“He loans us the money to build our road.  We build it—­on through our timber and into his.  The collateral security which we put up will be a twenty-five-years contract to haul his logs to tidewater on Humboldt Bay, at a base freight-rate of one dollar and fifty cents, with an increase of twenty-five cents per thousand every five years thereafter, and an option for a renewal of the contract upon expiration, at the rate of freight last paid.  We also grant him perpetual booming-space for his logs in the slough which we own and where we now store our logs until needed at the mill.  In addition we sell him, at a reasonable figure, sufficient land fronting on tidewater to enable him to erect a sawmill, lay out his yards, and build a dock out into the deep water.

“Thus Gregory will have that which he hasn’t got now—­an outlet to his market by water; and when the railroad to Sequoia builds in from the south, it will connect with the road which we have built from Sequoia up into Township Nine to the north; hence Gregory will also have an outlet to his market by rail.  He can easily get a good manager to run his lumber business until he finds a customer for it, and in the meantime we will be charging his account with our freight-bills against him and gradually pay off the loan without pinching ourselves.”

“Have you talked with Gregory?”

“Yes.  I met him while I was in San Francisco.  Somebody brought him up to a meeting of the Redwood Lumber Manufacturers’ Association, and I pounced on him like an owl on a mouse.”

John Cardigan’s old hand came gropingly forth and rested affectionately upon his boy’s.  “What a wonderful scheme it would have been a year ago,” he murmured sadly.  “You forget, my son, that we cannot last in business long enough to get that road built though Gregory should agree to finance the building of it.  The interest on our bonded indebtedness is payable on the first—­”

“We can meet it, sir.”

“Aye, but we can’t meet the fifty thousand dollars which, under the terms of our deed of trust, we are required to pay in on July first of each year as a sinking fund toward the retirement of our bonds.  By super-human efforts—­by sacrificing a dozen cargoes, raising hob with the market, and getting ourselves disliked by our neighbours—­we managed to meet half of it this year and procure an extension of six months on the balance due.

“That is Pennington’s way.  He plays with us as a cat does with a mouse, knowing, like the cat, that when he is weary of playing, he will devour us.  And now, when we are deeper in debt than ever, when the market is lower and more sluggish than it has been in fifteen years, to hope to meet the interest and the next payment to the sinking fund taxes my optimism.  Bryce, it just can’t be done.  We’d have our road about half completed when we’d bust up in business; indeed, the minute Pennington suspected we were paralleling his line, he’d choke off our wind.  I tell you it can’t be done.”