"That is what I most want, before we go any further," assented Mr. Farnum. "I will say, however, that I have in mind a proposition that I would like to submit, before we hear from your side."

"I am listening," nodded Mr. Melville, suavely.

"We have already decided," continued Mr. Farnum, "that my boat yard, with all its equipment, and including the ownership of the 'Pollard,' may be fairly rated at three hundred thousand dollars."

"That is quite true," nodded Mr. Melville. "That figure is in accordance with the estimates made by our expert accountant."

"In the boat itself," continued Jacob Farnum, "my friend Pollard has a stated amount of interest. To come quickly to the point, then, I propose that Pollard and myself, with the aid of a necessary third party—my superintendent, Partridge, for instance—form a stock company with a capital stock of three hundred thousand dollars. Then the six hundred and fifty thousand dollars that you and your associates are to advance, Mr. Melville, may be secured by an issue of bonds, which the company will secure authority to issue. These bonds will bear the unusually high interest of seven per cent., and this interest, of course, will have to be paid before any dividend can be declared on the capital stock of the company. That will retain the control of the company in my hands, and in Pollard's, and that is what we want."

"Yet do you expect that it will be easy to secure such an understanding with capital?" inquired Mr. Melville, easily. "The proposition amounts to this: That you put in the smaller amount of capital, and yet expect to reap the greater profits."

"By no means," replied Jacob Farnum, seriously. "We have demonstrated the value of our type of boat, and we have some valuable knowledge and ideas that cannot be appraised in dollars. So, though our amount of material capital is less than you and your associates would contribute, we feel that we are bringing to the enterprise the larger share."

"I see your point," nodded Mr. Melville, pleasantly. "Yet there is much to be discussed from our side."

So the contest was on—the quiet, polite battle that is as old as capital itself. The men who contribute the money expect the control of the business; the men who contribute the ideas and knowledge expect, capital to be satisfied with a good return on its money.

Both sides were silent for awhile. The lawyer, tapping a pencil against his lips, knew that George Melville did not intend to go into the enterprise on any arrangement that did not allow him to gain business control swiftly and surely.

"We have much to discuss, along these lines," pursued Mr. Melville, in his smoothest tones and with his friendliest air. "But I have no doubt at all, Mr. Farnum, that we shall presently reach a basis that will be wholly agreeable to both sides."

Which, on the contrary, was what the capitalist knew to be impossible. Melville found himself wishing that something else would come into the conversation, in order to get the boatbuilder's mind briefly away from the main proposition.

Steps were heard, at this moment, in the outer office, and then the faces of Jack and Hal appeared close to the glass in the door. Eph was not far behind them.

"Oh, my crew," nodded Mr. Farnum, looking up. "You remember our experiment, the other day, of having a man leave the boat while under water? Some other problems have come up in that connection. So I sent word to the young men, asking them to step over to the office as soon as convenient. I guess they did not quite understand, and were busy at the time, so that they have come over a little too late. I will step to the door, and so inform them."

Here was the diversion for which Mr. Melville had just been wishing.

"Don't dismiss them, please," urged the capitalist. "On the contrary, will you be good enough to ask them to step in here? There is something that it might be as well to make clear before them."

Bowing slightly, as he rose, Jacob Farnum stepped to the door, opening it.

"Come right in, boys," he requested. "Mr. Melville wishes to say something before you."

Each of the three submarine boys felt a quick throb at the heart. All had a suspicion that a blow might be about to fall. So they stepped inside, halting not far from Mr. Farnum's desk, and turning to face the Melville group.

Mr. Melville cleared his throat before he began:

"In the reorganization of affairs here, my investing friends and myself will be obliged to expect that the command of the 'Pollard' submarine boat will pass to my son, who will actively represent our group. My son, Don, will have charge and knowledge of the boat, its successors, and of all new ideas tried aboard, and he will safeguard, so far as may be necessary our interests. It is possible, however, that he may find it advisable to employ some or all of the present crew. That will, of course, be for him to decide in the near future."

CHAPTER IV

A SQUALL IN AN OFFICE

Jack Benson paled, clenching his hands tightly. Hal Hastings raised his eyebrows slightly; he, too, changed color swiftly. Eph's face reddened; he had all he could do to keep from shouting outright.

Jacob Farnum flushed, half rose from his chair, then seated himself again and turned to look at the boys.

But George Melville appeared to have eyes, at that moment, for no one but young Captain John Benson.

Don stood just beyond his father's chair, regarding the leader of the submarine boys with a supercilious stare.

There was such silence, for a few seconds, that the ticking of the big clock in the corner sounded almost like hammer-blows.

"You understand fully, do you not, Benson?" demanded George Melville, breaking the silence.

"I heard you, sir," Jack replied, not without an effort.

"And what have you to say, Captain Benson?" inquired Mr. Farnum, speaking with some effort.

Captain Jack turned around to face his employer; the other two submarine boys wheeled with him.

"Mr. Farnum, we have been in your employ, and we have always taken your orders. If you say we are to be dropped from the boat's crew, we bow to what we can't prevent."

"No one has spoken—definitely, that is—of dropping you boys from the 'Pollard's' crew," interposed Mr. Melville, slowly. "I have only announced that in the reorganization of this enterprise the group that I represent will require that my son, Don, be placed in command of the 'Pollard,' and of any other submarine boats that may be built. If you do not like to work aboard the submarines, very likely we can find work for you at something in this yard."

Jacob Farnum exchanged a few words in an undertone with David Pollard.
Now, the boat builder faced about.

"Mr. Melville," he began, "Mr. Pollard and I feel under a debt of deep obligation to Captain Benson and his mates. Boys though they are, they have done much to make the 'Pollard' as famous as it already is. Between an intelligent employer and a capable, honest employe there can be no question about gratitude. I speak for both Mr. Pollard and myself, therefore, when I say that it is our feeling that Captain Benson and his mates must continue in their present positions."

The color came back to Jack's face. Joy beamed out in his eyes. Hal looked as though he had been given a new lease of life.

"Hooray!" roared Eph. He gave two