have been; she intended to make him see that she was what he wanted, not Muriel. The glamour was still there, the fascination of the unknown, the unattainable. The reason so many men and women think they would have been happier married to the other one is because they never married the other one. Molly could not very well arrange a trial marriage for this pair, but perhaps that was not necessary. She evolved a plan by which, she believed, Muriel would destroy herself.

The Carrolls were going off on a vacation next month, up in the North Woods, and they were telling their guests about it at a dinner Muriel attended, looking enigmatic and resplendent. "You see, he's never had a vacation, poor lamb, since the summer we were married. I've gone off and visited my people and his; but he has stayed on here in the heat of the city turning out work."

Fred smiled in a deprecatory manner, but he liked it. They always do, the noble martyrs.

"So, when he refused again this time, there was nothing for me to do but go ahead and telegraph the guides. And now he must go, whether he wants to or not."

Molly knew one reason why he did not want to go. So did the guests, including Muriel herself. The cunning little wife was going to remove him from temptation.

Muriel, who sat very high and straight, when she was dining out, smiled down upon Molly. She could not resist displaying her potency and the fear of it. "What fun you'll have. Won't you take me, too?" she asked, stepping gracefully into Molly's trap.

"Will you come!" cried Molly with genuine eagerness. "Oh, how nice." And it was arranged at once between them. Fred meanwhile pretending to talk shop to the woman on his left, while he, like her, listened to Molly with astonishment.

Muriel considered it sheer bravado. The young wife wished to say to her and to the others, "See, I'm not afraid." Muriel made up her mind to accept in earnest. She was no longer amused with the conventional little thing. She was becoming rather annoyed. Molly seemed so calmly sure of herself and of her husband.

"You didn't mean that?" asked Fred as soon as the door closed on the last guest.

"Why not?" asked Molly guilelessly. "She's such a dear friend-of both of us now."

"She won't like camping," said Fred scowling.

"Oh, she told us when you were in the other room that she 'adored nature.'”

Fred did not laugh. For an intelligent girl, Molly seemed very short-sighted. "Think what people will say," he reminded her reluctantly.

"Oh, but we don't look at these things in that stupid way," quoted Molly.

It would seem that her husband, however, was beginning to look at things in a rather stupid way, for he protested to Muriel herself.

"So you don't want me?" she asked standing before him, smiling. "No, I don't want you." She only laughed at him. "But you do!" she reproved him delightfully, and as if to shake him (perhaps) she lightly took him by the shoulders, then stopped. "You mean that you're afraid of me!" she said in a burlesque whisper, searching his eyes.

"So you've often told me," he replied, coolly returning her gaze.

"That settles it," she said, flushing slightly, "I'm coming. We'll see." So she came and saw.

"My, what won't that girl do next!" asked certain of the lookers on. "Is Molly blind?"

"No, but she can wink."

But they were only lookers on. They never understand.

VII

It was the last day of Muriel's visit at the Carrolls' camp. The climate or something did not agree with her, and so she was leaving earlier than had been expected, much to Molly's disappointment, it seems. Fred, too, protested politely. In all the six days he had never once been out of Muriel's sight. Molly saw to that.

Muriel was not at her best camping. She "adored nature," but not in the raw. The only kind of camping she had ever done was at certain Adirondack "camps" which contained butlers and formal gardens. This was different. There was but one guide, an old friend of the Carrolls named John, who was willing to do any

thing, but expected the "city sports" to do their share. Since Muriel was a guest, Molly and Fred did Muriel's share, because she did not know much about life in the woods.

Molly did. She was good in camp. "You are the only woman I ever knew," Fred had once said, "who isn't a nuisance in the woods." That was the summer they became engaged-perhaps it had something to do with their becoming engagedand a girl does not forget much that is said to her during the summer she is engaged.

But camping did not seem to suit Muriel's long attenuated style, and the sun played havoc with her beautiful nose. She could not drape herself becomingly upon the rocks, as with the Italian chairs in the soft candle light of the studio.

She talked at breakfast. That was something Molly had long since learned would never do when Fred was around. She talked interestingly, but it wouldn't do. "See those clouds," she would say, "like disappointed hopes."

"Yes, indeed," said Fred, without looking up. "Any more flapjacks, Molly?" He was unshaven and his necktieless flannel shirt was open at the throat-a gross

"Not at all," said Molly, "Fred will be delighted to bring your breakfast to you. And he will be only too glad to get up and heat some water for you before breakfast, if you like. Won't you, dear."

"Yes, indeed," said Fred.

But Muriel preferred to have John, the guide, perform these functions. Her toilet was complicated, and required plenty of hot water and time. (Molly understood.) So she tipped John, and this hurt his feelings. John used to crouch upon his haunches before the camp fire in the evening and gaze upon her for minutes at a time in mute contempt. He had never seen anything quite like this before. He

did not care for it. Perhaps his prejudice tinged the whole camp. The prejudices of guides are apt to do that.

Fred was all right by moonlight on the lake, unless he were too sleepy after being out doors all day, but the trouble with Fred was that he had not been in the woods for years and he was consumed with a barbarous lust for taking innocent life. His manner was no longer bullying with Muriel, he had become suspiciously gallant, extravagantly polite. "Oh, we are going to have a wonderful time together up here," his manner said—“but just wait till I catch a two-pounder." He had once been an expert fly-caster. He'd forgotten how much he loved it.

He took Muriel with him to some of the nearby streams, while Molly obligingly went far away to the good streams with John. The good streams are always far away. Muriel could not stand the journey. She did not know how to sit in a canoe, much less paddle it, and-she was bored, frankly bored. She began to think she ought never to have come to this wild place, with this uncouth, provincial little pair who were not her sort in the least.

Molly was making ready to start for Round Pond with John. "You and Muriel can guard the camp-fire," she said. Fred was helping her sort out flies, enviously, Muriel was gazing out upon the lake, her hands clasped behind her head, tall, erect, enigmatic-the very pose in which Fred had painted her. "Molly," he whispered boyishly, "why can't I go?"

"Muriel," she replied. "Threesomes are such a bore! Besides, she could not stand the long carry."

"Why can't you stay with Muriel-just once," he laughed.

"Why, Fred! She's your guest."
"She is not. You invited her."
"For your sake, Fred."

"Well, it doesn't seem right for you to leave her on the last day of her visit. It's not nice." He said it humorously, but he hoped she would take the hint.

"Oh, you can entertain her. Talk about nature. You haven't grown tired of her so soon, my dear!"

"No, of course not. But, hang it, I've been entertaining her from morning till night ever since we arrived, and I'm sick of it, I tell you. You haven't done your

share. You've been skipping out and having a good time and getting all the fishing. I want some fishing, too. That's what I came for. I think it's selfish of you, I didn't think it of you!"

"Fred, Fred! I didn't think this of you! Cheer up, dear. There's only one day more, then we'll be together-alone, dear. Besides, you are going to see enough of me this winter. We're going to get a studio apartment and economize."

"What are you two children quarrelling about?" asked Muriel in her delightfully modulated voice, as she 'swam' toward them gracefully, her hands still behind her head. "I never supposed I'd find you quarrelling."

At this Molly bent lower over her flybook. "Ask Fred," she said.

"Oh, the devil," growled Fred, and he hurried down the bank to help John overturn the canoe.

"He's as cross as a bear to-day," said Molly, busily unreeling her line and testing its strength. "Do cheer him up, when I am gone, Muriel. If you can't, who can ?" Fred, on the little dock, holding the canoe, watched her approach carrying the rod which he had taught her to handle better than most men. She looked like a mere girl in her short khaki skirt, as she stepped briskly toward him, strong, alert, full of verve and grace.

Ignoring the hand he held out to her, she stepped nimbly into the canoe, into the centre of it, with apparent thoughtlessness. Then taking up her paddle, as John took up his, "Good-by, my dears," she said, "take good care of each other. Muriel, help yourself to my cold cream, if yours is all gone. Help yourself to anything of mine you want. Good-by. I'll be back at sunset," and away she went, paddling swiftly. The two prisoners gazed after her in silent alarm, both self-conscious, dreading to meet each other's eyes, longing for cheerful Molly's return. Muriel was no longer a welcome luxury, and as Molly had interfered with her being a necessity, she had become disquietingly like a nuisance. To her Fred had simply become another disappointment-like all men, when once you know them well enough. Poor Muriel, she was out of the procession. . . . Molly's canoe disappeared behind the point. The two marooned mutineers became more

conscious of each other's presence. "May I not get you a sofa cushion and something to read?" asked Fred politely.

"No, thanks," Muriel replied musically, "I must pack."

When Molly returned the two egoists were sitting side by side talking animatedly about art. But she observed with a smile that each had a finger in books they had been reading.

When at last the hour of departure came, welcome to all, including John, groaning under Muriel's mountainous duffle bag, Mr. and Mrs. Carroll stood upon the little dock and waved good-by to their guest until the canoe disappeared behind the point. Molly heard her husband breathe a sigh of relief, and she smiled indulgently as when a mother hears a little child waking up from a bad dream. The little comedy was ended. The field was now clear for the greater task still unfinished, to make a real union of what had merely been a marriage. It was a good place to resume, here where they had made their false start. She had it in her own hands now. Man proposes marriage; woman disposes of it.

Fred had turned eagerly to talk of fishing plans. But he had been arrested by the look on his wife's half-turned face. He was still gazing at it in amazement as comprehension flashed across his own. Then with the mingled sensations of a man when he first awakes to the great fact that his wife understands him better than he does himself-alarm, respect, amusement and solid comfort-"Molly! you little wretch!" he cried, sheer admiration for her breaking through shame and all the rest, "I see it now!"

They turned and confronted each other with new eyes, understanding and unashamed, while laughter crowded out their old polite artificiality. For him it was the moment of clear vision. He saw what a stupid thing their marriage had been, what a goodly thing it might be. He caught and held her close in their glad renewal, the tenderest of passions.

"It isn't that I was such an ass that surprises me," he said, at last, "but that considered me worth pulling out!"

you

She looked up, tender, merry and wise. "Oh, I will always pull you out," she said.

I

HEN boards could be smoothed only by hand, a man with a plane might finish, perhaps, ten boards in a day. As soon as a planing-machine was invented, a man with such a machine might finish, perhaps, 500 in a day. (1) If the inventor owned all the planing-machines, he could hire them out, and builders would pay him a return something between the cost of smoothing 10 and 500 boards. To give the builder some advantage the inventor might charge for the use of the machine the cost of finishing 450 boards; thus the one would gain 40 over the old handsystem, and the inventor would enjoy a royalty of 450. The latter, if the price of finishing a board was 10 cents, would receive $45 as rent for his machine, and he could sell it at a price that would return him $45 a day, more or less, according to depreciation of the machine. That is, the monopolized machine would sell at the capitalized value of its earnings; and the inventor could retain this gain only because he had a monopoly over the machines which represented in permanent form his creative and managerial ability. (2) On the other hand, should the construction of planing-machines become common property, and thus be obtained by any one at the mere expense of producing them, the price of a machine would at once fall to the sum which would cover its expenses of production. Its efficiency may have remained as great as ever, but its value, when freely reproducible, would fall to its simple cost of reproduction. If not monopolized, this price under ordinary circumstances could go no higher. That is, supply can dominate utility in its effect on price. Thus we may see that a valuation based on a capitalization of earnings is, as a rule, possible only under more or less strict monopoly conditions.

Such a method of valuation, however, has played a prominent rôle recently in the

purchase of industrial plants by combinations. Mr. Carnegie, for instance, created during many years of operation a steel plant at Homestead. When the United States Steel Corporation was forced to buy him out, how much should it pay for the plant? On the one hand, the cost of reproducing the plant, its machinery, cokesupplies, railways, etc., might perhaps be $100,000,000. That sum might represent the actual capital invested. Should the value of a plant be computed as equal merely to the value of the capital put into it? Certainty not, unless, as in our former illustration, it were a freely reproducible article. If any group of men on the street, who could get together the required capital, could build and conduct a mill as profitably as Mr. Carnegie's, then the Homestead works were worth in the market only the cost of reproduction. A higher price could not be paid, because a similar establishment could be built at once at the price of construction. On the other hand, we are told that the most sagacious business men in the country paid Mr. Carnegie some $400,000,000, or even more, for this plant. It was also shown in the courts that the earnings in some years had been as high as $40,000,000. In short, no one hesitated to fix the price of the going concern by its proven, or average, earnings in a period including both lean and fat years. A capitalization of earnings was the method adopted for ascertaining the selling price not only of a steel plant, but of countless other industrial plants in the days since 1897. Why? Because Mr. Carnegie's mills were not freely reproducible articles. They were not freely reproducible, because similar managerial ability is scarce. Obviously, their earning power was due, not merely to the actual capital invested-for capital in and by itself does not produce anything-but to the energizing, fertile, devising, inventing, directing and crafty mind of the manager of the whole institution. His organizing and constructive genius formed a productive machine of high efficiency; his power of obtaining coke and ore; his knowledge of men and markets; his insight into

politics at Harrisburg and Washington; his dealings with transportation companiesall worked together with his invested capital to build up the annual earnings. In the price paid for his property was a large sum which represented the permanent efficiency of the machine created at Homestead. It was a case of a natural monopoly. It was open to other men to do the same thing; but few there were who could do it as well. A high price, therefore, was paid for a natural monopoly formed by a creative mind. It would be aside from the point to pay only for the capital invested; for admittedly capital is only one of the factors entering into the production of things of value.

II

THE question as to what is an equitable basis of valuation has been discussed in connection with other than industrial plants. Very recently the true method of valuing railways has been brought forward, not only as a means of controlling rates on traffic carried, but also as a means of regulating the amount of railway securities issued, and to afford a basis of taxation. Two methods of valuation, in general, have been proposed: (1) a commercial valuation, based on earnings; and (2) a physical valuation, based on an inventory, at an appraised value of the tangible property. This, in effect, is but an application of the general principles previously observed in regard to planing-machines and industrial plants. Thus we are obliged to determine the sources of a railway's earnings, and whether it is a monopoly, or a freely reproducible article. If the former, its value should be fixed according to its earnings; if the latter, according to its cost of production.

Is a railway, in truth, capable of reproduction by any group of men who can control merely the capital needed to create its visible property-its cuts, fills, bridges, road-bed, stations, rolling-stock, wharves and terminals? If one had the funds, could one make another Pennsylvania Railroad just like it? Clearly not. Why? To parallel it would not accomplish the task. In fact, the actual going concern is a complex, not merely of tangible forms of capital, but of capital guided and shaped by men who "bore with a large augur,"

and who have created an individual machine specially adapted for transportation in the particular region and cities which it serves. It is profitable precisely because it is different from other roads differently circumstanced. Each railway has problems of its own; and if each is now fairly well established, it is because it has had the services of men capable of the highest order of constructive managing ability. A successfully organized railway is as much the result of efficient management as a successful newspaper or magazine. A definite persona has come into being, capable of continuing usefulness under experienced guidance. Such an organization is as little capable of being freely reproduced as anything under a natural monopoly-like a great book or a work of art.

Nevertheless, in the generally critical attitude of to-day toward railways, caused no doubt by conspicuous cases of indefensible "high finance," there has sprung up in several states, as well as at Washington, the intention to make a physical valuation of railways, in order to prevent over-capitalization and unduly high rates. Behind this intention there is a very definite idea that the earnings of railways are attributable in the main to the capital invested, plus the income derived from privileges given the roads by the public. That is, earnings are analyzed as due (1) to capital investment, and (2) to franchises, and that the earnings from the latter should be in some way-by lowered rates, or otherwise

returned to the public who gave the privileges. Then, obviously, the railways should be allowed, on general principles, to receive reasonable income on only the capital actually invested. This proposal has been strenuously opposed by the railways, generally on the ground that a commercial valuation based upon earnings is the only correct method of valuation. To this it is answered that no one denies the validity of determining the selling price of a railway by capitalizing its earnings; but it is claimed that the real point at issue is to be found in ruling out a certain part of the earnings; and thus forcing a reduction of the capitalization. In brief, it is urged that all earnings due to franchises should be eliminated, that they should not be capitalized or represented by securities, and, consequently, that there is no justice in the