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 NINTH EDITION

THE HANDBOOK OF

FIXED
INCOME
SECURITIES
EDITED BY

FRANK J. FABOZZI WITH THE ASSISTANCE OF

FRANCESCO A. FABOZZI AND STEVEN V. MANN

FABOZZI-9E_00-FM.indd 1 4/6/21 11:36 AM

Copyright © 2021, 2012, 2005, 2001, 1997, 1995, 1991, 1987, 1983 by McGraw Hill. All rights re-
served. Except as permitted under the United States Copyright Act of 1976, no part of this publication
may be reproduced or distributed in any form or by any means, or stored in a database or retrieval
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 CONTENTS

Preface xxiii
Acknowledgments xxvi
Contributors xxvii

PART ONE
INTRODUCTION
Chapter 1
Overview of the Types and Features of Fixed Income Securities 3
Frank J. Fabozzi, Adam Kobor, Steven V. Mann, and Francesco A. Fabozzi

Bonds 3
Medium-Term Notes 16
Preferred Stock 17
Residential Mortgage-Backed Securities 18
Commercial Mortgage-Backed Securities 19
Asset-Backed Securities 19
Covered Bonds 20
Beyond Traditional Liquid Fixed Income Instrument 20
Key Points 21

Chapter 2
Risks Associated with Investing in Fixed Income Securities 23
Frank J. Fabozzi, Adam Kobor, Francesco A. Fabozzi, and Ravi F. Dattatreya

Interest-Rate Risk 24
Reinvestment Risk 25
Call/Prepayment Risk 26
Corporate Credit Risk 26
Sovereign Credit Risk 29
Inflation, or Purchasing-Power, Risk 30
Liquidity Risk 30
Exchange-Rate Risk (Currency Risk) 33
Volatility Risk 33
Political or Legal Risk 34
Event Risk 34
Sector Risk 35
Other Risks 35

iii

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 iv Contents

Statistical Measures of Portfolio Risk 35

Tracking Error Risk 36
Key Points 37

Chapter 3
The Structure of Interest Rates 39
Frank J. Fabozzi

The Base Interest Rate 39

Risk Premium 40
The Term Structure of Interest Rates 43
Key Points 59

PART TWO
BASICS OF FIXED INCOME ANALYTICS
Chapter 4
Bond Pricing, Yield Measures, and Total Return 63
Frank J. Fabozzi

Bond Pricing 63
Conventional Yield Measures 76
Total Return Analysis 87
Key Points 94

Chapter 5
Measuring Interest-Rate Risk 97
Frank J. Fabozzi, Gerald W. Buetow, Jr., Robert R. Johnson, and Brian J. Henderson

The Full-Valuation Approach 98

Price Volatility Characteristics of Bonds 102
Duration 111
Modified Duration Versus Effective Duration 117
Convexity 123
Price Value of a Basis Point 138
The Importance of Yield Volatility 139
Key Points 140

Chapter 6
Data Science and the Corporate Credit Markets 143
Robert S. Kricheff

Defining Data Science 145

Selected Data Science Tools, Techniques, and Uses for Investing 147
Data Science and Investment Efficiency 155

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 Contents v

Risk and Performance 157

Why Data Science Is Different in Credit 162
Organization and Planning 164
Key Points 166

PART THREE
TREASURY, AGENCY, MUNICIPAL,
AND CORPORATE BONDS
Chapter 7
U.S. Treasury Securities 171
Michael J. Fleming and Frank J. Fabozzi

Types of Securities 172

The Primary Market 173
The Secondary Market 178
Zero-Coupon Treasury Securities 183
Key Points 184

Chapter 8
Agency Debt Securities 185
Mark Cabana

Agency Debt Market Overview 185

Types of Agency Debt Securities 188
The Primary Market 190
The Secondary Market 192
Agency Debt Issuance 193
Issuing Agencies 193
Large, Active Issuers 195
Smaller, Active Issuers 197
Nonactive Issuers and Recently Retired GSEs 198
Key Points 199

Chapter 9
Municipal Bonds 201
Sylvan G. Feldstein, Frank J. Fabozzi, Douglas Gaylor, and David Ratner

Features of Municipal Securities 203

Types of Municipal Obligations 205
The Commercial Credit Rating of Municipal Bonds 214
Municipal Bond Insurance 220
Valuation Methods 221
Tax Provisions Affecting Municipals 222
Yield Relationships Within the Municipal Bond Market 225

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 vi Contents

Primary and Secondary Markets 227

Bond Indexes 229
Official Statement 229
Regulation of the Municipal Securities Market 230
Key Points 233

Chapter 10
Corporate Bonds 235
Frank J. Fabozzi, Steven V. Mann, and Adam B. Cohen

The Corporate Trustee 236

Some Bond Fundamentals 237
Security for Bonds 240
Alternative Mechanisms to Retire Debt Before Maturity 246
Credit Risk 252
Event Risk 254
High-Yield Bonds 256
Default Rates and Recovery Rates 258
Medium-Term Notes 259
Key Points 260

Chapter 11
Leveraged Loans 263
Stephen J. Antczak, Frank J. Fabozzi, and Jung Lee

Syndicated Bank Loans 264

Loan Structure 265
Loan Terms 266
Recovery Rates 267
Secondary Market 269
Key Points 270

Chapter 12
Structured Notes and Credit-Linked Notes 273
John D. Finnerty and Rachael W. Park

Structured Notes 275

Credit-Linked Notes 291
Key Points 298

Chapter 13
Commercial Paper 301
David K. Musto

Payment Schedule and Price Quotation 301

Primary and Secondary Markets 301

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 Contents vii

Regulatory Treatment 302

Issuers 303
Investors 304
Default Risk Measurement and Realization 304
CP Rates 305
Maturity Distribution 306
Backup Lines 306
Regulatory Responses to Crises 308
Key Points 310

Chapter 14
Floating-Rate Securities 311
Frank J. Fabozzi, Fred Hoffman, and Steven V. Mann

General Features of Floaters and Major Product Types 312

Call and Put Provisions 314
Spread Measures 315
Price Volatility Characteristics of Floaters 316
Portfolio Strategies 320
Demise of LIBOR 321
Key Points 321

Chapter 15
Inflation-Linked Bonds 323
John B. Brynjolfsson

Mechanics and Measurement 325

Marketplace 331
Valuation and Performance Dynamics 332
Investors 333
Issuers 338
Other Issues 340
Key Points 341

Chapter 16
Non-U.S. Sovereign Bonds 343
Francesco A. Fabozzi, Frank J. Fabozzi, and Adam Kobor

Size of the Sovereign Bond Market 343

Types of Securities Issued 344
Primary Market for Sovereign Debt 346
Secondary Market 348
Sovereign Credit Risk 348
Sovereign Bond Yield Spreads 351
Sovereign Bonds from the Investor’s Perspective 353
Key Points 354

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 viii Contents

Chapter 17
The Emerging Markets Debt 355
Jane Brauer, Lucas Martin, and David Beker

The Debt Universe 356

External Debt Markets 358
Local Debt Markets 362
The Foreign Investor Base 364
EM Debt Performance 365
Sovereign Debt Sustainability 371
What Do EM Spreads Compensate For? 376
Sovereign Restructurings 380
Derivatives 393
Key Points 395

Chapter 18
Fixed Income Exchange Traded Funds 397
Matthew Tucker and Stephen Laipply

Investment Characteristics 398

Fixed Income ETF Management 404
Fixed Income ETF Characteristics and Mechanics 405
Trading Behavior: A Closer Look at Premiums, Discounts, and Price Discovery 412
Key Points 414

Chapter 19
Nonconvertible Preferred Stock 415
Steven V. Mann

Preferred Stock Issuance 416

Trust Preferred 417
Preferred Stock Ratings 418
Tax Treatment of Dividends 418
Key Points 419

Chapter 20
Private Infrastructure Debt 421
Frédéric Blanc-Brude

Infrastructure Borrowers 421

Characteristics 423
Pricing Determinants 429
Credit Risk 434
Key Points 440

FABOZZI-9E_00-FM.indd 8 4/6/21 11:36 AM

 Contents ix

PART FOUR
MORTGAGE-BACKED AND
ASSET-BACKED SECURITIES
Chapter 21
An Overview of Mortgages and the Mortgage Market 443
Anand K. Bhattacharya and Bill Berliner

Product Definition and Terms 444

The Mortgage Industry 453
The Loan Underwriting Process 455
Generation of Mortgage Lending Rates 458
Risks Associated with Mortgage Products 464
Key Points 470

Chapter 22
Agency Mortgage Passthrough Securities 471
Glenn Schultz and Frank J. Fabozzi

Issuers of Agency Passthroughs 472

Cash-Flow Characteristics 473
Some MBS Analytics 483
Anatomy of the Agency Passthrough Market 491
TBA Coupons 494
Specified Trades 495
Key Points 496

Chapter 23
Agency Collateralized Mortgage Obligations 499
Alexander Crawford

The CMO Market 499

The Reasons Why CMOs Exist 500
CMO Tranche Types 501
Agency Versus Nonagency CMOs 520
Agency CMO Analysis 521
Key Points 528

Chapter 24
Stripped Mortgage-Backed Securities 531
Cyrus Mohebbi, Min Fan, and Ardeshir Shahmaei

Overview of the SMBS Market 532

Investment Characteristics 536
Key Points 547

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 x Contents

Chapter 25
Nonagency Residential Mortgage-Backed Securities:
Legacy, RMBS 2.0, and Non-QM 549
Dapeng Hu and Mario Triantafillou

Market Overview 551

Collateral 556
Capital Structure 578
Housing Market 588
Relative Value and Risk Analysis 590
Key Points 592

Chapter 26
Covered Bonds 595
Vinod Kothari

Covered Bonds: From Europe to the Rest of the World 596

Understanding Covered Bonds 596
Structure of Covered Bonds 597
Maturity Structure of Covered Bonds 602
Cover Assets and Credit Enhancements 603
Asset/Liability Mismatches and Liquidity Risk 603
Ratings of Covered Bonds 604
Covered Bonds and Securitization 604
Accounting for Covered Bonds 608
Key Points 608

Chapter 27
Commercial Mortgage-Backed Securities 611
Wayne M. Fitzgerald II, Mark D. Paltrowitz, and Amit Madaan

The Collateral Pool 613

CMBS Trust Structure 625
Transaction Participants 627
Transaction Features 630
Market Development 635
Modeling 637
Key Points 640

Chapter 28
Credit Card Asset-Backed Securities 643
John McElravey

Securitization of Credit Card Receivables 645

The Credit Card ABS Life Cycle 650

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 Contents xi

Cash-Flow Allocations 653

Credit and Investment Considerations 655
Key Points 663

Chapter 29
Securities Backed by Auto Loans and Leases,
Equipment Loans and Leases, and Student Loans 665
John McElravey

Securitization in Brief 665

Auto Loans and Leases 670
Equipment Loans and Leases 673
Student Loans 675
Key Points 678

Chapter 30
Collateralized Loan Obligations 681
Frank J. Fabozzi and Fred Hoffman

Assets 682
Capital Structure 682
Creation Purpose 683
Credit Structures 684
Market Size, Trading 685
How a CLO is Created 686
Fees 686
Buyers 687
Trading of CLO Collateral 687
Key Points 688

PART FIVE
THE YIELD CURVE AND
THE TERM STRUCTURE
Chapter 31
Overview of Forward Rate Analysis 691
Antti Ilmanen

Computation of Par, Spot, and Forward Rates 692

Main Influences on the Yield-Curve Shape 695
Using Forward Rate Analysis in Yield-Curve Trades 703
Key Points 713

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 xii Contents

Chapter 32
A Framework for Analyzing Yield-Curve Trades 715
Antti Ilmanen

Forward Rates and Their Determinants 716

Decomposing Expected Returns of Bond Positions 723
Key Points 741

Chapter 33
Empirical Yield-Curve Dynamics and Yield-Curve Exposure 743
Wesley Phoa

Empirical Analysis of Yield-Curve Dynamics 745

Theoretical Determinants of Yield-Curve Dynamics 760
Yield-Curve Dynamics and Risk Management 768
Key Points 775

Chapter 34
Term Structure Modeling with No-Arbitrage Interest Rate Models 777
Gerald W. Buetow, Jr. and Brian J. Henderson

Introduction to Models of the Short Rate 778

Binomial Interest Rate Lattices 783
Trinomial Lattice 803
Key Points 806

PART SIX
VALUATION AND RELATIVE VALUE
Chapter 35
Relative Value Trading 809
Jordan Hu, Marc Seah, and Xu Gao

What Is Fixed Income Relative Value? 809

Z-Score, Mean Reversion, and Expected Return 811
Market-Based vs. Model-Based Relative Value 813
Scenario and Horizontal Analysis 825
Data and the Future of Relative Value 827
Key Points 829

Chapter 36
Valuation of Bonds with Embedded Options 831
Frank J. Fabozzi, Andrew Kalotay, and Michael Dorigan

The Interest Rate Lattice 832

Calibrating the Lattice 836

FABOZZI-9E_00-FM.indd 12 4/6/21 11:36 AM

 Contents xiii

Using the Lattice for Valuation 840

Fixed-Coupon Bonds with Embedded Options 840
Valuation of Two More Exotic Structures 845
Extensions 849
Key Points 852

Chapter 37
Valuation of Mortgage-Backed Securities 855
Rajashri (Priya) Joshi, Debra Chen, and Tom P. Davis

Static Valuation and Its Limitations 855

Monte Carlo Models for Valuing MBS 859
Mbs Modeling Framework 866
Option-Adjusted Valuation Metrics 873
An Illustrative Example 876
Key Points 879

Chapter 38
Convertible Securities 881
Mihir Bhattacharya

Convertible Note 882

Convertible Note as a Contingent Claim 888
Stages of a Convertible Note 892
Investing in Convertible Securities 894
Convertible Note Valuation Framework 896
Model Outputs: Implieds and Greeks 903
Mandatorily Convertible Securities 907
Trading Convertible Portfolios 913
Delta Trading P&L: A High Volatility Scenario Example 914
Key Points 915
Additional Comments 926

Chapter 39
Risk Neutral Pricing of Convertible Bonds 929
Peter J. Zeitsch, Matthew Hyatt, and Tom P. Davis

The Model 930

The Default Intensity 933
Specifying the Credit Spread 938
Sensitivities 952
Convertible Bond Arbitrage 968
Key Points 971

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 xiv Contents

PART SEVEN
CREDIT ANALYSIS
Chapter 40
Credit Analysis for Corporate Bonds 975
Martin Fridson, Frank J. Fabozzi, and Adam B. Cohen

Approaches to Credit Analysis 975

Industry Considerations 977
Financial Analysis 983
Combining Financial and Nonfinancial Analysis 993
Indenture Provisions 994
Utilities 1002
Finance Companies 1007
The Analysis of High-Yield Corporate Bonds 1012
Credit Scoring Models 1018
Key Points 1020

Chapter 41
The Credit Analysis of Municipal General Obligation
and Revenue Bonds 1021
Sylvan G. Feldstein, Douglas Gaylor, and David Ratner

The Legal Opinion 1022

The Need to Know Who Really Is the Issuer 1027
On the Financial Advisor and Underwriter 1029
General Credit Indicators and Economic Factors in the Credit Analysis 1030
Red Flags for the Investor 1046
Information Sources for the Analyst 1047
Key Points 1048

Chapter 42
Credit-Risk Modeling 1051
Tim Backshall, Kay Giesecke, and Lisa Goldberg

Structural Credit Models 1052

Reduced-Form Credit Models 1062
Incomplete-Information Credit Models 1066
Key Points 1070

FABOZZI-9E_00-FM.indd 14 4/6/21 11:36 AM

 Contents xv

PART EIGHT
PORTFOLIO MANAGEMENT AND STRATEGIES
Chapter 43
Introduction to Bond Portfolio Management 1075
Kenneth E. Volpert

Overview of Traditional Bond Management 1075

Overview of the Core/Satellite Approach 1078
Why Choose Indexing? 1079
Which Index Should Be Used? 1081
Primary Bond Indexing Risk Factors 1082
Enhancing Bond Indexing 1086
Measuring Success 1092
Key Points 1094

Chapter 44
Trading in the Bond Market 1097
Gueorgui S. Konstantinov and Momtchil Pojarliev

Fixed Income Liquidity 1098

Trading Approaches 1102
Mechanics of Bond and Foreign Exchange Trading 1104
Electronic Trading 1117
Key Points 1122

Chapter 45
Bond Indexes and Bond Portfolio Management 1125
Gueorgui S. Konstantinov and Frank Osswald

Building a Bond Index 1126

Description 1128
Bond Index Risk and Return 1133
Bond Index Relationship 1134
Bond Indexes and Smart Beta 1141
Key Points 1145

Chapter 46
Quantitative Management of Benchmarked Portfolios 1147
Lev Dynkin, Jay Hyman, Vadim Konstantinovsky, and Bruce D. Phelps

Selection and Customization of Benchmarks 1148

Diversification Issues in Benchmarks 1155
Portfolio Analysis Relative to a Benchmark 1160
Quantitative Approaches to Benchmark Replication 1166
Controlling Issuer-Specific Risk in the Portfolio 1172

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 xvi Contents

Quantitative Methods for Portfolio Optimization 1175

Summary: Portfolio Management Tool Set 1178
Key Points 1179

Chapter 47
Factor Investing in Fixed Income Securities 1181
Guido Baltussen, Patrick Houweling, Martin Martens, and Olaf Penninga

Factor Investing 1181

Which Factors? 1184
Factors Premiums in Government Bonds 1185
Factor Premiums in Corporate Bonds 1191
Fixed Income Factors in Multi-Asset Portfolios 1198
Key Points 1201

Chapter 48
Active Factor Fixed Income Investing 1203
Pururav Thoutireddy, Patrick Klein, Thomas Runkel, and David Yuen

Active Quant Fixed Income 1203

Active Quant Top Down 1209
Active Quant Bottom Up 1212
Four-Dimensional Chess 1216
Key Points 1217

Chapter 49
Introduction to Multifactor Risk Models in Fixed Income
and Their Applications 1219
Barclays

Motivation and Structure Underlying Fixed Income Multifactor Risk Models 1219
Fixed Income Risk Models 1222
Applications of Risk Modeling 1228
Key Points 1236

Chapter 50
Analyzing Risk from Multifactor Fixed Income Models 1239
Barclays

Approaches Used to Analyze Risk 1239

Key Points 1269

Chapter 51
Cash-Flow Matching 1271
Ronald J. Ryan

What Is Cash-Flow Matching? 1271

FABOZZI-9E_00-FM.indd 16 4/6/21 11:36 AM

 Contents xvii

The CDI Methodology 1274

Future Value Versus Present Value 1278
Interest Rate Risk 1279
CDI Versus Active Bond Management 1279
CDI Versus LDI 1280
Key Points 1284

Chapter 52
Building Corporate Bond Portfolios 1287
Marielle de Jong

Buy-and-Hold Investing 1288

Benchmarked Portfolios 1291
Key Points 1301

Chapter 53
Managing the Spread Risk of Credit Portfolios
Using the Duration Times Spread Measure 1303
Arik Ben Dor, Lev Dynkin, and Jay Hyman

The Need for a New Measure of Credit Spread Exposure 1304

Spread Volatility and DTS 1307
Risk Projection: Predicting Spread Volatility 1310
Hedging: Predicting Sensitivities to Market Spread Changes 1314
Replication: Creating Index Tracking Portfolios 1318
Expressing Macro Views in Active Portfolios 1323
Portfolio Construction: Optimal Diversification of Issuer Risk 1323
Modeling: Calibrating Credit Risk Factors 1327
The Term Structure of Relative Spread Volatility 1329
Key Points 1330

Chapter 54
Constructing and Managing High-Yield Bond Portfolios 1331
Nicholas R. Sarchese and Mark R. Shenkman

Bottom-Up Credit/Security Analysis 1333

Top-Down High-Yield Market Drivers and Macro Considerations 1359
Portfolio Considerations 1365
Key Points 1374

Chapter 55
Corporate Bonds and ESG 1377
Gueorgui S. Konstantinov and Christoph Gross

The Bond Manager Role 1380

Managing Risks and Taking Opportunities 1381

FABOZZI-9E_00-FM.indd 17 4/6/21 11:36 AM

 xviii Contents

International Norm-Based Strategies 1382

Key Strategies for Managing Climate Impact of Bond Portfolios 1383
The Green Bond Dilemma and Future Outlook 1387
Key Points 1389

Chapter 56
Global Credit Bond Portfolio Management 1391
Jack Malvey

Credit Relative-Value Analysis 1393

Total-Return Analysis 1397
Primary Market Analysis 1398
Liquidity and Trading Analysis 1400
Secondary Trade Rationales 1401
Spread Analysis 1406
Structural Analysis 1408
Credit-Curve Analysis 1411
Credit Analysis 1412
Green Bonds/ESG Compliant 1412
Asset Allocation/Sector Rotation 1413
Key Points 1413

Chapter 57
International Bond Portfolio Management 1417
Gueorgui S. Konstantinov and Frank J. Fabozzi

Risks and Returns in International Bond Portfolios 1418

A Yield Curve–Based Approach for International Bond Portfolios 1420
Currency Allocation and Bond Selection: Portfolio Construction 1425
Optimization Technique for Multicurrency Bond Portfolios 1427
Risk Management and Additional Tools 1432
Performance Measurement and Attribution 1438
Key Points 1445

Chapter 58
Factor Investing in Sovereign Bond Markets 1447
Frank Fabozzi, Jean-Michel Maeso, Lionel Martellini, and Riccardo Rebonato

Problems with Existing Bond Benchmarks 1448

Benefits and Pitfalls of Factor Investing in Fixed-Income Markets 1448
Taxonomy of Fixed Income Factors 1450
Level and Slope Factors in Sovereign Bond Markets 1452
Value Factor 1458
Momentum Factor 1462
Key Points 1465

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 Contents xix

Chapter 59
Hedge Fund Fixed Income Strategies 1467
Ellen Rachlin, Chris P. Dialynas, and Vineer Bhansali

Macro Investing 1467

Understanding the Components of the Statistics 1469
Big Changes Are Very Important 1470
The Yield Curve 1470
Political Self-Interest Versus Interest of the Sovereign 1472
Asset-Backed Credit Strategy 1474
Capital Structure Arbitrage 1475
Long/Short Credit Strategy 1477
Distressed Debt 1478
Basis Trading 1480
Volatility Trading 1481
Cross-Currency Arbitrage 1483
Key Points 1483

Chapter 60
Financing Positions in the Bond Market 1485
Frank J. Fabozzi and Steven V. Mann

Repurchase Agreement 1485

Dollar Rolls 1489
Margin Buying 1490
Securities Lending 1491
Key Points 1493

PART NINE
DERIVATIVE INSTRUMENTS AND
THEIR APPLICATIONS
Chapter 61
Introduction to Interest-Rate Futures and Options Contracts 1497
Frank J. Fabozzi, Steven V. Mann, and Adam Kobor

Basic Characteristics of Futures Contracts 1497

Basic Characteristics of Forward Contracts 1498
Basic Characteristics of Option Contracts 1499
Differences Between Options and Futures (Forward) Contracts 1500
Representative Exchange-Traded Interest-Rate Futures Contracts 1500
Mechanics of Futures Trading 1511
Representative Exchange-Traded Futures Options Contracts 1514
OTC Contracts 1518
Key Points 1523

FABOZZI-9E_00-FM.indd 19 4/6/21 11:36 AM

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 “Reckless age!” scoffed Tavia. “When does a boy or a man ever
cease to be reckless?”
“Right-oh!” agreed Nat, looking back along the towline of the sled.
“See how he forever puts himself within the danger zone of pretty
girls. Gee! but Ned and I are a reckless team! What say, Neddie?”
“I say do your share of the pulling,” returned his brother. “Those
girls are no feather-weights, and this is up hill.”
“Oh, to be so insulted!” murmured Tavia. “To accuse us of bearing
extra flesh about with us when we all follow Lovely Lucy Larriper’s
directions, given in the Evening Bazoo. Not a pound of the
superfluous do we carry.”
“Dorothy’s getting chunky,” announced Nat, wickedly.
“You’re another!” cried Tavia, standing up for her chum. “Her lovely
curves are to be praised—oh!”
At that moment the young men ran the runners on one side of the
sled over an ice-covered stump, and the girls all joined in Tavia’s
scream. If there had not been handholds they would all three have
been ignominiously dumped off.
“Pardon, ladies! Watch your step!” Ned said. “And don’t get us
confused with your ‘beauty-talks’ business. Besides, it isn’t really
modest. I always blush myself when I inadvertently turn over to the
woman’s page of the evening paper. It is a delicate place for mere
man to tread.”
“Hooray!” ejaculated his brother, making a false step himself just
then. “Wish I had creepers on. This is a mighty delicate place for a
fellow to tread, too, my boy.”
In fact, they soon had to order the girls off the sled. The way was
becoming too steep and the side of the hill was just as slick as the
highway had been.
With much laughter and not a few terrified “squawks,” to quote
Tavia, the girls scrambled up the slope after the boys and the sled.
Suddenly piercing screams came from above them.
 “Those rascals!” ejaculated Ned.
“Oh! they are sliding on this side,” cried Dorothy. “Stop them, Ned!
Please, Nat!”
“What do you expect us to do?” demanded the latter. “Run out and
catch ’em with our bare hands?”
They had come to a break in the path now and could see out over
the sloping pasture in which the boys had been sliding for an hour.
Their sled had worked a plain path down the hill; but at the foot of it
was an abrupt drop over the side of a gully. Dorothy Dale—and her
cousins, too—knew that gully very well. There was a cave in it, and
in and about that cave they had once had some very exciting
adventures.
Joe and Roger had selected the smoothest part of the pasture to
coast in, it was true; but the party of young folk just arrived could see
that it was a very dangerous place as well. At the foot of the slide
was a little bank overhanging the gully. The smaller boys had been
stopping their sled right on the brink, and with a jolt, for the watchers
could see Joe’s heelprints in the ground where the ice had been
broken away.
They could hear the boys screaming out a school song at the top
of the hill. Ned and Nat roared a command to Joe and Roger to halt
in their mad career; but the two smaller boys were making so much
noise that it was evident their cousins’ shout was not heard by them.
They came down, Joe sitting ahead on the sled with his brother
hanging on behind, the feet of the boy sitting in front thrust out to halt
the sled. But if the sled should jump over the barrier, the two reckless
boys would fall twenty feet to the bottom of the gully.
“Stop them, do!” groaned Jennie Hapgood, who was a timid girl.
It was Dorothy who looked again at the little mound on the edge of
gully’s bank. The frost had got into the earth there, for it had been
freezing weather for several days before the ice storm of the
previous night. Now the sun was shining full on the spot, and she
could see where the boys’ feet, colliding with that lump of earth on
the verge of the declivity, had knocked off the ice and bared the
earth completely. There was, too, a long crack along the edge of the
slight precipice.
“Oh, boys!” she called to Ned and Nat, who were struggling up the
hill once more, “stop them, do! You must! That bank is crumbling
away. If they come smashing down upon it again they may go over
the brink, sled and all!”
 CHAPTER XVI
THE FLY IN THE AMBER

“Oh, Dorothy!” cried Tavia.

Jennie, with a shudder, buried her face in her hands.
Joe and Roger Dale were fairly flying down the hill, and would
endeavor to stop by collision with the same lump of frozen earth that
had previously been their bulwark.
“See! Ned! Nat!” cried Dorothy again. “We must stop them!”
But how stop the boys already rushing down hill on their coaster?
It seemed an impossible feat.
The White brothers dropped the towline of the big sled and
scrambled along the slippery slope toward the edge of the gully.
With a whoop of delight the two smaller boys, on their red coaster,
whisked past the girls.
“Stop them!” shrieked the three in chorus.
Ned reached the edge of the gully bank first. His weight upon the
cracking earth sent the slight barrier crashing over the brink. Just as
they had supposed there was not a possible chance of Joe’s
stopping the sled when it came down to this perilous spot.
Tavia groaned and wrung her hands. Jennie burst out crying.
Dorothy knew she could not help, yet she staggered after Ned and
Nat, unable to remain inactive like the other girls.
Ned recovered himself from the slippery edge of the bank; but by a
hair’s breadth only was he saved from being thrown to the bottom of
the gully. He crossed the slide in a bound and whirled swiftly,
gesturing to his brother to stay back. Nat understood and stopped
abruptly.
“You grab Roger—I’ll take Joe!” panted Ned.
 Just then the smaller boys on the sled rushed down upon them.
Fortunately, the steeper part of the hill ended some rods back from
the gully’s edge. But the momentum the coaster had gained brought
it and its burden of surprised and yelling boys at a very swift pace,
indeed, down to the point where Ned and Nat stood bracing
themselves upon the icy ground.
“Oh, boys!” shrieked Tavia, without understanding what Ned and
Nat hoped to accomplish. “Do something!”
And the very next instant they did!
The coaster came shooting down to the verge of the gully bank.
Joe Dale saw that the bank had given way and he could not stop the
sled. Nor did he dare try to swerve it to one side.
Ned and Nat, staring at the imperilled coasters, saw the look of
fear come into Joe’s face. Ned shouted:
“Let go all holds! We’ll grab you! Quick!”
Joe was a quick-minded boy after all. He was holding the steering
lines. Roger was clinging to his shoulders. If Joe dropped the lines,
both boys would be free of the sled.
That is what he did. Ned swooped and grabbed Joe. Nat seized
upon the shrieking and surprised Roger. The sled darted out from
beneath the two boys and shot over the verge of the bank, landing
below in the gully with a crash among the icy branches of a tree.
“Wha—what did you do that for?” Roger demanded of Nat, as the
latter set him firmly on his feet.
“Just for instance, kid,” growled Nat. “We ought to have let you
both go.”
“And I guess we would if it hadn’t been for Dorothy,” added Ned,
rising from where he had fallen with Joe on top of him.
“Cracky!” gasped Joe. “We’d have gone straight over that bank
that time, wouldn’t we? Gee, Roger! we’d have broken our necks!”
Even Roger was impressed by this stated fact. “Oh, Dorothy!” he
cried, “isn’t it lucky you happened along, so’s to tell Ned and Nat
what to do? I wouldn’t care to have a broken neck.”
“You are very right, kid,” growled Nat. “It’s Dorothy ‘as does it’—
always. She is the observant little lady who puts us wise to every
danger. ‘Who ran to catch me when I fell?’ My cousin!”
“Hold your horses, son,” advised his brother, with seriousness. “It
was Dorothy who smelled out the danger all right.”
“I do delight in the metaphors you boys use,” broke in Dorothy. “I
might be a beagle-hound, according to Ned. ‘Smelled out,’ indeed!”
“Aren’t you horrid?” sighed Jennie, for they were all toiling up the
hill again.
Ned put the cup of his hand under Jennie’s elbow and helped her
over a particularly glary spot. “Boys are very good folk,” he said,
smiling down into her pretty face, “if you take them just right. But
they are explosive, of course.”
Nat, likewise helping to drag the big sled, was walking beside
Tavia. Dorothy looked from one couple to the other, smiled, and then
found that her eyes were misty.
“Why!” she gasped under her breath, “I believe I am getting to be a
sour old maid. I am jealous!”
She turned her attention to the smaller boys and they all went gaily
up the hill. Nobody was going to discover that Dorothy Dale felt blue
—not if she could possibly help it!
Over on the other side of the hill where the smooth road lay the
party had a wonderfully invigorating coasting time. They all piled
upon the double-ripper—Joe and Roger, too—and after the first two
or three slides, the runners became freed of rust and the heavy sled
fairly flew.
“Oh! this is great—great!” cried Tavia. “It’s just like flying. I always
did want to fly up into the blue empyrean——”
They were then resting at the top of the hill. Nat turned over on his
back upon the sled, struggled with all four limbs, and uttered a soul-
searching: “Woof! woof! Ow-row-row! Woof!”
 “Get up, silly!” ordered Tavia. “Whenever I have any flight of fancy
you always make it fall flat.”
“And if you tried a literal flight into the empyrean—ugh!—you’d fall
flat without any help,” declared Nat. “But we don’t want you to fly
away from us, Tavia. We couldn’t get along without you.”
“‘Thank you, kindly, sir, she said,’” responded his gay little friend.
However, Tavia and Nat could be serious on occasion. This very
day as the party tramped home to luncheon, dragging the sleds,
having recovered the one from the gully, they walked apart, and
Dorothy noted they were preoccupied. But then, so were Ned and
Jennie. Dorothy’s eyes danced now. She had recovered her poise.
“It’s great fun,” she whispered to her aunt, when they were back in
the house. “Watching people who are pairing off, I mean. I know
‘which is which’ all right now. And I guess you do, too, Aunt Winnie?”
Mrs. White nodded and smiled. There was nothing to fear
regarding this intimacy between her big sons and Dorothy’s pretty
friends. Indeed, she could wish for no better thing to happen than
that Ned and Nat should become interested in Tavia and Jennie.
“But you, my dear?” she asked Dorothy, slyly. “Hadn’t we better be
finding somebody for you to walk and talk with?”
“I must play chaperon,” declared Dorothy, gaily. “No, no! I am
going to be an old maid, I tell you, Auntie dear.” And to herself she
added: “But never a sour, disagreeable, jealous one! Never that!”
Not that in secret Dorothy did not have many heavy thoughts when
she remembered Garry Knapp or anything connected with him.
“We must send those poor girls some Christmas remembrances,”
Dorothy said to Tavia, and Tavia understood whom she meant
without having it explained to her.
“Of course we will,” she cried. “You would not let me give Forty-
seven and her sister as much money as I wanted to for finding my
bag.”
 “No. I don’t think it does any good to put a premium on honesty,”
Dorothy said gravely.
“Huh! that’s just what Garry Knapp said,” said Tavia, reflectively.
“But now,” Dorothy hastened to add, “we can send them both at
Christmas time something really worth while.”
“Something warm to wear,” said Tavia, more than ordinarily
thoughtful. “They have to go through the cold streets to work in all
weathers.”
It seemed odd, but Dorothy noticed that her chum remained rather
serious all that day. In the evening Nat came in with the mail bag and
dumped its contents on the hall table. This was just before dinner
and usually the cry of “Mail!” up the stairway brought most of the
family into the big entrance hall.
Down tripped Tavia with the other girls; Ned lounged in from the
library; Joe and Roger appeared, although they seldom had any
letters, only funny postal cards from their old-time chums at Dalton
and from local school friends.
Mrs. White took her mail off to her own room. She walked without
her crutch now, but favored the lame ankle. Joe seized upon his
father’s mail and ran to find him.
Nat sorted the letters out swiftly. Everybody had a few. Suddenly
he hesitated as he picked up a rather coarse envelope on which
Tavia’s name was scrawled. In the upper left-hand corner was
written: “L. Petterby.”
“Great Peter!” he gasped, shooting a questioning glance at Tavia.
“Does that cowpuncher write to you still?”
Perhaps there was something like an accusation in Nat’s tone. At
least, it was not just the tone to take with such a high-spirited person
as Tavia. Her head came up and her eyes flashed. She reached for
the letter.
“Isn’t that nice!” she cried. “Another from dear old Lance. He’s
such a desperately determined chap.”
 At first the other young folk had not noted Nat’s tone or Tavia’s
look. But the young man’s next query all understood:
“Still at it, are you, Tavia? Can’t possibly keep from stringing ’em
along? It’s meat and drink to you, isn’t it?”
“Why, of course,” drawled Tavia, two red spots in her cheeks.
She walked away, slitting Lance Petterby’s envelope as she went.
Nat’s brow was clouded, and all through dinner he said very little.
Tavia seemed livelier and more social than ever, but Dorothy
apprehended “the fly in the amber.”
 CHAPTER XVII
“DO YOU UNDERSTAND TAVIA?”

“You got this old timer running round in circles, Miss Tavia, when
you ask about a feller named Garford Knapp anywhere in this
latitude, and working for a feller named Bob. There’s more ‘Bobs’
running ranches out here than there is bobwhites down there East
where you live. Too bad you can’t remember this here Bob’s last
name, or his brand.
“Now, come to think, there was a feller named ‘Dimples’ Knapp
used to be found in Desert City, but not in Hardin. And you ought to
see Hardin—it’s growing some!”

This was a part of what was in Lance Petterby’s letter. Had Nat
White been allowed to read it he would have learned something else
—something that not only would have surprised him and his brother
and cousin, but would have served to burn away at once the debris
of trouble that seemed suddenly heaped between Tavia and himself.
It was true that Tavia had kept up her correspondence with the
good-natured and good-looking cowboy in whom, while she was
West, she had become interested, and that against the advice of
Dorothy Dale. She did this for a reason deeper than mere mischief.
Lance Petterby had confided in her more than in any of the other
Easterners of the party that had come to the big Hardin ranch. Lance
was in love with a school teacher of the district while the party from
the East was at Hardin; and now he had been some months married
to the woman of his choice.
When Tavia read bits of his letters, even to Dorothy, she skipped
all mention of Lance’s romance and his marriage. This she did, it is
true, because of a mischievous desire to plague her chum and Ned
and Nat. Of late, since affairs had become truly serious between Nat
and herself, she would have at any time explained the joke to Nat
had she thought of it, or had he asked her about Lance.
The very evening previous to the arrival of this letter from the
cowpuncher to which Nat had so unwisely objected, Nat and Tavia
had gone for a walk together in the crisp December moonlight and
had talked very seriously.
Nat, although as full of fun as Tavia herself, could be grave; and
he made his intention and his desires very plain to the girl. Tavia
would not show him all that was in her heart. That was not her way.
She was always inclined to hide her deeper feelings beneath a light
manner and light words. But she was brave and she was honest.
When he pinned her right down to the question, yes or no, Tavia
looked courageously into Nat’s eyes and said:
“Yes, Nat. I do. But somebody besides you must ask me before I
will agree to—to ‘make you happy’ as you call it.”
“For the good land’s sake!” gasped Nat. “Who’s business is it but
ours? If you love me as I love you——”
“Yes, I know,” interrupted Tavia, with laughter breaking forth. “‘No
knife can cut our love in two.’ But, dear——”
“Oh, Tavia!”
“Wait, honey,” she whispered, with her face close pressed against
his shoulder. “No! don’t kiss me now. You’ve kissed me before—in
fun. The next time you kiss me it must be in solemn earnest.”
“By heaven, girl!” exclaimed Nat, hoarsely. “Do you think I am
fooling now?”
“No, boy,” she whispered, looking up at him again suddenly. “But
somebody else must ask me before I have a right to promise what
you want.”
“Who?” demanded Nat, in alarm.
 “You know that I am a poor girl. Not only that, but I do not come
from the same stock that you do. There is no blue blood in my
veins,” and she uttered a little laugh that might have sounded bitter
had there not been the tremor of tears in it.
“What nonsense, Tavia!” the young man cried, shaking her gently
by the shoulders.
“Oh no, Nat! Wait! I am a poor girl and I come of very, very
common stock. I don’t mean I am ashamed of my poverty, or of the
fact that my father and mother both sprang from the laboring class.
“But you might be expected when you marry to take for a wife a
girl from a family whose forebears were something. Mine were not.
Why, one of my grandfathers was an immigrant and dug ditches
——”
“Pshaw! I had a relative who dug a ditch, too. In Revolutionary
times——”
“That is it exactly,” Tavia hastened to say. “I know about him. He
helped dig the breastworks on Breeds Hill and was wounded in the
Battle of Bunker Hill. I know all about that. Your people were Pilgrim
and Dutch stock.”
“Immigrants, too,” said Nat, muttering. “And maybe some of them
left their country across the seas for their country’s good.”
“It doesn’t matter,” said the shrewd Tavia. “Being an immigrant in
America in sixteen hundred is one thing. Being an immigrant in the
latter end of the nineteenth century is an entirely different pair of
boots.”
“Oh, Tavia!”
“No. Your mother has been as kind to me—and for years and
years—as though I were her niece, too, instead of just one of
Dorothy’s friends. She may have other plans for her sons, Nat.”
“Nonsense!”
“I will not answer you,” the girl cried, a little wildly now, and began
to sob. “Oh, Nat! Nat! I have thought of this so much. Your mother
must ask me, or I can never tell you what I want to tell you!”
Nat respected her desire and did not kiss her although she clung,
sobbing, to him for some moments. But after she had wiped away
her tears and had begun to joke again in her usual way, they went
back to the house.
And Nat White knew he was walking on air! He could not feel the
path beneath his feet.
He was obliged to go to town early the next morning, and when he
returned, as we have seen, just before dinner, he brought the mail
bag up from the North Birchland post-office.
He could not understand Tavia’s attitude regarding Lance
Petterby’s letter, and he was both hurt and jealous. Actually he was
jealous!
“Do you understand Tavia?” he asked his cousin Dorothy, right
after dinner.
“My dear boy,” Dorothy Dale said, “I never claimed to be a seer.
Who understands Tavia—fully?”
“But you know her better than anybody else.”
“Better than Tavia knows herself, perhaps,” admitted Dorothy.
“Well, see here! I’ve asked her to marry me——”
“Oh, Nat! my dear boy! I am so glad!” Dorothy cried, and she
kissed her cousin warmly.
“Don’t be so hasty with your congratulations,” growled Nat, still red
and fuming. “She didn’t tell me ‘yes.’ I don’t know now that I want her
to. I want to know what she means, getting letters from that fellow
out West.”
“Oh, Nat!” sighed Dorothy, looking at him levelly. “Are you sure you
love her?”
He said nothing more, and Dorothy did not add a word. But Tavia
waited in vain that evening for Mrs. White to come to her and ask the
question which she had told Nat his mother must ask for him.
 CHAPTER XVIII
CROSS PURPOSES

Tavia was as loyal a girl as ever stepped in shoe-leather. That was

an oft-repeated expression of Major Dale’s. He loved “the flyaway”
for this very attribute.
Tavia was now attempting to bring joy and happiness for Dorothy
out of chaos. Therefore, she felt she dared take nobody into her
confidence regarding Lance Petterby’s letter.
She replied to Lance at once, explaining more fully about Garry
Knapp, the land he was about to sell, and the fact that Eastern
schemers were trying to obtain possession of Knapp’s ranch for
wheat land and at a price far below its real worth.
Satisfaction, Tavia might feel in this attempt to help Dorothy; but
everything else in the world was colored blue—very blue, indeed!
When one’s ear has become used to the clatter of a noisy little
windmill, for instance, and the wind suddenly ceases and it remains
calm, the cessation of the mill’s clatter is almost a shock to the
nerves.
This was about the way Tavia’s sudden shift of manner struck all
those observant ones at The Cedars. As the season of joy and
gladness and good-will approached, Tavia Travers sank lower and
lower into a Slough of Despond.
Had it not been for Dorothy Dale, the others must have audibly
remarked Tavia’s lack of sparkle. Though Dorothy did not imagine
that Tavia was engaged in any attempt to help her, and because of
that attempt had refused to explain Lance Petterby’s letter to Nat
White, yet she loyally began to act as a buffer between the others
and the contrary Tavia. More than once did Dorothy fly to Tavia’s
rescue when she seemed to be in difficulties.
 Tavia had a streak of secrecy in her character that sometimes
placed her in a bad light when judged by unknowing people. Dorothy,
however, felt sure that on this present occasion there was no real
fault to be found with her dear friend.
Nat refused to speak further about his feeling toward Tavia;
Dorothy knew better than to try to tempt Tavia herself to explain. The
outstanding difficulty was the letter from the Westerner. Feeling sure,
as she did, that Tavia liked Nat immensely and really cared nothing
for any other man, Dorothy refrained from hinting at the difficulty to
her chum. Let matters take their course. That was the better way,
Dorothy believed. She felt that Nat’s deeper affections had been
moved and that only the surface of his pride and jealousy were
nicked. On the other hand she knew Tavia to be a most loyal soul,
and she could not imagine that there was really any cause, other
than mischief, for Tavia to allow that letter to stand between Nat and
herself.
To smooth over the rough edges and hide any unpleasantness
from the observation of the older members of the family, Dorothy
became very active in the social life of The Cedars again. No longer
did she refuse to attend the cousins and Jennie and Tavia in any
venture. It was a quintette of apparently merry young people once
more; never a quartette. Nor were Nat and Tavia seen alone together
during those few short weeks preceding Christmas.
Secretly, Dorothy was very unhappy over the misunderstanding
between her chum and Nat. That it was merely a disagreement and
would not cause a permanent break between the two was her dear
hope. For she wished to see them both happy. Although at one time
she thought the steadier Ned, the older cousin, might be a better
mate for her flyaway friend, she had come to see it differently of late.
If anybody could understand and properly appreciate Tavia Travers it
was Nathaniel White. His mind, too, was quick, his imagination
colorful. Dorothy Dale, with growing understanding of character and
the mental equipment to judge her associates better than most girls,
or young women, of her age, believed in her heart that neither Tavia
nor Nat would ever get along with any other companion as well as
the two could get along together.
 The two “wildfires,” as Aunt Winnie sometimes called them, had
always had occasional bickerings. But a dispute is like a
thunderstorm—it usually clears the air.
Nor did Dorothy doubt for a moment that her cousin and her friend
were deeply in love now, the one with the other. That Tavia had
turned without explanation about Lance Petterby’s letter from Nat
and that the latter had told Dorothy he was not sure he wished Tavia
to answer the important question he had put to her, sprang only from
pique on Nat’s side, and, Dorothy was sure, from something much
the same in her chum’s heart.
Light-minded and frivolous as Tavia had always appeared, Dorothy
knew well that the undercurrent of her chum’s feelings was both
deep and strong. Where she gave affection Tavia herself would have
said she “loved hard!”
Dorothy had watched, during these past few weeks especially, the
intimacy grow between her chum and Nat White. They were bound
to each other, Dorothy believed, by many ties. Disagreements did
not count. All that was on the surface. Underneath, the tide of their
feelings intermingled and flowed together. She could not believe that
any little misunderstanding could permanently divide Tavia and Nat.
But they were at cross purposes—that was plain. Nat was irritated
and Tavia was proud. Dorothy knew that her chum was just the sort
of person to be hurt most by being doubted.
Nat should have understood that if Tavia had given him reason to
believe she cared for him, her nature was so loyal that in no
particular could she be unfaithful to the trust he placed in her. His
quick appearance of doubt when he saw the letter from the West had
hurt Tavia cruelly.
Yet, Dorothy Dale did not try to make peace between the two by
going to Nat and putting these facts before him in the strong light of
good sense. She was quite sure that if she did so Nat would come to
terms and beg Tavia’s pardon. That was Nat’s way. He never took a
middle course. He must be either at one extreme of the pendulum’s
swing or the other.
 And Dorothy was sure that it would not be well, either for Nat or for
Tavia, for the former to give in without question and shoulder the
entire responsibility for this lover’s quarrel. For to Dorothy Dale’s
mind there was a greater shade of fault upon her chum’s side of the
controversy than there was on Nat’s. Because of the very fact that all
her life Tavia had been flirting or making believe to flirt, there was
some reason for Nat’s show of spleen over the Petterby letter.
Dorothy did not know what had passed between Tavia and Nat the
evening before the arrival of the letter. She did not know what Tavia
had demanded of Nat before she would give him the answer he
craved.
Nat kept silence. Mrs. White did not come to Tavia and ask the
question which meant so much to the warm-hearted girl. Tavia
suffered in every fiber of her being, but would not betray her feelings.
And Dorothy waited her chance to say something to her chum that
might help to clear up the unfortunate state of affairs.
So all were at cross purposes, and gradually the good times at
The Cedars became something of a mockery.
 CHAPTER XIX
WEDDING BELLS IN PROSPECT

Four days before Christmas Dorothy Dale, her cousins, and Tavia
all boarded the train with Jennie Hapgood, bound for the latter’s
home in Pennsylvania. On Christmas Eve Jennie’s brother Jack was
to be married, and he had written jointly with the young lady who was
to be “Mrs. Jack” after that date, that the ceremony could not
possibly take place unless the North Birchland crowd of young folk
crossed the better part of two states, to be “in at the finish.”
“Goodness me,” drawled Tavia, when this letter had come from
Sunnyside Farm. “He talks as though wedded bliss were something
like a sentence to the penitentiary. How horrid!”
“It is. For a lot of us men,” Nat said, grinning. “No more stag
parties with the fellows for one thing. Cut out half the time one might
spend at the club. And then, there is the pocket peril.”
“The—the what?” demanded Jennie. “What under the sun is that?”
“A new one on me,” said Ned. “Out with it. ’Thaniel. What is the
‘pocket peril’?”
“Why, after a fellow is married they tell me that he never knows
when he puts his hand in his pocket whether he will find money there
or not. Maybe Friend Wife has beaten him to it.”
“For shame!” cried Dorothy. “You certainly deserve never to know
what Tavia calls ’wedded bliss.’”
“I have my doubts as to my ever doing so,” muttered Nat, his face
suddenly expressing gloom; and he marched away.
Jennie and Ned did not observe this. Indeed, it was becoming so
with them that they saw nobody but each other. Their infatuation was
so plain that sometimes it was really funny. Yet even Tavia, with her
sharp tongue, spared the happy couple any gibes. Sometimes when
she looked at them her eyes were bright with moisture. Dorothy saw
this, if nobody else did.
However, the trip to western Pennsylvania was very pleasant,
indeed. Dorothy posed as chaperon, and the boys voted that she
made an excellent one.
The party got off gaily; but after a while Ned and Jennie slipped
away to the observation platform, cold as the weather was, and Nat
plainly felt ill at ease with his cousin and Tavia. He grumbled
something about Ned having become “an old poke,” and sauntered
into another car, leaving Tavia alone with Dorothy Dale in their
compartment. Almost at once Dorothy said to her chum:
“Tavia, dear, are you going to let this thing go on, and become
worse and worse?”
“What’s that?” demanded Tavia, a little tartly.
“This misunderstanding between you and Nat? Aren’t you risking
your own happiness as well as his?”
“Dorothy——”
“Don’t be angry, dear,” her chum hastened to say. “Please don’t. I
hate to see both you and Nat in such a false position.”
“How false?” demanded Tavia.
“Because you are neither of you satisfied with yourselves. You are
both wrong, perhaps; but I think that under the circumstances you,
dear, should put forth the first effort for reconciliation.”
“With Nat?” gasped Tavia.
“Yes.”
“Not to save my life!” cried her friend. “Never!”
“Oh, Tavia!”
“You take his side because of that letter,” Tavia said accusingly.
“Well, if that’s the idea, here’s another letter from Lance!” and she
opened her bag and produced an envelope on which appeared the
cowboy’s scrawling handwriting. Dorothy knew it well.
 “Oh, Tavia!”
“Don’t ‘Oh, Tavia’ me!” exclaimed the other girl, her eyes bright
with anger. “Nobody has a right to choose my correspondents for
me.”
“You know that all the matter is with Nat, he is jealous,” Dorothy
said frankly.
“What right has he to be?” demanded Tavia in a hard voice, but
looking away quickly.
“Dear,” said Dorothy softly, laying her hand on Tavia’s arm, “he told
me he—he asked you to marry him.”
“He never!”
“But you knew that was what he meant,” Dorothy said shrewdly.
Tavia was silent, and her friend went on to say:
“You know he thinks the world of you, dear. If he didn’t he would
not have been angered. And I do think—considering everything—
that you ought not to continue to let that fellow out West write to you
——”
Tavia turned on her with hard, flashing eyes. She held out the
letter, saying in a voice quite different from her usual tone:
“I want you to read this letter—but only on condition that you say
nothing to Nat White about it, not a word! Do you understand,
Dorothy Dale?”
“No,” said Dorothy, wondering. “I do not understand.”
“You understand that I am binding you to secrecy, at least,” Tavia
continued in the same tone.
“Why—yes—that,” admitted her friend.
“Very well, then, read it,” said Tavia and turned to look out of the
window while Dorothy withdrew the closely written, penciled pages
from the envelope and unfolded them.
In a moment Dorothy cried aloud: