“Do go on, Uncle Seth.  I’m tremendously interested,” averred Shirley.

“Shortly after I launched the Laguna Grande Lumber Company—­in which, as your guardian and executor of your father’s estate, I deemed it wise to invest part of your inheritance—­I found myself forced to seek further for sound investments for your surplus funds.  Now, good timber, bought cheap, inevitably will be sold dear.  At least, such has been my observation during a quarter of a century—­and old John Cardigan had some twenty thousand acres of the finest redwood timber in the State—­timber which had cost him an average price of less than fifty cents per thousand.

“Well, in this instance the old man had overreached himself, and finding it necessary to increase his working capital, he incorporated his holdings into the Cardigan Redwood Lumber Company and floated a bond-issue of a million dollars.  They were twenty-year six per cent. certificates; the security was ample, and I invested for you three hundred thousand dollars in Cardigan bonds.  I bought them at eighty, and they were worth two hundred; at least, they would have been worth two hundred under my management—­”

“How did you manage to buy them so cheap?” she interrupted.

“Old Cardigan had had a long run of bad luck—­due to bad management and bad judgment, my dear—­and when a corporation is bonded, the bondholders have access to its financial statements.  From time to time I discovered bondholders who needed money and hence unloaded at a sacrifice; but by far the majority of the bonds I purchased for your account were owned by local people who had lost confidence in John Cardigan and the future of the redwood lumber industry hereabouts.  You understand, do you not?”

“I do not understand what all this has to do with a railroad.”

“Very well—­I shall proceed to explain.”  He held up his index finger.  “Item one:  For years old John Cardigan has rendered valueless, because inaccessible, twenty-five hundred acres of Laguna Grande timber on Squaw Creek.  His absurd Valley of the Giants blocks the outlet, and of course he persisted in refusing me a right of way through that little dab of timber in order to discourage me and force me to sell him that Squaw Creek timber at his price.”

“Yes,” Shirley agreed, “I dare say that was his object.  Was it reprehensible of him, Uncle Seth?”

“Not a bit, my dear.  He was simply playing the cold game of business.  I would have done the same thing to Cardigan had the situation been reversed.  We played a game together—­and I admit that he won, fairly and squarely.”

“Then why is it that you feel such resentment against him?”

“Oh, I don’t resent the old fool, Shirley.  He merely annoys me.  I suppose I feel a certain natural chagrin at having been beaten, and in consequence cherish an equally natural desire to pay the old schemer back in his own coin.  Under the rules as we play the game, such action on my part is perfectly permissible, is it not?”