Computational Finance: MATLAB®

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Francesco Cesarone
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 Computational Finance
MATLAB® Oriented Modeling
 Francesco Cesarone

Computational Finance
MATLAB® Oriented Modeling

G. Giappichelli Editore
First published 2021
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge
52 Vanderbilt Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an informa business

and by G. Giappichelli Editore

Via Po 21, Torino – Italia

© 2021 Francesco Cesarone

The right of Francesco CesaroneWREHLGHQWLÀHGDVDXWKRURIWKLVZRUNKDVEHHQDVVHUWHGE\KHULQDFFRUGDQFHZLWK
sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic,
mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for
LGHQWLÀFDWLRQDQGH[SODQDWLRQZLWKRXWLQWHQWWRLQIULQJH

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

A catalogue record for this book has been requested

MathWorks Contact Information

The MathWorks, Inc.
3 Apple Hill Drive
Natick, MA, 01760-2098 USA Tel: 508-647-7000
Fax: 508-647-7001
E-mail: info@mathworks.com
Web: https://www.mathworks.com
How to buy: https://www.mathworks.com/store
)LQG\RXUORFDORIÀFHKWWSVZZZPDWKZRUNVFRPFRPSDQ\ZRUOGZLGH

ISBN: 978-0-367-49293-9 (pbk-Routledge)

ISBN: 978-0-367-49303-5 (hbk-Routledge)
ISBN: 978-88-921-3250-4 (hbk-Giappichelli)
ISBN: 978-1-003-04558-8 (ebk-Routledge)

Typeset in Simoncini Garamond

by G. Giappichelli Editore, Turin, Italy

The manuscript has been subjected to the double blind peer review process prior to publication.
A

Where there is a will there is a way

Dedicated to my best friend, my father
Contents

I Programming techniques for financial calculus 9

1 An introduction to MATLAB®with applications 11

1.1 MATLAB®basics . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.1.1 Preliminary elements . . . . . . . . . . . . . . . . . . . . . 12
1.1.2 Vectors and matrices . . . . . . . . . . . . . . . . . . . . 15
1.1.3 Basic linear algebra operations . . . . . . . . . . . . . . . 18
1.1.4 Element-by-element multiplication and division . . . . . . 21
1.1.5 Colon (:) operator . . . . . . . . . . . . . . . . . . . . . . 22
1.1.6 Predefined and user-defined functions . . . . . . . . . . . 24
1.2 M-file: Scripts and Functions . . . . . . . . . . . . . . . . . . . . 26
1.3 Programming fundamentals . . . . . . . . . . . . . . . . . . . . . 29
1.3.1 if, else, and elseif construct . . . . . . . . . . . . . . . 29
1.3.2 for loops . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
1.3.3 while loops . . . . . . . . . . . . . . . . . . . . . . . . . . 33
1.4 MATLAB®graphics . . . . . . . . . . . . . . . . . . . . . . . . . . 34
1.5 Preliminary exercises on programming . . . . . . . . . . . . . . . 36
1.6 Exercises on the basics of financial evaluation . . . . . . . . . . . 49
1.6.1 Interest Rate Swap . . . . . . . . . . . . . . . . . . . . . . 55

II Portfolio selection 61

2 Preliminary elements in Probability Theory and Statistics 63

2.1 Basic concepts in probability . . . . . . . . . . . . . . . . . . . . 63
2.2 Random variables . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
2.3 Probability distributions . . . . . . . . . . . . . . . . . . . . . . . 74
2.4 Continuous random variables . . . . . . . . . . . . . . . . . . . . 76
2.5 Higher-order moments and synthetic indices of a distribution . . 80
2.6 Some probability distributions . . . . . . . . . . . . . . . . . . . . 82

1
 2.6.1 Uniform distribution . . . . . . . . . . . . . . . . . . . . . 83
2.6.2 Normal distribution . . . . . . . . . . . . . . . . . . . . . 86
2.6.3 Log-normal distribution . . . . . . . . . . . . . . . . . . . 91
2.6.4 Chi-square distribution . . . . . . . . . . . . . . . . . . . 94
2.6.5 Student-t distribution . . . . . . . . . . . . . . . . . . . . 95

3 Linear and Non-linear Programming 99

3.1 General Framework . . . . . . . . . . . . . . . . . . . . . . . . . 99
3.2 Optimization with MATLAB® . . . . . . . . . . . . . . . . . . . 100
3.2.1 Linear Programming . . . . . . . . . . . . . . . . . . . . . 101
3.2.2 Quadratic Programming . . . . . . . . . . . . . . . . . . . 102
3.2.3 Non-Linear Programming . . . . . . . . . . . . . . . . . . 104
3.3 Multi-objective optimization . . . . . . . . . . . . . . . . . . . . . 106
3.3.1 Efficient solutions and the efficient frontier . . . . . . . . 108

4 Portfolio Optimization 111

4.1 Portfolio of equities: prices and returns . . . . . . . . . . . . . . 112
4.2 Risk-return analysis . . . . . . . . . . . . . . . . . . . . . . . . . 116
4.2.1 Elements of Expected Utility Theory . . . . . . . . . . . . 116
4.2.2 General Framework . . . . . . . . . . . . . . . . . . . . . 118
4.2.3 Mean-Variance model . . . . . . . . . . . . . . . . . . . . 119
4.2.4 Effects of diversification for an EW portfolio . . . . . . . 139
4.2.5 Mean-Mean Absolute Deviation model . . . . . . . . . . . 141
4.2.6 Mean-Maximum Loss model . . . . . . . . . . . . . . . . . 145
4.2.7 Value-at-Risk . . . . . . . . . . . . . . . . . . . . . . . . . 149
4.2.8 Mean-Conditional Value-at-Risk model . . . . . . . . . . . 152
4.2.9 Mean-Gini model . . . . . . . . . . . . . . . . . . . . . . . 161
4.3 Elements of bond portfolio immunization . . . . . . . . . . . . . 166

III Derivatives pricing 175

5 Further elements on Probability Theory and Statistics 177

5.1 Introduction to Monte Carlo simulation . . . . . . . . . . . . . . 177
5.2 Stochastic processes . . . . . . . . . . . . . . . . . . . . . . . . . 179
5.2.1 Brownian motion . . . . . . . . . . . . . . . . . . . . . . 187
5.2.2 Ito’s Lemma . . . . . . . . . . . . . . . . . . . . . . . . . 192
5.2.3 Geometric Brownian motion . . . . . . . . . . . . . . . . . 196

2
6 Pricing of derivatives with an underlying security 199
6.1 Binomial model . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
6.1.1 A replicating portfolio of stocks and bonds . . . . . . . . 201
6.1.2 Calibration of the binomial model . . . . . . . . . . . . . 206
6.1.3 Multi-period case . . . . . . . . . . . . . . . . . . . . . . . 209
6.2 Black-Scholes model . . . . . . . . . . . . . . . . . . . . . . . . . 213
6.2.1 Assumptions of the model . . . . . . . . . . . . . . . . . . 214
6.2.2 Pricing of a European call . . . . . . . . . . . . . . . . . . 218
6.2.3 Pricing equation for a call . . . . . . . . . . . . . . . . . . 220
6.2.4 Implied volatility . . . . . . . . . . . . . . . . . . . . . . . 223
6.2.5 Black-Scholes formulas via integrals . . . . . . . . . . . . 224
6.3 Option Pricing via the Monte Carlo method . . . . . . . . . . . . 226
6.3.1 Path Dependent Derivatives . . . . . . . . . . . . . . . . . 228

References 231

Suggested lesson plan 235

3
Preface

Computational Finance is becoming increasingly important in the financial in­

dustry. It is the necessary complement to apply the theoretical models to real-
world challenges. Indeed, many models used in practice involve complex math­
ematical problems, for which an exact or a closed-form solution is not available.
Consequently, we need to rely on computational techniques and specific numer­
ical algorithms.
This book aims at combining theoretical concepts and their practical imple­
mentation. Furthermore, the numerical solution of models is exploited both to
enhance the understanding of some mathematical and statistical notions and to
acquire sound programming skills in MATLAB®, which can b e useful also in
several other programming languages.
Most of the content of this book has been taught for several years at a Master’s
course in Finance to students with a relatively small background in mathematics,
probability and statistics. Hence, the book contains a short description of the
fundamental tools needed to address the two main fields of quantitative finance:
portfolio selection and derivatives pricing. Both fields are developed here, with
a particular emphasis on portfolio selection, where we include recent approaches
that have appeared only in the literature.
We develop the ability to place financial models in a computational setting.
This supports the understanding of theoretical concepts through their practical
application.
Audience
This text is intended for students of Economics, Engineering and Applied Math­
ematics, and for practitioners who wish to investigate some quantitative pro­
cedures in the field of finance. The prerequisites are undergraduate courses in
Calculus and Financial Mathematics, even though the readers could acquire
these notions on their own with a bit of effort.

5
Scheme of the book
The book contains more than 100 examples and exercises, together with MAT­
LAB codes providing the solution for each of them. The road map of the book is
as follows. Chapter 1 is devoted to an introduction to the MATLAB®language
and development environment, for programming, numerical calculation and vi­
sualization applied to simple calculus and financial problems. Chapter 2 in­
troduces basic concepts in probability and statistics, simplifying as much as
possible the discussion. Chapter 3 deals with the main constrained optimiza­
tion models, mainly focusing on recognizing the type of problems treated, and
how to implement and solve them in MATLAB®. In Chapter 4 we address Port­
folio Optimization, providing several portfolio selection models mainly based on
risk-gain analysis. Chapter 5 presents some probabilistic tools which are used
in Chapter 6 for describing three methodologies to price derivatives.
Supplemental material
I created the web page http://host.uniroma3.it/docenti/cesarone/Books.htm
containing supplemental materials and updates related to this book. Here you
can also find where to download the MATLAB®codes described in the book.
Contact information
In spite of my efforts in drafting and checking the text and the MATLAB®codes,
some errors and typos could still remain. For this reason, I strongly appreciate
any feedback and suggestions kindly sent to the Email address:
francesco.cesarone@uniroma3.it.
About the author
Francesco Cesarone was born in Rome in 1975. He received a Master’s de­
gree in Physics and a Ph.D. degree in Mathematics for Economic and Financial
Applications from the Sapienza University of Rome. He initially worked as a
researcher in the field of climatology at CNR (National Research Council), then
as a PostDoc in finance at the Sapienza University of Rome, and as a consultant
for ARPM (Advanced Risk and Portfolio Management, New York, US). Since
2011 he is an Assistant Professor of Computational Finance at the Department
of Business Studies of the Roma Tre University. His research interests currently
include portfolio selection problems, risk management, risk modeling, and op­
timal risk decisions, enhanced indexation problems, algorithms for large scale
linear, quadratic integer and mixed-integer programming problems, heuristic
optimization. He serves as a referee for several scientific journals.

6
Acknowledgements
First of all, I would like to thank my father Antonio Cesarone who encouraged
(or rather “forced”) me to write this book. I am grateful to several colleagues
from whom I have drawn inspiration on various topics of this project: Flavio
Angelini, Massiliano Corradini, Carlo Mottura, and Fabio Tardella. I express
my deep gratitude to Jacopo Moretti, Giovanni Lo Russo, and Jacopo Maria
Ricci for their practical support during the writing of this book. I would also like
to thank Attilio Meucci who taught me how to write a book efficiently, during
my collaboration with ARPM. Finally, I am grateful to my family members for
their continuous support.

Roma, January 2020,

Francesco Cesarone

7
What are the rumors about the book?
“Solving problem and decision analysis. Both are carried out, throughout the
book, by precise mathematical elements, concepts and functions (Theory), then
by fundamental exercises provided with solutions (Practice). Last, but not the
least, the book is easy to read and to understand.”
Maria Luisa Ceprini, Professor expert in Welfare System, Research Associate,
MIT, Sloan School of Management, USA

“An essential guide to understand and apply financial key concepts.”

Rosella Giacometti, Professor in Mathematical Methods for Economics and
Actuarial and Financial Sciences, Department of Management, Economics and
Quantitative Methods, University of Bergamo, Italy

“The most important knowledge for quantitative analysts is included in the

book. Based on the book, Readers can develop their own numerical tools to
find optimal investments and hedge the risk.”
Young Shin Aaron Kim, Associate Professor in Finance, College of Business
Stony Brook University, New York, USA

“Praiseworthy in its coverage of both portfolio theory and option pricing at an

introductory but rigorous level. A gentle introduction to computational finance
for the student with a healthy combination of theory and numerics. It will be a
finance student bible.”
Mustafa Celebi Pinar, Professor of Industrial Engineering, Bilkent Univer­
sity, Ankara, Turkey

“This book is a clever compilation of theory and exercises. It constitutes an

excellent source for instructors to organize a course on quantitative finance and
for students to get some knowledge on different quantitative procedures in the
field of finance.”
Justo Puerto, Professor of Operations Research and Optimization, Facultad
de Matemticas, Universidad de Sevilla, Spain

8
 Part I

Programming techniques for

financial calculus
Chapter 1

An introduction to
®
MATLAB with applications

MATLAB is a numerical computing environment and a programming language.

It is one of the most popular programming tools, whose fields of application
range from finance to robotics, from computer vision to communications, and
much more. One of the main reasons for its spread is due to its peculiar language,
which is based on matrix calculus. Developed by MathWorks, MATLAB works
on different operating systems, including Microsoft Windows, Mac OS X, and
Linux. Chapter 1 is devoted to an introduction to the MATLAB language and
development environment including programming, numerical calculation, and
visualization applied to simple calculus and financial problems.
This chapter is structured as follows: first, we introduce some basic elements
for computing in MATLAB. Then, we describe how to build an ordered sequence
of commands in a single file, in order to easily and efficiently implement all
instructions to reproduce a model. Furthermore, we address the main statements
of MATLAB that allow the user to execute expressions repeatedly, or to impose
or check certain conditions. Finally, some exercises on programming and on
Financial Mathematics are proposed. We point out that the first part of this
chapter is devoted to teaching MATLAB to those who use it for the first time,
while the part concerning Financial Mathematics is addressed to readers who
already have at least a basic knowledge of this topic.

®
1.1 MATLAB basics
In this section, we discuss how to start programming with MATLAB. In partic­
ular, we describe the basic syntax (i.e., how commands should be structured, so

11
that MATLAB executes appropriate calculations and operations), the commonly
used operators and special characters, and some of the variables, constants, and
functions, which are predefined in MATLAB.

1.1.1 Preliminary elements

MATLAB is a useful software both for numerical computations and for graphical
visualization. MATLAB stands for Matrix Laboratory, and the arrays are the
basic unit of its language. The numerical computations, previously mentioned,
aim at the practical implementation of mathematical models. MATLAB has
several features: it is an interpreter of commands, a programming language,
and provides wide graphics facilities. Furthermore, it is able to effectively com­
municate with different applications (e.g., Excel).
In addition to the basic platform, MATLAB has a variety of tools, called
Toolboxes, for specific applications. For our purposes, the Statistics, the Opti­
mization and the Financial Toolboxes are the most useful ones.
A software strictly linked with MATLAB is Simulink, a graphical program­
ming environment for modeling, simulating and analyzing complex and dynamic
systems, but this topic is beyond the aim of this book.
Let us start by running MATLAB. One can generally observe a main window
divided in several subwindows, as shown in Fig. 1.1. In this case, we have
the Current Folder on the left, the Command Window at the center, and the
Workspace and the Command History on the right. The Current Folder (or
Directory) represents the place where we are working, the Command History
lists, in chronological order, the last commands used, and the Command Window
contains the prompt (the blank line that follows the symbol >>), where we insert
instructions, run MATLAB programs, and so on. Note that the complete path
of the Current Folder is generally shown above the Command Window. Fig
1.1 shows an example of the MATLAB main window (corresponding to version
R2019b), where, at the top, we can see three sheets: Menu, Plots, and Apps.
Generally, these contain elements for managing and elaborating the MATLAB
files; for finding bugs; for setting up the parallel programming; for configuring
the desktop of MATLAB; for accessing to Help menu. Note that the Help
menu and the Mathworks website (http://www.mathworks.it/matlabcentral/)
are extremely useful for solving problems, especially for MATLAB beginners.

Variable assignment
Let us consider how to define a variable, for instance, a scalar. As mentioned
above, the building block of MATLAB is the array, i.e., an orderly arrangement

12
 Figure 1.1: Example of the layout of the MATLAB main window.

of cells, usually in rows and columns. If the cells are numbers, we obtain scalars,
vectors and matrixes. Otherwise, if the cells are strings, we have an array of
strings, and so on. Consider now a scalar, that is a 1×1 matrix. To define a new
variable equal to 3.2, one can write on the prompt the following instruction
>> x=3.2;
where x is the name of the variable, and 3.2 is its assigned value. The name
of a variable must not exceed 31 continuous characters and must not contain
mathematical operators (-,+,*,=), apostrophe, punctuation, slash, or backslash.
If one writes a scalar on the prompt (>>), a default variable is generated and
it is indicated by ans. For instance, one can type
>> 1.67;
Note that adding the semicolon (;) at the end of an instruction avoids showing
the output on the Command Window and decreases the running time of an
algorithm. Conversely, in order to visualize the assigned variables, one can run
the name of a variable (for example, x or ans) on the prompt; otherwise, it is
possible to directly see the variable in the Workspace subwindow (see Fig 1.1).

13
 There are different options to visualize numbers associated to the assigned
variables. Below, various formats are illustrated:

FORMAT (SHORT) four digits after the comma 2.7000

FORMAT LONG fifteen digits after the comma 2.700000000000000
FORMAT SHORT E exponential short form 2.7000e+000
FORMAT LONG E exponential long form 2.700000000000000e+000
FORMAT SHORT G best representation with four digits 2.7
FORMAT LONG G best representation with fifteen digits 2.7
FORMAT BANK numbers expressed in euro and euro cents 2.70

Furthermore, MATLAB provides some predefined variables listed in the follow­

ing table:

Variable Meaning
ans Value of the last operation, to which a name is not assigned
i Imaginary unit
pi Approximation of π
eps Machine accuracy
realmax Maximum positive machine number
realmin Minimum positive machine number
Inf inf (namely a number greater than realmax)
NaN Not a Number (e.g., 00 )
computer the type of your computer
version MATLAB version

Workspace
The Workspace is represented by a subwindow and is the place where assigned
variables are stored. It can show several details of the assigned variables, for
instance:

Name name of the variable

Value assigned value
Size array dimension (rows × column)
Bytes allocated memory
Class variable types

The MATLAB variable types are double, cell, sparse, char, struct, and uint8.
By default, MATLAB works with variables in double precision. A cell array is
an array whose elements are, in turn, arrays with different possible dimensions.

14
A sparse matrix is generally a matrix with most of the elements equal to zero,
where, therefore, only the elements different from zero are represented. For
more details, see the MATLAB Help. Another feature of the Workspace is that
it allow us to open a window similar to an Excel spreadsheet by double-clicking
on the variable.
Note that MATLAB is case sensitive. Thus, the variables x and X are con­
sidered different variables.

Arithmetic operations
The basic calculation operations are the arithmetic ones: sum (+), subtraction
(-), multiplication (*), division(/), and power (^). For instance, if we have to
calculate
6 + 93 − 8/2
x=
2 ∗ (2 + 1)4
we can write the following instruction on the command prompt:
>> x=(6+9^3-8/2)/(2*(2+1)^4);
In the MATLAB environment, the arithmetic operations work in the following
order:
Order Operation Example
I Brackets (3+4)*4=7*4
II Power 3^2+2=9+2
III ∗ /, from left to right 2*3/5=6/5
IV + −, from left to right 8-5+3=3+3
However, one can change the order of the operations by appropriately applying
parentheses (). If an instruction consists in a long expression, one can divide
it in two or more lines by writing three consecutive points, as shown in the
following example:
>> x=1/2+(9*3)^3-...
3+12;
These instructions compute the expression x = 1
2 + (9 ∗ 3)3 − 3 + 12.

1.1.2 Vectors and matrices

The building block of MATLAB is the array. An array is an ordered succession
of memory locations that contains a collection of elements of the same type. As
specified in Section 1.1.1, an array can be made by six types of variables: char,

15
double, sparse, cell, uint8, struct. Consider now an array a (1 × 5), namely
1 row and 5 columns (a row vector), that contains integer numbers from 1 to 5.
As shown below, we can create a in several ways:
>> a=[1 2 3 4 5];
>> a=[1,2,3,4,5];
>> a=1:5

a =

1 2 3 4 5
To generate an array b (5 × 1), namely 5 rows and 1 column (a column vector),
that contains integer numbers from 1 to 5, for instance, we can write:
>> b=[1;2;3;4;5]

b =

1
2
3
4
5
Note that the space or the comma (,) separate elements on the same row, while
the semicolon (;) separates elements on the same column. To define an array c
(2 × 5), i.e., a matrix with 2 rows and 5 columns, we can opportunely combine
the space (or the comma) and the semicolon as follows:
>> c=[15 2 4 -1 9; 1 5 -7 0 7]

c =

15 2 4 -1 9
1 5 -7 0 7
Detecting the dimensions of a matrix becomes very useful when the number
of its elements is too large to visualize them directly. There are two built-in
functions that allow for the identification of array dimensions, namely size and
length. Applying the function size to a generic matrix m × n generates the
number of rows (m) and columns (n) as outputs. In the case of the matrix c
just defined, we have

16
 >> size(c)

ans =

2 5
The function length is usually used to detect the number of elements in a vector.
However, applying the function length to a matrix gives the greater number
between m and n as output. In the previous example, we obtain
>> length(c)

ans =

5
Then, we have that length(c)=max(size(c)).
Another important issue to address is how to access and manipulate the
elements of an array. For instance, given the matrix c, we can detect the first
element of the second row in the following way:
>> c(2,1)

ans = 1
A similar procedure can be used for a vector. For example, given the vector b,
to identify its second element, we can write
>> b(2)

ans = 2
Furthermore, equating a specific element to a scalar replaces that element with
the newly assigned scalar. For instance, continuing the previous example, we
have
>> b(2)=6

b =

1
6
3
4
5

17
To modify an element or a set of elements in a matrix, we have to suitably specify
two indices. For instance, considering the matrix c, to modify the element c1,3 ,
we can write
>> c(1,3)=21

c =

15 2 21 -1 9
1 5 -7 0 7
Note that running the command d(3,4)=3 without predefining the matrix d
generates a 3 × 4 matrix with all elements equal to zero, except for that of
position (3, 4):
>> d(3,4)=7

d =

0 0 0 0
0 0 0 0
0 0 0 7

1.1.3 Basic linear algebra operations

As mentioned above, the natural environment of MATLAB is the matrix calcu­
lus. Its standard operations are the following:

+ → element-by-element sum of matrices (or vectors)

- → element-by-element difference of matrices (or vectors)

* → row-by-column product of matrices (or vectors)

Note that, for the sum and the difference, i.e., for element-by-element operations,
the matrices (or the vectors) involved must have the same dimensions. While
for the row-by-column product the number of columns of the first matrix must
be equal to the number of rows of the second matrix. For instance, given the
vectors a and b previously introduced, and the column vector a =[1;2;3;4;5],
we can implement the following operations

18
 >> a +b >> a -b >> a*b

ans = ans = ans =

2 0 63
8 -4
6 0
8 0
10 0

Note that, if we compute the difference between the vectors a e b, we obtain the
following output:
>> a-b

Error using ==> ­

Matrix dimensions must agree.
Similarly, we can apply the basic linear algebra operations among matrices. For
instance, consider the following matrices
⎛ ⎞
2 1
2 1 2
e= and f = ⎝ 1 0 ⎠ ,
3 0 1
0 1

and calculate their product:

>> g = e*f

g =
5 4
6 4

This result is a consequence of the matrix multiplication rule, which, in terms

of dimensions, works as follows: (2×3)(3×2) = (2×2).
Other standard operations are the transposition and the inversion of matrices.
Below we show these operations by means of two examples. Firstly, we transpose
the matrix e
>> e’

ans =
2 3
1 0
2 1

19
Note that if we consider
>> f*e’

we obtain the following output

??? Error using ==> mtimes
Inner matrix dimensions must agree.
Indeed, in this case, the number of columns of the first matrix is not equal to
the number of rows of the second matrix.
Furthermore, we can invert the non-singular square matrix g defined above as
follows:
>> g inv=inv(g)

g inv =
-1.0000 1.0000
1.5000 -1.2500
Obviously, it must hold that g −1 · g = I, where I is the identity matrix
>> g inv*g

ans =
1.0000 0.0000
0.0000 1.0000
For further information about matrix inverse, see the MATLAB Help (mldivide
\).

Example 1 (Linear equations system) Let us consider the following sys­

tem of linear equations

3x1 + 4x2 = 25
x1 − 6x2 = 50

3 4
In matrix notation, we can write that Ax = b, where A = ,
1 −6
x1 25
x = , and b = . Since A is an invertible matrix (i.e.,
x2 50
det(A) = −22 = 0), we have x = A−1 b. Using MATLAB, we can write:

20
 >> A = [3 4; 1 -6];
>> b = [25;50];
>> x = A\b

x =

15.9091
-5.6818

Note that the product between the inverse of A (A−1 ) and b can be obtained
with the backslash (\) command.

1.1.4 Element-by-element multiplication and division

In many cases, it could be useful to perform element-by-element power, mul­
tiplication, and division operations among matrices. MATLAB provides these
operations by adding a dot (.) before the commands ^, * or / (i.e., .^, .*, ./).
For instance, to define a new vector whose elements are squares of the elements
of the vector b (modified at the end of the previous section), we can write
>> b.^2

ans =

1
36
9
16
25

Observe that the expression b^2 does not make sense, since it corresponds to
the matrix product (5×1)(5×1).

Example 2 (Element-by-element operations) Compute the element­

by-element product and division between the vectors a 2=[2,2,2,2,2] and
b 2=[4,8,16,2,10]. On the command prompt, we can type:

21
 >> a 2.*b 2

ans =

8 16 32 4 20

and
>> a 2./ b 2

ans =

0.5000 0.2500 0.1250 1.0000 0.2000

Note that the involved vectors (or matrices) must have the same dimensions.

1.1.5 Colon (:) operator

This command is frequently adopted for several purposes. For instance, it can be
used to create vectors with equally spaced elements, such as a set of numbers that
identifies the index k = 1, 2, . . . , n, by writing >> k = 1:n. As a consequence,
the colon operator (:) can be exploited to select rows or columns of an array.
For instance, considering the matrix c of Section 1.1.2, we can select the first
two rows and columns of c as follows
>> c(1:2,1:2)

c =

15 2
1 5

or we can extract the third column as follows:

>> c(:,3)

ans =

21
-7

More generally, the command Vector=Start:Step:End generates a vector with

equally spaced elements between the number Start and the number End. For

22
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 "Then 'tis waste of time to be rude to Him. Civility costs nought
anyway. My old father said to me when I was a child, 'Always touch your
hat to a pair of hosses, William, for you never know who's behind 'em.'"

"I puzzle a good deal upon the subject, and life often flings it
uppermost," answered Bullstone. "In fact so are we built, through education
of conscience, that it's impossible to go very far without being brought up
against God. How often in my secret times of pain do I catch the Name on
my tongue? How often do I say 'My God, my God, what have I done?' I ask
Him that question by night and day. A silly question, too, for I know what
I've done as well as God can. But I know what I've suffered far better than
He can. I went on hoping and hoping, as you bade me, last year. I went
hoping, with one eye on God, like a rat that creeps out of his hole with one
eye on the dog hard by. But the game had to be played out by inches. He
knew that Margery was dying, a few miles away, and He kept it secret from
me and didn't let me hear till it was too late. He planned it, so that I should
just be there after the very last breath was breathed, should touch her before
she was cold, should miss her by seconds. And she longing—longing to
come back to me—to save me. What should we call that if a man had done
it—eh, William?"

"Come and look at my bees, Jacob. A brave swarm yesterday, and poor
Sammy Winter took 'em for me with all the cleverness of a sane man."

"Mysteries everywhere. People pity Samuel. I don't—not now, I did

once, because it's the fashion to think anybody's lacking reason is a sad
sight. Why? Brains are like money—poison so often as not. My brains have
poisoned me—fretted and festered and burnt out my soul like an acid. The
more I see of the wild, innocent creatures, the more I feel that reason's not
all we think it, William. You can't fetter the soul down to reason. What has
reason done for me? The little comfort I get now is outside reason. Reason
only goads me into wanting to end it and make away with myself. That
would be the reasonable thing. What happened yesterday? Auna found a
rhyme book that belonged to my wife. And in that book was a sprig of
white heath I picked for her on a wonderful day we had, just after she had
promised to marry me. There it was faded to brown—more than twenty
years old. And what else did Auna find? Between the pages she found the
crumbs of a little sweet biscuit—a sort of a little biscuit, William, that
Margery loved. Where's the reason when a crumb of wheat can stab the soul
deeper than a sword? And what then? What did Auna say? Nothing in
reason, God knows. 'Father,' she said, 'you and me will eat these crumbs—
then we'll have shared the biscuit with dear mother.' A holy sacrament—
yes, faith—'holy's' not too strong a word. We ate the crumbs, and there was
a strange, mad comfort in it; and the child smiled and it made her happier
too. You could see it in her face. Why? Why? All darkness—no answer.
And the little verse book, with the heather bloom, will be in my breast
pocket now till I die—never out of reach of my hand—warmed daily by my
warmth. Why? Can reason tell me? No—it's only because I'm gone below
reason, William."

"Or it might be above it, my son."

"Such things make your head whirl. If there's to be happiness in heaven,

we mustn't be built like we are here. Fear must be left out of us and the
power of remembering. We must be suffered to forget earth, William; yet,
what would that make of heaven? Nothing. It all tumbles to pieces
whichever way you think of it, for reason, whether it is a good or evil thing,
makes heaven a wilderness."

"Don't you fret your wits with such stuff, for it won't help you to
patience or wisdom."

"No, it won't bring the dead to life, or lift the brand from me. But I
thresh it out by night and see great things heave up in my mind. Then, when
I jump to put them into words, they fade and I lose them. Reason may be
the work of the devil—his master-stroke to turn us from salvation. You can't
be damned without it; but you can be saved without it. Or would you say a
man can't have a soul to be saved, until he is a reasonable creature, built to
separate good from evil and choose the right? No doubt it's well understood
by deep men. My mind turns in and feeds on itself, William, because there's
nothing left outside to feed on."

"You must come back to your appointed task. You must keep doing
good things. You must do more and think less."
 "I'm going up to Huntingdon with Auna this afternoon."

"And let her talk to you. Don't think her words are worthless. You've got
a nice bit of your wife left in Auna. Always remember that."

"I do. I shall live on for Auna. There's one beautiful thing left for me—
beautiful, and yet a living wound, that grows painfuller every day I live.
And that's Auna—Auna growing more and more and more like Margery—
bringing her back, even to the toss of her head and the twinkle of her eye.
She laughs like her mother, William; she cries like her mother; she thinks
like her mother. So my only good will be my first grief. The things still left
to care about will torture me more than all the hate of the world can torture
me. They'll keep memory awake—stinging, burning, till I scream to Auna
to get out of my sight presently, and leave me with the foxes and the carrion
crows."

Then Bullstone limped away. He soon grew calmer, as he was wont to

do when alone with nobody to whet his thoughts upon.

During the later part of this day he ascended the moors with Auna and
walked to the empty Warren House. They talked of those who had dwelt
there, for that morning a letter had come from Mrs. Veale for Margery,
giving her news of the Veale family—Benny and the children.

"You must answer it, Auna, and tell the woman that your mother passed
away last winter," said Jacob. "If I was a younger man, I might go out to
Canada myself and take you with me; but we'll stop here. You'll like
Huntingdon, won't you?"

"Yes, father."

"Your mother's dead," he told her; "but we shan't be without a lot of

treasures to remind us of her."

"All the things she specially cared about you'll have round you, father."

"I know them all," he answered, "because, so long as I felt hope that she
might come back, I was specially careful for them and set them aside out of
harm's way. She had a great liking for little things that she coupled with the
thoughts of friends."

He spoke the truth, for many trifles that had sustained some faint
fragrance of hope while Margery lived—trifles that her heart had valued
and her hands had held—were now subject to a different reverence, set
apart and sanctified for ever.

"We might take a few of her favourite flowers too," suggested Auna,
"but I doubt they would live up there in winter. You can always come down
and see them at the right time, father."

"Everything shall be just as you will, Auna. You'll be mistress and I'll be
man."

She laughed and they tramped forward. Jacob could now walk all day
without suffering for it, but he was lame and his pace slower than of old.

He brought the key with him and opened the silent house. A week rarely
passed without a visit, and Jacob always awoke to animation and interest
when he came. The melancholy spot and mean chambers, though they had
chilled not a few human hearts in the past, always cheered him. To a
dwelling whence others had thankfully departed for the last time, he now
looked forward with satisfaction; and Auna, seeing that only here came any
peace to her father, welcomed Huntingdon already as her future home. Not
a shadow clouded her eyes as she regarded it, and not one regret before the
receding vision of Red House and her own life therein. For her father was
her world, as he had always been, and when he turned against his home, she
echoed him and loved Red House no more. She knew that for Jacob the
death of her mother had destroyed Red House; she understood that he
desired to begin again and she felt well content to begin again with him. His
influence had come between her and normal development in certain
directions. She was old for her age, but also young. No instinct of sex had
intruded upon her life, and little interest in any being outside her own home
circle. Even within it her sister and brothers were nothing compared to her
father, and impulses, fears, suspicions that might have chilled a girl's
forward glance under the walls of forlorn Huntingdon, never rose in Auna's
mind to darken the future. Her father willed there to dwell and her welfare
and happiness as yet took no flight beyond him.

They wandered through the stone-paved kitchen and climbed to the

little chambers above, while for the twentieth time, Jacob planned how
things should be.

"I'll have this room," he said, "because the sun sets upon it; and you will
bide here, Auna, because it's fitting the sun shall rise where you wake."

She was happy when he spoke thus tenderly sometimes.

"My sun set, when mother died," continued Jacob. "What's left is
twilight; but you'll be the evening star, Auna, as it says in mother's little
book. You can read it if you want to. I'll let it touch no other hand but yours.
I've read every word many times, because I know her eyes rested on every
word once."

"I'm afraid I don't understand about poetry, father."

"You'll come to understand it when you're older, perhaps. She

understood it and got pleasure from it."

The desolation of the warren house soothed Jacob, and having wandered
through it he sat for a time outside the enclosures before starting to return
home. He rolled his melancholy eyes over the great spaces to a free horizon
of the hills folding in upon each other.

"Will time speed swifter here, Auna?"

"I hope it will, father," she answered, "but the days will be very like
each other."

"Days too like each other drag," he told her. "We must change the
pattern of the days. It shan't be all work for you. We'll do no work
sometimes, and now and then you'll go for a holiday down to the 'in
country,' and I shall be alone till you come back."
 "I'm never going to leave you alone," she said. "If you think upon a
holiday for me, you've got to come too, or have Peter up here for a bit."

"There's only one other thing beside the moor that's good to me; and
that's the sea; and you well love to be on the sea, so we might go to it now
and again."

Auna's eyes sparkled.

"I'd like that dearly," she told him.

"To know the sea better may be a wise deed for me," he said. "Some it
hurts and cannot comfort—so I've heard. Not that it could ever be a friend
to me, like the hills."

"You'd love it better and better, specially if you'd sail out on to it, same
as I did with Uncle Lawrence."

Her father nodded and this allusion did not banish his placid mood. The
sun rays were growing slant and rich as they set out for home. Auna
laughed at their shadows flung hugely before them. Then they descended
and she walked silently for a long way with her hand in her father's hand.
But she was content despite their silence, for she knew that his mind had
passed into a little peace. She often wondered why the desert solitudes
cheered him, for they cast her down. She liked to leave it behind her—that
great, lonely thing—and descend into the kindly arms of the Red House
trees and the welcome of the river. For the river itself, in Auna's ear, sang a
different song beside her home, than aloft, in its white nakedness, and
loneliness. There it was elfin and cold and silvery, but it did not seem to
sing for her; while beneath, at the feet of the pines, under the bridge of logs,
in the pools and stickles she knew to the last mossy boulder—there her
name river had music for her alone and she understood it. It was a dear
friend who would never pass away out of her life, or die and leave her to
mourn. A time was coming when she would know it better still, see it aloft
nigh its cradle, learn its other voices, that yet were strange to her. In the
valley the river was old and wise; perhaps aloft, where it ran nigh
Huntingdon, it was not so wise or tender, but younger and more joyous.
 "It'll have to be my friend," thought Auna, "for there won't be no others
up there but father."

An incident clouded the return journey, and though neither Jacob nor his
daughter was sentimental, death confronted them and made them sorry. An
old goat, one of the parents of the Red House flock, had disappeared during
the previous winter, and they had fancied that he must have fallen into the
stream and been swept away in a freshet that happened when he vanished.
But now, in a little green hollow rimmed with heath and granite, they found
all that was left of the creature—wisps of iron-grey hair, horns attached to
his skull, a few scattered bones picked clean by the carrion crows and the
hollow skeleton of his ribs with young grasses sprouting through it.

"Oh, father—it's 'Beardy,'" whispered Auna.

"So it is then. And I'm glad we found him. A very dignified thing, the
way the creatures, when they know they're going to die, leave their friends
and go away all alone. A fine thing in them; and there's many humans
would do the same if they had the strength I dare say."

Auna descended among the bones and picked up "Beardy's" horns.

"Peter will like to have them for a decoration," she said. "I hope he
didn't suffer much, poor old dear."

"Not much, I expect."

"And I hope the carrion crows didn't dare to touch him till he was gone,
father."

"No, no. There's unwritten laws among the wild things. I expect they
waited."

"Did his wives miss him, should you think?"

"We don't know. They can't tell us. Perhaps they wondered a bit. More
likely they knew he'd gone up to die and wouldn't come back. They know
deeper than we think they know among themselves, Auna."
 "I've often been sorry for that poor Scape-goat in the Bible, father. I
read about him to grandmother long ago, one Sunday, and never forgot
him."

"And so have I been sorry for him, too."

They tramped on together and presently Jacob spoke. He was thinking

still of her last speech and his mind had turned dark.

"The Scape-goat in the wilderness was a happy beast compared to me,"

he said suddenly. "He went to his doom a clean thing—a harmless creature,
pure as Christ's self under his filthy load of human sins. For a foul burden
doesn't make the carrier foul. He'd done no wrong and wondered, perhaps,
in his brute mind, why the scarlet thread was tied upon him and he was
driven into the unkind desert, far from his bite of green grass and the
shadow to guard him against the burning sun. But I'm different. I'm a goat
caked and rotted with my own sins. The sins of the world are white and
light against mine."

"I won't hear you say things like that, father. I won't live with you if you
say things like that."

"Bear with me, bear with me. It comes in great waves, and I'm a
drowning man till they roll over and pass. You'll sweeten me presently. Who
could live with you and not grow sweeter, you innocent?"

He broke off.

Venus throbbed upon the golden green of the west, and as they
descended, the valley was already draped with a thin veil of mist under
which the river purred. From the kennels came yapping of the dogs; and
when they reached home and entered the yard, half a dozen red terriers
leapt round Auna and nosed with excitement at "Beardy's" horns.
 CHAPTER V

THE AUTUMN WIND

On a rough day of autumn, when the river ran high and leaves already
flew upon half a gale of wind, a little crowd of men gathered up the valley
beyond Red House, and with crow-bars and picks sought to lift up the block
of granite whereon aforetime Margery Bullstone so often sat. Jacob had
long ago dug down to the foundation, that he might satisfy himself to its
size; and it had proved too great beneath the soil, where twice the bulk of
the visible part was bedded. Now, therefore, having heaved it from the
ground, they were busy to drive four holes in it, where the cleft must take
place. Then they inserted four cartridges, set the slow match, lighted it and
retreated beside a cart that already stood out of harm's reach.

There had come Peter and Auna, Adam and Samuel Winter and Jacob
Bullstone; and Adam had lent his pig-cart to convey the stone to the
churchyard.

They watched silently; then came a flash, a puff of white smoke,

whirled instantly away on the wind, and a dull explosion that reverberated
from the hill above. The great stone was sundered and they returned to it,
bringing the horse and cart with them.

The block had split true and a mass accordant with its memorial purpose
was presently started upon the way. Jacob directed great care, and helped to
lift the stone, that none of the native moss in its scooped crown should be
injured.

"Whether it will live down in the churchyard air I don't know," he said,
"but the grave lies in shade most times and we can water it."

Samuel was regarding the boulder with a puzzled face.

"Where be her name going?" he asked.

 "The name goes on the side, Sammy," explained Jacob. "Blake, the
stone-cutter, was up over a bit ago and took my meaning."

They went slowly away under the rioting wind, and near Red House
Peter and his sister left them, while at Shipley Bridge Samuel also returned
home.

Jacob walked beside Adam at the horse's head. It was a bad day with
him and the passion of the weather had found an echo in his spirit. The rain
began to fall and Winter drew a sack from the cart and swung it over his
shoulders.

"You'd best to run into Billy Marydrew's till the scat's passed, else you'll
get wet," he said.

But the other heeded not the rain.

"A pity it isn't my coffin instead of her stone you've got here," he said.
"I'm very wishful to creep beside her. No harm in that—eh?"

"There's every harm in wishing to be dead afore your time, Jacob; but
none I reckon in sharing her grave when the day's work is ended."

"Truth's truth and time can't hide truth, whatever else it hides. I killed
her, Adam, I killed her as stone-dead as if I'd taken down my gun and shot
her."

"No, no, Bullstone, you mustn't say anything like that. You well know
it's wrong. In one way we all help to kill our fellow-creatures I reckon; and
they help to kill us. 'Tis a mystery of nature. We wear away at each other,
like the stone on the sea-shore; we be thrown to grind and drive at each
other, not for evil intent, but because we can't help it. We don't know what
we're doing, or who we're hurting half our time—no more than frightened
sheep jumping on each other's backs, for fear of the dog behind them."

"That's all wind in the trees to me. I wasn't blind: I knew what I was
doing. I don't forget how I hurt you neither, and took good years off your
life."
 "Leave it—leave it and work. Think twice before you give up work and
go to Huntingdon."

"My work's done, and badly done. Don't you tell me not to get away to
peace if I'm to live."

"Peace, for the likes of us, without learning, only offers through work."

They had reached Marydrew's and Adam made the other go in.

"I'll stop under the lew of the hedge till this storm's over," he said. "Tell
Billy I'd like to see him to-night if he can drop in. The wind's turning a
thought north and will go down with the sun no doubt."

He went forward, where a deep bank broke the weather, and Jacob
entered William's cottage. Mr. Marydrew had seen them from the window
and now came to the door.

"A proper tantara 'tis blowing to-day," he said. "My loose slates be
chattering, like a woman's tongue, and I'm feared of my life they'll be
blowed off. The stone's started then? That's good."

Jacob, according to his habit, pursued his own thoughts and spoke on, as
though Adam still stood beside him.

"To talk of peace—to say there's any peace for a red-handed man. Peace
is the reward of work and good living and faithful service. Red hands can't
earn peace."

"Now don't you begin that noise. Let the wind blow if it must. No call
for you to blow. Take my tarpaulin coat for the journey. A thought small,
but it will keep your niddick dry."

"Give me a dram," said Jacob, "and listen to me."

Mr. Marydrew brought his spirit from a cupboard while the other
rambled on.
 "We've just hacked the stone for her grave out of the earth. Torn up by
the roots, like she was herself. She dies and her children lose a father as
well as a mother, because they know the stroke was mine; and what honest
child shall love a father that killed a mother? That's not all. Think of that
man now helping me to get the stone to her grave. Think of the suffering
poured on Winter's head. A very good, steadfast sort of man—and yet my
hand robbed him of much he can never have again. Three out of four
children lost, and that saint underground. And all allowed by the good-will
of a watchful God."

He nodded, emptied the glass his friend offered him and looked out at
the rain.

"You're dark to-day and don't see very clear, my dear," said Billy. "You
put this from your own point of view, and so 'tis very ugly I grant; but every
thing that haps has two sides. You've bitched up your show here, Jacob, and
I'm not going to pretend you have not. You've done and you've suffered a
lot, along of your bad judgment; and you was kindiddled into this affair by
the powers of darkness. But 'tis the way of God to use men as signposts for
their fellow-men. He sees the end of the road from the beginning, and He
knows that the next scene of your life, when you meet Margery, will belike
be full of joy and gladness."

"It's your heart, not your head, that speaks that trash, William,"
answered the younger. "Can future joy and gladness undo the past? Can the
sunshine bring to life what the lightning killed an hour afore? How shall
understanding in Heaven blot out the happenings on earth? Things—awful
things—that God's self can't undo? And answer me this: if some live happy
in this world and go happy to the next, as well we know some do; then why
should not all? If some are born to live with their minds clear, their tempers
pure, their passions under control, why should such as I am blot the earth?
Would a man make maimed things? Would a decent man bring living
creatures to the birth short of legs or eyes, when he could fashion them
perfect? Where's the boasted mercy of your God, William? Where's His
eternal plan, and what's the sense of talking about a happy eternity if a man
comes to it poisoned by time? I'm calm, you see—a reasoning creature and
honest with myself. My everlasting inheritance would be nothing but one
undying shame and torture at the ruin I have made; and I know that I cannot
stand up in the next world among those I have spoiled and wronged and feel
a right to do so. And if my Creator has built me to gnaw my heart out in
agony through a life without end—what is He? No, the only poor mercy left
for me is eternal night—endless sleep is what I'd pray for if I could pray;
because another life must be hell wherever it is spent. Let Him that made us
unmake us. 'Tis the least and best that He can do for nine men out of ten."

The storm had swept past and a weather gleam flashed upon the rain.
The red beech trees before William's home shone fiery through the falling
drops and shook off little, flying flakes of flame, as the leaves whirled in the
wind.

Mr. Marydrew did not answer, but followed Jacob to the wicket gate
and watched him as he rejoined Winter. William waited until the cart had
disappeared and was turning to go in, when a neighbour came up the
shining road from Shipley.

It was Amelia Winter in her pattens.

"Did Adam tell you he's wishful to see you to-night?" she asked and
Billy answered that he had not.

"Well he is," she said, and put down the big umbrella under which she
had come. "He's lending a hand with a heathen lump of stone just now. That
forgotten man up the valley be going to put it on poor Margery Bullstone's
grave; and for my part I'm a good deal surprised that parson will suffer such
a thing in a Christian burial ground."

"They've just gone round the corner—Adam and him and the cart. He
was in here storming against his fate a minute agone."

"Not Adam? He don't storm against nothing."

"No—t'other. My old friend. He ain't through the wood by a long way

yet, Amelia. His thoughts and griefs crowd down on him like a flock of foul
birds, and shake the roots of his life something shocking."
 "'Tis well if the Lord's Hand is heavy," she answered.

"So it should be, if there's justice in the world."

"Try to think kindly on the man. He's suffered much."

"I live with Adam Winter," she answered and went her way.

CHAPTER VI

THE CHILDREN

Accident sometimes invoked a strange spectre of the old jealousy in

Jacob Bullstone—that quiddity of his nature responsible for his ruin. It
flashed now—a feeble glimmer of the ancient emotion—and involved
Auna. She alone in his opinion cared any longer for him, or felt interest in
his fortunes; therefore he was quick to resent any real, or fancied, attempts
on the part of others to weaken the bonds between them. Such a task had in
truth been impossible, yet there came hints to his ear that the girl should not
be dragged with him into the fastness of the moor. He had to some extent
lost sight of her natural demands and requirements. He little liked her to be
overmuch interested in affairs that no longer concerned himself; but she
was intelligent in this matter and, helped by advice, kept in closer touch
with her relations than Jacob knew. With her grandmother Auna had indeed
broken, for Judith declined to see her any more, and the younger did not
pretend sorrow; but with Barlow Huxam, and with her Uncle Jeremy and
Aunt Jane, she preserved a friendship they did not report to Mrs. Huxam;
while despite harsh sayings against them from her father, Auna continued to
love John Henry and Avis. She was loyal, would not hear a word against
Jacob, and set him always first. She regarded the coming life at Huntingdon
as no ordeal, but a change of infinite promise, because it might bring him
nearer peace. Meantime, behind Bullstone's back others were busy in hope
to change his plans, and these alternatives were placed before him by his
children.

The occasion found him fretful after a period of comparative

contentment. He was unaware that time cannot stand still, and in the usual
parental fashion continued to regard his family as anchored to childhood.
He was smarting under grievances on a day that he met Adam Winter and
walked with him from Brent to Shipley.

"There's nothing so cold as the chill of your own flesh," he said. "A
child's a fearful thing, Adam, if it turns against a parent, especially when
you've kept your share of the bargain, as I have."

"No doubt there is a bargain," admitted Winter. "I speak as a childless

man and my word's of no account; but you've been quick to see what you
owed your own, and I hope they do the like. If they don't, so far, that's only
to say they're young yet. They will get more thoughtful with years."

"Yes, thoughtful for themselves. Young and green they are, yet not too
young to do man and woman's work, not too young to know the value of
money. Something's left out of them, and that is the natural feeling there
should be for their father. Hard, hard and ownself they are."

"Your eldest is born to command, and that sort play for their own hand
by reason of the force that's in 'em. Time will mellow John Henry's heart,
and experience of men will show him the manner of man his father is."

Jacob grew calmer.

"He loved his mother more than he loved anything, and it may be out of
reason to ask them, who loved her, to spare much regard for me. That I
grant and have always granted. Yet I've striven to show him now, with all
my awful faults, I'm a good father."

"He can't fail to know it."

"John Henry comes of age in a minute and I've made over Bullstone
Farm to him. A great position for one so young—eh, Winter?"
 "A wondrous fine thing, and what makes it finer is that he's a born
farmer and will be worthy of it."

"Kingwell's lease is up ere long, and then my son will reign and be the
head of the family in the eye of the nation."

"You mustn't say that. You're the head of the family, not your son."

"He had scarce a word to answer when I told him how I'd been to
Lawyer Dawes and turned it over. As for Dawes himself, he feels a thought
doubtful whether I should part with my own so freely; but 'no,' I said, 'I
understand what I'm doing.' A bit of bread and a cup of water is all I shall
ever ask from my children. Let them do what I've failed to do and carry on
the name in a proper way. I want to be forgot, Adam; and yet, because
they're quite agreeable to take all and let me be forgot, I smart. Such is
man."

"Nature and order can't be swept away," answered Winter. "Your

children are very orderly children, and no doubt they'll do as you wish; but
you mustn't think to go out of their lives and deny them your wisdom and
advice. You've got your bargain to keep still, while you're in the land of the
living. You mustn't wash your hands of 'em. You must show 'em that you're
part of 'em yet, and that their good is yours and your good is theirs."

"They care not for my good—why should they? They don't want my
wisdom, for well they know my wisdom is foolishness. Who'd seek me
now? Who'd listen to me now, but a few such as you and William, who
have the patience of those who grow old and can still forgive all and laugh
kindly? No: they are children, and wisdom they need and experience they
lack—the more so because the world has run smooth for them. But they
don't look to me and they never did. All but Auna were set against me from
their short coats. They began to doubt as soon as they could walk. Their
grandmother was their god, and they'll live to find she was a false god.
They didn't get their hard hearts from Margery, or me."

"Trust to that then," urged the other. "Be patient and wait and watch,
and you'll see yourself in them yet, and your wife also."
 "You have a great trust in your fellow-creatures, Adam Winter."

"You must trust 'em if you're going to get any peace. What's life worth if
you can't trust? 'Tis to people the world with enemies and make yourself a
hunted creature."

"'Hunted' is a very good word," answered Jacob, "that's the state of most
of us. As to my children," he continued, "Peter will carry on here with
Middleweek, and he's very well able to do it—better already at a bargain
than ever I was, and likely to be more popular with customers than I. But
my sons have got to make me payments. That's fair—eh?"

"Certainly it is."

"And Auna must be thought upon also. She's first in my mind, and
always will be, and she needn't fear, when I go, that she'll be forgot. I've
managed pretty cleverly for her, well knowing that she'd not think of such
things when she grows up."

"Don't you force her to grow up too quick, however," urged Adam.
"Such a far-seeing man as you must not come between her and her own
generation, and keep her too close pent if you really go to the moor. Youth
cleaves to youth, Jacob; youth be the natural food of youth."

"You're wrong there," answered the elder. "Youth's hard, narrow,

ignorant and without heart. I want to get her away for her own sake. She's a
flower too fair to live with weeds. She's her mother again. The rest are dross
to her—workaday, coarse stuff, wishing me dead as often as they trouble to
think on me at all."

Adam argued against this opinion and indeed blamed Bullstone heartily.

"Don't you be poisoned against your own," he said. "The hardness of

youth isn't all bad. It often wears out and brings tenderness and
understanding with experience. I'd never fear a hard youngster: it's the
hardness of middle age that I'd fear."
 And no distant day proved Adam to have spoken well. A certain thing
fell out and Jacob remembered the other's opinion, for it seemed that
Winter's prophecy came true quicklier than even he himself might have
expected it to do so. On a certain Sunday in February their father received a
visit from John Henry and Avis. The latter did not bring her husband, since
the object of their visit proved purely personal to the family.

John Henry drove his sister in a little market cart from Bullstone Farm
and they surprised their father walking by the river. Auna accompanied him
and they were exercising some puppies. He had just pointed out to the flat
rock by the river where Margery was wont to sit, when she took vanished
generations of puppies for their rambles; then Auna cried out and the cart
stopped beside them.

John Henry alighted to shake hands with his father and Avis descended
and kissed him. He was astonished and asked the meaning of their visit.

"You'll catch it from Mrs. Huxam, playing about on Sunday," he said.

"We're not playing about," answered John Henry, "we've come on a very
important, family matter—our affair and not grandmother's at all. And we
thought we might stop for dinner and tea."

"Come and welcome; but I've done all I'm going to do, John Henry—all
for you and all for Avis. You're not going to squeeze me any more."

"We haven't come to squeeze you, father—quite the contrary," declared

Avis.

"Leave it till after dinner," directed the young man. "I heard you were
fixed beyond power of changing on Huntingdon; but I do hope that's not so,
father; because I think there's a good few reasons against."

"What you think is no great odds," answered Bullstone. "And why

should you think at all about it?"

"I'll tell you after dinner."

 He changed the subject and began talking of his farm. Already he had
new ideas.

"I don't see no use in that copse up the valley," he said. "'Tis good
ground wasted—only a place for badgers to breed, and we don't want them
killing the poultry. But if it was cleared to the dry-built wall—cleared
slowly and gradual in winter—it would give a bit of work and some useful
wood, and then offer three good acres for potatoes and rotation after. It's
well drained by nature and worth fifty pounds a year presently if not more."

"It's yours, John Henry. You'll do as you think best."

Jacob was in an abstracted mood and the sight of all his children met
together gave him pain rather than pleasure. They accentuated the empty
place and their spirits jarred upon him, for they were cheerful and noisy. He
thought that Auna was the brighter for their coming and resented it in a dim,
subconscious fashion.

They found him silent and absorbed. He seemed to withdraw himself

and pursue his own thoughts under their chatter. They addressed him and
strove to draw him into their interests, but for a time they failed to do so.
Once or twice Avis and Auna whispered together and Auna was clearly
excited; but Avis quieted her.

"I'll tell him myself come presently," she said.

When dinner was done, John Henry spoke.

"Light your pipe and listen, father. You must wake up and listen. I've
got a very big idea and I'm very wishful you'll think of it, and so is Avis."

He looked at them dreamily.

"What big idea could you have that I come into?" he asked.

"Why, you yourself and your future."

"Who's put you up to thinking about me at all? You weren't used to."
 "God's my judge nobody put me up to it; did they, Avis?"

"Nobody," answered Avis. "It was your own thought, and you asked me,
and I said it was a very fine thought."

"Nothing about Auna?"

"No, father. It's just this. I know you don't want to stop here. That's
natural. But there's other places beside the moor. And I'm very wishful
indeed for you to come and live with me at Bullstone—you and Auna. Then
you'd be near Peter, and Avis too; and she could come and go and look after
you."

Jacob took it ill. He believed that selfish motives had prompted John
Henry, nor did he even give him credit for mixed motives. Then, as he
remained silent, another aspect of the proposal troubled him. This woke
actual anger.

"To 'look after me'? To 'look after me'? God's light! what do you take
me for? D'you think my wits are gone and my children must look after me?
Perhaps you'd like to shut me up altogether, now you've got your farms?"

They did not speak and he took their silence for guilt, whereas it only
meant their astonishment.

"Where the hell did you scheming devils come from?" he shouted.
"Where's your mother in you? Are you all your blasted grandmother?"

Avis flushed and John Henry's face also grew hot. Auna put her arms
round her father's neck.

"Don't, don't say such awful things," she begged him; "you know better,
dear father."

Then John Henry spoke without temper.

"You wrong us badly when you say that, father. We meant no such thing
and was only thinking of you and Auna. You must have stuff to fill your
mind. You're not a very old man yet, and you're strong and active. And I