1903

1. Saturday Evening Post (November 28, 1903)   "International Skull and Cross Bones, Ltd." A story. "A Practical Example of the Principles of 'High Finance.'" Drawn by Martin Justice. p 6-8, 26, 28.  [HANNIGAN]

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from Saturday Evening Post
International Skull and Cross Bones, Ltd.
by Ellis Parker Butler

In the days when Belize, on the coast of Honduras, was the meeting place for pirates great and pirates small, many queer craft appeared in that harbor, and many rich cargoes of goods that had been shipped for far other ports were unladed, and no questions asked. Piracy was a booming business and the source of many large incomes, but it was at the best subject to extreme fluctuations.

The year 1728 was remarkable for some of the greatest successes in the piratical world. Not only did the pirates make a vast number of unusually rich captures on the sea, but they became so daring as to attack the coast towns and levy tribute. Piratical profits made a new high record in that year, and the leading spirits of the business predicted still greater returns for the next year.

It so happened that the master pirate, Blackbeard, toward the close of September of that year, while cruising off the island of Jamaica, ran alongside the sloop Ann Eliza, bound from New York to Spanish Town, and, boarding her, murdered the crew and appropriated the cargo. In this there was nothing surprising, for such was Blackbeard's pleasant custom, but there was aboard the sloop a young man of the town of New York, and his face was so fair and childlike, his eyes so blue and innocent, and his manner so suave and pleasing, that Blackbeard preserved his life, and announced his intention of taking him to Belize where he could easily be sold as a slave at a good, round sum.

For several days after his capture the young man (whose name was John Henry Vandam) was considerably downcast, but on the fifth day, Blackbeard, who was a great hand for eccentric actions, ordered John Henry into his cabin. The poor fellow expected to be murdered, but to his surprise found a banquet laid such as he had not imagined the pirate craft could produce, and when he had overeaten and overdrunk to the extent to which he had become accustomed in the town of New York, he felt more like himself than he had since leaving the Battery. In both eating and drinking the terrible Blackbeard proved himself a match for John Henry, and while the effects of the banquet were still upon them Blackbeard garrulously bragged of his prowess and wealth, and, led on by the subtle questions of the younger man, divulged many secrets of his terrible life and occupation.

During the remainder of the voyage to Belize, John Henry was preoccupied and thoughtful, and Blackbeard seemed to have forgotten him, but when the ship was safe at anchor in the port the pirate came to the young man and laid his hand roughly on his shoulder and burst into a string of oaths.

"Now, my young ape," he said, grinning coarsely, "I am ready to deal with you. I meant to sell you to some landlubber, but it won't do. You know too much. When I was drunk I told you more than it is good that any man should know about Blackbeard, and as I can't get it out of your head again I am going to remove your head from your body."

The frightful creature drew his sword, and was about to bring it down upon the neck of the landsman, but Vandam sprang backward.

"Stop!" he cried. "If you kill me you will make a tremendous error. However much you may want to kill me, the game is not worth the candle. I can make you a fortune that will make your present wealth look like a mere pittance."

Blackbeard leaned against the mast and laughed long and loud.

"You!" he shouted, slapping his brawny hand upon his bloodstained breeches. "You dainty lady's man! You baby-eyed child! You make a fortune! Beware how you jest with Blackbeard!"

John Henry put his hand into his pockets and carelessly rattled the few coins he still possessed.

"Mr. Blackbeard," he said, "you can't frighten me. You have just said I must die, so no threat you can make can awe me, but as for jesting, I give you my word I am as far from jesting as I ever was in my life. A man on the edge of the grave (if you put your victims in graves) does not jest. He talks business. All I ask is five minutes of your time, and if I don't convince you that you can make more money in my way in a year than you can in your way in a lifetime, you can bring out a plank and I will cheerfully walk it into eternity."

Something in the indifferent, cheerful mien of the young man impressed the veteran pirate and he threw his sword on the deck and seated himself astride a cannon.

"Go on, young one," he said, "but remember, you die at the end of your talk."

John Henry smiled.

"First," he said, "I will tell you the story of my life. I am a promoter."

Blackbeard swore a mighty oath.

"Now, by the immortal marlinspike," he vowed, "I didn't say I would listen to the tale of your life, and I sha'n't do it."

"You have already heard it," said John Henry. "I am a promoter -- that is the story of my life."

"And what in the big brass binnacle is a promoter?" asked Blackbeard coarsely.

"A promoter," said John Henry, "is a man who takes a business that isn't as good as it might be, and makes people think it is better than it would be if it was as good as it isn't."

Blackbeard scratched his blood-matted locks thoughtfully.

"Yes! oh yes!" he said, nodding his head wisely. "I understand. The man from whom I bought my first ship must have been one of them."

"Did you pay a big price?" asked John Henry.

"I did," said Blackbeard.

"Was it a good ship?" asked John Henry.

"It was not," said Blackbeard with decision.

"You are right," said John Henry. "That man was a promoter. I am glad you understand what a promoter is, for it will make my further explanations easier. But my line is not ships -- it is industrial promotion. Did you ever think of selling your pirate business?"

"No," Blackbeard said grimly, "nor I can't. I'm it. I'm the whole business. Take me away and there is no business left. Blackbeard is the whole thing. When he dies the business isn't worth a plugged Spanish dollar."

"In other words," said John Henry, "the assets of your business are your brains, your daring, your courage, your ship and your crew."

"Right you are, my hearty," shouted the pirate, "and I can't sell any of them but the ship. You see," he continued, "the pirate business is a free-for-all business. Anybody who can buy or steal a ship can go into it."

John Henry waved his hand toward the town of Belize.

"Wouldn't all the men in that town like to go into it?" he asked. "Then why don't they? Plenty of them have money enough to buy a ship."

Blackbeard's eyes twinkled.

"They don't have the courage, or the daring, or the brain," he said scornfully.

"All right," said John Henry. "What I propose to do is to sell them your courage, and daring, and brain, and ship."

Blackbeard scowled.

"The scuttlebutt you do!" he roared; "but I propose to keep them myself."

"Of course," said John Henry, "that is also what I propose. I mean to sell them your business for ten times what it is worth, and let you keep it at the same time. You get the money and you keep the business."

Blackbeard arose to his feet and swore an oath that unfurled the mainsail.

"Vandam," he shouted, "if you can do that you are a bigger pirate than I am. But what do the other fellows get?"

"Well," said John Henry thoughtfully, "they get a run for their money, and they get experience. But it won't do them any good. It never does."

II

"Now, Mr. Blackbeard," said John Henry, "according to the detailed statement which you made to me in confidence the other night at the banquet, this year has been the most prosperous in the whole history of modern piracy. All the members of the brotherhood of the sea have prospered. More ships have been taken than ever before. Logically, therefore, you look for still better profits next year, and better the next, and so on."

"That's right, my hearty," admitted Blackbeard.

"But it is not true," John Henry declared positively, "for the opposite is the fact. This year has ruined the pirate business. England, France and the colonists will be enraged by this great attack on their commerce. They will send out countless men-of-war and drive the pirates from the seas. And the reports of your vast success this year will cause hundreds of men to embark in piracy who would never have done so but for the phenomenal winnings you have made. Even if the navies of the world should not combine to hunt you down (as they will), this vast increase in the pirate ranks will so divide the spoils that the expense will exceed the profit. In short, the business of piracy will be a losing one from now on."

Blackbeard rubbed his beard meditatively. "I hadn't looked at it that way," he said.

"No," said John Henry, "of course not. But it is true. For the next ten years the business of piracy on the high seas will be profitless. If you don't take my advice you will go bankrupt inside of eighteen months."

Blackbeard shook his head sadly.

"You are right," he groaned, "you are right. I'll sell my ship for what it will bring and quit. What's the use of fighting against fate?"

John Henry laid his hand on the pirate's arm. "You can do one of two things," he announced. "Cut off my head as you proposed and sell out for forty thousand Spanish dollars, or leave my head where it is and make a vast fortune."

"Considering that I don't need your head very badly in its severed state," said the pirate, "I shall accept your second proposition. And now, what will you do next?"

John Henry placed his hand in that of the grimy pirate and shook it heartily.

"The next thing to do," he said, "is to form a trust and capitalize it."

III

When John Henry and the pirate had retired to the cabin of the ship they seated themselves at the table with pens, ink and paper before them.

"Now," said John Henry, "I will show you how we do these things in New York, where all men are unselfish. You have a business that paid you well this year. Quite unselfishly we will permit the general public to share in your good fortune. We will take the general public in as a partner. Of course," he added with a twinkle in his eye, "if the business doesn't pay so well next year we will be very sorry, but we can't help it."

Blackbeard, who was beginning to understand the art of finance, jovially jabbed John Henry in the ribs and then lay back and guffawed.

"But," continued John Henry, "we will not end there. We will be still more unselfish. We will not shut out your competitors, the other pirates. You and I know this is a plan to favor the general public, and we might conduct the operation of benevolently taking the public's money without outside assistance. But that might seem selfish. We will take five of the leading pirates into our confidence and make them partners with us."

"I wouldn't do that," said Blackbeard greedily. "Why should we divide with them?"

"Because," John Henry explained, "we are unselfish. And besides, in union is strength. Alone you represent a certain amount of power in piracy. The five greatest pirates separately represent certain amounts of power in piracy. But if you combine and work in harmony to freeze out the lesser pirates your power is doubled. Consequently, the value of your business is doubled and it will sell for twice as much. And besides that, by my plan, in the end you will get for yourself not only your own business, but that of your partners. This is called 'letting them in on the ground floor.' It is a beautiful operation."

"I don't just understand it," said Blackbeard doubtfully, "but if it works as you say it must be a very beautiful operation, and I shall always be in favor of letting people in on the ground floor hereafter."

"It will work," said John Henry. "And first we must form the trust. As soon as we make the combination of the six greatest and most unscrupulous pirates we will form a fleet of all their ships and destroy the ships of all the pirates who are not in the trust. It will be easy, for singly they cannot withstand our assaults."

"That will be delightful," said Blackbeard; "it is the sort of work I like."

"Very well," said John Henry, "just give me the names of the five most successful pirates you know."

As he named them, John Henry put the names on paper.

"What are their ships worth?" he asked next.

Blackbeard considered.

"My ship is the best in the lot," he said, "and I consider it worth forty thousand Spanish dollars."

"That is near enough," John Henry said. "We will put down the six ships at two hundred and forty thousand dollars. And your trademark is worth another two hundred and forty thousand."

"I have no trademark," Blackbeard declared.

"Oh, yes you have!" said John Henry. "The Jolly Roger that you fly at your masthead is a trademark. No vessel will lower her flag until she sees that brand. It is worth money."

"I think you are right again," Blackbeard admitted.

"I'm always right," said John Henry, "and I will also put down 'advertising, two hundred and forty thousand dollars.'"

"Do so," said the pirate, "but please explain what it means. I did not know I had ever advertised."

"Yes," John Henry assured him, "you have advertised your trademark every time you took a ship or murdered a crew. There is not a person in the world that does not fear the Jolly Roger, nor hardly a ship that will not surrender at sight of it. If there were no pirates in existence, and a man started out to be one, it would take many years and much loss of money and blood before his mere flag would be such an important factor as the Jolly Roger now is, so I consider two hundred and forty thousand dollars a very small allowance, indeed, to put down for advertising."

The pirate admitted that this reasoning was correct.

"Then," said John Henry, "we have for the total actual value of the assets of the six associated pirates the sum of seven hundred and twenty thousand dollars. But as the six pirates are to be a combination and work together, all these values may safely be doubled, which will make one million four hundred and forty thousand dollars. To be quite safe, we will call it an even two millions."

"Wonderful!" exclaimed Blackbeard. "I see it all now! We capitalize for two millions!"

John Henry looked at the pirate with a pitying glance.

"For that two millions," he said coldly, "we issue first mortgage bonds drawing six percent, interest. These bonds go to the six pirates in part payment for their businesses. As you are the greatest pirate and the originator of the scheme, you will receive five hundred thousand dollars in bonds, and we will give to each of the other five pirates three hundred thousand."

"I'm glad I originated the scheme," said Blackbeard heartily.

"Then," said John Henry, not heeding the interruption, "we will issue four million dollars in preferred stock in the company, bearing interest at seven percent."

"What's a preferred stock, and why issue so much?" asked Blackbeard, who was now as eager as a child to learn the details.

"Preferred stock," explained John Henry patiently, "is stock on which the dividends are paid in full at the agreed percent, before any dividends are paid on the other, or common stock. If there is any money to pay dividends the preferred stockholders get the preference. That is why they are so called. And as to why we should issue four millions of them, the answer is -- Why not?"

"Why not, indeed?" asked Blackbeard.

"So far, so good," said John Henry. "Now for the common stock. How much do you suppose the six pirates who are to go into our company earned this year?"

Blackbeard considered the question carefully.

"I am willing to swear," he said, "that we took goods and money to the value of eight hundred thousand Spanish dollars."

"Good!" said John Henry. "The interest on our two million in bonds at six percent, will be one hundred and twenty thousand dollars, and the dividend on our preferred stock at seven percent, will be two hundred and eighty thousand dollars. That makes a total of four hundred thousand dollars, and leaves four hundred thousand of the earnings still unplaced. Four percent per year is a good dividend on common stock these days, and four hundred thousand dollars would pay four percent on ten million dollars. So we will issue that amount of our common stock. The public will buy it greedily, for they will suppose the combination will earn even more than the six pirates earned when they were separate. The public will not know that we are capitalizing the concern on the basis of a good-times year in order to get rid of the property before bad times come to wipe out all the profit entirely."

Blackbeard looked doubtful.

"That hardly seems honest," he said, "and it looks as if it would be rough on the public."

"Honest!" exclaimed John Henry. "What have you got to do with honesty? Are you a pirate or are you not? And as for the public -- the public be d----d!"

"Very well," said the pirate meekly. "What are you going to do next?"

John Henry arose from the table.

"I have a lot to do," he said briskly. "First I want your long boat to take me around to the ships of these five associate pirates of ours. I want to interest them in our plan. Then I want to have the International Skull and Cross Bones, Ltd., incorporated under the laws of the Colony of New Jersey. And then," he said, smiling, "I want to go over to Belize and organize a stock exchange."

IV

John Henry Vandam had little difficulty in convincing the five pirates that it would be greatly to their advantage to come into the International Skull and Cross Bones. He took each pirate singly and explained that the combination was sure to be effected in any case, and that it was only a question whether that particular pirate preferred to come in or be annihilated, and as the pirates were all simple-minded, whole-souled creatures they gladly agreed to form a part of an association at the head of which the immortal Blackbeard was to rule.

John Henry then drew up the articles of incorporation of the International Skull and Cross Bones, Ltd., a corporation organized under the laws of the Colony of New Jersey. The capital stock was named as four millions preferred and ten millions common, and the object of the corporation was concisely stated to be "to transact any kind of business anywhere on sea, on land or in the air." The officers of the corporation were given as Blackbeard, president; Steve Bonnet, vice president, and John Henry Vandam, secretary, treasurer and general manager. To complete the five directors necessary the names of Redhead Pete and Whisky Briggs were put down, but they were merely dummies. In fact, the corporation was in reality an unlimited monarchy, with Blackbeard as Czar and John Henry as the power behind the throne.

The prospectus of the company was a glowing production. It set forth that for many years piracy had been a clean, legitimate and profitable business; that the profits were large and had been growing larger every year; that if the present earnings continued the common stock would pay four percent, but that there was every reason to believe that piracy was but in its infancy, and that there was no reason to doubt that, as a result of the association of the six greatest pirates in the business and the elimination of all other pirates, the International Skull and Cross Bones, Ltd., should, in a few years, pay ten, forty, or even a hundred percent, on the common stock. Attention was called to the fact that this stock would be issued in shares of one hundred dollars each, thus allowing the humblest person to possess an interest in this great company. The stock would be issued at par, and its sale would be confided to John Henry Vandam.

In the town of Belize were many gambling halls at that day, and John Henry went to the proprietor of the largest and suggested that he convert it into a stock exchange on the model of those existing in London and Amsterdam.

"But," said the proprietor, "we have no stocks."

"Never mind that," said John Henry. "I have just organized one stock company, and if its stock is not sufficient to keep things humming I will organize as many more as may be needed. That is my business as a promoter."

The town of Belize was delighted when it learned it was to have a stock exchange, for it knew that a stock exchange was a highly moral institution, conducted on strictly business principles and an honor and credit to the town; and the leading men rushed to buy seats. The ex-proprietor of the gambling hall made more money selling seats in his stock exchange than he had made in his life before, and he highly recommended John Henry Vandam and spoke of the stock of the International Skull as a fine investment.

"And now," said John Henry to Blackbeard, "we are ready to do business."

"Yes," Blackbeard replied, "but one thing bothers me. You are taking all the trouble and worry and work, but I don't see where you come in for any profits."

"You forget," said John Henry, "that I am trying to keep my head on my shoulders, which is quite enough for me; but if you want to do this thing as they do it in New York you can pay me for promoting the company."

"I want to treat every one fairly," swore Blackbeard, "and all you have to do is to name the proper figure."

"In New York," said John Henry, "for doing a job such as this I would receive $500,000 in bonds, $500,000 in preferred stock, and $1,000,000 in common stock."

"Bless my topgallant sails!" cried Blackbeard, "you shall have it here, too! The job isn't worth it, but nerve like yours is cheap at the price."

"Thank you," said John Henry, "I appreciate the compliment. Now only one thing more is necessary. Call the associated pirates together and have them sign this very unimportant little agreement!"

When the pirates had gathered on board the Revenge, John Henry presented the selling agreement for their signatures, and with many oaths they made their bloody marks. By a singular coincidence each made a skull and cross bones.

The agreement set forth that, whereas John Henry Vandam had organized the company and was a business man, and whereas the pirates were only pirates, it was agreed that all stock in the International Skull and Cross Bones, Ltd., should be placed in the hands of John Henry Vandam, to be sold for the benefit of the pirates; and the pirates of the second part agreed to sell no stock without permission of John Henry Vandam. And it was further agreed that in consideration of the fact that said John Henry Vandam and said pirate Blackbeard had conceived the idea of the International Skull and Cross Bones, Ltd., the said John Henry Vandam should sell the stock owned by said John Henry Vandam and said Blackbeard before any other stock should be sold."

"All of which," said John Henry lightly, "is merely a matter of form and doesn't amount to a row of pins."

So the pirates slapped him on the back and went on deck, where they held an old time orgy.

V

The morning of the opening of the Belize Stock Exchange there were twenty three pirate craft in the harbor, and as Blackbeard leaned on his ship's rail and gazed at them he shook his head.

"John Henry," he said, bringing his mighty fist down with a crash that made the solid oak creak, "we have made a mistake. We were fools to let these five dead ones in on the ground floor. What was the sense of dividing with them. I don't see why they should share our prosperity, and for a plugged doubloon I would sail over and sink the whole bunch."

"I see," said John Henry, "that you are beginning to be a financier yourself. But don't worry about the five. If you tackled them single-handed you might have your ship sunk or be killed. Watch me, and in a short while you will see that our respected fellow pirates don't get a counterfeit peso. We are not running a benevolent institution, if I know it."

Having given Blackbeard a few instructions, John Henry climbed down the ship's ladder and was rowed to Belize in the long boat.

As soon as the hour of nine struck the stock exchange opened for business and John Henry began selling the common and preferred stock of the International Skull. The good citizens of the town seemed rather wary at first, and although John Henry received $100 for the first few shares, by ten o'clock preferred had dropped to 98 and common to 90, and the bears were still trying to lower the price. At ten minutes after ten John Henry glanced anxiously from the window overlooking the harbor, and smiled, for he saw the six ships of the associated pirates cleared for action and bearing down upon the unsuspecting vessels of the independent pirates.

At the sound of the first gun International Skull common jumped to 95. When the first independent pirate lowered his flag International common touched 100, and by the middle of the afternoon it was eagerly sought at 128, but John Henry doled out the stock in such small lots that the demand was greater than the supply. When the sun set the harbor of Belize was strewn with wrecks, among which the associated pirates were still firing broadsides at the remaining independents. When the sun arose next morning not an independent remained in sight, and at the opening of the exchange 196 was bid for International Skull common, and the price rose rapidly during the day, closing at 246.

That night the associated pirates held an orgy that eclipsed anything in the entire annals of piracy, and when they called upon John Henry to divide the gold he had received from the sales of stock, he quietly called attention to the fact that so far only a portion of his and Blackbeard's stock had been sold.

"Which is lucky for you," he said, "since a large part of our stock was sold around 100, and now it is 240. And I give my word it will go to 300 before we even reach your stock, and no telling how much higher."

When the pirates heard this they yelled until the sails flapped.

During the next week International Skull common fluctuated between 240 and 260, and then it began to drop slowly. It was all very well, people said, for a company to promise dividends, but where were they to come from if the pirates remained idle in the harbor, drinking and carousing?

On a statement from John Henry that the first dividend would surely be paid, the stock rose slightly, but it soon dropped again and threatened to fall severely. Buyers were indifferent, and some of those who had already bought began to sell.

John Henry went to Blackbeard.

"See here," he said, "I have got rid only of about half of this stock of ours and we must keep up the price until it is all sold. The thing for you to do is to take your associates and go on a cruise."

"And mighty glad I will be," swore Blackbeard. "I'm getting thirsty for blood!"

As soon as the preparations for sailing were observed by the town, confidence in International Skull was restored, and the price of the stock stiffened. When the six pirate ships sailed out of the harbor in company, forming a gallant fleet indeed, it seemed that nothing could stand before them, and although John Henry let go of his stock in large blocks, the price soared to 425. By the end of the month he had disposed of all his stock and all that of Blackbeard, except one share apiece, which he reserved in order that they might retain their offices in the company.

"And now," chuckled John Henry, "to sell the stock of our associates."

That very day a stranger appeared in Belize who brought most astounding news. The war between France and England had been ended, and those two nations, with Spain added, had combined their fleets of war to hunt down and exterminate all pirates. The stranger furthermore reported that the fleet of war was already on the way, and that doubtless news would soon be received (if any word ever came) that the unfortunate pirates were sent to the bottom or strung on the yardarms of the royal navies.

Upon hearing this unfortunate news a veritable panic came upon the Belize stock exchange, and the shares of the International Skull fell from 425 to 90 in less than an hour. John Henry seemed as worried as the men of Belize and threw a block of ten thousand shares upon the market. International Skull common dropped to 40 before any one was found with faith enough to purchase even a few shares.

Nor was this the worst. A few days later, when the stock was hovering between 35 and 40, an unkempt, bedraggled fellow, with his head bound in bloody rags, drew his weary legs up the main street of Belize. He told a pitiful story. The six ships of the associated pirates had met the combined fleets of Europe and after a terrible battle of ten hours had been utterly demolished. This soiled and weary wanderer alone of all the pirate crews had escaped death, and had reached the shore after untold hardships. When the news was brought to John Henry that usually hopeful young man was seen to burst into tears.

International Skull common dropped to 12 7/8, and as John Henry threw block after block on the market it declined to 1 3/4, where it remained at the close of the day. When John Henry retired to his inn that night he had sold the entire stock holdings of Blackbeard's partners at prices averaging ten cents on the dollar, and any one in Belize would have told you that he was lucky to have secured such a good price.

Upon the opening of the exchange the next day John Henry announced that as he had been largely responsible for the formation of the International Skull and Cross Bones, Ltd., he felt that it was his duty to do as much as his poor means permitted to relieve those who had purchased stock. He would therefore buy as much International Skull as his small fortune allowed, in order that he might retain the good will of the people of Belize. He would pay two cents on the dollar.

Before the end of the week he had secured at this price three-fourths of the stock of the International Skull, together with the good wishes of all Belize, and the stock exchange closed its doors.

John Henry thereafter picked up at his own price other shares of International Skull until he held eighty percent, of the entire issue of common and preferred, with the balance in the hands of various small holders. Blackbeard still retained one share.

On the fifth day of December a lookout in the Belize lighthouse sighted six vessels approaching. He thought them strangely familiar, and as they drew nearer he rushed to the town with the glad news that the associated pirates had returned. The townspeople, in a rage, searched for the two strangers, but they were gone!

International Skull, at the reopening of the exchange, jumped to 100, and when the first long boat reached the shore, telling of the capture of ten richly laden Spanish merchantmen, it rose by bounds to 600, with none offered. At 1000 John Henry began letting out small blocks until he had reduced his holdings so that he retained just sufficient to have a majority if it came to a vote.

When the associated pirates came on shore and learned that their stock had been sold at an average of 10 they were tremendously angry. John Henry drew Blackbeard aside and explained to him that while the other five pirates had certainly been unfortunate, Blackbeard himself had fared famously well. The townspeople assured the pirates that it was no fault on the part of John Henry. Blackbeard swore he would kill the first man who made a complaint. On the whole, the five associate pirates decided to say nothing.

"And now, my hearty," said Blackbeard, when they were alone, "we will divide the spoils of this remarkably profitable cruise."

"Yes, most mighty captain," said John Henry, "but in a combination we do not call it dividing the spoils. It is called voting a dividend."

"Dividend or spoils, it is all one to me," laughed the pirate, "so long as it is a divide. And I tell you, you will get a fair share, for I like the way you handle things."

"Yes," said John Henry, "I shall get a fair share. I get a little more than half, for I hold more than half the stock."

"Then," roared Blackbeard, "what do I get?"

"As you own one share," said John Henry, "you will receive one one-hundred-and-forty-thousandth of the dividend, and be paid six percent, on your bonds."

When Blackbeard recovered from the swoon into which these words threw him he looked at John Henry with fear and awe.

"I think," he said hoarsely "I am beginning to know a little more about stock companies than I did."

"Yes," said John Henry, "and I hope to show you still more."

VI

Although the associated pirates dared not express their opinion of the manner in which John Henry Vandam had conducted the sale of their stock, their actions plainly gave evidence that they were by no means pleased, and they were blue indeed when they saw all the booty of their recent cruise turned into cash and divided between John Henry and a lot of home-staying landlubbers of Belize.

John Henry waited until the dividends were safely in his strong box, and then he went to the five pirates.

"Now, see here, friends," he said good-naturedly, "you are all feeling badly because you had no share in this dividend, and, personally, I do not think it fair, either, and I will make you a proposition. The bonds you hold pay you only six percent, and are selling at 108. Common stock, on which a quarterly dividend of fifty percent, has just been paid, is selling at 1000. But to show that I want to do the square thing, I will exchange one share of my common stock for every two of your bonds."

The five pirates grasped his hand eagerly, and there were tears in their eyes.

"No matter what people may say," they cried, "we know you are a noble, self-sacrificing fellow."

"I knew that long ago," said John Henry with emotion, "but we are often maligned in this world."

But for some unknown reason the International Skull began to decline again. Some one was selling large quantities, which pressed the price down gradually to 600. When it had reached that figure John Henry went to Blackbeard.

"This is confidential," he said. "I have sold all my International Skull stock but one share. You have only one share. But we have all the bonds, and I have proxies enough to control the majority vote of stock. I think it is time to announce that on account of the activity of the allied navies there will be no more cruises by the associated pirates for three years."

"But in that case," said Blackbeard, "we cannot pay dividends or interest."

"Do we want to?" asked John Henry. "We own no stock, so dividends would do us no good, and why should we risk our ships for the benefit of the landlubbers. And we do own the bonds."

Blackbeard wrinkled his scarred forehead, and thought.

"And therefore," he said, "we want the interest on them paid."

"No," declared John Henry, "we don't want it paid. I see you have not yet mastered the mystery of finance. Our next move is to get rid of these stockholders and our associates."

Blackbeard licked his lips and drew his sword. "Good!" he shouted. "When shall I begin the slaughter?"

"Easy now!" said John Henry, "I am doing the slaughtering this time. It is my killing. All you have to do is to prevent any of our ships going to sea."

As might have been expected, the stock of the International Skull fell to the lowest price on record. Preferred sold for 3 and common for 1/2, and as the weeks dragged along the tone of the market became more and more cynical. There was no chance whatever that the interest on the bonds would be paid, and exactly one year after the formation of the International Skull and Cross Bones, Ltd., the bondholders foreclosed their mortgage and took entire possession of all the vessels, stores, trademarks, good will and other property of the corporation.

John Henry Vandam and Blackbeard celebrated this happy consummation of their plans by a tremendous banquet. At least it was tremendous in its costliness, but it was attended by but two persons: John Henry Vandam and Blackbeard.

"And now," said John Henry, when cigars and coffee were in order, "you see the advantage of my method of doing business. We own the entire pirate business of the Western seas, and we are worth millions in glistening Spanish dollars. By your method, you robbed only a few stray vessels; by mine, we robbed our associates, our neighbors, the public and our friends. We will now reorganize the International Skull and Cross Bones, Ltd., and make more millions."

"Yes," admitted Blackbeard, "you are a better pirate than I am. But you must be more callous. I have a lurking desire to be admired, if only for my prowess, while you can surely only be reviled and hated."

John Henry lay back in his chair and laughed long and loud.

"Now that shows," he said, "that you can never really learn the ins and cuts of finance. In a few weeks time I shall be the best-beloved man in all Belize. I mean to give the town a public library, an art gallery and a home for retired pirates, and the citizens will erect a monument to my memory when I die."

Blackbeard shook his head sadly.

"And I used to think I was something of a robber king myself," he said with awe.

"Robber king!" laughed John Henry. "Pshaw! Why, you were never anything but a pirate. I am a promoter, if you please."

But, of course, all this was in the early part of the eighteenth century.

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