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To roBin
 aBoUT The aUThor

Michael Parkin is Professor emeritus in the department of economics

at the University of western ontario, canada. Professor Parkin has held faculty
appointments at Brown University, the University of Manchester, the University of
essex, and Bond University. he is a past president of the canadian economics
association and has served on the editorial boards of the American Economic
Review and the Journal of Monetary Economics and as managing editor of the
Canadian Journal of Economics. Professor Parkin’s research on macroeconomics,
monetary economics, and international economics has resulted in over 160 publi-
cations in journals and edited volumes, including the American Economic Review,
the Journal of Political Economy, the Review of Economic Studies, the Journal of
Monetary Economics, and the Journal of Money, Credit and Banking. he became
most visible to the public with his work on inflation that discredited the use of wage
and price controls. Michael Parkin also spearheaded the movement toward euro-
pean monetary union. Professor Parkin is an experienced and dedicated teacher
of introductory economics.

viii
 Brief conTenTs

ParT one ParT foUr

inTrodUcTion 1 MacroeconoMic flUcTUaTions 241
chaPTer 1 What Is Economics? 1 chaPTer 10 Aggregate Supply and Aggregate
chaPTer 2 The Economic Problem 31 Demand 241
chaPTer 3 Demand and Supply 53 chaPTer 11 Expenditure Multipliers 265
chaPTer 12 The Business Cycle, Inflation, and
ParT Two Deflation 295
MoniToring MacroeconoMic
PerforMance 83 ParT five
chaPTer 4 Measuring GDP and Economic MacroeconoMic Policy 321

Growth 83 chaPTer 13 Fiscal Policy 321

chaPTer 5 Monitoring Jobs and Inflation 107 chaPTer 14 Monetary Policy 349
chaPTer 15 International Trade Policy 375
ParT Three
MacroeconoMic Trends 131
chaPTer 6 Economic Growth 131
chaPTer 7 Finance, Saving, and Investment 159
chaPTer 8 Money, the Price Level, and
Inflation 181
chaPTer 9 The Exchange Rate and the Balance
of Payments 211

ix
This page intentionally left blank
 alTernaTive PaThways ThroUgh The chaPTers

Flexibility

Chapter 1 Chapter 6

What Is Economics? Economic Growth

Chapter 2 Chapter 7 Chapter 13

The Economic Problem Finance, Saving, Fiscal Policy

and Investment

Chapter 3 Chapter 4
Chapter 10 Chapter 12
Demand and Supply Measuring GDP and
Economic Growth Aggregate Supply and The Business Cycle,
Aggregate Demand Inflation, and Deflation

Chapter 15 Chapter 5
Chapter 7
International Monitoring Jobs Chapter 14
Trade Policy and Inflation Finance, Saving,
Monetary Policy
and Investment

Chapter 8

Money, the Price Level,

and Inflation

Chapter 9

The Exchange Rate and

the Balance of Payments

Chapter 11

Expenditure Multipliers

Start here ... … then jump to … and jump to any of these after
any of these … doing the prerequisites indicated

xi
This page intentionally left blank
deTailed conTenTs
Pa rt O ne
IntroductIon 1
chaPTer 1 ◆ What Is ecOnOMIcs? 1
definition of economics 2
Two Big economic Questions 3
What, How, and For Whom? 3
Do Choices Made in the Pursuit of Self-Interest
also Promote the Social Interest? 5
The economic way of Thinking 9
A Choice Is a Tradeoff 9
Making a Rational Choice 9
Benefit: What You Gain 9
Cost: What You Must Give Up 9
How Much? Choosing at the Margin 10
Choices Respond to Incentives 10
economics as social science and
Policy Tool 11
Economist as Social Scientist 11
Economist as Policy Adviser 11
Summary (Key Points and Key Terms), Worked
Problem, Study Plan Problems and Applications,
and Additional Problems and Applications appear
at the end of each chapter.
aPPendIx graphs in economics 15
graphing data 15
Scatter Diagrams 16
graphs Used in economic Models 18
Variables That Move in the Same Direction 18
Variables That Move in Opposite Directions 19
Variables That Have a Maximum
or a Minimum 20
Variables That Are Unrelated 21
The slope of a relationship 22
The Slope of a Straight Line 22
The Slope of a Curved Line 23
graphing relationships among More Than
Two variables 24
Ceteris Paribus 24
When Other Things Change 25
MatheMatIcal nOte
equations of straight lines 26
■ aT issUe, 8
■ econoMics in The news, 6, 12
xiii
xiv detailed contents
chaPTer 2 ◆ the ecOnOMIc PrObleM 31
Production Possibilities and opportunity
cost 32
Production Possibilities frontier 32
Production Efficiency 33
Tradeoff Along the PPF 33
Opportunity Cost 33
Using resources efficiently 35
The PPF and Marginal Cost 35
Preferences and Marginal Benefit 36
Allocative Efficiency 37
economic growth 38
The Cost of Economic Growth 38
A Nation’s Economic Growth 39
gains from Trade 40
Comparative Advantage and Absolute
Advantage 40
Achieving the Gains from Trade 42
economic coordination 44
Firms 44
Markets 44
Property Rights 44
Money 44
Circular Flows Through Markets 44
Coordinating Decisions 45
■ econoMics in acTion, 39
■ econoMics in The news, 34, 46
chaPTer 3 ◆ deMand and suPPly 53
Markets and Prices 54
demand 55
The Law of Demand 55
Demand Curve and Demand Schedule 55
A Change in Demand 56
A Change in the Quantity Demanded Versus a
Change in Demand 58
supply 60
The Law of Supply 60
Supply Curve and Supply Schedule 60
A Change in Supply 61
A Change in the Quantity Supplied Versus
a Change in Supply 62
Market equilibrium 64
Price as a Regulator 64
Price Adjustments 65
Predicting changes in Price and Quantity 66
An Increase in Demand 66
A Decrease in Demand 66
An Increase in Supply 68
A Decrease in Supply 68
Changes in Both Demand and Supply 70
MatheMatIcal nOte
demand, supply, and equilibrium 74
■ econoMics in The news, 67, 69, 72
ParT one Wr aP - u P ◆
Understanding the scope of economics
Your Economic Revolution 81
Talking with
Esther Duflo 82

Pa rt t W O
MonItorIng MacroeconoMIc
PerforMance 83
chaPTer 4 ◆ MeasurIng gdP and
ecOnOMIc grOWth 83
gross domestic Product 84
GDP Defined 84
GDP and the Circular Flow of Expenditure
and Income 84
Why “Domestic” and Why “Gross”? 86
Measuring U.s. gdP 87
The Expenditure Approach 87
The Income Approach 88
Nominal GDP and Real GDP 89
Calculating Real GDP 89
The Uses and limitations of real gdP 90
The Standard of Living Over Time 90
The Standard of Living Across Countries 92
Limitations of Real GDP 93
aPPendIx graphs in Macroeconomics 98
The Time-series graph 98
Making a Time-Series Graph 98
Reading a Time-Series Graph 98
Ratio Scale Reveals Trend 99
A Time-Series with a Trend 99
Using a Ratio Scale 99
MatheMatIcal nOte
chained-dollar real gdP 100
■ econoMics in acTion, 95
■ aT issUe, 94
■ econoMics in The news, 96
detailed contents xv
chaPTer 5 ◆ MOnItOrIng JObs
and InflatIOn 107
employment and Unemployment 108
Why Unemployment Is a Problem 108
Current Population Survey 109
Three Labor Market Indicators 109
Other Definitions of Unemployment 111
Most Costly Unemployment 112
Alternative Measures of Unemployment 112
Unemployment and full employment 113
Frictional Unemployment 113
Structural Unemployment 113
Cyclical Unemployment 113
“Natural” Unemployment 113
Real GDP and Unemployment Over
the Cycle 114
The Price level, inflation, and deflation 116
Why Inflation and Deflation are Problems 116
The Consumer Price Index 117
Reading the CPI Numbers 117
Constructing the CPI 117
Measuring the Inflation Rate 118
Distinguishing High Inflation from a High
Price Level 119
The Biased CPI 119
The Magnitude of the Bias 120
Some Consequences of the Bias 120
Alternative Price Indexes 120
Core Inflation 121
The Real Variables in Macroeconomics 121
■ econoMics in acTion, 108, 114
■ econoMics in The news, 122
ParT Two Wr a P- u P ◆
Monitoring Macroeconomic Performance
The Big Picture 129
Talking with
Richard Clarida 130
xvi detailed contents

chaPTer 7 ◆ fInance, savIng, and

Pa rt th re e
InvestMent 159
MacroeconoMIc trends 131
financial institutions and financial
Markets 160
chaPTer 6 ◆ ecOnOMIc grOWth 131
Finance and Money 160
The Basics of economic growth 132 Capital and Financial Capital 160
Calculating Growth Rates 132 Capital and Investment 160
Economic Growth Versus Business Cycle Wealth and Saving 160
Expansion 132 Financial Capital Markets 161
The Magic of Sustained Growth 133 Financial Institutions 162
Applying the Rule of 70 134 Insolvency and Illiquidity 164
Interest Rates and Asset Prices 164
long-Term growth Trends 135
Long-Term Growth in the U.S. Economy 135 The loanable funds Market 165
Real GDP Growth in the World Economy 136 Funds that Finance Investment 165
The Real Interest Rate 166
how Potential gdP grows 138
The Demand for Loanable Funds 167
What Determines Potential GDP? 138
The Supply of Loanable Funds 168
What Makes Potential GDP Grow? 140
Equilibrium in the Loanable Funds Market 169
why labor Productivity grows 143 Changes in Demand and Supply 169
Preconditions for Labor Productivity government in the loanable funds
Growth 143 Market 172
Physical Capital Growth 143
A Government Budget Surplus 172
Human Capital Growth 144
A Government Budget Deficit 172
Technological Advances 144
is economic growth sustainable? Theories, ■ econoMics in acTion, 162, 166, 167, 170
evidence, and Policies 147 ■ econoMics in The news, 174
Classical Growth Theory 147
Neoclassical Growth Theory 147
New Growth Theory 148
New Growth Theory Versus Malthusian
Theory 150
Sorting Out the Theories 150
The Empirical Evidence on the Causes of
Economic Growth 150
Policies for Achieving Faster Growth 150
■ econoMics in acTion, 137, 144, 145

■ econoMics in The news, 146, 152


chaPTer 8 ◆ MOney, the PrIce level, and
InflatIOn 181
what is Money? 182
Medium of Exchange 182
Unit of Account 182
Store of Value 183
Money in the United States Today 183
depository institutions 185
Types of Depository Institutions 185
What Depository Institutions Do 185
Economic Benefits Provided by Depository
Institutions 186
How Depository Institutions Are Regulated 186
Financial Innovation 188
The federal reserve system 189
The Structure of the Fed 189
The Fed’s Balance Sheet 190
The Fed’s Policy Tools 190
how Banks create Money 192
Creating Deposits by Making Loans 192
The Money Creation Process 193
The Money Multiplier 194
The Money Market 196
The Influences on Money Holding 196
The Demand for Money 197
Shifts in the Demand for Money Curve 197
Money Market Equilibrium 198
The Quantity Theory of Money 200
MatheMatIcal nOte
The Money Multiplier 204
■ econoMics in acTion, 183, 188, 191,
194, 200
■ aT issUe, 187
■ econoMics in The news, 195, 202
detailed contents xvii
chaPTer 9 ◆ the exchange rate
and the balance
Of PayMents 211
The foreign exchange Market 212
Trading Currencies 212
Exchange Rates 212
Questions About the U.S. Dollar Exchange
Rate 212
An Exchange Rate Is a Price 212
The Demand for One Money Is the Supply
of Another Money 213
Demand in the Foreign Exchange Market 213
Demand Curve for U.S. Dollars 214
Supply in the Foreign Exchange Market 215
Supply Curve for U.S. Dollars 215
Market Equilibrium 216
Changes in the Demand for U.S. Dollars 216
Changes in the Supply of U.S. Dollars 217
Changes in the Exchange Rate 218
arbitrage, speculation, and Market
fundamentals 220
Arbitrage 220
Speculation 221
Market Fundamentals 222
exchange rate Policy 223
Flexible Exchange Rate 223
Fixed Exchange Rate 223
Crawling Peg 224
financing international Trade 226
Balance of Payments Accounts 226
Borrowers and Lenders 228
The Global Loanable Funds Market 228
Debtors and Creditors 229
Is U.S. Borrowing for Consumption? 229
Current Account Balance 230
Net Exports 230
Where Is the Exchange Rate? 231
■ econoMics in acTion, 213, 219, 221,
224, 227, 231
■ econoMics in The news, 232
ParT Three Wr a P- u P ◆
Understanding Macroeconomic Trends
Expanding the Frontier 239
Talking with
Xavier Sala-i-Martin 240
xviii detailed contents
Pa rt fO u r
MacroeconoMIc fluctuatIons 241
chaPTer 10 ◆ aggregate suPPly and
aggregate deMand 241
aggregate supply 242
Quantity Supplied and Supply 242
Long-Run Aggregate Supply 242
Short-Run Aggregate Supply 243
Changes in Aggregate Supply 244
aggregate demand 246
The Aggregate Demand Curve 246
Changes in Aggregate Demand 247
explaining Macroeconomic Trends and
fluctuations 250
Short-Run Macroeconomic Equilibrium 250
Long-Run Macroeconomic Equilibrium 250
Economic Growth and Inflation in the AS-AD
Model 251
The Business Cycle in the AS-AD Model 252
Fluctuations in Aggregate Demand 254
Fluctuations in Aggregate Supply 255
Macroeconomic schools of Thought 256
The Classical View 256
The Keynesian View 256
The Monetarist View 257
The Way Ahead 257
■ econoMics in acTion, 248, 251, 252
■ econoMics in The news, 258
chaPTer 11 ◆ exPendIture
MultIPlIers 265
fixed Prices and expenditure Plans 266
Expenditure Plans 266
Consumption and Saving Plans 266
Marginal Propensities to Consume and Save 268
Slopes and Marginal Propensities 268
Consumption as a Function of Real GDP 269
Import Function 269
real gdP with a fixed Price level 270
Aggregate Planned Expenditure 270
Actual Expenditure, Planned Expenditure, and
Real GDP 271
Equilibrium Expenditure 272
Convergence to Equilibrium 273
The Multiplier 274
The Basic Idea of the Multiplier 274
The Multiplier Effect 274
Why Is the Multiplier Greater Than 1? 275
The Size of the Multiplier 275
The Multiplier and the Slope of the AE
Curve 276
Imports and Income Taxes 277
The Multiplier Process 277
Business Cycle Turning Points 278
The Multiplier and the Price level 279
Adjusting Quantities and Prices 279
Aggregate Expenditure and Aggregate
Demand 279
Deriving the Aggregate Demand Curve 279
Changes in Aggregate Expenditure and Aggregate
Demand 280
Equilibrium Real GDP and the Price Level 281
MatheMatIcal nOte
The algebra of the keynesian Model 286
■ econoMics in acTion, 269, 278
■ econoMics in The news, 284

chaPTer 12 ◆ the busIness cycle,
InflatIOn, and
deflatIOn 295
The Business cycle 296
Mainstream Business Cycle Theory 296
Real Business Cycle Theory 297
inflation cycles 301
Demand-Pull Inflation 301
Cost-Push Inflation 303
Expected Inflation 305
Forecasting Inflation 306
Inflation and the Business Cycle 306
deflation 307
What Causes Deflation? 307
What are the Consequences of Deflation? 309
How Can Deflation be Ended? 309
The Phillips curve 310
The Short-Run Phillips Curve 310
The Long-Run Phillips Curve 310
■ econoMics in acTion, 298, 308, 311
■ econoMics in The news, 312
ParT foUr WraP -u P ◆
Understanding Macroeconomic fluctuations
Boom and Bust 319
Talking with
Ricardo J. Caballero 320
detailed contents xix
Part f Ive
MacroeconoMIc PolIcy 321
chaPTer 13 ◆ fIscal POlIcy 321
The federal Budget 322
The Institutions and Laws 322
Highlights of the 2015 Budget 323
The Budget in Historical Perspective 324
Budget Balance and Debt 326
State and Local Budgets 328
supply-side effects of fiscal Policy 329
Full Employment and Potential GDP 329
The Effects of the Income Tax 329
Taxes on Expenditure and the Tax Wedge 330
Taxes and the Incentive to Save and Invest 331
Tax Revenues and the Laffer Curve 333
The Supply-Side Debate 333
generational effects of fiscal Policy 334
Generational Accounting and Present Value 334
The Social Security Time Bomb 334
Generational Imbalance 335
International Debt 335
fiscal stimulus 336
Automatic Fiscal Policy and Cyclical and
Structural Budget Balances 336
Discretionary Fiscal Stimulus 339
■ econoMics in acTion, 328, 330, 338, 340
■ aT issUe, 327
■ econoMics in The news, 332, 342
xx detailed contents
chaPTer 14 ◆ MOnetary POlIcy 349
Monetary Policy objectives and
framework 350
Monetary Policy Objectives 350
Operational “Stable Prices” Goal 351
Operational “Maximum Employment” Goal 351
Responsibility for Monetary Policy 352
The conduct of Monetary Policy 352
The Monetary Policy Instrument 352
The Fed’s Decision-Making Strategy 353
Monetary Policy Transmission 355
Quick Overview 355
Interest Rate Changes 355
Exchange Rate Fluctuations 356
Money and Bank Loans 357
The Long-Term Real Interest Rate 357
Expenditure Plans 357
The Change in Aggregate Demand, Real GDP,
and the Price Level 358
The Fed Fights Recession 358
The Fed Fights Inflation 360
Loose Links and Long and Variable Lags 361
extraordinary Monetary stimulus 364
The Key Elements of the Crisis 364
The Policy Actions 365
Persistently Slow Recovery 365
Policy Strategies and Clarity 367
■ econoMics in acTion, 354, 363, 367
■ aT issUe, 366
■ econoMics in The news, 362, 368
chaPTer 15 ◆ InternatIOnal
trade POlIcy 375
how global Markets work 376
International Trade Today 376
What Drives International Trade? 376
Why the United States Imports T-Shirts 377
Why the United States Exports Airplanes 378
winners, losers, and the net gain from
Trade 379
Gains and Losses from Imports 379
Gains and Losses from Exports 379
Gains for All 379
international Trade restrictions 380
Tariffs 380
Import Quotas 382
Other Import Barriers 385
Export Subsidies 385
The case against Protection 386
Helps an Infant Industry Grow 386
Counteracts Dumping 386
Saves Domestic Jobs 386
Allows Us to Compete with Cheap
Foreign Labor 386
Penalizes Lax Environmental Standards 387
Prevents Rich Countries from Exploiting
Developing Countries 387
Reduces Offshore Outsourcing that Sends Good
U.S. Jobs to Other Countries 387
Winners and Losers 387
Avoiding Trade Wars 388
Why Is International Trade Restricted? 388
Compensating Losers 389
■ econoMics in acTion, 376, 381, 382
■ aT issUe, 388
■ econoMics in The news, 384, 390
 detailed contents xxi

ParT five WraP -u P ◆

Understanding Macroeconomic Policy
Tradeoffs and Free Lunches 397
Talking with
Stephanie Schmitt-Grohé 398

Glossary g-1
Index I-1
Credits c-1
This page intentionally left blank

the future is always uncertain. But at some times,
and now is one such time, the range of possible
near-future events is unusually large. Political ten-
sions in the Middle east and eastern europe are one
source of this uncertainty. But economic policy is
another source. There is uncertainty about the way
in which international trade policy will evolve as
bilateral deals reshape the competitive landscape.
There is uncertainty about exchange rate policy as
currency fluctuations bring changes in international
relative prices. There is extraordinary uncertainty
about monetary policy with the fed having quadru-
pled the quantity of bank reserves and continuing to
delay the return of interest rates to levels considered
normal. and there is uncertainty about fiscal policy
as an ongoing federal budget deficit interacts with
an aging population and rising healthcare costs to
create a national debt time bomb.
In the years since the subprime mortgage crisis of
August 2007 moved economics from the business re-
port to the front page, a justified fall in confidence has
gripped producers, consumers, financial institutions,
and governments.
Even the idea that the market is an efficient al-
location mechanism has come into question. Many
thoughtful people worry about rising income inequal-
ity, and some political leaders called for the end of capi-
talism and the dawn of a new economic order in which
tighter regulation reins in unfettered greed.
Rarely do teachers of economics have such a rich
feast on which to draw. And rarely are the principles
of economics more surely needed to provide the solid
foundation on which to think about economic events
and navigate the turbulence of economic life.
Although thinking like an economist can bring a
clearer perspective to and deeper understanding of
today’s events, students don’t find the economic way
of thinking easy or natural. Macroeconomics seeks
to put clarity and understanding in the grasp of the
student with a careful and vivid exploration of the
tension between self-interest and the social interest,
the role and power of incentives—of opportunity cost
and marginal benefit—and demonstrating the possi-
bility that markets supplemented by other mechanisms
might allocate resources efficiently.
Parkin students begin to think about issues the
way real economists do and learn how to explore dif-
ficult policy problems and make more informed deci-
sions in their own economic lives.
Preface
the twelfth edition revision
◆
Thoroughly updated, intuitive rather than technical,
grounded in data and empirical evidence, extensively
illustrated with well-chosen examples and photo-
graphs, enlivened with applications that focus on is-
sues at play in today’s world, focused on learning-by-
doing, and seamlessly integrated with MyEconLab:
These are the hallmarks of this twelfth edition of
Macroeconomics.
This revision builds on the foundation of the
previous edition and retains a thorough and careful
presentation of the principles of economics, an em-
phasis on real-world examples and applications, the
development of critical thinking skills, diagrams re-
nowned for pedagogy and clarity, and path-breaking
technology.
highpoints of the text revision
This revision has many detailed changes and respons-
es to reviewers, but its highpoints are a new feature
and three content changes.
The new feature is a full-page end-of-chapter
worked problem. As part of the chapter review, the
student has an opportunity to work a multi-part
problem that covers the core content of the chapter
and consists of questions, solutions, and key figures.
This new feature increases the incentive for the stu-
dent to learn-by-doing and actively, rather than pas-
sively, review the chapter.
The three main content changes are in the cover-
age of
■ Financial markets
■ The exchange rate
■ Cycles, inflation, and deflation
financial Markets Chapter 7, Finance, Saving,
and Investment, has an expanded section on
the global financial crisis and its aftermath that
describes the≈growth of household debt and house
prices. The section on real and nominal interest
rates is expanded and illustrated with data. The
chapter now contains more on the magnitudes of
the sources and uses of loanable funds. The section
on loanable funds in the global economy is moved
to the chapter on the exchange rate and balance
of payments.
the exchange rate Chapter 9, The Exchange Rate
and the Balance of Payments, contains a heavily
revised section entitled Arbitrage, Speculation, and
xxiii
xxiv Preface
Market Fundamentals that explains the powerful
forces that equilibrate the foreign exchange market in
the short run and the long run. This section includes
a discussion of the Big Mac index. An Economics in
the News examines the forces at work leading to a
strong dollar in the summer of 2014. The section on
the global loanable funds market is now integrated
into this chapter in the section on the balance of
payments.
cycles, Inflation, and deflation Chapter 12, The
Business Cycle, Inflation, and Deflation, is re-titled,
reorganized, and amended. The business cycle mate-
rial is moved to the beginning of the chapter and a
new final section describes and explains the problem
of deflation that has gripped Japan for most of the
1990s and the 2000s and is feared in Europe at the
present time. Coverage of the Phillips curve is re-
tained but condensed.
Many other chapters have been thoroughly
reworked to achieve even greater clarity and to
place greater emphasis on applications to current
issues. And every chapter now contains a new
opening vignette linked directly to an Economics
in the News, an end-of-chapter problem, and
online practice.
All the end-of-chapter Economics in the News ar-
ticles have been updated, and the analysis of the news
and the linked problems and applications have been
appropriately revised.
enhanced Pearson etext and
new Interactive features
MyEconLab with Enhanced eText combines
digital resources that illuminate content with
accessible self-assessment tools to provide students
with a comprehensive learning experience—all
in one place.
The Enhanced eText’s digital resources include
animations of figures that bring learning to life,
interactive graph drawing exercises, problem solving
tools, and news applications.
The results of all the activities in the Enhanced
eText feed into the MyEconLab Adaptive Study
Plan, which provides an exceptional adaptive learn-
ing experience uniquely tailored to the learning
challenges of each individual student.
This powerful digital resource enables students
to actively use the concepts they’re reading about
and, through learning-by-doing, achieve deeper
understanding of the key economic principles.
features to enhance teaching
◆
and learning
The changes that I have described are adjustments to
an already powerful teaching and learning package.
Here, I briefly review the features retained from the
previous edition.
economics in the news
This Parkin hallmark helps students think like econo-
mists by connecting chapter tools and concepts to the
world around them. In this new edition, Economics
in the News comes in two formats. One format, as in
the previous edition, presents a brief newsclip supple-
mented by data where needed, and then poses some
questions and walks through the answers.
The other format of Economics in the News is a
rebranding of what I called Reading Between the Lines
in all the earlier editions. This feature, which appears
at the end of every chapter (except the first), shows
students how to apply the tools they have learned by
analyzing an article from a newspaper or news Web
site. The news article connects with the questions
first raised in the chapter opener, and the analysis is
reinforced with a related end-of-chapter problem.
at Issue
Eleven At Issue boxes, three of which are new, engage
the student in debate and controversy. An At Issue
box introduces an issue and then presents two oppos-
ing views. It leaves the matter unsettled so that the
student and instructor can continue the argument in
class and reach their own conclusions.
economics in action boxes
This feature uses boxes within the chapter to provide
data and information that links models to real-world
economic activity. Some of the issues covered in these
boxes include the best affordable choice of recorded
music, movies and DVDs; the cost of selling a pair of
shoes; how Apple doesn’t make the iPhone; oppos-
ing trends in air pollution and carbon concentration;
structural unemployment in Michigan; how loanable
funds fuel a home price bubble; and the size of the
fiscal stimulus multipliers.
chapter Openers
Each chapter opens with a student-friendly vignette
that raises questions to motivate the student and focus
the chapter. This chapter-opening story is woven into
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Economics in the News feature that ends each chapter.

diagrams that show the action
Through the past eleven editions, this book has set
the standard of clarity in its diagrams; the twelfth
edition continues to uphold this tradition. My goal
is to show “where the economic action is.” The
diagrams in this book continue to generate an enor-
mously positive response, which confirms my view
that graphical analysis is the most powerful tool
available for teaching and learning economics at the
principles level.
Because many students find graphs hard to
work with, I have developed the entire art program
with the study and review needs of the student
in mind.
The diagrams feature
■ Original curves consistently shown in blue
■ Shifted curves, equilibrium points, and other
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■ Color-blended arrows to suggest movement
■ Graphs paired with data tables
■ Diagrams labeled with boxed notes
■ Extended captions that make each diagram and
its caption a self-contained object for study
and review
Price
Decrease in
quantity
demanded
Decrease in Increase in
demand demand
Increase in
quantity
demanded
D1
D0
D2
0 Quantity
Key terms
Highlighted terms simplify the student’s task of
learning the vocabulary of economics. Each high-
lighted term appears in an end-of-chapter list with its
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Preface xxv
number, boldfaced in the index, and in MyEconLab
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Interviews with economists
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These interviews explore the education and research
of these prominent economists and their advice for
those who want to continue the study of economics.
This edition has a new interview with Esther Duflo
(MIT). The 65 past and present interviews I have
conducted are available in full in MyEconLab.
◆ for the Instructor
This book enables you to focus on the economic way
of thinking and choose your own course structure in
your principles course.
focus on the economic Way of thinking
As an instructor, you know how hard it is to encourage
a student to think like an economist. But that is your
goal. Consistent with this goal, the text focuses on and
repeatedly uses the central ideas: choice; tradeoff; op-
portunity cost; the margin; incentives; the gains from
voluntary exchange; the forces of demand, supply, and
equilibrium; the pursuit of economic rent; the tension
between self-interest and the social interest; and the
scope and limitations of government actions.
flexible structure
You have preferences for how you want to teach your
course, and I’ve organized this book to enable you to
choose your teaching path. The chart on p. xi illus-
trates the book’s flexibility. By following the arrows
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The Project Gutenberg eBook of Nick Carter Stories
No. 160, October 2, 1915: The Yellow Label; or, Nick
Carter and the Society Looters
This ebook is for the use of anyone anywhere in the United States
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Title: Nick Carter Stories No. 160, October 2, 1915: The Yellow Label;
or, Nick Carter and the Society Looters

Author: Nicholas Carter

Contributor: Bertram Lebhar

Hero Strong

Release date: June 17, 2022 [eBook #68338]

Language: English

Original publication: United States: Street & Smaith, 1914

Credits: David Edwards, Chuck Greif and the Online Distributed

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University Digital Library)

*** START OF THE PROJECT GUTENBERG EBOOK NICK

CARTER STORIES NO. 160, OCTOBER 2, 1915: THE YELLOW
LABEL; OR, NICK CARTER AND THE SOCIETY LOOTERS ***
Issued Weekly. Entered as Second-class Matter at the New York Post Office,
by Street & Smith, 79-89 Seventh Ave., New York.
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No. 160. NEW YORK, October 2, 1915. Price Five
Cents.
 THE YELLOW LABEL;

Or, NICK CARTER AND THE SOCIETY LOOTERS.

Edited by CHICKERING CARTER.

 CHAPTER I.

AN ENTERPRISING WAITER.

Alfred Knox Atherton was one of the most popular members of the
“Marmawell Club.” He was a man in the prime of life, but, in spite of his
wealth and good looks—and in spite of the schemes of designing mothers—
he was still unmarried.
He had a country house in the Berkshires, and a luxuriously furnished
bachelor’s apartment on Park Avenue. He was also the owner of a small, up-
to-date steam yacht, which bore the uncommon name of The Philosopher’s
Stone.
As is usually the case in such places, most of the waiters at the
Marmawell Club were foreigners. One among them is worthy of special
mention. He was the cardroom waiter, who went by the name of Max Berne,
and was understood to hail from that land of model hotel keepers and
waiters, Switzerland.
Max evidently had seen a great deal of the world, although he was still a
young man. Paris, Berlin, Vienna, Rome, Madrid, St. Petersburg—we beg
pardon, Petrograd—mention any of these cities to Max, and he could tell you
which was the quickest way of getting there, which were the best hotels to
stay at, how much they would charge you, what the cooking was like, and
what quality of cigars and wines they stocked.
Needless to say, this made him very popular with the members of the
Marmawell. He was, in fact, a perfect encyclopedia of information on all
matters relating to the leading cities of Europe, and he could speak French,
Italian, and Spanish as fluently as he spoke English.
That evening he was hovering over one of the tables in the deserted
cardroom, giving a deft touch here and there, when Atherton walked in.
“Evening, Max!” the social favorite said affably. “Do you know if Mr.
Frost is about?”
He referred to Jackson Frost—“Jack Frost,” as his friends called him—a
young man of excellent family and expensive tastes, who belonged to the so-
called “sporting set.”
 “Yes, sir,” replied Max, in his silky, deferential voice. “Mr. Frost is in the
writing room. He told me to let him know when you arrived. Shall I tell him
you are here, or will you go up to him?”
“Is he alone in the writing room?”
“No, sir—at least, he wasn’t when I was there. There were several other
gentlemen in the room.”
“Then ask him to join me here, and, after you have given him my
message, bring me some Scotch.”
Max noiselessly retired, and presently returned with the whisky.
“Mr. Frost will be down in a moment, sir,” he said, as he placed the
articles at Atherton’s elbow.
He had scarcely spoken before Jackson Frost appeared, a tall young
fellow, faultlessly dressed.
“So, here you are!” he said, addressing Atherton. “A bit late, aren’t you?”
Before Atherton could reply, two other members of the club strolled into
the room, a fact which brought a frown of annoyance to the man’s handsome
face.
While the newcomers were giving their orders to Max, the latter stood
before them in an attitude of respectful attention. All the time, however, he
was straining his ears to catch what was passing between Atherton and Frost.
“Is everything arranged?” he heard the latter ask, in a low tone.
“Yes,” Atherton replied. “I came to tell you what the arrangements are,
but we can’t talk here.”
“Come up to my room,” suggested Frost. “I’ll say I’m going up to dress
for dinner, and you can follow me in a few minutes.”
“Right,” said Atherton. “We’ll be safe from interruption there.”
By this time the others had given their orders to Max, and one of them
turned to Jackson Frost.
“We’re trying to make up a four for cards; would you and Mr. Atherton
care to join us?”
“Thanks, but I haven’t time,” said Frost. “I’m dining out to-night, and I’m
just going up to my room to change.”
“And I’m only staying for a few minutes,” put in Atherton. “As a matter
of fact, I only dropped in for a drink, and as soon as I’ve finished it, I’m off.
By the way, did I pay you for this Scotch, Max?”
 “No, sir,” said the waiter.
Atherton paid, and Max left the room.
The club bar was in the basement, but instead of going there to procure
the drinks which had been ordered, Max glided to the end of the entrance
hall, walked leisurely up one flight of stairs, and then, being out of sight
from below, darted up two other flights.
It seemed a curious thing for a cardroom waiter to do. On the fourth floor
of the building were quite a number of private rooms, which were reserved
by members who wished to have a place where they could spend a night, or
where they could change into evening dress—or out of it—without the
trouble of going home. One of these rooms—it was number twenty-five—
was rented by Jackson Frost.
Reaching this fourth floor, Max did another curious thing—an extremely
curious thing for a cardroom waiter to do.
Approaching the door of Frost’s room, he drew a bunch of skeleton keys
from his pocket, selected one of them, and opened the door. Having gained
access to the room, he darted across to the window, opened it an inch or two
from the bottom, then hastily retreated, locking the door behind him and
hurrying back downstairs.
Halfway down the last flight of stairs, he met Jackson Frost. Max humbly
stepped aside to allow Frost to pass, and then went on to the bar, secured the
drinks which had been ordered, and took them to the cardroom.
Atherton was still there, but two or three minutes later he rose to his feet,
nodded to the two other members, and left the room.
“He’s going up to Frost’s room,” thought the waiter.
He glanced impatiently at his watch. It was five minutes to seven. In five
minutes he would be off duty.
“Confound it!” he exclaimed inwardly. “Why couldn’t Atherton have
waited that long? However, I don’t suppose he and Frost will finish their talk
in five minutes. All the same, I hope Sachs won’t be late to-night.”
Sachs was the name of the waiter who was to relieve Max at seven
o’clock. He was very punctual as a rule, and this was no exception. Just as
the clock was striking seven, he appeared at the cardroom door.
“Anything new, Max?” he asked.
“Nothing,” Max answered shortly. “Good night.”
 “What’s your rush?” asked Sachs, with a grin. “You seem to be in a
tearing hurry.”
“I am,” was the answer, and without another word Max left the room.
If he was in such a desperate hurry to be off, though, one would have
expected him to go straight down to the waiters’ room, change his clothes,
and leave the premises, but, instead of doing this, he repeated most of his
curious performances of a few minutes earlier.
That is to say, he dawdled up the first flight of stairs, and then, as soon as
he was out of sight of those in the entrance hall, he darted up to the fourth
floor.
With catlike steps he glided to the door of room No. 25, and stood for a
moment in a listening attitude.
A murmur of voices inside the room told him that Atherton and Frost
were there. He could not hear what they were saying, but he had anticipated
that, and that was why he had opened the window of Frost’s room.
Having satisfied himself of the whereabouts of the two, he stole to the
door of number twenty-seven, adjoining, picked the lock, glided into the
room, and closed the door behind him.
Groping his way softly along the dark room, he quietly opened the
window and stepped out on the fire escape.
The platform of the fire escape extended from the window of number
twenty-seven to that of number twenty-five, and all Max had to do was to
creep along the iron grating until he was beside the window with which he
had previously tampered.
When he reached it, he crouched down, hidden by the dark shade which
had been drawn, and put his ear close to the crack.
He could now hear every word that was spoken, and, it was plain to be
seen, it afforded him the liveliest satisfaction.
“So I was right!” he thought triumphantly, “I suspected it for some time,
but now I know it. I must have some more tangible proof, though. I must see
the thing done, and find out who else is in the plot. And then—farewell to
the old Mar, and hurrah for a life of ease and luxury.”
 CHAPTER II.

THE WAITER HAS A WIFE.

The waiter remained outside the window until he heard Atherton leave
the room, then he stole back to number twenty-seven, left things exactly as
he had found them, and descended to the waiters’ room, where he changed
to street attire.
Ten minutes later he left the premises, and at the end of half an hour he
let himself into a modest little flat in a “model” tenement house on East
Seventy-seventh Street, near the river.
Here he proceeded to do other things which were out of the ordinary for a
club waiter.
For instance, he changed his clothes once more, and, after he had done so,
he loaded a revolver and stowed it away in one of his pockets. He put a fresh
battery into an electric flash light, and slipped that into another pocket.
He next went down to a room in the basement, in which a motor cycle
was stored, and he spent half an hour in pumping up the tires, tinkering with
the lamp, oiling the bearings, filling the tank, and generally putting the
machine in order for a run.
Finally he returned to the little sitting room, set out a frugal supper for
two, consisting of cold beef and potato salad from a delicatessen store, bread
and cheese, and a bottle of first-class claret—the last named being from the
cellars of the Marmawell.
When all these preparations were completed, he lighted a pipe and
consulted his watch.
“Half past nine,” he mused. “I needn’t start for the theater for another
hour yet.”
He opened a black leather case and drew out a well-worn mandolin.
Dropping into an easy-chair, he started to play the instrument in a fashion
which proved that he was both a passionate lover of music and a capable
performer.
Any one popping into the little room and seeing him leaning back in that
easy-chair, with a far-away, dreamy look in his half-closed eyes, and a rapt
expression on his face, would have found it hard to believe that he was
capable of the side he had shown shortly before.
To say the least, he must have been a curious combination of the poetic
and the matter of fact, of the dreamer and the doer, otherwise that revolver in
his pocket, for instance, was decidedly out of place.
Such was the case, and, moreover, the man had had many ups and downs,
which his pretty wife had shared.
The latter was an American girl, who had married him some five years
before, and who now—because funds were low—had returned to her former
calling. In other words, she was back on the stage, in the chorus of a
Broadway production.
Elaine Stowe was the name by which she was professionally known.
Max was a most devoted husband, and never allowed his young wife to
return from the theater alone. As a rule, he left the flat about half past ten,
and was waiting at the stage door when Elaine came out.
To-night, however, he was so absorbed in his mandolin—and in other
things—that he forgot all about the flight of time, and he was positively
amazed when the door opened and there walked into the room a remarkably
attractive and well-formed young woman, cheaply but effectively dressed,
with an innocent, babyish face lighted by a pair of big blue eyes.
“Elaine!” he ejaculated, jumping up and laying his instrument aside.
“Why are you home so early to-night?”
“Early!” the girl echoed with a laugh, unbuttoning her gloves. “Do you
call half past eleven early?”
“Never!” he cried, dragging out his watch. “By George, so it is! What a
thoughtless brute I am to let you come home alone. I fully intended to come
for you as usual, but I just sat down to play for an hour, and the combination
of the music and my plans for the future made me forget everything else.”
“Your plans for the future?” Elaine repeated, with just a touch of irony in
her voice. “More plans of making our fortunes, I suppose?”
Her husband nodded.
“Yes,” he answered. “I know what you think, but you’re wrong this time,
as it happens. These plans are the real thing, and I’m going to put them
through.”
Elaine shrugged her dainty shoulders.
 “I wonder how often I’ve heard that,” she said wistfully. “We’re always
going to make our fortunes, but somehow or other something always turns
up at the last moment and messes up our schemes.”
“I’ll tell you while we’re having supper,” Max replied. “I haven’t too
much time, for I must start in three-quarters of an hour.”
“Start? Where are you going?” his wife asked curiously, as she removed
her hat and coat.
“That doesn’t come until almost the end of the story,” was the answer.
“Sit down and you’ll hear it all.”
The girl obeyed wonderingly, and Max began.
“Do you remember,” he said, “that very shortly after I started work at the
Marmawell, I told you I had a suspicion that Alfred Knox Atherton was
more or less crooked?”
“Yes,” answered Elaine, “you’ve said so often, and you made the same
statement about another member of the club—Frost, I think was the name.
You told me you thought he was so crooked that if he ever fell out of bed he
could rock himself to sleep on the floor.”
“That’s right,” agreed the waiter, with an appreciative grin. “I couldn’t
give you any reason for my suspicions, though. It was just instinct, I guess.
You know the old saying, ‘set a thief to catch a thief.’ It must have been that.
Being a rogue myself, I instinctively spotted a fellow rogue when I saw him.
Anyhow, I was convinced that Atherton and ‘Jack Frost,’ as they call him,
were playing some deep game of a crooked nature, and I determined to find
out what it was.”
“And have you found out?” asked Elaine.
“I certainly have, and it is a deeper game and a more crooked one than
ever I dreamed of.”
“This sounds interesting,” remarked the girl, pouring out a glass of wine
for herself. “Do tell me what you have discovered.”
“Well, about half past six this evening,” her husband explained, “Frost
came to the club and asked me if Atherton was there. When I told him he
was not, he said he would go up to the writing room, and I was to let him
know when Atherton arrived. There was nothing much in that, of course, but
it showed me that Atherton and Frost had arranged to meet at the club this
evening.
 “Presently Atherton put in an appearance. He came into the cardroom,
which was deserted at the time, and asked me if Frost was about. I told him
Frost was in the writing room, and asked him if he would go up. His answer
showed me that he wished to see Frost alone, for he asked me if there was
anybody else in the writing room, and when I said there was, he told me to
tell Frost to come down to the cardroom. It was plainer than ever that they
shared some secret, so naturally I determined by hook or crook to hear what
they had to say to each other.
“I delivered Atherton’s message to Frost and the latter came down to the
cardroom. Before he had a chance to say anything of a personal nature to
Atherton, however, a couple of other men walked in, and I saw Atherton
scowl at them.
“While I was taking their orders, I kept my ears open, and heard Atherton
and Frost arrange to meet in the latter’s private room upstairs.
“As soon as I got that tip, I slipped upstairs, used a skeleton key on
Frost’s door, and opened his window a little from the bottom. I passed Frost
on the lower flight, and a few minutes later Atherton left the cardroom and
went upstairs.
“That was five minutes to seven, and at seven I was relieved. The
moment I was free I sneaked upstairs once more, and made use of the room
adjoining Frost’s. By picking the lock of that room, and softly opening the
window, I managed to get out on the fire escape, and in that way reached
Frost’s window. The crack I had left made it possible for me to hear every
word they said, without the risk of being seen.”
“Very clever!” commented Elaine. “And what did you hear?”
 CHAPTER III.

“GOOD-BY TO THE SIMPLE LIFE!”

He told her what he had heard, and her big, blue eyes grew bigger still
with incredulous amazement.
“You take my breath away!” she gasped. “Alfred Knox Atherton, one of
the idols of New York society, who is hand in glove with most of the ‘big
bugs’! It sounds unbelievable.”
“It’s a bit of an eye opener, isn’t it?” chuckled the waiter. “What a
sensation I could create if I hunted up a reporter and filled him up with the
details of that little conversation in Frost’s room! But, of course, I’m not
going to do anything of the kind. It’s too good a thing to give away. It’s a
veritable gold mine, and I’m going to work it for all it’s worth.”
“Blackmail, I suppose?” the girl suggested calmly. “You will interview
Mr. Atherton and tell him what you have discovered, and threaten to expose
him unless he buys your silence?”
“Not so fast, my dear! That’s not quite the idea. I shall certainly interview
Atherton and tell him what I have discovered, but instead of demanding
money as the price of my silence, I shall demand a place in the firm. In other
words, I shall say to Atherton: ‘I know everything. Let me stand in with you
and share the loot, or I’ll give away the show!’ ”
The girl nodded approvingly.
“Yes, that will be much better than merely demanding money,” she said.
“You bet your life it will!” declared her husband, and it was curious to
note that he seemed perfectly at home with American slang. Indeed, there
was nothing suggestive of Switzerland about him now. “Instead of a lump
sum,” he went on, “it means a comfortable income for the rest of our lives.
Better still, it means action, excitement, risk. Perhaps, even the chance of a
tussle with Nick Carter.”
Elaine shivered at the mention of the great detective’s name, but the man
laughed light-heartedly.
“You don’t like to hear that name?” he asked teasingly.
 “I don’t,” his wife confessed. “Nick Carter has never really caught us, but
he’s spoiled more than one pretty plan of ours, and he has always seemed a
sort of bogy man to me. I wish you hadn’t mentioned him just now, and I
don’t see how you can think of him at such a time—at least, how you can
make a joke of it. Whenever Nick Carter comes to my mind, I find my
courage oozing out, and my feet getting cold.”
Her husband leaned over the corner of the table, gave her a great hug, and
kissed her.
“Cheer up, little girl!” he said. “Nick Carter isn’t going to hurt you. Trust
me for that.”
“But what if he catches you? Could anything hurt me more than that?”
“But he isn’t going to catch me, dear. I’ll admit that he hasn’t really tried
as yet, but I’m perfectly ready to have him do it. He’s certainly a wonder, but
I think I can tie him up in a knot, and I like to think of him when I’m
planning to turn a trick. It puts me on my mettle, and makes me plan more
carefully than I otherwise might. Therefore, I’m really glad he’s on the job.
You mustn’t have such fancies. They’re no real part of you. You’re the
pluckiest girl who ever bucked up against the law, and you know you would
tackle anything.”
Elaine’s smile was serious.
“I’ve proved that I’m not a coward, and I like excitement as well as you
do. I come nearer being afraid of Nick Carter, though, than of anybody else.
He’s been so successful. They say he never really went after a crook, big or
little, without getting him in the end, no matter how long it took.”
Max reseated himself again.
“The longest string of victories is sometimes broken,” he said confidently.
“There’s no doubt that Carter has set a hot pace, but he can’t keep it up.
Somebody is going to spoil his record some of these days—and why not
yours truly?”
The girl shrugged her shoulders.
“I know there’s no use of arguing with you,” she said. “I wouldn’t have
you different, anyway. If you weren’t so sure of yourself, you couldn’t have
done half the things you’ve done, and very likely you wouldn’t have won
me, either. Tell me this, though: Supposing Mr. Atherton tries to bluff you
when you go to see him? Supposing he indignantly denies your charge, and
orders you to leave the house, and all that sort of thing, what will you do?
You see, you can’t prove that he and Mr. Frost are leading this double life.
You were alone when you listened to their talk this evening, and if they both
deny that they said what you say they did, you have no witness to bring
forward.”
“Don’t you fret. I’ve thought of that,” the man informed her. “Before I
pay that little call on Atherton, I’m going to have positive proof of his guilt,
and I’m going to know who his other accomplices are.”
“But how can you obtain such a proof?”
“By going to Freehold. It’s now ten minutes to twelve, and the job is
fixed for three o’clock in the morning. I have tuned up my motor bike, and
everything is ready. If I leave here about quarter after twelve, I ought to
reach Freehold easily by two o’clock.
“When I do so,” he continued, “I shall hide my machine, and keep watch
on the Meadowview house. When I have seen all I want to see, I’ll come
back here, and to-morrow I’ll interview Atherton. He’ll have to accept my
terms when he finds out what I know, and then——”
He refilled his glass, and surveyed it with the critical eye of a
connoisseur.
“Good-by to the Marmawell!” he said. “Good-by to the front row of the
chorus! Good-by to the simple life in a tenement house! Exit all the things
we hate, and enter all the things we love—ease and wealth and luxury!”
He drained the glass, and, twenty minutes later, mounted on his motor
cycle, started for Long Island.
 CHAPTER IV.

LATE HOURS AT MEADOWVIEW.

Freehold is a sleepy little village on Long Island. It has no railway

stations, and its chief claim to distinction rests on the fact that it is intimately
associated with the life of a revolutionary hero.
We are speaking now of the village itself, not of its important
neighborhood, for the latter boasts of more than one pretentious country
house.
One of these is known far and wide as Meadowview. It’s a great pile of
white sandstone, which was built in 1900 by Charles P. Massey, a millionaire
banker.
The elder Massey died soon after Meadowview was completed, and it
passed into the possession of his son, Francis Massey, who was himself
nearing middle age.
At the time of which we write, the great house was occupied by Francis
Massey, his wife, two grown daughters, and a large staff of servants.
Meadowview was distant about a mile and a half from Freehold, and was
surrounded by spacious grounds.
These grounds were inclosed by a high stone wall, which divided them on
two sides from the neighboring estates, on a third from a turnpike much
favored by motorists, and on a fourth side from a narrow country lane.
The clock in the tower in one of Freehold’s churches was chiming a
quarter to two when Max Berne, seated on his motor cycle, sped swiftly up
the Main Street of the little village.
At that late—or early—hour, it need hardly be said that the inhabitants
were all in bed. Some wakeful women may possibly have heard the clatter of
his engine, but nobody saw him as he passed through the village, continued
along the road for a mile and a half, and eventually into a narrow lane
already mentioned.
“This is the lane Atherton spoke of, without a doubt,” he murmured, as he
dismounted from his machine. “Now, to find the door.”
 He started to walk up the deserted road, pushing his motor cycle in front
of him. On one side was a low fence, overhung here and there by low trees
and bushes; on the other side was a high stone wall, which marked the
boundary of the Massey place.
The night was pitch dark, but his bicycle lamp gave him all the light he
required. Presently, after walking a few hundred yards, he found what he
was looking for—a wooden door let into the stone wall.
Having ascertained that the door was locked, he wheeled his machine
across the road, set it up against the low bank just outside the fence, and cut
a large branch from a neighboring tree. Armed with this branch, which was
covered with leaves, he returned to the motor cycle and screened it in such a
way that the foliage seemed to belong to a bush growing out from the side of
the bank.
“That was a happy thought of one,” he told himself. “It wouldn’t have
been easy to lift the machine over the fence, and there isn’t any natural
shelter for it this side—at least, there’s none near enough to the gate to suit
me.”
Before hiding the motor cycle in this way, he had extinguished the light.
Now he retraced his steps to the wooden door, turned the lock with the
skeleton key, and stepped into the well-kept grounds.
He closed and locked the door behind him, after which he drew out his
electric torch. A momentary flash revealed the fact that a footpath started at
the door and ran through the grounds, doubtless in the direction of the house.
“Just as Atherton said,” he muttered. “Now, shall I wait here until they
arrive, or shall I spend the interval in having a look at the outside of the
house?”
He consulted his watch.
“Two o’clock,” he soliloquized. “They won’t be here for an hour yet. I’ll
stroll up to the house, and then come back and wait for them.”
So numerous and closely planted were the trees that even if it had been
lighted, the intruder could not have seen the house from where he stood. In
fact, it was not until he had groped his way along the path for three or four
hundred yards that he suddenly emerged from among the trees, and found
himself in full view of the front of the house.
It was an imposing frontage, four stories high, and was approached from
the main gates by a long, straight drive. A balustraded terrace ran along the
whole front of the building, and outside the principal door were a handsome
stone porch and a broad flight of steps.
At such an hour the waiter had naturally expected to find the house in
darkness, and all its occupants in bed. Judge then of his surprise, to say
nothing of his dismay, when he saw that a light was burning in the entrance
hall, that the front door was wide open, and that two men—they appeared to
be a butler and a footman—were standing on the porch.
“Jerusalem!” he exclaimed, whistling softly to himself. “This looks as if
Atherton’s calculations had miscarried. He and his pals will certainly have to
postpone their little enterprise, or else they’ll find themselves——”
His musings ended in a startled gasp, for at that moment his quick ears
caught a sound which filled him with added dismay.
It was the distant chug-chug of a motor car, faint and far off at first, but
growing louder and louder every moment.