turned over the stock of the subsidiary companies that Centralized Power absorbed. They had options on many contracts.
“Unquestionably, those three have profited heavily through Centralized Power. By suspending operations, I have stopped their gain. If we go into bankruptcy, our remaining funds will be required to make them further payments.
“If we continue, we will require more money to meet the debts that Hildon, Amboy and Norgan have saddled on us. Such payments will have to be made before we can begin to buy out the companies that hold riparian rights. All that means further loss.”
As Darring paused, Warlock arose. The gray-haired president was trembling with suppressed anger. His wrath, however, was not directed toward Darring. Warlock’s fury had been fanned by the mention of the three promoters.
“They were swindlers!” cried Warlock. “The three of them. Hildon, Amboy and Norgan! Those parasites have fattened themselves with the funds that we have invested in Centralized Power!”
“But you met their demands,” reminded Darring.
“I met them in good faith,” declared Warlock. “Despite their exorbitant terms, I believed that we could make our project pay. It is this question of riparian rights that has ruined us; and I am convinced that those scoundrels are in back of it. Another scheme to bleed us!”
“Yet you advise our continuance?” questioned Darring.
“Only if we can first bring those rogues to justice,” returned Warlock. “Make them disgorge their ill-gotten millions. Regain the funds that are rightfully our own—”
“ONE moment,” interposed Darring, with a wave that curbed Warlock. Then, to the stockholders:
“Gentlemen, if we could prove these accusations against Hildon, Amboy and Norgan, our case might be different. But it is impossible to show actual conspiracy on their part.
“I have visited them, with Mr. Warlock. All have denied any knowledge in this matter of riparian rights. All of their sales and contracts were legal. None of them involved the matter of water supply. Moreover, they take the stand that if the president of Centralized Power knew nothing about the situation that existed, why should they be expected to have such knowledge?
“I argued with them from another angle. That of exorbitant charges on property, options and contracts. There, again, I was balked by the previous actions of our president. Hildon — Amboy — Norgan — all three pointed out that Mr. Warlock had invested in turbine motors that had proven worthless. Hence his payments to them — for actual property and materials delivered — were not out of keeping with his system of management.