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Chapter One | The Financial Environment
©John Wiley and Sons, Inc. Melicher, Introduction to Finance, 16/e. For Instructor Use Only.
1-1
Solution Manual for Introduction to
Finance: Markets, Investments, and
Financial Management, 16th Edition
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Chapter 1
The Financial Environment
CHAPTER PREVIEW
This first chapter provides an overview of the three areas of finance—institutions and markets,
investments, and financial management. We begin by providing clear answers to the following two
questions: What is finance? Why study finance? To underscore the importance of studying finance,
we briefly discuss how the financial environment changed during the early-part of the twenty-first
century. Six principles of finance are identified and discussed: time value of money, risk versus
return, diversification of risk, financial markets are efficient, management versus owner objectives,
and reputation matters. The basic requirements of an effective financial system need to be
understood in order to tie finance into the economy in general. We also discuss the financial
functions in the U.S. system: creating and transferring money, accumulating and lending/investing
savings, and marketing and transferring financial assets. We then identify financial markets
characteristics and describe major types of financial markets. We next follow with a brief discussion
of some of the careers available in finance and use this introduction about finance careers to provide
the basis for more detailed discussions in later chapters. The chapter concludes with a description
of the plan of study for the book.
LEARNING OBJECTIVES
LO 1.1 Define finance and describe the three areas of finance.
LO 1.2 Explain why finance should be studied.
LO 1.3 Describe and discuss the six principles of finance.
LO 1.4 Identify the four components of the financial system and describe their roles.
LO 1.5 Describe financial markets characteristics and the four types of financial markets.
LO 1.6 Identify several major career opportunities in finance.
LO 1.7 Describe this textbook’s plan of study.

Section Two | Instructor Support Materials
©2017 John Wiley and Sons, Inc. Melicher, Introduction to Finance, 16/e. For Instructor Use Only.
1-2
CHAPTER OUTLINE
I. (1.1) WHAT IS FINANCE?
A. Two Themes
II. (1.2) WHY STUDY FINANCE?
III. (1.3) SIX PRINCIPLES OF FINANCE
A.Time Value of Money
B. Risk Versus Return
C.Diversification of Risk
D.Financial Markets are Efficient
E.Management Versus Owner Objectives
F. Reputation Matters
IV. (1.4) OVERVIEW OF THE FINANCIAL SYSTEM
A. Characteristics and Requirements
B. Financial System Components and Financial Functions
1. Creating Money
2. Transferring Money
3. Accumulating Savings
4. Lending and Investing Savings
5. Marketing Financial Assets
6. Transferring Financial Assets
V. (1.5) FINANCIAL MARKETS: CHARACTERISTICS AND TYPES
A. Money and Capital Markets
B. Primary and Secondary Markets
C. Major Types of Financial Markets
VI. (1.6) CAREERS IN FINANCE
VII. (1.7) THE PLAN OF STUDY
VIII. SUMMARY
LECTURE NOTES
I. (1.1) WHAT IS FINANCE?
Finance is the study of how individuals, institutions, governments, and businesses acquire,
spend, and manage money and other financial resources. The financial environment
encompasses the financial system, institutions, markets, and individuals that make the
economy operate efficiently.

1-3
The three areas of finance within the financial environment and financial system are:
institutions and markets, investments, and financial management. Financial institutions are
intermediaries that help the financial system operate efficiently and help transfer funds from
savers to investors. Financial markets are physical locations or electronic forums that
facilitate the flow of funds. Investments involve the marketing of securities, securities
analysis, and the management of investment risk. Financial management involves financial
planning, asset management, and fund raising decisions to enhance the value of firms.
Within the context of the three areas of finance we cover the themes of small business
management and personal financial planning. Entrepreneurial finance studies how growth-
driven, performance-focused, early-stage firms raise financial capital and manage their
operations and assets. Personal finance studies how individuals prepare for financial
emergencies, protect against premature death and the loss of property, and accumulate
wealth over time.
(Use Figure 1.1 and Review Questions 1 through 4 here.)
II. (1.2) WHY STUDY FINANCE?
The first fifteen years of the twenty-first century has been characterized by a volatile
economic environment in the U.S. A price bubble for technology stocks (including dot.com
start-ups) burst in 2000. A subsequent economic downturn was made worse by the
September 11, 2001 terrorist attack. Although there followed a period of economic recovery,
a housing price bubble burst in 2006. Debt securities tied to housing prices subsequently fell
causing many financial institutions to be pushed to the brink of failure which led to the 2007-
08 financial crisis. The economy entered the 2008-09 Great Recession. Although economic
recovery has been slow, unemployment rates, which exceeded 10 percent in 2009, dropped
to the 5 percent level by the end of 2015.
We encourage instructors to spend time at the beginning of the course explaining to,
and discussing with, their students about the importance of studying finance. We suggest
several reasons why students should study finance.
a. First, as a citizen (of the U.S.A. or another country), you should want to make informed
economic decisions. Whatever your financial and economic goals may be, you need to
be an informed participant if you wish to “make a difference.” The operation of the
financial system and the performance of the economy are influenced by policy makers.
The citizens elect important policy makers such as the President and Congress who can
pass or change laws, and through their decisions impact on the level of economic
activity. Thus, it is important that citizens be informed when making
political/economic choices.

1-4
b. Second, having some knowledge about finance, particularly the financial markets or
investments component, should be important to you. An understanding of various
aspects of personal finance should help you better manage your existing financial
resources, as well as provide the basis for making sound decisions for accumulating
wealth over time.
c. Third, to be successful in the business world, it is important to have a basic
understanding of business finance in addition to an understanding of macro finance and
investments (financial markets). Even if your “business interest” is in a non-finance
career, you likely will need to interact with finance professionals both within and
outside your firm. To do so will require a basic knowledge of the concepts, tools, and
applications of business finance.
(Use Review Questions 5 and 6 here.)
III. (1.3) SIX PRINCIPLES OF FINANCE
Finance is founded on six principles. They are:
1. Money has a time value.
2. Higher returns are expected for taking on more risk.
3. Diversification of investments can reduce risk.
4. Financial markets are efficient in pricing securities.
5. Manager and stockholder objectives may differ.
6. Reputation matters.
An individual’s reputation reflects his/her ethical behavior which is how an individual
treats other legally, fairly, and honestly.
(Use Review Questions 7 and 8 here.)
IV. (1.4) OVERVIEW OF THE FINANCIAL SYSTEM
An effective financial system is a complex mix of government and policy makers, a
monetary system, financial institutions, and financial markets that interact to expedite the
flow of financial capital from savings into investment. Basic requirements for an effective
financial system include: a monetary system, a savings-investment process, and financial
markets. The monetary system must provide an efficient medium for exchanging goods and
services. This is accomplished by an efficient system for creating and transferring money.
The financial system must also be able to allow capital formation by channeling savings into
investment. In addition, markets must exist in which to buy and sell measures of (or claims
to) wealth, such as financial assets or real estate.
In a simple economy, such as a self-sufficient farm, a farmer can create capital by building
a new barn. Capital formation takes place indirectly in a highly developed economy. For

1-5
example, individuals may save a portion of their current income which is, in turn, loaned to
others who want to purchase equipment.
The basic financial functions in an effective financial system include: creation of money,
transferring money, accumulating savings in financial institutions, lending and investing
savings, marketing financial assets, and transferring financial assets.
The functions of finance can be developed in class by asking students to list on the board
all financial institutions with which they are familiar. They can then be asked which services
they and their families receive from these institutions. It will take some probing and grouping
of items to develop the list of functions, but time spent on this significant topic is worth the
effort.
(Use Figures 1.2 and 1.3 and Review Questions 9 and 10 here.)
V. (1.5) FINANCIAL MARKETS: CHARACTERISTICS AND TYPES
Financial markets can be classified into: (a) money and capital markets; and (b) primary and
secondary markets. Money markets are where debt securities with maturities of one year or
less are issued and traded. Capital markets are where debt instruments or securities with
maturities longer than one year and corporate stocks (equity securities) are issued and traded.
Primary markets are where the initial offering or origination of debt and equity securities
takes place. Secondary markets are physical locations (or electronic forums) where debt
(bonds and mortgages) and equity securities are traded.
Debt securities are obligations to repay borrowed funds. Common stocks are ownership
shares in corporations.
There are four main types of financial markets—debt securities markets, equity securities
markets, derivative securities markets, and foreign exchange markets. Debt securities
markets are markets where money market securities, bonds, and mortgages are originated
and traded. Equity securities markets are markets where stocks are initially traded and sold.
Derivative securities markets are markets for financial instruments or contracts that derive
their values from underlying debt or equity securities. Foreign exchange markets (or
FOREX markets) are electronic markets in which banks and institutional traders buy and
sell various currencies on behalf of businesses and other clients.
(Use Review Questions 11 through and 14 here.)
VI. (1.6) CAREERS IN FINANCE
Career opportunities in finance are generally found in the areas of financial management,
depository financial institutions, contractual savings and real property organizations, and
securities markets and investment firms.

1-6
Entry-level finance job opportunities also exist in government or not-for-profit
organizations, as well as with international or global businesses.
(Use Review Question 15 here.)
VII. (1.7) THE PLAN OF STUDY
Part 1 describes the overall financial environment and introduces the three areas of finance—
institutions and markets, investments, and financial management. We also discuss how the
necessary components (a monetary system, financial institutions, and financial markets) of
the financial system interact to make the financial system operate efficiently. Part 2 is
concerned with the investments area of finance including the characteristics and valuation of
stocks and bonds, as well as the roles and operations of securities markets. Part 3 focuses on
the financial management of businesses and includes how the business sector interacts with
the financial system.
REVIEW QUESTIONS AND ANSWERS
1. (LO 1.1) What is finance?
Finance is the study of how individuals, institutions, governments, and businesses acquire,
spend, and manage money and other financial resources.
2. (LO 1.1) What is meant by the term financial environment?
The financial environment encompasses the financial system, institutions, markets, and
individuals that make the economy operate efficiently.
3. (LO 1.1) What are the three areas of finance?
The three areas of finance within the financial environment and financial system are
institutions and markets, investments, and financial management.
Financial institutions are intermediaries that help the financial system operate efficiently and
assist the savings-investment process.
Financial markets are physical locations or electronic forums that facilitate the flow of funds.
Investments involve the marketing of securities, securities analysis, and the management of
investment risk.

1-7
Financial management involves financial planning, asset management, and fund raising
decisions to enhance the value of firms
4. (LO 1.1) Briefly describe the terms entrepreneurial finance and personal finance.
Entrepreneurial finance studies how growth-driven, performance-focused, early-stage firms
raise financial capital and manage their operations and assets.
Personal finance studies how individuals prepare for financial emergencies, protect against
premature death and the loss of property, and accumulate wealth over time.
5. (LO 1.2) Briefly describe how the financial environment has changed during the past few
years.
The technology/dot.com stock price bubble burst in 2000. The housing price bubble burst
in 2006. Falling housing prices accompanied by falling values of mortgage-backed
securities led to the 2007-08 financial crisis and the resulting 2008-09 Great Recession.
Economic activity has been slow to recover and unemployment rates remained at high levels
at the end of the first decade of the twenty-first century.
6. (LO 1.2) Identify and briefly describe several reasons for studying finance.
There are several reasons to study finance.
a. As a citizen (of the U.S.A. or another country), you should want to make informed
economic decisions. Whatever your financial and economic goals may be, you need
to be an informed participant if you wish to “make a difference.”
b. Having some knowledge about finance, particularly the financial markets or
investments component, should be important to you. An understanding of various
aspects of personal finance should help you better manage your existing financial
resources, as well as provide the basis for making sound decisions for accumulating
wealth over time.
c. To be successful in the business world, it is important to have a basic understanding of
business finance in addition to an understanding of institutions, markets, and
investments.
7. (LO 1.3) What are the six principles of finance?

1-8
The six principles are:
8. (LO 1.3) Describe what is meant by ethical behavior.
Ethical behavior is how an individual or organization treats others legally, fairly, and
honestly. Laws and regulations ensure minimum levels of protection and compliance and
the difference between unethical and ethical behavior. High ethical behavior occurs when
behavior exceeds basic legal or regulatory standards.
9. (LO 1.4) What are the four major components of an effective financial system?
The basic requirements are:
a. Policy makers. Comprised of the President, Congress, the U.S. Treasury, and the
Federal Reserve Board.
b. An efficient monetary system: This requires a unit of account such as the dollar and a
convenient means of paying for everything from a pack of chewing gum to a business
worth millions.
c. A system for channeling savings into investment: This requires proper legal instruments
and financial institutions so that savers are willing and able to transfer savings to those
having a demand for them.
d. Financial markets and procedures for transferring claims to wealth: This facilitates the
investment process since the owner of funds will invest more readily if claims can be
converted into cash when there is a need or desire to do so.
10. (LO 1.4) Identify and briefly describe the financial functions in the financial system.
The three components of the financial system are: a monetary system, financial
institutions, and financial markets.
a. Monetary system financial functions are: creating money and transferring money.
b. Financial institutions carry out the savings-investment process via the financial functions
of accumulating savings and lending/investing savings.

1-9
c. Financial markets perform the financial functions of marketing and transferring financial
assets.
11. (LO 1.5) Briefly describe the differences between money and capital markets.
Money markets are the markets where debt instruments of one year or less are traded. In
contrast, capital markets are markets for debt securities with maturities in excess of one year
and corporate stocks.
12. (LO 1.5) What are the differences between primary and secondary markets?
Primary securities markets are markets in which the initial offering of debt and equity
securities to the public occurs.
Secondary securities markets are markets where the transfer of existing debt and equity
securities between investors occurs.
13. (LO 1.5) How do debt securities and equity securities differ?
Debt securities are obligations to repay borrowed funds. Common stocks are ownership
shares in corporations.
14. (LO 1.5) Identify the four types of major financial markets.
The four types of financial markets are debt securities markets, equity securities markets,
derivative securities markets, and foreign exchange markets.
Debt securities markets are markets where money market securities, bonds (corporate,
financial institution, and government), and mortgages are originated and traded.
Equity securities markets are markets where common stocks are initially sold and traded.
Derivative securities markets are markets for financial contracts (or instruments) that derive
their values from underlying debt and equity securities.
Foreign exchange markets are electronic markets in which banks and institutional traders
buy and sell various currencies on behalf of businesses and other clients.
15. (LO 1.6) Indicate some of the career opportunities in finance available to business

1-10
graduates today.
Career opportunities are generally found in the following areas.
a. Financial management. Entry-level opportunities (either in the treasurer’s department
or the controller’s department) include cash management analyst, capital expenditures
analyst, credit analyst, financial analyst, cost analyst, and tax analyst
b. Depository financial institutions. Entry-level job opportunities include loan analyst,
bank teller, and investments research analyst.
c. Contractual savings and real property organizations. Entry-level opportunities include
insurance agent or broker, research analyst, real estate agent or broker, and mortgage
analyst.
d. Securities markets and investment firms. Entry-level opportunities include stockbroker
or account executive, security analyst, investment banking analyst, and financial planner
assistant.
Entry-level finance job opportunities are also available in government or not-for-
profit organizations. Such jobs may involve management of cash funds, asset
acquisition decisions, and borrowing funds. Various entry-level finance job
opportunities also are available internationally.
EXERCISES AND ANSWERS
1. Match the following dates with the associated events:
a. 2000 [#4 technology stock bubble]
b. 2001 [# 2 U.S. terrorist attack]
c. 2006 [# 5 housing price bubble]
d. 2007-08 [#3 financial crisis]
e. 2008-09 [#1 great recession]
2. The U.S. financial system is comprised of: (1) policy makers, (2) a monetary system, (3) financial
institutions, and (4) financial markets. Indicate which of these components is associated with each
of the following “roles”:
a. accumulate and lend/invest savings [# 3 financial institutions]
b. create and transfer money [# 2 a monetary system]
c. pass laws and set fiscal and monetary policies [# 1 policy makers]
d. market and facilitate transfer of financial assets [# 4 financial markets]

1-11
3. Financial markets may be categorized as: (1) debt securities markets, (2) equity securities
markets, (3) derivative securities markets, and (4) foreign exchange markets. Indicate in which
of these markets the following securities trade:
a. mortgages [# 1 debt securities markets]
b. bonds [# 1 debt securities markets]
c. common stocks [# 2 equity securities markets]
d. currencies [# 4 foreign exchange markets]
4. In business, ethical dilemmas or situations occur frequently. Laws and regulations exist to define
unethical behavior. However, the practicing of high quality ethical behavior often goes beyond
just meeting laws and regulations. Indicate how you would respond to the following situations.
a. Your boss has just told you that there will be an announcement tomorrow morning that the
Federal Drug Administration has approved your firm’s marketing of a new breakthrough
drug. As a result of this information, you are considering purchasing shares of stock in your
firm this afternoon. What would you do?
The violation of U.S. laws is both illegal, which could result in prison time, and unethical. U.
S. securities laws prohibit officers, employees, and others from taking advantage of “inside”
information which when released will impact security prices. This situation seems to violate
securities laws and thus you should not purchase shares of stock in your firm prior to the
public announcement of this inside information.
b. In the past, your firm has been in compliance with regulatory standards relating to product
safety. However, you have heard through the “company grapevine” that recently some of
your firm’s products have failed resulting in injuries to customers. You are considering
quitting your job due to personal moral concerns. What would you do?
Ethical behavior is how an individual or organization treats others legally, fairly, and
honestly. Your firm has been legally in compliance with regulatory standards relating to
product safety. At this time injury-related product failures seem to be rumors and product
safety regulations do not attempt to ensure there will be no injuries. You probably would
want to wait until actual “facts” are known before taking any actions. Ultimately you should
decide whether you believe your firm is treating customers fairly and honestly in addition
to legally.
5. Obtain several recent issues of The Wall Street Journal or Bloomberg Businessweek. Identify,
read, and be prepared to discuss at least one article relating to one of the six principles of finance.
The six principles of finance are:

1-12
The instructor will need to identify recent articles from The Wall Street Journal and/or
Bloomberg Businessweek for possible class discussion.
6. Obtain several recent issues of The Wall Street Journal or Bloomberg Businessweek. Identify,
read, and be prepared to discuss at least one article relating to one of the four types of financial
markets identified in this chapter.
The four main types of financial markets are:
1. debt securities markets,
2. equity securities markets,
3. derivative securities markets, and
4. foreign exchange markets.
The instructor will need to identify recent articles from The Wall Street Journal and/or
Bloomberg Businessweek for possible class discussion.
7. Obtain several recent issues of the Wall Street Journal or Bloomberg Businessweek. Identify,
read, and be prepared to discuss at least one article relating specifically to recent changes in
the financial environment.
The instructor will need to identify recent articles in The Wall Street Journal and/or Bloomberg
Businessweek for possible class discussion.
8. Go to the Small Business Administration (SBA) Web site, www.sba.gov, and search for
information on starting a new business. Identify and prepare a written summary of the startup
basics described on the SBA site.
First go to the SBA Web site. Then, click on “Starting Your Business.” This will take you to
“Startup Basics” involving startup topics, financing, topics, marketing topics, tax topics, and
legal topics.
SUGGESTED QUIZ
1. Briefly answer the question: “What is finance?”
2. Identify the six principles of finance.
1. List the three financial system components and their financial functions in an effective
financial system.
2. Identify the four main types of financial markets.

1-13
3. Describe:
a. money markets
b. capital markets
c. primary markets
d. secondary markets

Section Three | Concept Check Questions
1-14
Concept Check Questions
SECTION 1.1
Finance is the study of how individuals, institutions, governments, and businesses
a. acquire, spend, and manage money and other financial assets.
b. spend and manage financial assets.
c. acquire and spend money.
d. acquire and manage money and real assets.
ANSWER: a
What are the three areas of finance?
a. Institutions and markets, investments, and entrepreneurial finance
b. Investments, institutions and markets, and personal finance
c. Institutions and markets, investments, and financial management
d. Investments, entrepreneurial finance, and financial management
ANSWER: c
What are the two finance themes carried throughout this book?
a. Financial environment and financial management
b. Entrepreneurial finance and personal finance
c. Personal finance and investments
d. Entrepreneurial finance and financial management
ANSWER: b
SECTION 1.2
When did the “Great Recession” occur?
a. 1999–2000
b. 2005–2006
c. 2007–2008
d. 2008–2009
ANSWER: d

1-15
The reasons for studying finance are to make informed
a. economic, personal and business investment, and career decisions.
b. political, economic, and career decisions.
c. economic, social, and behavioral decisions.
d. personal, business, and government decisions.
ANSWER: a
A basic understanding of business finance is important even if you are interested in
a nonfinance career or professional activity because you will likely need
a. to interact with finance professionals within and outside your organization.
b. a basic knowledge of the concepts, tools, and applications of financial management.
c. to make informed career decisions based on a basic understanding of business finance.
d. All of the choices are correct.
ANSWER: d
SECTION 1.3
Finance principles focus on an individual’s
a. political and economic behavior.
b. economic and social behavior.
c. economic and ethical behavior.
d. ethical and political behavior.
ANSWER: c
Which principle of finance is not an economic principle?
a. Time value of money
b. Risk versus return
c. Diversification of risk
d. Reputation matters
ANSWER: d
Which one of the following is a principle of finance?
a. Money has the same value today or tomorrow.
b. Lower returns are expected for taking on more risk.
c. Diversification of investments increases risk.
d. Financial markets are efficient in pricing securities.
ANSWER: d

1-16
SECTION 1.4
What are the four major components of the U.S. financial system?
a. Policy makers, a monetary system, financial institutions, and financial markets
b. Policy makers, a monetary system, a fiscal system, and real estate markets
c. A monetary system, a fiscal system, a banking system, and securities markets
d. Congress, Federal Reserve central bank, securities firms, and equity securities markets
ANSWER: a
What is the role of a monetary system in an effective financial system?
a. Pass laws and set fiscal and monetary policies
b. Create and transfer money
c. Accumulate and lend/invest savings
d. Market and facilitate transfer of financial assets
ANSWER: b
What are the financial functions carried out by financial markets in an effective financial system?
a. Passing laws and setting fiscal and monetary policies
b. Creating money and transferring money
c. Accumulating savings and lending/investing savings
d. Marketing financial assets and transferring financial assets
ANSWER: d
SECTION 1.5
What are financial markets, where debt securities with maturities of one year or less are issued
and traded, called?
a. Money markets
b. Capital markets
c. Primary markets
d. Secondary markets
ANSWER: a
What are financial markets that are physical locations or electronic forums where debt and equity
securities are traded called?
a. Money markets
b. Capital markets
c. Primary markets
d. Secondary markets
ANSWER: d
What are the financial markets where ownership shares in corporations are initially sold and
traded?

1-17
a. Debt securities markets
b. Bond and mortgage markets
c. Equity securities markets
d. Derivative securities markets
ANSWER: c
Ch01 Sec 1.6
What are the major areas for possible careers in finance?
a. Business financial management
b. Depository financial institutions
c. Contractual savings and real property organizations
d. Securities markets and investment firms
e. All the choices are correct
ANSWER: e
Entry-level career opportunities involving business financial management include which of the
following?
a. Capital expenditures analyst
b. Investments research analyst
c. Stockbroker or account executive
d. Insurance agent or broker
ANSWER: a
Ch01 Sec 1.7
What topics do the three parts of this book cover?
a. Institutions and markets
b. Investments
c. Financial management
d. All of the choices are correct
ANSWER: d
In what part of this book is the financial management of businesses covered?
a. Part 1
b. Part 2
c. Part 3
d. Part 4
ANSWER: c
Which of the following is the sequencing of the three parts covered in this book’s plan of study?

1-18
a. Institutions and markets, investments, and financial management
b. Investments, institutions and markets, and financial management
c. Financial management, investments, and institutions and markets
d. Institutions and markets, entrepreneurial finance, and personal finance
ANSWER: a

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Title: The Masterfolk
wherein is attempted the unravelling of the strange
affair of my Lord Wyntwarde of Cavil and Miss Betty
Modeyne
Author: Haldane Macfall
Release date: April 4, 2020 [eBook #61754]
Most recently updated: October 17, 2024
Language: English
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*** START OF THE PROJECT GUTENBERG EBOOK THE
MASTERFOLK ***

New 6s. Novels
PIGS IN CLOVER
By Frank Danby
THE CALL OF THE WILD
By Jack London
SPENDTHRIFT SUMMER
By Margrey Williams
IN THE GUARDIANSHIP OF GOD
By Flora Annie Steel
BEGGAR’S MANOR
By R. Murray Gilchrist
GORDON KEITH
By Thomas Nelson Page
THE LUCK OF BARERAKES
By Caroline Marriage
SIR JULIAN THE APOSTATE
By Mrs. Clement Parsons
TYPHOON
By Joseph Conrad
JERUSALEM
By Selma Lagerlöf
’TWIXT GOD AND MAMMON
By William Edwards Tirebuck

LONDON
WILLIAM HEINEMANN
20 & 21 Bedford Street, W.C.

THE MASTERFOLK
Wherein is attempted the unravelling
of the Strange Affair of my Lord
Wyntwarde of Cavil and Miss
Betty Modeyne
by
HALDANE MACFALL
Author of ‘The Wooings of Jezebel Pettyfer,’ etc.
London
William Heinemann
1903

All rights reserved
TO
GEORGE MEREDITH
ESQUIRE
TO GIVE YOU THE SALUTE OF SOVEREIGNTY,
SIR, CAN ADD NO TITTLE TO YOUR STATURE;
BUT THERE IS SOLDIER’S DELIGHT IN SALUTING
A CONQUEROR—AND TO YOUR BAYS
THERE IS NO PRETENCE OF A PRETENDER

CONTENTS
OF THE BUDDING OF THE TREE OF LIFE
Chapter Page
I. Which shows some of the Gods in their Machinery,
with but a Shadowy Hint of the Printer’s Devil 3
II. Wherein it is discovered that, likely enough from an
Ancestor who was Master of the Horse to King Harry
the Eighth, Master Oliver had inherited some Gift of
Horseplay, together with a Keen Eye for a Fine Leg
on a Woman 13
III. Wherein Master Oliver comes to the Conclusion that,
to complete the Dramatic Picture, Greatness should
have known the Hair-Shirt and the Makeshifts of
Adversity 20
IV. Wherein it would appear that the most respectable
Stucco Architecture may be but a Screen for Gnawing
Secrets 30
V. Wherein Miss Betty Modeyne is introduced to the
Study of Nature 36
VI. Wherein it is hinted that to be Famous is not
necessarily to be Great 41
VII. Wherein Ambition shrinks from looking down the
Ladder 51
VIII. Wherein it is discovered that the Strength of Genius
may lie in the Hair 55
IX. Wherein Master Oliver is convinced that it is Difficult
to play the Man’s Part on a Weak Stomach 71
X. Wherein Master Oliver entertains Guests 77

XI. Wherein Egoism begins to suspect that there is a
Bottom to the Pint Pot 82
XII. Wherein Miss Betty Modeyne wins more Hearts 88
XIII. Which contains Some Hints towards the Making of a
Baronet 93
XIV. Which has to do with the Fascination of Naughtiness 97
XV. Which tells of a Poet that offered Himself for
Sacrifice, and was rejected of the Gods 100
XVI. Which hints at an Age of Gold 105
OF THE BUDDING OF THE TREE OF KNOWLEDGE
XVII. Which has to do with the Awakening of Youth 111
XVIII. Of the Coming of Quilliam O’Flaherty Macloughlin
Myre upon the Town 115
XIX. Wherein a Strutting Cock comes near to losing a
Feather upon his Own Dunghill 118
XX. Wherein Master Devlin throws a Fierce Sidelight upon
the Genius of Poetry 121
XXI. Which discovers a Great Man in the Hour of his
Triumph 124
XXII. Wherein we are obliged to spend a Brief Moment in
the Company of the Titled Aristocracy 128
XXIII. Wherein the Major fights a Brilliant Rearguard Action;
and beats off a Pressing Attack 133
XXIV. Which tells, with quite Unnecessary Frankness, of
what chanced at the Tavern of The Cock and Bull in
Fleet Street 138
XXV. Wherein the Major takes to his Bed 142
XXVI. Wherein Tom Folly blunders along in his Self-centred
Gig—and drags a Dainty Little Lady’s Skirts into the
Wheel 144
XXVII. Wherein a Dainty Little Lady, looking out of the
Window of a Shabby Home at a Shabbier Destiny,
147

joins the Streaming Crowd whose Faces pass in the
Street, drifting towards the Strange Riot of Living
XXVIII. Wherein Dawning Womanhood whispers that Dolls
are Dolls 150
XXIX. Wherein Mr. Pompey Malahide loses his Breath in the
Midst of a Boast 155
XXX. Wherein Miss Betty Modeyne posts a Letter 157
XXXI. Wherein a Great Financier is satisfied with his
Bargain 159
XXXII. Wherein the Gallant Major rises from the Dead 162
XXXIII. Which has to do with one of those Emotional Crises
that change the Whole Tenor of a Man’s Political
Convictions 165
XXXIV. Which, to some extent, discloses the Incident of the
Sentimental Tea-cups 170
XXXV. Wherein we are bewildered by the Cooings of
Chivalry 175
XXXVI. Which touches upon the Pains of enjoying the Glow
of Self-Abasement whilst maintaining a Position of
Dignity 177
XXXVII. Which is Uneasy with the Restlessness of Youth 182
XXXVIII. Which has to do with the Breaking of a Pretty Lady’s
Picture 186
XXXIX. Wherein, the Barber letting the Cat out of the Bag,
we give Chase 189
XL. Which, in Somewhat Indelicate Eavesdropping
Fashion, hovers about a Trysting-Place, and
Scandalously Repeats a Private Conversation 194
XLI. Which discovers Something of Despised Poetry in a
Waste-paper Basket 197
XLII. Wherein we are shown an Emotional Hairdresser at
Loggerheads with Destiny 199

XLIII. Wherein we catch a Glimpse of the Benefits that
accrue to a Sound Commercial Education 203
XLIV. Wherein a Palace of Art disappears in the Night 207
XLV. Wherein a Poet burns his Verse to keep his Feet
Warm 211
OF THE BLOSSOMING OF THE TREE OF KNOWLEDGE
XLVI. Wherein the Husband of the Concierge fears that he
is growing Blind 217
XLVII. Which introduces us to the First Lady of France 220
XLVIII. Which has to do with the Motherhood of the World 223
XLIX. Wherein the Rich Man’s Son seeks the Sweets of
Poverty—not Wholly without Success 225
L. Wherein the Spring comes a-frolic into the Court 229
LI. Wherein it is hinted that it were Best to “Touch not
the Catte botte a Glove” 234
LII. Wherein Yankee Doodle is bugled—with a Strong
Foreign Accent 238
LIII. Wherein we skip down the Highway of Youth 242
LIV. Wherein the Widow Snacheur separates the Milk
from Human Kindness 249
LV. Wherein is Some Worship of the Moon 252
LVI. Wherein it is suspected that there has been Peeping
through Windows 256
LVII. Which treats of what chanced at the Tavern of The
Scarlet Jackass 261
LVIII. Wherein the Tears of Compassion heal the Bleeding
Feet of a Straying Woman 271
LIX. Wherein it is suspect that our Betty has the Healing
Touch 275
LX. Wherein Betty feels the Keen Breath of Winter 277
LXI. Wherein the Landlord of The Scarlet Jackass is
unable to sing his Song 279

LXII. Wherein a Comely Young Woman waits at a Window
all Night, watching for Sir Tom Fool—listening for his
Step 281
LXIII. Wherein the Ceiling of the Tavern that is called The
Scarlet Jackass is stained with Blood 283
LXIV. Wherein the Angel of the Annunciation enters into a
Garret 285
LXV. Wherein Betty walks into the Desert 288
LXVI. Which has to do with the Great Orgy of Youth 293
LXVII. Wherein Youth finds the Cap and Bells to be but a
Bizarre Crown 300
LXVIII. Wherein it is seen that a Man is More or Less
Responsible for his Father 301
LXIX. Which treats of a Farewell Banquet to Departing
Youth—whereat Gaston Latour glitters with a Hectic
Glitter 305
LXX. Wherein a Comely Young Woman broods upon the
Years 309
LXXI. Which treats of a Harmless Riot amongst Such as
Dwell on Mount Parnassus 313
LXXII. Wherein our Hero is ill at ease with his own Shadow 315
LXXIII. Wherein our Hero dabbles his Hands in the Turgid
Waters of Philosophy, and brings up Some Grains of
Truth from a Pebbly Bottom. A Chapter that the
Frivolous would do well to skip—the Ironies being
infrequent, if not wholly wanting, and the Humours
lacking in the Comic Interest 317
LXXIV. Which sees the Day break in the Tavern of The
Golden Sun 323
LXXV. Wherein our Hero goes out into the Night 329
LXXVI. Wherein our Hero sets Foot upon the Road to Rome 332
LXXVII. Wherein Foul Things are plotted with Some Glamour
of Romance 336

LXXVIII. Wherein our Hero scatters Some Pages of the
Indifferent Wisdom of the Ages to the even more
Indifferent Gulls 340
LXXIX. Wherein the Honourable Rupert Greppel shows
Hidalgic 344
LXXX. Which treats of the Masterfolk 349
LXXXI. Wherein the Widow Snacheur comes into her Fortune 351
LXXXII. Wherein Quilliam O’Flaherty Macloughlin Myre struts
airily towards the Goal of Freedom 355
LXXXIII. Which essays the High Epic Note 358
LXXXIV. Which has to do with Blue Blood and a Jade-handled
Cane 360
LXXXV. Wherein a Man of the World commits the Indiscretion
of putting his Experiences into Writing 363
LXXXVI. Wherein our Hero, and Another, go Home 366
OF THE BLOSSOMING OF THE TREE OF LIFE
LXXXVII. Which has to do with the Binding of Books in Half-
calf and the Whimsies of Calf Love 375
LXXXVIII. Wherein it is suspected that, on Occasion, the
Trumpet of Fame is not Wholly Immaculate of the
Hiccup 381
LXXXIX. Wherein Andrew Blotte draws aside the Arras that
hangs Across the Unknown and joins the Company at
a Larger Banquet 396
XC. Wherein Hereditary Greatness fails to Glitter Hidalgic 400
XCI. Wherein the Heir of the Ffolliotts falls the Victim to a
Limited Badinage 403
XCII. Wherein it is seen that the Blood of the Oldest
Families may run to Inconsequence and Mere Vulgar
Stains 407
XCIII. Wherein our Hero comes into a Wide Heritage 411
XCIV. Wherein it is suspected that the Garden of Eden was
Well Lost 413

OF THE BUDDING OF
THE TREE OF LIFE

CHAPTER I
Which shows Some of the Gods in their Machinery, with but a
Shadowy Hint of the Printer’s Devil
Amidst the untidy litter of torn paper that strewed the bare plank
floor there stood a large double writing-table, spread with proofs
and manuscript and pamphlets; and, with his feet in the litter of the
floor and his elbows in the litter of the table, sat a gaunt yellow-
haired youth, solemnly writing.
Netherby Gomme peered at his work in the waning light of the
departing November afternoon; and the deepening dusk that took
possession of the shabby room, turning all things to the colour of
shadows, strained his attention, drawing long lines about his mouth
and pronouncing the pallor of his serious face—the grim mask of the
humorist. The slips of paper that were set into the sleeve-ends of his
well-brushed threadbare coat to save the soiling of his shirt-cuffs,
and the long reach of yellow sock that showed his feet thrust a
wrinkled span beyond the original intention of his much-knee’d
trousers, marked the ordered untidiness of the literary habit.
Everything in the room—the overflowed waste-paper basket at his
feet; the severe academic comfort of the polished wooden armchair
that stood yawning augustly vacant opposite to him; the shut door
at his right hand, with its curt announcement of “Editor” in stiff,
forbidding letters; the low bookshelves about the room with their
rows of books of reference, stacks of journals and literary scraps
piled a-top of them; the walls with their irregular array of calendars,
advertisements, notices, and printed and pictured odds and ends;
the atmosphere of the scrap-gathering paste-pot and of clippings
from the knowledge of the world; the sepulchral, monotonous clock
that ticked its aggressive statement of the passage of time as
though with a cough of admonition that, whatever journalism might
be, life was short and art was long; the naked mantel beneath it,
which held the shabby soul of the jerrybuilder turned to stone—for it

is the hearth that is haunted by the spirit of the architect, and this
one had been a vulgar fellow—the bare fireplace that did not even
go through the feeble pretence of giving comfort, for it had no
fender, no hearthrug, but gaped, bored and empty and black, upon
the making of literature—everything marked the room to be one of
those scanty workshops where opinions are made, the dingy
editorial office of a struggling weekly review; and the extent of the
dinginess showed it to be a very struggling affair indeed.
The young man blotted his writing, and flipped through some pages
of manuscript:
“Oliver,” said he, without looking up, “a light, I think!... We have here
lying before us a most caustic literary criticism; but the light is so far
gone that we can scarce see the dogmatic gentleman’s own literary
infelicities—nay, can scarce see even his most split infinitives.”
He spoke like a leading article, with a slight cockney accent.
In the gloom of a dark corner by the window, at a high desk that
stood against the wall, where he sat perched on a tall office stool
with his feet curled round its long legs, a small boy ceased reading,
and, fumbling about in the breast-pocket of his short Eton jacket,
lugged out a tin box, struck a match, and, leaning forward, set a
flame to the gas-jet. The place leaped into light. The youngster flung
the matchbox across the room, and went on with his reading. It fell
at the feet of the yellow-haired youth.
“Ah, Noll,” said he, stooping over and searching for it amongst the
torn fragments of paper, “like those of even greater genius, our aims
are only too often lost in the sea of wasted endeavour.”
He found the box; lit the gas at his right hand; coughed:
“Are you putting that down?” he asked drily of the grim unanswering
silence.
The boy took no notice. The yellow-haired youth chuckled, and the
deep-furrowed lines about his mouth broadened into a quizzical
smile.

The boy Oliver could scarcely have been fourteen years of age, and
had he not been son of the editor, and that editor the thriftless
owner of but a very broken-winged Muse, and of a steadily
diminishing literary property, the boy must still have been at school.
He sighed heavily, rousing from his reading:
“I say, Netherby,” said he, “here’s a poem by that fellow with the
hair.”
He held out the manuscript.
Netherby Gomme looked up:
“A lyric?” he asked.
“No. Drivel.”
Netherby Gomme sighed, and sat back in his chair:
“With what candid brutality the sub-editorial mind treats the most
ecstatic flights of the imagination!” said he.
The boy Oliver shifted impatiently on his high stool:
“Shall I reject the ponderous rot?” he asked.
Netherby Gomme coughed:
“We—if you please, Oliver—we. It is always better to adopt the
editorial we in matters of weight; and it throws the responsibility
upon the irresponsible gods of journalism.”
Noll sighed, stretched himself, and yawned.
“All right. We’ll reject it, eh?... No good troubling the governor”—he
jerked his thumb towards the editor’s room—“he’s so beastly short
this afternoon. But I had better write the rejection, I suppose—the
father doesn’t like poets to be rejected on the printed form—they’re
so sensitive.”
He settled himself to write a letter, tongue in cheek, head down, and
quoting for the other’s approval as he wrote:

“The—editor—regrets—that—whilst—he—appreciates—the—beauty
of—the—lines—herewith—returned—he—is—unable—to—make—use
of—them—owing—to——”
He came to a halt and invited the prompt. None coming, he glanced
over his shoulder:
“What is it owing to, Netherby? I’m such a beastly poor liar. You’ve
been on the press so much longer. Hustle your vivid imagination and
chuck us an excuse.”
Netherby Gomme shook his head:
“I am only a humorist, Oliver—humour must walk knee-deep in
truth. I do not travel on Romance——”
“Oh, shut up!... No good chucking the idiot roughly.... It’s beastly
long.... We’ll chuck it for length, eh?”
Netherby Gomme smiled at him:
“Noll,” said he, “you are possessed of the magnificent carelessness
of the gods—and I never interfere with religious bodies.”
Noll turned to his writing again, and there was a steady scratching of
pen on paper.
Netherby Gomme sat for awhile, his face seamed with comic lines of
grim amusement:
“I suppose,” he said at last—“I suppose we have read the poem,
Oliver?”
“No, I haven’t. But you can.”
Netherby Gomme moved uneasily in his seat:
“N-no. No thanks, Oliver. We’ll take it as read.”
He coughed:
“By the way, Oliver, have you got the dummy for next week’s issue
over there?”
Noll licked, sealed, and thumped the letter on the desk:

“Oh, ah, yes—I’m sitting on it and a bunch of keys to remind me.”
He took a bunch of keys from under him, and put them in his
trousers pocket, then lugged out from beneath him the dummy form
of the review in its brown-paper cover. He opened it, and wetting his
finger on his lip, he flipped through the leaves with their proofs
pasted in position for guidance to the printer.
“Look here, Netherby.” He held up the booklet, pointing to a blank
space. “The governor said I was to tell you we had better complete
this column with a poem—says verse gives a pleasant appearance to
the page.” He dropped the dummy on the desk in front of him. “It’s
an awful bore, Netherby,” said he, “but that bundle of poems he
gave me the other day took up such a lot of space on my desk that I
flung them into the waste-paper basket. Can’t you knock up about
twenty lines of amorous matter? I promise not to whistle.”
Netherby Gomme smiled grimly, sighed, took up a pen, and, drawing
a sheet of paper to him, prepared to write....
The yellow-haired youth had been with this literary venture from the
start. He had begun as office-boy; and as each member of the
original staff had fallen out, at the stern prunings of necessity, he
had been promoted to their places, until he sat alone, as leader-
writer, humorist, topical poet, sentimentalist, sub-editor, office lad,
and general usefulness. Scrupulous to the smallest detail, reliable in
the performance of the minutest fraction of his bond, he got through
his work with the facility of a man of affairs; and, like all busy men,
finding time for everything, he had spent his hours of leisure outside
the office in the humane atmosphere of the theatre, in the tragic
fellowship of the street, in the eternal fresh comedy of the city’s by-
ways, and in the company of the mighty masters of his tongue; in
this, the best school of education in all the round world, he had
acquired such a knowledge of letters, such a taste for the niceties of
the written word, and such a mastery in its use, as would have
astounded, as indeed it was destined to astound, even them that
thought they knew him to his fullest powers.

The other, the editor’s son, Oliver Baddlesmere, had come to the
office to complete establishment straight out of the schoolroom
some months back. He had been brought in to reduce the pressure
of clerking work, and, owing to extreme youth and inexperience, had
been given the simpler duties to perform, so that he came naturally
and as a matter of course to preside over the destinies of the poet’s
corner and to impart information to a hungry world from the
battered volumes of an encyclopædia, and suchlike heavy books of
reference, the weight of which, in the intervals of airily relieving the
world’s thirst for knowledge, the boy used for the purpose of
pressing prints—of which he was gathering a collection from the
illustrated papers of the day, pasting them into brown paper scrap-
books of his own making.
Netherby Gomme had scarcely got under fair way with the writing of
his amorous matter when the boy whipped round on his office-stool.
“I say, Netherby,” said he; “your book is making a splash all along
the Thames. The bookstalls are covered with it—the whole blessed
town is saffron with it.”
The yellow-haired youth smiled complacently; sitting back in his
chair, he nodded:
“Indeed?” he said.
Noll slipped down off the stool, took it up, and carried it over to the
fireplace:
“You were a chunk-head not to put your name to it!” he said. “But all
the same, you know, it’s been roaring funny to hear the father and
mother talk about it.”
He vaulted to the top of the high stool, scrambled on to his feet,
and, reaching up, opened the glass face of the clock:
“It almost bursts me sometimes that I can’t tell ’em you wrote it,” he
said. He got on tip-toe and put forward the large hand twenty

minutes, shut the face with a click, turned where he stood, and,
thrusting his hands into his trouser-pockets, he added confidentially:
“D’you know, Netherby, between you and me and the office ink-pot,
I never thought myself that you could be so uncommon funny.”
The yellow-haired youth blushed.
Clambering down off the stool, Noll carried it back to his desk, took
down a tall silk hat, ran his coat-sleeve round it, and put it on his
head.
“Oliver,” said he—hesitated—made a pause—then added nervously:
“Oliver, I am going to confide in you. In fact, if I don’t I shall get
some sort of low malarial fever. Now, don’t treat the confidence with
the giggle of childishness.”
Noll sighed. He turned, leaped on to his office-stool, swung round,
set his feet on the bar, his elbows on his knees, his chin in his palms,
and, peering at the other out of the shadow from under the brim of
his hat, said gloomily:
“O lor! the little typewriter girl!... Why the dickens you don’t kiss
Julia and have done with it, Netherby, I can’t make out. Hang it, I
have!... It was very nice whilst it lasted, and all that, but there was
nothing in it to write poetry about!”
Netherby Gomme flushed.
“Oliver,” said he, with biting distinctness, “we have not yet shown
the resentment that your vulgarity courts; but we would remind you
that we may be goaded into flinging the office ink-pot——” He
stretched out his long arm towards the large zinc well of ink before
him.
Noll slid off the stool, putting it between them with the swift and
calculated strategy of experience, guarding his head with his raised
elbow:

“Chuck it, Netherby!” he bawled, dodging under cover of his desk
warily; and he added in a hoarse aside, jerking his thumb towards
the editor’s door: “Chuck it! I withdraw.”
The yellow-haired youth put down the heavy ink-pot.
Noll saw out of the corner of his alert eye that honour was satisfied,
and as he ran his finger pensively down a large splash of ink that
had dried on the wall beside his desk, he asked:
“Well?... About that confidence!”
Netherby Gomme cleared his throat:
“Now, Oliver, don’t say anything about this to anyone. It might make
me so ridiculous, and—professional humorists are keenly sensitive to
ridicule——”
“Lor!” said Noll, leaving the patch on the wall. “Get on.”
“This is in strict confidence, Noll.”
“Oh, it’s Julia all right enough,” growled Noll.
Gomme went on, ignoring the comment:
“Noll, it is one of the penalties of fame that its victims must appear
in the brilliant world of fashion.” He coughed. “Come here, Noll.” He
unlocked and pulled open the drawer before him, and Noll, aroused
to sudden interest, sidled over to him as he brought out from the
drawer a very carefully folded dress-coat. “Oliver, I’ve got a dress-
coat. You see, I may have to go into society at any moment, now
that my book has caught the public eye.”
Noll put out his hand:
“Let’s look at the thing,” said he eagerly.
Gomme caught his arm and kept him off it:
“Careful, Noll!” he gasped anxiously—“gently! or we shan’t get it
back into its folds.”

He put it away carefully, locked it up, and, sitting back in his chair,
he added gravely:
“Now, Noll, as one who has knowledge of the usages of polite
society——”
“Eh?” said Noll.
Gomme touched him on the shoulder nervously.
“No, no, Noll—I’m not accusing you of practising them. But as one
born within the pale of good society—from no fault of your own, I
admit—ought one to put scent on the coat?”
Noll whistled:
“Je—hoshaphat!” said he, “I never noticed.” He pushed his hat back
on his head, thrust his hands deep into his breeches pockets, and
fixed a searching eye on experience: “I’m not sure. N-no—I don’t
think so. The governor doesn’t.”
The yellow-haired youth shook his head solemnly:
“It’s a most awkward point, Oliver—a most awkward point—and
somewhat momentous.... One’s first step at the threshold of a career
should not be a stumble.”
Noll’s face lighted up with a suggestion:
“Tell you what I should do, Netherby. Just scent your handkerchief;
and if it kicks up a beastly lot of notice and makes you
uncomfortable, you can always get rid of it——”
“Indeed, Oliver!”
“Rather. Hand it to a lady and ask her if it is hers. Gives you a sort of
introduction, too.”
Netherby Gomme stared aghast:
“B-but, Oliver, surely one is introduced in society!”
“Rather not—it ain’t form.”
“Why?”

“Oh, I don’t know; it’s the new hospitality. But about that scent,
Netherby—let us try some on me, and I’ll see if it worries the
mother. The father’ll soon be nasty about it if it’s bad form.”
Gomme shook his head, and sighed heavily:
“Ah, Oliver, one has to be very careful in one’s pose on entering a
new world.”
Noll nodded:
“Rather!... Do you know, Netherby, it’s a rummy thing how one
begins to wash one’s self and think about ornaments and things
when one becomes a man, eh?”
“A most rummy thing indeed, Noll.”
Netherby Gomme sighed.
Noll looked at him with interest:
“It must be wonderful to feel famous,” he said.
“It is,” said Gomme gloomily. “Wonderful.”
“But I don’t see why you should be so beastly miserable about it,
Netherby. It don’t hurt, does it?”
“Not exactly, Noll.” The yellow-haired youth sighed. “I am only
suffering from the mood of the time.... Pessimism is on the town....
A clerk with any claim to culture must affect Decadence this season
—and it gives me the hump.” He coughed. “Causes me acute mental
discomfort.”
Noll snorted:
“Then I should chuck it,” he said. “When I was a kid I used to worry
if I were not the same as the other kids; but—hullo!” He looked up
at the clock. “It seems to me it’s about time to go and get tea.”
He winked an eye solemnly at Gomme, and whistled his way airily
out of the office. The door swung open, revealing a dingy stair-
landing, shut with a bang, and swallowed him.

The sound of Noll’s retreating footsteps on the stair had scarce
faded away into the distant echoes of the street, when the door that
led to the editor’s room opened, and a well-groomed man of about
thirty-five entered the office. Anthony Baddlesmere was a
handsome, well-set-up fellow—indeed, it was as much from his
father as from his mother that Noll inherited his good looks. He was
handsome to the degree of beauty; and this it was, perhaps, which,
in spite of the easy carriage of the body and the subtle air of good-
breeding, gave the impression of some indecision of character in the
man. Or it may have been that this indecision was increased by a
certain embarrassment as he endeavoured to get a firm note into his
voice:
“Oh, Gomme—have you completed the dummy yet—for this week’s
issue?”
Gomme got up from his chair and searched for the dummy amongst
the papers on Noll’s desk. But Anthony Baddlesmere had seated
himself on the corner of the desk, and, fingering a paper-knife, he
said:
“Oh—er—never mind. There’s another matter, Netherby.... It’s some
years since I started this sorry venture in this office.” He sighed, and
passed his hand over his forehead wearily—“more years than I care
to remember. You, the office-boy, were a lank lad of thirteen—I a
young man, full of literary enthusiasms.... I tried to sell the public
artistic wares”—he shrugged his shoulders—“tried to show them vital
things—real things, instead of sham—tried to encourage promising
youth”—he laughed sadly—“and a nice waste-paper basket we’ve
made of it!”
He swung his foot and kicked the waste-paper basket into the
middle of the room, sending its contents flying over the floor.
“Yes, sir,” said he, “a great deal of the promise of youth goes into the
waste-paper basket.”

Anthony Baddlesmere laughed uncomfortably; the laugh died out of
his eyes, obliterated by a frown:
“Downstairs,” he went on, as though repeating an unpleasant task
he had set himself—“downstairs they have given the public trash—
cheap. And I have lost.... In me the literary enthusiasm, a little
chilled, perhaps, remains; but the youth has gone. As for you—you
are office-boy still, to all purposes, and lank still—but, lord! how you
have grown!”
Netherby Gomme looked down at his scanty trousers and sighed:
“Yes, sir, I have grown.”
“H’m! like a scandal,” said Baddlesmere; and a gleam of merriment
shot into his eyes, ran round the corners of his mouth, and vanished.
“Gomme,” said he, “we are at the end of our resources. This is our
last week in these rooms.... The office is bare—my home is bare. All
my money—all my wife’s literary success—all have gone to feed the
printing machine. It’s great inky maw has swallowed everything....
However, there is no debt—except to you. But that is a heavy one.
My conscience tells me that you ought not to have been allowed to
remain here and share in the collapse; you ought to have been
promoted—to have been sent to—to——”
He hesitated—stopped.
“Where, sir?” asked the yellow-haired youth.
The bald fact was that Baddlesmere had never given the matter a
thought until this disaster was upon him. He smiled sadly, and added
vaguely:
“No place would have been good enough for you, Gomme.... You
should have been promoted long ago....” He roused and faced the
position boldly: “But you have been such a good friend to me and to
the boy—so useful a part of this office, that I am afraid I have
treated you like a part of myself, and have come by habit to think
the hat that covered my head covered yours.... Dame Fortune has
knocked the hat off—and I find there were two heads inside it.”

“Well, sir, we can look her in the face without the hat.”
“Yes, yes, Gomme—but I have looked over your head.”
“It has saved your eyes from the commonplace, sir, and my heart
from a bad chill. I wouldn’t have missed the past years in this office
for a fortune.”
“No, no, Gomme; nor I—nor I.”
“They have made a man of me,” the youth added hoarsely.
Baddlesmere put his hand on the other’s shoulder:
“But you should have been promoted—you should have been
promoted.... And I could so easily have sent you to a better billet.”
He sat down, and, fidgeting with the paper-knife again, he added,
after a pause: “By the way, Gomme, I wish you did not write such a
shocking bad hand.” He smiled, half jesting, half serious. “Why don’t
you practise writing?”
Gomme’s face became a dull, expressionless mask:
“I have, sir,” he said grimly.
“How? You have!”
“I’ve written a book,” he said.
Baddlesmere whistled:
“The devil you have!... Ah, Gomme, everybody writes books
nowadays.”
“But they read mine, sir,” said Netherby Gomme. He dived his hand
into the breast-pocket of his coat, and, taking out a bundle of press-
cuttings, drew a much-thumbed one from the others. “Listen to the
mighty Thrumsby Burrage in The Discriminator, sir.” He read out the
paragraph:
“We have here a refined humorist, whose work is stamped with the
hall-mark of genius.”
Baddlesmere nodded; he was only half listening.

“Oh yes,” said he—“hall-mark of genius is Thrumsby Burrage.”
Gomme went on with a yawning travesty of the pulpit manner:
“In the present day it is indeed a veritable intellectual treat to come
upon the subtle workmanship of a man of large experience of life—
workmanship marked by that delicate wit which grows only to
perfection in the cloistered atmosphere of scholarship.”
“Yes—cloistered atmosphere is Thrumsby Burrage.”
Gomme’s eyes twinkled:
“We rejoice that a new man of genius has risen amongst us, and we
do not hesitate to say that the anonymous writer of ‘The Tragedy of
the Ridiculous’ is that man.”
Anthony Baddlesmere shook off boredom, stood up slowly, stared at
the gaunt yellow-haired youth before him in frank tribute of
bewilderment, and said at last with hoarse surprise:
“You wrote this book, Gomme?”
“Yes, sir,” said Netherby Gomme simply; “but when I write my
tragedy——”
Baddlesmere clapped a hand on his shoulder, and pleasure danced in
his eyes.
“But, good God! you are famous, man—famous!... And you must be
making a fortune.”
“No, sir—I sold the thing for a few pounds.”
Anthony Baddlesmere strode up and down the room.
“But, man,” said he—“I have been trying all my life, and with every
advantage, to create a work of art such as this; and here are you, a
mere stripling—damn it, scarcely out of knickerbockers—though, on
my soul, you are nearly as old as your trousers—here are you, a
mere stripling, famous!” He came to him, gripped him affectionately
by the shoulder. “Of all men that I know, I would rather this thing
had come to you than to any.” He turned and got to striding up and

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