s it may seem, the dummy-director idea was no
novelty in New Jersey.

"I take it, then, that the paid-in capitalization of the company is
not represented in actual cash," said Mr. Squinch.

"No," admitted Wallingford cheerfully. "As a matter of fact, at our
first meeting the directors paid me ninety-five thousand dollars for
my plan of operation."

Again broad smiles illuminated the faces of the four, and this time
Tom Fester actually accomplished a smile himself, though the graining
might be eternally warped.

"Then you started in business," sagely deduced Mr. Squinch, with the
joined finger-tip attitude of a triumphant cross-examiner, "having but
a total cash capitalization of five thousand dollars."

"Exactly," admitted Wallingford, chuckling. There was no reservation
whatever about Mr. Wallingford. He seemed to regard the matter as a
very fair joke.

"You are a very bright young man," Mr. Squinch complimented him, and
that opinion was reflected in the faces of the others. "And what is
your plan of loans, Mr. Wallingford?"

"Also very simple," replied the bright young man. "The members are in
loan groups, corresponding to the lodges of secret societies, and, in
fact, their meetings are secret meetings. Each member pays in a dollar
and a quarter a week, and the quarter goes into the expense fund."

The five individually and collectively nodded their heads.

"Expense fund," interpolated Doc Turner, his blue-tipped nose
wrinkling with the enjoyment transmitted from his whetting palms,
"meaning yourself."

"Exactly," agreed Wallingford. "The dollar per week goes into the loan
fund, but at the start there will be no loans made until there is a
thousand dollars in the fund. Ten per cent. of this will be taken out
for loan investigations and the payment of loan officers."

"Meaning, again, yourself," squeaked Andy Grout, his vertical lines
making obtuse bends.

"Exactly," again agreed Wallingford. "Twenty-five per cent. goes to
the grand annual loan, and the balance will be distributed in loans as
follows: One loan of two hundred and fifty dollars, one loan of one
hundred, one of fifty, four of twenty-five and fifteen of ten dollars
each. These loans will be granted without other security than an
unindorsed note of hand, payable in four years, without interest, and
the loans will be made at the discretion of the loan committee,
meeting in secret session."

Mr. Squinch drew a long breath.

"A lottery!" he