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2.5. Adjusted prices are given by P̄3 = P3 = $5.40,
D3
P̄2 = 1− P2 = P2 = $4.80
P2

and
D2 D3 0.40
P̄1 = 1− 1− P1 = 1− 4.00 = $3.60.
P1 P2 4.00

7
8 2 Solutions for Chapter 2

2.6. (a) The single-period return at time t is given by

P + Dt P + αPt−1 Pt
Rt = t −1= t −1= − 1 + α.
Pt−1 Pt−1 Pt−1

(b) Let P̄t , t = 0, 1, 2, . . . , T denote the sequence of adjusted prices. Then P̄T = PT ,
DT
P̄T −1 = 1 − PT −1 = (1 − α) PT −1 ,
PT −1

DT DT−1 2
P̄T −2 = 1− 1− PT −2 = (1 − α) PT −2
PT −1 PT −2

and so on. The general relationship is

P̄T −k = (1 − α)k PT −k .

2.7. Consider

Cov(Yt + Xt , Ys + Xs ) = Cov(Yt , Ys ) + Cov(Xt , Xs ) + Cov(Yt , Xs ) + Cov(Ys , Xt ).

Let γY denote the covariance function of {Yt : t = 1, 2, . . .} and let γX denote the covariance
function of {Xt : t = 1, 2, . . .}. Since these processes are both weakly stationary,

Cov(Yt + Xt , Ys + Xs ) = γY (|t − s|) + γX (|t − s|) + Cov(Yt , Xs ) + Cov(Ys , Xt ).

However, since we do not know anything about the covariance of Yt and Xs , it does not follow
that the process Y1 + X1 , . . . is weakly stationary. For instance, if Yt and Xs are uncorrelated
for all t, s, then it is weakly stationary. However, if the correlation of Yt and Xs is 1/2 if
t = s = 1 and 0 otherwise, then the process is not weakly stationary.

2.8. (a) The mean function is given by

E(Yt ) = E(Xt − Xt−1 ) = E(Xt ) − E(Xt−1 ) = 0

and the variance function is given by

Var(Yt ) = Var(Xt − Xt−1 ) = Var(Xt ) + Var(Xt−1 ) − 2Cov(Xt , Xt−1 ) = 2
− 2γ(1).
2σ

(b) The covariance function is given by

Cov(Yt , Ys ) = Cov(Xt − Xt−1 , Xs − Xs−1 )

= Cov(Xt , Xs ) + Cov(Xt−1 , Xs−1 ) − Cov(Xt−1 , Xs ) − Cov(Xt , Xs−1 )
= 2γ(|t − s|) − γ(|t − s − 1|) − γ(|t − s + 1|).
2 Solutions for Chapter 2 9

(c) The mean and variance functions of the process are constant. Consider the term in the
covariance function
γ(|t − s − 1|) + γ(|t − s + 1|).
If t = s this is 2γ(|1|) = 2γ(|t − s| + 1). If t ≥ s + 1, then

γ(|t − s − 1|) + γ(|t − s + 1|) = γ(t − s − 1) + γ(t − s + 1) = γ(|t − s| − 1) + γ(|t − s| + 1).

Similarly, if t ≤ s − 1,

γ(|t − s − 1|) + γ(|t − s + 1|) = γ(s + 1 − t) + γ(s − 1 − t) = γ(|t − s| + 1) + γ(|t − s| − 1).

It follows that the covariance of Yt , Ys is a function of |t − s| and, hence, the process is

weakly stationary.

2.9. (a) E(Xt ) = E(ZZt ) = E(Z)E(Zt ) = 0; hence, the mean function is 0. Let µ = E(Zt )
and σ 2 = Var(Zt ). Since E(X 2t) = E(Z 2 Z 2t) = E(Z 2 )E(Zt2 ) = (σ 2 + µ2 ), the variance
function of the process is σ 2 + µ2 .
(b) Since E(Xt ) = 0 for all t,

Cov(Xt , Xs ) = E(Xt Xs ) = E(Z 2 Zt Zs ) = E(Z 2 )E(Zt Zs ) = 0.

(c) Since the mean and variance functions are constant and the X1 , X2 , . . . are uncorrelated,
it follows that {Xt : t = 1, 2, . . .} is a white noise process. Hence, it is also weakly
stationary.

2.10. Since E(rt ) does not depend on t, clearly E(r̃t ) does not depend on t. Let σ 2 = Var(rt )
and consider Var(r̃t ). Using the fomula for the variance of a sum,
X
Var(r̃t ) = 21σ 2 + 2 Cov(r̃21(t −1)+i , r̃21(t−1)+j )
i<j

where the sum in this expression is over all i, j from 1 to 21 such that i < j. Note that, since
{rt : t = 1, 2, . . .} is weakly stationary,

Cov(r̃21(t−1)+i , r̃21(t−1)+j ) = γ(|i − j|)

where γ(·) is the autocovariance function of {rt : t = 1, 2, . . .}. It follows that Var(r̃t ) does
not depend on t.
Now consider Cov(r̃t , r̃s ) for t = s. Note that
21 X
X 21
Cov(r̃t , r̃s ) = Cov(r21(t −1)+j , r21(s−1)+i ).

j=1 i=1

Since, for any i, j,

Cov(r21(t−1)+j , r21(s−1)+i ) = γ(|21(t − s) + j − i|)

10 2 Solutions for Chapter 2

for any j = 1, 2, . . . , 21,

21 X
X 21
Cov(r̃t , r̃s ) = γ(|21(t − s) + j − i|),
j=1 i=1

which clearly depends on t, s only through t − s. By symmetry of the covariance operator,

21 21 21 21
XX XX
γ(|21(t − s) + j − i|) = γ(|21(s − t) + j − i|)
j=1 i=1 j=1 i=1

so that Cov(r̃t , r̃s ) depends on t, s only through |t − s|. It follows that {r̃t : t = 1, 2, . . .} is
weakly stationary.

2.11. Since E(Xj ) = µ, j = 1, . . . , n,

k+w
1 X 1
E(Yk ) = E(Xj ) = wµ = µ, k = 1, . . . , n − w.
w j=k+1 w

Since X1 , . . . , Xn are independent with Var(Xj ) = σ 2 , j = 1, . . . , n,

k+w
1 X 1 12
Var(Yk ) = 2
Var(Xj ) = 2 wσ = σ , k =2 1, . . . , n − w.
w j=k+1 w w

Consider Cov(Yi , Yk ), where i < k. If k > i + w, then Yi and Yk have no terms in common so
that Cov(Yi , Yk ) = 0. Otherwise, the sums
Xi+w X
k+w
Xj and X`
j=i+1 `=k+1

have terms Xk+1 , . . . , Xi+w in common so that

i−k+ w 2
Cov(Yi , Yk ) = σ .
w2

Since E(Yk ) and Var(Yk ) are constant and Cov(Yi , Yk ) depends only on k − i, it follows that
the process Y1 , . . . , Yn−w is weakly stationary with mean function µ and variance function
σ 2 /w.
The correlation of Yi and Yk is
((i−k+ w)/w 2 )σ 2 k−i
= 1−
σ /w
2
w
so that the correlation function of the process is
 |h|
ρ(h) = 1 − , h = 1, 2, . . . .
w
2 Solutions for Chapter 2 11
2.12. (a) Let µX = E(Xt ), σ 2X = Var(Xt ), µY = E(Yt ), and σ 2Y = Var(Yt ). Then

E(Xt + Yt ) = E(Xt ) + E(Yt ) = µX + µY , t = 1, 2, . . . ,

Var(Xt + Yt ) = Var(Xt ) + Var(Yt ) = σ 2 + σ 2 , t = 1, 2, . . .
X Y
and for t = s,

Cov(Xt + Yt , Xs + Ys ) = Cov(Xt , Xs ) + Cov(Xt , Ys ) + Cov(Yt , Xs ) + Cov(Yt , Ys ) = 0.

It follows that {Xt + Yt : t = 1, 2, . . .} is a weak white noise process.

(b) Using the same notation as in part (a),

E(Xt Yt ) = E(Xt )E(Yt ) = µX µY , t = 1, 2, . . . ;

note that
E{(Xt Yt )2 } = E(X 2 )E(Y 2 ) = (µ2 + σ 2 )(µ2 + σ 2 )
t t X X Y Y

so that
Var(Xt Yt ) = (µ2 + σ 2 )(µ2 + σ 2 ) − µ2 µ2 , t = 1, 2, . . . .
X X Y Y X Y

Similarly, for t = s,
E(Xt Yt Xs Ys ) = µX µY µX µY = µ2X µ2Y
so that
Cov(Xt Yt , Xs Ys ) = µ2 µ2 − (µX µY )2 = 0.
X Y

It follows that {Xt Yt : t = 1, 2, . . .} is a weak white noise process.

2.13. (a) The following R commands may be used to download the necessary price data.

> library(tseries)
> x<-get.hist.quote(instrument="PZZA", start="2012-12-31", end="2015-12-31",
+ quote="AdjClose", compression="d")
> pzza0<-as.vector(x)

(b) The returns corresponding to the prices downloaded in part (a) may be calculated using
the commands

> length(pzza0)
[1] 757
> pzza<-(pzza0[-1]-pzza0[-757])/pzza0[-757]

(c) The summary statistics for the returns are

> summary(pzza)
 Min. 1st Qu. Median Mean 3rd Qu. Max.
-0.1210 -0.0074 0.0010 0.0011 0.0097 0.0804
12 2 Solutions for Chapter 2

Time Series Plot of Daily Returns on Papa John's Stock

0.05
0.00
Daily Return

−0.05
−0.10

0 200 400 600

Time

FIGURE 2.1
Plot in Exercise 2.13

(d) The time series plot of the returns may be constructed using the commands

> plot(pzza, type="l", xlab="Time", ylab="Daily Return")

> title(main="Time Series Plot of Daily Returns on Papa John’s Stock")

The plot is given in Figure 2.1.

2.14. (a) The following R commands may be used to download the necessary price data.

> library(tseries)
> x<-get.hist.quote(instrument="PZZA", start="2010-12-31", end="2015-12-31",
+ quote="AdjClose", compression="m")
> pzza0<-as.vector(x)

(b) The returns corresponding to the prices downloaded in part (a) may be calculated using
the commands

> length(pzza0)
[1] 61
> pzza.m<-(pzza0[-1]-pzza0[-61])/pzza0[-61]

(c) The summary statistics are

2 Solutions for Chapter 2 13

> summary(pzza.m)
Min. 1st Qu. Median Mean 3rd Qu. Max.
-0.1780 -0.0072 0.0216 0.0265 0.0696 0.1890

(d) The time series plot of the returns may be constructed using the commands

> plot(pzza.m, type="l", xlab="Time", ylab="Monthly Return")

> title(main="Time Series Plot of Monthly Returns on Papa John’s Stock")

The plot is given in Figure 2.2.

Time Series Plot of Monthly Returns on Papa John's Stock

0.2
0.1
Monthly Return

0.0
−0.1

0 10 20 30 40 50 60

Time

FIGURE 2.2
Plot in Exercise 2.14

2.15. The running means may be calculated and the plot constructed using the following
commands.

> library(gtools)
> pzza.rmean<-running(pzza.m, fun=mean, width=12)
> mean(pzza.m) + 2*sd(pzza.m)/(12^.5)
[1] 0.0677
> mean(pzza.m) - 2*sd(pzza.m)/(12^.5)
[1] -0.0147
> plot(pzza.rmean, type="l", ylim=c(-.02, .07), xlab="Time", ylab="Return")
14 2 Solutions for Chapter 2

> title(main="Running Means for Monthly Returns on Papa John’s Stock")

> lines(1:49, rep(0.0677,49), lty=2)
> lines(1:49, rep(-0.0147,49), lty=2)
The plot is given in Figure 2.3. According to this plot, there is no evidence of non-
stationarity in the returns.

Running Means for Monthly Returns on Papa John's Stock

0.06
0.04
Return

0.02
0.00
−0.02

0 10 20 30 40 50

Time

FIGURE 2.3
Plot in Exercise 2.15

2.16. The running standard deviations may be calculated and the plot may be constructed
using the following commands.
> pzza.rsd<-running(pzza.m, fun=sd, width=12)
> log(sd(pzza.m)) + (2/11)^.5
[1] -2.21
> log(sd(pzza.m)) - (2/11)^.5
[1] -3.07
> plot(log(pzza.rsd), type="l", ylim=c(-3.6, -2), ylab="log of running sd",
+ xlab="time")
> title(main="Log of Running SDs of Returns on Papa John’s Stock")
> lines(1:49, rep(-2.21, 49), lty=2)
> lines(1:49, rep(-3.07, 49), lty=2)
The plot is given in Figure 2.4. According to this plot, there is some evidence of non-
stationarity of the returns. There is a relatively long period of relatively small variability, as
well as brief periods of relatively large variability.
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2 Solutions for Chapter 2 15

Log of Running SDs of Returns on Papa John's Stock

−2.0
−2.5
log of running sd

−3.0
−3.5

0 10 20 30 40 50

time

FIGURE 2.4
Plot in Exercise 2.16

2.17. The autocorrelation function based on the daily returns may be calculated using the
command
> print(acf(pzza, lag.max=20))

Autocorrelations of series pzza, by lag

0 1 2 3 4 5 6 7 8 9 10
1.000 -0.011 -0.013 0.050 -0.013 -0.061 0.005 -0.036 0.062 0.052 -0.007
11 12 13 14 15 16 17 18 19 20
-0.027 0.044 -0.016 -0.023 0.027 0.029 -0.018 0.032 0.008 -0.028
The plot is given in Figure 2.5.
The estimated autocorrelation function based on the monthly returns is given by
> print(acf(pzza.m, lag.max=12))

Autocorrelations of series pzza.m, by lag

0 1 2 3 4 5 6 7 8 9 10
1.000 0.167 -0.009 -0.061 -0.057 -0.179 -0.146 -0.053 0.103 -0.218 -0.064
11 12
0.049 0.015
16 2 Solutions for Chapter 2
Series pzza

1.0
0.8
0.6
ACF

0.4
0.2
0.0

0 5 10 15 20

Lag

FIGURE 2.5
ACF for Daily Returns in Exercise 2.17

The plot is given in Figure 2.6. The autocorrelations are all small and, hence, the results
are consistent with the assumption that the returns are uncorrelated random variables.
Series
pzza.m
1.0
0.8
0.6
0.4
ACF

0.2
0.0
−0.2

0 2 4 6 8 10 12

Lag

FIGURE 2.6
ACF for Monthly Returns in Exercise 2.17
2 Solutions for Chapter 2 17

2.18. The daily returns on Papa John’s stock are stored in the R variable pzza. To construct
a normal probability plot of these data, we may use the commands

> qqnorm(pzza)
> abline(a=mean(pzza), b=sd(pzza))

The plot is given in Figure 2.7. The plot is very similar to the one in Figure 2.11 in the
text; it suggests that the distribution of the daily returns on Papa John’s stock is long-tailed
relative to a normal distribution.

Normal Q−Q
Plot

●
0.05

● ●
●
●●
●●
●●
●●
●●
●●
●
●
●●
● ●
●
●●
●
●●●
● ●
●
●●●
●●●
●
●●●●
●●●●
●●●
●●
●●
● ●●
●●●
●●●●
●●
●●
0.00

●
●
●●●●
●●
●●●
●
●
●●
Sample Quantiles

●
●●
●
●
●●●
● ●●
●●●
●
●●
● ●●
●●●
●● ●●●
●●
●●●
●●●●●
●
●
●
●
●●●●
●
●●●●
●
●●●
●
●●
●●
●●
●
●●
●
●
●●●
●
−0.05

●
●●
●

●
−0.10

−3 −2 −1 0 1 2 3

Theoretical Quantiles

FIGURE 2.7
Q-Q Plot for Daily Returns in Exercise 2.18

The monthly returns on Papa John’s stock are stored in the R variable pzza.m. To
construct a normal probability plot of these data, we may use the commands

> qqnorm(pzza.m)
> abline(a=mean(pzza.m), b=sd(pzza.m))
The plot is given in Figure 2.8. The plot suggests that the distribution of the monthly
returns on Papa John’s stock is more nearly normal than is the distribution of daily returns,
although there is some evidence of asymmetry, with a slightly-long left tail.
18 2 Solutions for Chapter 2

Normal Q−Q
Plot
0.2

●
●

●
●
●● ●
0.1

●
●●

●●
●●●
●●●
Sample Quantiles

●●●
●●
●●●●●●●
●●●●●
●●●
0.0

●●●●
●●●●
●
●●
●
●
●●
●
●
●
−0.1

−2 −1 0 1 2

Theoretical Quantiles

FIGURE 2.8
Q-Q Plot for Monthly Returns in Exercise 2.18
Exploring the Variety of Random
Documents with Different Content
 Slowly the lids of Miles Hathaway moved twice. "No."

"And you think I'm right to go? It's the only thing to do? We'll lose
everything, for Pontifex will loot the wreck and be gone before we could
get back here and have the cutter after him. But isn't it the only thing to
do?"

"Yes," said the eyes of Miles Hathaway.

CHAPTER X

THE WRECK

From Unalaska to the position indicated upon the chart as the resting-
place of the John Simpson was, in the rough, six hundred knots—nearly
seven hundred miles.

When Tom Dennis wakened, the morning after the Pelican tacked out of
the Unalaska channel, he found that she had, with the audacity of all
whaling ships, run through Unimak Pass in the dark and was now tearing
across the North Pacific at an eight-knot clip, with a stiff south-easter
rolling her along bravely.

Dennis realized full well that he must avoid all appearance of suspicions
having been awakened in him. When at breakfast Mrs. Pontifex remarked
upon the blessed relief of having the cook aboard, Dennis quite ignored the
subject therefore, conscious that Ericksen was watching him with keen and
predatory gaze.

"And when shall we make that position, Skipper?" he asked.

Pontifex shrugged. "If this breeze holds, it's a three-day run for us.
Barring a dead calm, we'll be on the spot—let's see, this is Saturday; we'll
be on the spot Tuesday morning without fail. Eh, Mr. Leman?"

"Easy, sir. Had we better overhaul that diving-tackle, sir?"

"Yes. Break it out to-day. Bo'sun Joe, rig up a derrick for'ard to-day;
chances are we'll be able to lay close enough to the wreck to swing the stuff
directly aboard, and we'll not want to waste time. A south-easter might lay
us up on those islands. Ever been diving, Mr. Dennis?"

Dennis nodded. "Twice. Never at sea, but in Lake Michigan."

"Then we'll have a new sensation for you, if you like." Pontifex smiled
cruelly.

"Bo'sun Joe and I are the only ones aboard with any experience, and if
you care to take a shift with us, we'll be glad."

"I'm in for anything that'll make me useful," said Dennis. "You think the
wreck is still on the rocks where we can reach it, then?"

"We're gambling on it," returned Pontifex curtly.

The wind held, and the old whaler blew down the miles of westering
with every stitch of canvas taut as a drumhead. That afternoon Tom Dennis
got a good straight look at the new cook—a most disreputable little man,
dirty and slouchy in the extreme. Gone were the trim mustachios, gone was
all the natty air; but the man was the same who had spilled a vial of
chloroform in the Chicago room of Tom Dennis. There was no doubt about
it.

Dennis, however, said nothing; later, when Corny introduced the cook as
Frenchy, he shook hands and was very pleasant, and if Dumont suspected
anything, his suspicions were set at rest by Dennis' air of careless non-
interest.

Upon the following day the brigantine was still tearing along with a
swirl of water hissing under her counter. Off to the north the islands showed
their mountain-tips against the sky, blue and continuous as some distant
mainland. Talking with the mates and boat-steerers and Kanakas, Tom
Dennis was entertained with many stories of those islands: how fox- and
seal-farmers were scattered through the group; how small launches cruised
the entire length of the island chain with impunity; how in time to come
there would be a thriving island population where now were empty
stretches of land or scattered communities of miserable natives.

And there were other and more ominous tales: tales of Boguslav and
Katmai, of islands that came and went overnight, of oil-soaked whalers
caught under descending showers of hot ash and burned to the water's edge.
There were tales of seal-poaching, of poachers who fought each other, of
Yankees who fought Japs; and these tales verged upon the personal. Nods
and winks were interchanged when Bo'sun Joe told about "men he had
known", or when black Manuel Mendez related exploits of which "he had
heard". Tom Dennis gained some fine material for feature-stories—but it
worried him. He began to realize that these men among whom he had fallen
were, so far as their natures were concerned, no better than pirates.

Then, upon the evening of the second day, came the affair which proved
that all restraint was now loosed.

Darkness was falling, and having no particular longing for the society of
the Missus and Pontifex, in the stern cabin, Dennis was in the waist near the
try-works, listening while Corny spun a whaling yarn to the watch. The
yarn was broken into by a sudden choking cry, followed by an excited call
in Portuguese. The voice was that of Manuel Mendez who would take the
deck from Mr. Leman in a few moments.

At sound of the cry, Corny whipped out his knife and was gone like a
shadow. Dennis was the first to follow, darting after the black boat-steerer
toward the windward side of the deck, whence the voice had come.

An instant later, Dennis had turned the corner of the try-works. What had
happened he could not tell; but he saw the huge figure of Manuel Mendez
hanging to the mizzen-shrouds, groaning faintly. Close by, the insignificant
little cook was facing the glittering knife of Corny—facing it with bare
hands.

Corny, growling savage Cape Verde oaths, leaped. Swift as light was
Frenchy, darting in and out again, sweeping the knife aside, striking catlike.
Corny staggered back.

At that instant Mr. Leman swept upon the scene, his grey wisps of hair
flying, his long arms flailing. Frenchy, not hearing him, was knocked
headlong into the galley and fell with a tremendous crashing of pots and
pans.

"He keel Manuel!" cried out Corny, retreating from the second mate and
putting up his knife. "He mos' get my eyes—ah, de poor Manuel!"

The giant figure of the bearded black fell limply. Dennis retreated,
feeling sick; for Manuel Mendez had been stabbed with his own knife—
after his eyes had been gouged away. Even for sea-fighting, there was
something horrible about it.

Later, Dennis came upon the steward and two of the miserable white
sailors talking near the forecastle scuttle. The steward was describing what
had happened.

"Joked 'im, the mate did; chaffed 'im abaht some woman. Bli' me!
Frenchy was hup and at 'im like this." And the Cockney held the two first
fingers of his right hand forked and aloft. "Tried to jerk at 'is knife, 'e did,
but Frenchy hup an' took if first—ugh! 'Orrible it was. And now the
Capting, 'e'll 'ang Frenchy."

Somebody guffawed in the darkness.

"Hang Frenchy? Not him! Frenchy an' the Skipper have sailed together
for years, they tell me. Hey, mates?"

"You bet," came a response. "Skipper don' dast hang him, I guess."
 To Dennis it was rankly incredible; but it was true. In the morning
Manuel Mendez, who would smile no more his white-toothed hungry smile,
was sent overside with a chunk of coal sewed at his feet; and as the body
was committed to the deep, Frenchy leaped to the rail and sent a bucket of
slush over the canvas. An old whaling custom, this, to keep the dead man's
ghost from following the ship. But Frenchy remained untouched for his
crime. If there were any inquiry or punishment, Dennis never heard of it.
The ship's routine pursued its usual course, Ericksen being advanced to the
position of second mate, Leman to that of first mate.

One man aboard, however, did not forget the happening; and this was
Corny, the compatriot of the murdered mate. More than once, Dennis saw
Corny's eyes follow Frenchy about the deck with a black, murderous look.

These things, however, swiftly were forgotten in the rumoured vicinity

of the wreck; and since everyone aboard either knew, or had guessed, the
import of this strange cruise, the ship hummed like a beehive with
speculation and gossip. At noon, with the remarkable keenness which
distinguishes whaling skippers, Captain Pontifex completed his
observations and then laid out a new course, stating that it would bring
them under the lee of the island at four bells in the morning watch, at which
time the brigantine was to be hove to and await daylight.

Tom Dennis was the only one aboard, except Captain Pontifex and the
Missus who did not sleep by watches. At dinner that night the skipper
broached a bottle of wine, and sent forward a tot of grog for all hands;
suppressed excitement ruled the ship, even the gentle Kanakas breaking into
wild native songs until suppressed by the Skipper's order. After an evening
of much talk, mainly about the various methods of raising sunken treasure,
Dennis turned in.

With the morning came disenchantment. Dennis had dreamed of gold-

mad sailors, of wild haste, of everything forgotten save the proximity of
sudden riches. But once on deck he found things very different. The Pelican
was standing across the end of a barren rocky island; just beyond and ahead
of her was a long scooped-out depression in the rocky shore, and in the
centre of this depression lay the wreck of the Simpson. The seamen were
attending strictly to their positions and duties; there was no hilarious ring of
voices, and everything was about as romantic as a visit to a coaling-station.

But the John Simpson was there—no doubt about it!

Her stern, apparently wedged in among a nest of rocks, stood up at a

sharp angle, the deck not quite awash but running down into the water
swiftly. The aftermast stood a broken stump. At some distance showed the
foremast, likewise broken. Dennis turned to Pontifex and the Missus who
stood beside him.

"That foremast seems a long distance away," he said. "Doesn't look

natural."

"Broke in two," vouchsafed the Missus curtly. Pontifex nodded.

"That's it," he stated with conviction. "Fore part lays in deep water—
eight or ten fathom, probably. Look at her stern. See the water a-drip? She's
well covered at high tide: just now the tide's out. No wonder she broke!"

"Looks as if we'd anchor right close to her fore-hatch," said the Missus.

Ericksen, with a whaleboat and hand-line, was engaged in taking

soundings of the position. Suddenly a savage exclamation escaped Pontifex
who had been scrutinizing the visible stern of the wreck through a pair of
binoculars.

"Take charge, Mr. Leman," snapped the skipper, then lifted his voice.
"Corny! Lower away—four hands will be enough to row us in. Come on,
Mr. Dennis!"

As Corny's crew leaped to the falls of a forward boat, Pontifex strode

forward, his thin face murderous. Dennis followed him in amazement.

"What's the trouble, Skipper?"

"Come on," responded Pontifex snarlingly. "I'm not sure yet—but if it's
true——"
 Seeing that the Skipper was in no mood for questions, Dennis said
nothing further but followed into the whaleboat. Four Kanakas gave way at
the long oars, and the boat began to slide landward. Pontifex studied the
wreck through his binoculars a moment, then handed the glasses to Dennis.

"Look at it—on the mainmast!"

Puzzled, Dennis focused on the stump of the mainmast. High up, so high
as to be well beyond reach, he discerned a small object; it looked like a bit
of board nailed to the mast.

"Is that writing on it?" he exclaimed, lowering the glasses.

Pontifex nodded sourly. "Probably. We'll soon see."

Boatswain Joe's boat, which had finished its survey and was heading for
the ship, passed within hail. Pontifex transmitted word to Mr. Leman by
Ericksen, ordering the Pelican laid as close alongside the fore-hatch of the
wreck as the depth would allow. Bo'sun Joe reported that the fore-part of
the Simpson lay in nine fathoms, with fair holding-ground for the anchors,
and that the whaler could crowd alongside her easily.

As their boat drew in, Tom Dennis could see that the stern of the wreck
must indeed be completely submerged at low tide; this was attested by the
barnacles and weedy growths covering the rails and decking. But it was the
square bit of plank nailed to the mast which drew his gaze and that of the
Skipper.

"Ah!" cried Pontifex, with a furious oath. "Look at that, Dennis! A

painted sign!"

Taking the glasses, Dennis could indeed make out that the board
appeared to bear words or characters—and to his eye they were Japanese.
At this query, the skipper swore again.

"Aye, the yellow scum! They swarm around the islands, raiding fox-
farms and poaching or trading according as they dare. One of their boats
happened along here, blast the luck, and saw the wreck; posted a sign to
warn off their own countrymen, and went for help. They came at high water
and didn't wait for ebb tide. Notice where that sign is, up there? Way
enough, Corny; we don't want to board her."

The boat swung around on idle oars, twenty feet from the rocks that held
the stern of the Simpson. Dennis scrutinized the board carefully, then
handed the glasses to Pontifex.

"It's tough luck, Skipper," he said quietly. "To think that she lay here
undiscovered for over two years, then was found only a week or so before
we came!"

"A week?" Pontifex stared at him with flaming eyes. "How d'ye know
that?"

"Focus up on those nail-heads in that board. They're rusty, of course, but

the rust hasn't gone into the wood around them—see? And the black paint
on the board looks pretty glossy when the sunlight catches it right."

"Right you are!" commented the Skipper with a growl.

"What are you going to do about it?"

"Do about it!" Pontifex looked venomous. "Fight, by the lord Harry!
This is salvage. Whoever can hold hardest, gets. Let me get the old brig
anchored in here, and I'd like to see any dirty yellow poachers pry my
fingers loose!"

Dennis remembered the big gun-rack in the cabin, and said no more.
Rifles can be used for other purposes than killing seals and bears.

"We'll be all snug by breakfast-time," added Pontifex, watching the

Pelican come slowly in as her top canvas fluttered down. "Then we'll set to
work pronto. We don't want a gale to catch us here, either. More likely to
catch fog, anyway."

And the skipper made good his words. Before seven bells were struck at
7.20 that morning* the Pelican was berthed alongside the fore half of the
Simpson and all was made snug below and aloft. Captain Pontifex called all
hands and made an address.

* Usually struck at this time so the relieving watch may breakfast first.

"The Japs have been here, and they'll be back," he said curtly. "There's
salvage money ahead of everybody, men, so we're going to pitch in and
work day and night, watch and watch. The day watches will devote
themselves to getting the stuff aboard, because a diver can't remain down
very long in this water: all hands will have a chance at going down. The
night watches will stow the stuff below and make a clear deck before
morning.

"While we're lying here, we'll redistribute the watches. Mr. Leman and
Mr. Ericksen will take the port watch, I'll take the starboard watch with Mr.
Dennis and Corny. One man from each watch will be set ashore—that high
point of rock makes a better lookout perch than the crosstrees—to watch for
the approach of any craft whatever. And mark this, men! If you don't report
back to the beach when the watches are changed, I'll come ashore and hunt
you down with a shotgun! That's all. The starboard watch will keep the
deck."

Did the port watch go below? Not yet! Breakfast was a formality, a
hurriedly bolted affair; ten minutes later one of the four white seamen was
set ashore as lookout, and the Skipper fell to work.

"You'll mind the pumps my watch, my dear," said Pontifex to the

Missus. "When I'm down, I'll trust nobody else to watch my air supply. Do
you want to go down, Mr. Dennis?"

"You bet," and Dennis laughed. "I'd like nothing better!"

A complete double set of diving apparatus was already awaiting them.

 CHAPTER XI

THE ENEMY COMES

The water was cold—cold and clear and biting as ice. To Dennis, inside
the rubber suit, it seemed as though he had been plunged bodily into liquid
ice. Through the thick glass of the helmet he could see the green
translucence all around him, clear and empty and shimmering with the
sunlight from above. For himself, as for the other green hands at the work,
he knew that a long submersion would be impossible.

Darker grew the water underfoot as the light from above was diffused to
the greater depths. Dennis had gone down from the quarter-deck of the
Pelican; this, according to the soundings, would bring him to the sea-floor
at the after end of the front half of the wreck. He could thus see whether the
contents of the Simpson's main-hold, aft of which she had broken in two,
lay piled upon the sea-floor between the two sections of the wreck. If so,
the work of salvage would be greatly hastened. Pontifex, in the meantime,
was exploring the bows and fore hatch of the wreck.

Down went Tom Dennis into the depths, in a seemingly interminable

descent. Suddenly a huge shadowy black mass seemed rushing at him from
below, and swift terror sent his heart throbbing; for he felt very helpless.
Then he remembered—the wreck, of course! The regular "click-click" of
the pumps, sounding down through his air-valves, reassured and heartened
him. An instant later he stood upon the bottom.

He wondered that there was very little growth or algae to obstruct him,
until he realized that what little algae he could see were bending far over in
the grip of a fairly strong sub-surface current, which, combined with the
intense coldness of the water, had a discouraging effect upon marine
growths. The bottom was not smooth, however, being extremely rocky and
uneven.

The Simpson had apparently broken just abaft the engine-room, and the
fore half lay with her sloping deck toward the shore. Dennis had come to
the bottom close to her keel, and he was no long time in discovering that
spilled over the sea bottom lay almost enough cargo to fill up the Pelican.

Having brought a line ready prepared, Dennis got the bight around a
packing-case plastered with barnacles. As he was drawing it taut, came a
jerk upon his lifeline—the signal that his agreed "stint" was up. Having no
wish to be crippled or laid on the sick list, Dennis responded, and at once
was hauled off the bottom.

His ascent was very slow, and of necessity; for a quick jerk up from the
depths would ruin any man alive. The progression had to be gradual and
halting.

On the way up, it occurred to him for the first time that he was literally
in the hands of his enemies!

The moment he was in the morning sunlight again, Tom Dennis forgot
his uneasiness and laughed at the terror which had seized upon him in the
depths. It was absurd.

He did not go down again that morning, however.

Dennis was nearly clear of his diving-suit before the Skipper's copper
helmet broke the water amidships. Pontifex reported that the bow plates of
the wreck were torn out, and he had lined two cases; these were brought in,
together with that which Dennis had secured, and were at once smashed
open. The two cases from the fore hold proved to contain ammunition; that
from the main hold, two excellently packed machine-guns.

This was enough for Pontifex, who at once conjectured that the main and
after holds of the Simpson had contained the bulk of the machine-guns, the
most valuable part of her cargo. Corny at once broke out a kedge, lowered it
to the stern of his boat and hung it there by a stop to the ring, then started
off to the stern of the Simpson. Once laid among the rocks in the shallower
water there, the crew tramped around the capstan while Bo's'n Joe lifted
"Windy weather! Stormy weather!" into a resounding chorus.

At last it was done. The Pelican, all reconnaissance over, lay snugly
ensconced between the two sections of the John Simpson. The off watch
went below, curiosity appeased by the barnacled unromantic packing-cases;
and Captain Pontifex fell to hard work, going down again almost at once.

Dennis took charge of the after pumps, while the Missus herself took the
wheel of those in the waist. The Kanakas, only prevented from diving naked
by the depth and the icy coldness of the water, were eager to try the diving-
suits. As each man went down in turn, he carried four lines, making them
fast to as many cases. Thus, despite the brief diving spells, in no long time
the cases began to come aboard as fast as they could be handled.

When the watch knocked off at eight bells, noon, Dennis was amazed by
the number of cases which had come aboard. He was dead tired, also; the
constant strain of watching the pump gauges and keeping the air at exactly
the right pressure was no light one, and at odd moments he had tailed on to
the lines with the other men.

"I see you're no greenhorn," commented Pontifex at dinner, with a sharp

glance at the hands of Dennis. "Where'd you learn to keep your thumb clear
while hauling a line?"

"Oh, I've knocked around ships a little," Dennis laughed. "Are you going
to stay in this position?"

"Yes. If the Japs come, we're fixed to keep 'em off both ends of the
wreck. Well, think you can go down again this afternoon?"

Dennis nodded. "Sure! I'm supposed to have a bad heart, but I haven't
noticed it."
 As it chanced, however, he did not go down again that day, for during
Mr. Leman's watch the after airhose developed a leak which had to be fixed,
and the second apparatus was consequently out of business until the
following morning. Pontifex, who took the first dog-watch, kept the one
suit hard at work, and all aboard were well satisfied with results.

That night, by the light of a huge flare set atop the try-works, the cargo
was stowed. Shears had to be run up over the hatchways to handle the
heavy cases, and the deck was not washed down until just before the
morning watch. When Dennis came on deck at 4 a.m. the ship was incased
in so heavy a fog that the lookout was withdrawn from the island.

"Dis fog, maybe she keep up a week," grumbled Corny, overhauling the
diving lines. "If de Jap sheep come, den look out!"

The stern of the wreck, which had been hidden at high tide, was again
being uncovered. So thick was the fog that Dennis doubted the possibility
of diving, but his doubts were soon set at rest. Corny and the skipper, each
carrying lines, made a descent, and Corny returned with word that it was a
"cinch".

Pontifex was still down, and Dennis was preparing to get into the suit as
Corny vacated it, when of a sudden the voice of the Missus bit out from the
waist.

"Keep quiet, all hands! Listen!"

Astonished, Dennis obeyed. Corny, beside him, stood with hand cupped
to ear, slowly shaking his head. Nothing was to be heard, The fog was
impenetrable.

"What did she hear?" murmured Dennis. The Cape Verde man shook his
head.

"No telling. But nobody don't fool her—ah! Listen, queek!"

Dennis heard it then—an indistinct and muffled vibration, too slight to

be called a noise, which was felt rather than heard. It came again and again,
an irregular sound.

"It's de sail," said Corny. "De sail flap-flap in de wind—and dere's

somet'ing else goin', too——"

"A boat's engine!" exclaimed Dennis softly.

"Yeou, Corny!" The Missus gave swift command aft. "Call all hands aft
an' tell Mr. Leman to fetch the rifles. Lively yeou!"

Meantime, she was bringing Pontifex aboard, manifestly against his will,
as the signal-line testified. Dennis kicked out of the rubber suit, getting
clear just as Bo's'n Joe came up the companion way. A moment later both
Leman and Corny appeared, each with an armload of rifles interspersed
with shot-guns.

"Strike me blind!" exclaimed Ericksen, pausing beside Dennis, and

listening intently. "If it ain't them Japs—a schooner, likely, beatin' up for the
island under power, and all hands too lazy to take in sail! Aye, that's them."

"But it may be someone else," said Dennis. "A fisherman, perhaps."

Bo's'n Joe gave him a look of pitying scorn from his uptwisted eye. "You
wait an' see!"

Rifles were served out to all aboard, Dennis among the rest, and by the
time Captain Pontifex was up and out of his suit, the ship was ready for
defence. Pontifex heard the news without comment; a rifle under his arm,
he dispatched Corny to the crosstrees to keep watch from there, and ordered
Mr. Leman to stand by with a megaphone.

"Growin' closer, sir," volunteered Ericksen. "Takin' soundings, she is."

The skipper nodded. The fog-muffled thrum of an engine was now

distinctly perceptible, while the slatting of sails told that the approaching
craft was not far off. The fog was thick and steady without a breath of wind
to thin it out.
 "All right, Mr. Leman," said Pontifex suddenly. "Let 'em have it."

Instantly the stentorian tones of Mr. Leman, intensified a thousandfold

by the megaphone, blared out upon the fog.

"Stand off or ye'll run us down, ye lubbers! Keep away!"

From the mist came a shrill thin yell of surprise, followed by an excited
jabbering of many tongues. Clearly the visitors were of foreign origin. Then
a shrill voice lifted in English amid sudden silence as the thrumming motor
ceased its noise.

"'Ello! Oo are you?"

"Very good, Bo's'n Joe," said the skipper calmly. "She'll be in the centre
of the fairway, most likely—about two points abaft our beam."

Ericksen lifted to his shoulder the shotgun with which he had armed
himself, and two smashing reports blasted into the fog as he fired both
barrels. A shrill clamour of voices made answer, followed by instantaneous
and blanket-like silence. Then came a single sullen plunge, as of some
heavy object striking the water.

"Ah!" remarked Pontifex, staring into into the fog as though he could see
through it. "Very good, Bo's'n—you reached 'em. They've anchored, and
they'll lie doggo until the fog lifts. They know we'll waste no bullets if we
can't see them."

"Reached them?" repeated Dennis. "You don't mean that Ericksen tried
to hit them?"

Bo's'n Joe guffawed, and Pontifex gave Dennis a peculiar smiling look—
a very diabolical look.

"My dear Mr. Dennis, that's exactly what he did. And some yellow
beggar caught the pellets in his hide—in other words, got the hint! They'll
try no games until they can see what they're up against."

"But where are they?" demanded Dennis, giving up any expostulation.

 "About six fathoms away, I should say—not more than fifty feet,
certainly." The skipper glanced at Mr. Leman, who nodded confirmation.
"They might be less than that, and we couldn't see them, nor they us. After
the fog lifts—well, then there'll be fun!"

"They'll fight?"

Pontifex caressed his moustache and smiled softly.

"More or less—they'll try some deviltry on us first. Lay out some

harpoons and shoulder-guns, Mr. Leman; we'll have a few tonite bombs
ready. Corny, bring in those cases that I lined before I came up. We'll get
back to work directly."

Dennis saw no good in making protests. There was no law here save that
of the strongest, and Pontifex was dead right in carrying the fight to the
enemy, aggression being nine points of fighting law. Besides, Pontifex was
manifestly enjoying the prospect, and just at present Dennis was playing a
waiting game and had no desire to bring about any crisis.

There being no time for more workman-like methods, an anvil and a

cold-chisel were brought aft, with half a dozen harpoons, and two of the
hands were set to work cutting through the iron harpoon hafts, just behind
the spear-points. Now, modern whaling is carried out almost exactly as the
New Bedford whalers did it a century ago, except for a small brass cylinder
fastened to the haft of the harpoon. In this cylinder is carried a tonite bomb.
Whether the harpoon be flung by hand or be fired from a shoulder-gun, it
carries the bomb into the whale—and that ends the whale.

The points off the six harpoons, Mr. Leman made ready a couple of
shoulder-guns and loaded the cylinders of the harpoons with bombs. As he
observed, they might or they might not do much damage, but they would
make a big noise when they hit; and with this intent the weapons were laid
aside to be used in case of any aggressiveness on the part of the enemy. For
the present, at least, the Japs seemed to be maintaining a careful silence.

"Well, Mr. Dennis," said Pontifex at length, "I'm going to resume my

interrupted job; I guess I can lay a few more lines before quitting. Who's
going down on your lines?"

"Why, I will—if you think it's safe," returned Dennis. "You're not going
to knock off work, then?"

"On account of that yellow scum? I should say not!" exclaimed Pontifex.
"Mr. Leman will do any fighting that's necessary while I'm down; and the
Missus will see to it that nothing fouls our lines. But send someone else if
you don't like the idea."

"Oh, it suits me," answered Dennis, knocking out his pipe. "I dare say
there's no great risk, but it would feel sweet if the ship left us prowling on
the bottom, eh?"

Pontifex grunted and went forward, being swallowed up in the fog that
cloaked everything.

Having learned from Corny that the bottom was pretty dark, but by no
means unsuited to working, Dennis called the steward. Although the little
Cockney was a viperous criminal ashore, he was a faithful soul at sea, and
Dennis had learned that he entertained a strong feeling of responsibility
while watching the pumps.

"Hi, steward!" he called. "Come and give me a hand with this suit—and
bring a couple of Kanakas to run these pumps, too. Corny's busy with the
lines."

"Comin' sir," said the steward's voice, and the Cockney appeared a
moment later.

Meantime, in the waist, Captain Pontifex was engaged in talk with the
cook, while the Missus listened.

"Now's the time, Dumont," said Pontifex, fondling his curled mustache.
"Work right along aft until you get on his line, savvy?"

"Mais oui!" returned Frenchy, his black eyes glittering. "But me, I like
not this diable of a fog! It will be dark under the water."
 "So much the better." And Pontifex smiled his cruel smile. "So much the
better! He thinks I'm going down. Let the steward attend to his pumps—and
we'll blame the steward for what happens. In this murky water he'll not see
you coming down there—you can get on top of him and cut his lines and be
off in a shot. Are you ready or not?"

"Yes!" exclaimed Frenchy, reaching for the diving-suit.

"And watch out for the tide," cautioned the skipper. "It's ebbing strong
and you might lose your bearings if you don't look sharp."

Frenchy grinned, and unstrapped his sheath-knife.

CHAPTER XII

IN THE DEPTHS

As the steward helped pull up the rubber dress about the body of Dennis,
he spoke in a low voice.

"Beg pardon, sir, but hit looks like you 'ad lost your knife."

Dennis glanced down at the deck where his paraphernalia lay. The belt
and sheath were there; but the large knife, a regular part of every diver's
equipment, was missing.

"That's queer!" he said slowly. "Hm! Probably Corny lost the knife and
didn't notice it. Better get me one from the galley, steward: it'll take a
carving knife to fit that big sheath."

"Yes, sir." The steward slipped off into the mist. The two Kanakas stood
at the pump-wheels, shivering in the mist and talking together.
 A moment later the steward reappeared, carrying a long, keenly edged
carving knife. He tried it in the sheath, and it fitted well enough.

"Werry good, sir. All set!"

Dennis liked the little Cockney—he liked the man's thorough

responsibility in his job of watching the pumps. But now, as he helped
adjust the back and breast-pieces, and buckled the belt about his waist, he
felt once more that in this work he was putting himself in the power of his
enemies.

He forced a laugh at the idea; yet it took a supreme effort to conquer his
imagination. They did not want to kill him, of course—but if they did, how
easy in this fog! But that was all nonsense. There was no question of
murdering. The very notion was folly!

Dennis helped the steward adjust the big copper helmet, and the
Cockney screwed it fast into the neck-plate. A moment later, Dennis was
climbing over the rail. The usual diver's shot-line would carry him straight
down, and besides this, a ladder had been slung over the stern to assist in
the ascent. The steward gave him the four lines, attached to the rail at
intervals which would prevent their fouling after being attached to the
cases, and Dennis slipped down into the depths.

As always, the steady and regular clicking of the pumps sounded

through his air valves with reassuring effect. Captain Pontifex had not
provided very up-to-date outfits, with telephones and electric lights and
other frills—for this reason no diving work could be done at night. The suits
were good and dependable, however, lacking only gloves to make them
well adapted to this icy water.

Dennis resolutely dismissed all thoughts of possible danger, and

concentrated his attention upon the work in hand.

As Corny had reported, the water down below was clear enough for
work, but the lack of filtering sunlight made it gloomy, grey, and obscure in
details. When at last Dennis felt his feet touch the bottom, he was forced to
stand for a moment and adjust his eyesight to the altered conditions.
Presently he was enabled to descry objects, and he moved toward the
scattered and far-strewn heaps of boxes which lay between the two sections
of the John Simpson.

Dennis could see nothing of Pontifex at work below, but in the present
obscurity that was not strange. Besides, the divers, from waist and stern of
the Pelican, kept as far apart as possible for fear of the lines fouling.

Now, as he advanced, Dennis thought that he perceived a dimly moving

shape off to his left to seaward; but it vanished almost instantly. It might
have been some fish, he concluded, or a bunch of drifting algae. It was now
hard upon noon, and the tide was fast on the ebb.

With the strange buoyancy which comes to the diver on the bottom,
Dennis took leaps, one after the other, with a boyish delight. He cleared no
ground this way, however, and soon returned to the slow progress afoot;
there was too much danger of losing his balance and burying his helmet in
the ooze as he came down.

Presently he came to an upright crowbar in a heap of boxes, which

Corny had been using to pry loose each case in order to pass the bight of a
line around it. Dennis found two loose boxes and made fast two of his lines;
but without tying himself to the pile, he could not use the crowbar—his
own buoyancy was too great. So, to save time, he passed on to some
scattered cases ahead.

At this juncture, his remaining two lines fouled about his dragging air
hose. When at length he got them extricated and clear, he had great
difficulty in maintaining his balance against the set of the tide. But at length
he got the first line fast to a box, and with the second line he secured
another.

As he straightened up and grasped his safety-line to signal the steward

that he was ready to ascend, he observed a great shadowy mass in the water
ahead. Accustomed to the gloom by this time, he perceived that the mass
was the after-end of the John Simpson, reaching up through the water on a
sharp incline.

He tugged at his line. To his amazement he felt no resistance whatever.

He tugged harder, more sharply—and the line coiled snakily toward him. At
the same instant he heard a sharp click behind his ear; the safety valve in his
helmet had snapped shut. His air-tight hose and his line had been parted!

In this supreme moment, when he faced inescapable death, Tom Dennis

felt none of his previous fear. His brain worked like a clock.

He knew that either from the stern above, or from the water beneath he
had been cut off and left to die. He had been too slow—he had failed to
heed his inward premonitions. And the sheer horror of it was that he would
not die for a comparatively long time. There was sufficient air in his helmet
and in the bellying folds of his rubber suit to sustain life for several
minutes!

What good would this do him? None! What good would it do him to
reach the line he had made fast to boxes? None. This was no accident. The
ends of his lines told him that they had been cut clean, severed. Those
above would disregard any possible signals, would let him perish miserably.
He could depend upon no one. He was trapped, helpless, murdered!

Then suddenly, Dennis perceived something in the water behind him. He

turned.

Not a dozen feet distant, another diver stood there, helmet turned toward
him watching. Through the thick glass Dennis glimpsed keen dark eyes, a
gleam of white teeth; this was not Pontifex at all. Recognition came to him,
and a thin cry escaped his lips—Dumont! Here was the murderer!

Dennis gripped his knife, half-minded to retaliate upon this assassin who
had cut his lines; for in the man's hand he dimly caught the glitter of steel.
But, as Dennis tensed himself for the leap, he checked the movement—
another dim figure had appeared!
 Amazement held Dennis spellbound, incredulous. There had been but
two diving-suits aboard the Pelican; of this he was quite certain. Yet here
upon the sea floor stood three divers!

Dumont—for the second figure was manifestly that of the cook—stood

staring at Dennis as though inviting any hostile movement. But the third
figure suddenly rose in the water with a great leap—rose and threw itself
forward, and went caroming down upon Frenchy, Then the answer came to
Dennis—a diver from the Jap boat! Under shelter of the fog, knowing
themselves unseen, the little brown men had gone to work!

And as he realized this, Dennis saw the figures of the two other divers,
plunging together upon the bottom, abruptly obscured from his sight by a
red mist uprising through the water. With horrified comprehension, Dennis
realized that the murderer, Dumont, had been taken unawares, had been
caught in his own trap—had cut the lines of one man only to have an
unseen enemy spring upon him and stab him to death!

Dennis turned, and with a wild leap left the red-smeared scene behind.

The whole affair, from the moment he had heard his helmet valve click,
had not taken twenty seconds, Already there had sprung into Dennis's brain
the comprehension that he had but one bare slim hope of salvation—almost
subconsciously he was aware of it, and almost upon intuition he leaped
upward through the water. He leaped not toward the Pelican, where he
knew well that no help awaited him, but away from her; he leaped toward
the shattered and sundered afterpart of the John Simpson.

Speed now meant life. He could not reach the shore in time, already—
was it fact or imagination?—he fancied that his breathing was getting more
difficult, the air in his lungs hot and vitiated. There came to him the horrible
thought of a diver leaping about the bottom of the sea, leaping in huge
bounds of twenty feet upward, leaping like a mad crazed animal until the air
in his suit gave out and he dropped head-foremost in the ooze. It was a
frantic thought. Upon the heels of it something tugged at the trailing lifeline
and jerked Dennis down head first.
 Knife in hand, he recovered his balance, thinking that the Jap diver had
pursued him. But the trailing end of his line had caught in some obstruction
—nothing more. With a sobbing breath of relief, Dennis slashed away the
line and bore onward with a high leap.

That bound gained the crushed decking of the John Simpson. The
afterpart of the wreck lay upon a sharply inclined plane, its broken forward
end upon the bottom, the stern high in its nest of rocks. Up that sharp steep
slope crawled Tom Dennis.

To maintain his balance and to keep any foothold upon the slimy decking
was difficult. He clung to the rail with his left hand, slowly working himself
upward. He dared try no leaping here, lest like a rubber ball he fly over the
rail with the seaward current and drop; and if a diver drops thirty feet he is
apt to be crushed all at once into his helmet by the pressure—and it would
not be nice.

"Can't take chances!" thought Dennis, then laughed inwardly at the

notion. Take chances! Why, he was basing his entire hope of salvation upon
chances of which he was totally uncertain! It had swiftly come to him that
by gaining the after end of the wreck, by crawling up her sloping deck to
the stern, he would be out of the water. But would he? How far had the tide
ebbed? He did not know. He could not remember what time the tide had
turned—whether the wreck would be now uncovered or not.

Then there was the fog; another chance. If the fog had only slightly
lessened, so those aboard the Pelican could see stern of the wreck, they
would finish their work with rifles should Dennis emerge. Thus there was a
double chance against him. Should he find himself out of water at the stern
of the wreck, his only hope then would be that the fog still held thick as
ever.

His ears were roaring now, and paining with an ache that thrummed at
each pulse-beat. The air was steadily growing worse; Dennis paused to
press more air up from his billowing suit, and gained momentary relief.
 It occurred to him that he still had one friend aboard the Pelican—the
steward. His knife had been removed purposely; the steward had noticed its
absence; therefore, the little Cockney was not in on the murder-scheme.
Dennis laughed slightly and turned again to his task of climbing.

Dragging himself up that slimy steep decking was hard work, and he
cursed the tremendous weights that held him down; the buoyancy seemed
gone out of him with his weariness. Then, suddenly, he came to a dead halt,
straining his eyes to look upward and ahead, and keen despair went through
him like a knife.

He had gained the after hatchway which was uncovered and yawned in a
black hole to his right. Directly in front of him was the overhang of the
poop—an eight-foot wall which, owing to the position of the wreck,
deserved its name so far as Dennis was concerned. It overhung him; in
order to go up the ladder in front of him, Dennis would have to do it hand
over hand, or not at all!

For a moment he paused. Pains had seized and were racking him. His
throat and lungs felt afire. He knew that he could not last much longer, and
with a frightful effort he flung himself forward; the knife, his sole means of
escape from the diving-suit, he thrust down into the sheath of his belt,
trusting that it would remain there.

Gripping the stairs of the ladder, Dennis hauled himself up. He dared
spare nothing of energy or effort now; he was staking all upon one effort. If
he failed to reach the poop he was gone.

Strangling, gasping spasmodically for the air that burned out his lungs,
he came at last to the end of the ladder. He got his head about it; he could
see the poop-deck there before him, and he writhed desperately over the
edge of the ladder. With all his lightness in the water, he nearly failed at that
moment. For one sickening instant he felt himself going backward and
down—then, heaving upward convulsively, he somehow made it safely. For
a moment he lay weak and helpless.

A spasm of strangulation forced him on. He groped behind him for his
knife, found it, and pressed forward. The water was lighter now—he was
near the top. How near? Unless the stern were clear of the water, he would
be lost. There was blood in his throat; his nose and ears were bleeding. To
his terror, he lost his balance and plunged against the rail, nearly going over.
He gripped the rail and hauled himself onward.

A frightful madness seized him, a convulsive gasping for relief, and he

was near to ripping asunder his diving-suit. His frantic efforts had
exhausted what little oxygen remained; he could press up no more good air
from his suit. Then, suddenly and unexpectedly, he found that some
horrible, deadly, agonizing weight was pressing him down. He could see
only the grey dimness around him; red specks were dancing before his eyes;
that awful weight was oppressing him, and what caused it, he did not know,
unless it were death. He came up against the rounded bulge of the stern-rail.
It was the end. He could go no farther.

"That ends it!" he thought despairingly. "The tide hasn't ebbed enough."

He fell forward, unable to lift the weight of that copper helmet, for the
oppression was crushing him down. He could not make out what that
frightful weight could be, nor did he care. He reached up with his knife, as
he lay there, and determined to end things swiftly. He refused to be longer
tortured.

With a swift, reckless motion he ripped asunder the breast of his diving-
suit.

To his amazement, nothing happened. No water entered. Instead, came a

breath of cold sweet air that literally brought life into his lungs!

Two minutes later he was sitting up, sobbing the good clean air into his
body! He saw then what had happened—what that awful weight had been!
It had been only the weight of his own body and equipment. Unknown to
himself, he had emerged from the water into the dense thickness of the fog.

He had won clear!

 CHAPTER XIII

PONTIFEX PLANS REVENGE

"Strike me blind," observed Bo's'n Joe gloomily, "if they ain't gone an'
got poor Frenchy!"

No one else spoke for a bit. Mr. Leman spat over the rail and stared at
the fog in the direction of the unseen Japanese ship. The Missus had gone to
her cabin when the body was hauled aboard. Captain Pontifex stood looking
down at the form, still incased in its diving-suit; and his pallid cavernous
features were venomous with rage.

"I'd sooner have lost anyone aboard rather than Dumont—except the
Missus," he said softly. "And to think they must have got him just after he
got Dennis."

"Aye," said Bo's'n Joe.

It was very evident how Frenchy had come by his fate. Transfixing his
body, fastened so firmly within him that no easy pull would remove it, was
a long-bladed knife with shark-skin handle—palpably a Japanese knife.

"Well," the Skipper turned away, "see that he's sewed up proper, Mr.
Leman, and we'll bury him shipshape. Attend to repairing that dress, too."

When the skipper had disappeared aft, Bo's'n Joe looked at Mr. Leman.

"What's the Skipper got on his mind? He ain't goin' to stand by and see
Frenchy killed without doin' anything?"

Mr. Leman reflectively tugged his whiskers, and squinted down his
broken nose.

"Not him, Bo's'n—not him! 'Ready to work to-morrow', says he. Just
wait till to-night, Bo's'n! If something don't happen to them Japs, I miss my
guess. Leave it to him and the Missus! If this blasted fog don't break, he'll
show 'em a thing or two."

The Pelican swung idly to her anchors all that afternoon.

It was easy for those aboard her to deduce exactly how Dumont had
come to his end. The knife told the whole story. The flurry at the end of the
lines, Dumont's frantic signal to be hoisted, all explained perfectly that he
had encountered a diver from the enemy ship. The Japs had diving
apparatus, of course.

Sullen resentment and fury filled the Pelican, from skipper to meekest
Kanaka. All aboard had been wildly excited over salvage and treasure;
because of this fact, Pontifex had a solidly united crew behind him in
whatever he might attempt. Frenchy had not been particularly loved, but his
murder showed that the enemy meant business—and in defence of their
treasure-trove the crew of the Pelican were only too anxious to fight.

As the afternoon wore on, the fog thickened rather than lessened. At the
end of the first dog-watch all hands were called and Frenchy was
committed to the deep, with the usual bucket of slush.

Someone observed that there was no chance of laying the ghost of

Dennis in this customary fashion; within five minutes the remark had gone
through the brig. No one cared particularly how Dennis had perished, but
everyone was superstitious in the extreme. Mr. Leman allowed an anxious
frown to disturb his flat countenance, and even the skipper, upon hearing
the rumour, appeared disturbed.

"Not that I give two hoots for any ghost," he confided to the Missus, "but
it makes a bad spirit aboard ship. Nonsense! A ghost doesn't come back,
anyway."

"I've heard 'baout that happening," said the Missus gloomily but firmly.
"And what folks believe in is apt to come true. You mark my words!"

"Then" and the skipper brightened—"they say that a death aboard ship
always brings wind—so we'd better get busy with those Japs before the fog
lifts!"

This latter superstition was equally well known aboard, and predictions
were that before morning the fog would be gone. Within another hour,
however, everybody aboard was too busy to bother further with
superstitions.

When darkness began to fall, with no sign of activity from Captain

Pontifex, open grumbling began to spread along the deck, It was silenced
by the Skipper in person, who appeared and ordered two of the whaleboats
lowered.

"Mr. Leman," he commanded quietly, the entire crew listening tensely,

"you'll take command of one boat. Lay aboard her six of those oil-bags
from the store-room. Muffle the oars. Take a compass and mind your
bearings. Two of you men lay aft, here."

Two of the white hands hastened aft and followed the Skipper down the
companion way. In five minutes they reappeared, struggling beneath the
weight of the pride of the whaling fleet—-the green-striped tea-jar. It was
minus the big scarlet geranium plant, and should have been light; but it
seemed most unaccountably heavy.

"Easy, there!" snapped the Skipper.

"Corny, reeve a rope through that block at the mains'l yard and sling the
jar into the boat—not Mr. Leman's boat, but mine. Bo's'n, lay down there
and place her in the bow."

Ericksen seemed not to relish his task in the least, but he obeyed. In ten
minutes the jar was safely stowed in the other whaleboat; from this boat all
whaling gear was now removed, six oars alone being left.

"In with you, Corny," commanded the Skipper. "You and Ericksen with
four Kanakas will row me out. Mr. Leman, precede us very slowly; when
you sight that Jap, lay that oil on the water and then stand back to pick us
up."

He turned to salute the Missus with a chaste kiss upon the cheek.

"Good-bye, my dear! You insist upon taking the third boat?"

"I reckon I can do as well as yeou," returned the Missus impassively.

"Good luck!"

"Same to you," answered the Skipper.

Six men were at the oars in Mr. Leman's boat, four more in that of the
skipper. Mrs. Pontifex ordered the forward boat down, and the five
remaining men into her. To them she handed rifles, then turned to the
trembling steward.

"I'm leavin' yeou to tend ship," she stated firmly. "There's a shot-gun
beside the helm; if anybody else boards, yeou let fly! No telling but some o'
those Japs might ha' worked araound by the shore—but we'll give 'em
something else to think abaout."

With that, she descended into her boat, compass in hand, ordered her
rowers to give way, and vanished into the darkness of the fog—not
following the Skipper, but departing at a tangent from his course.

The steward hastened to the quarter-deck, secured the shot-gun, and

perched upon the rail.

The Cockney was by no means lacking in acuteness. He had been

cleaning up a muss in the stern cabin for the last half-hour; he knew that
this muss was the debris from several ammunition packets, broken from the
packing-case of ammunition that had been hauled in upon the morning
previous. He knew that the scarlet geranium had been transplanted into a
keg. He knew that this keg had previously been full of gunpowder; he knew
likewise that the skipper had laboriously fashioned a fuse—and that the tide
was now going out.