"the market is not a capricious thing, as you
think. There are signs. I pay attention to a lot of facts, which give
me indications: coupons, the amount shares advance, the calculation of
probabilities; and I compare all these scientific data with empirical
observations that are difficult to explain. In such a situation, events
are what make the least difference to me. Is there going to be a
revolution or a Carlist war?... I am careless about it."

"But this is impossible," Alzugaray used to say. "Excuse me for saying
so, but I don't believe you. You have some secret, and that is what
helps you."

"How fantastic you all are!"' Caesar would exclaim; "you refuse to
believe in the rational, and still you believe in the miraculous."

"No, I do not believe in the miraculous; but I cannot explain your
methods."

"That's clear! Am I to explain them to you! When you don't know the
mechanism of the market! I am certain that you have never considered the
mechanism of the rise produced by the reintegration of the coupon, or
the way that rise is limited to double its value. Tell me. Do you know
what that means?"

"No."

"Well, then, how are you to understand anything?"

"All right, then; explain it to me."

"There's no difficulty. You know that the natural tendency of the market
is to rise."

"To rise and to fall," interrupted Alzugaray.

"No, only to rise."

"I don't see it."

"The general tendency of the market is to rise, because having to fall
eighty _centimos_, the value of the coupon, every quarter, if the market
didn't rise to offset that loss, shares would reach zero...."

"I don't understand," said Alzugaray.

"Imagine a man on a stairway; if you oblige him to go down one step
every so often, in order to keep in the same place as before he will
necessarily have to go up again, because if he didn't do so, he would be
constantly approaching the front door."

"Yes, surely." "Well, this man on the stairway is the quotation, and the
mechanical task of constantly making up for the quarterly loss is what
is called the reintegration of the coupon."

"You do not convince me."

Alzugaray didn't like listening to these explanations. He had formed
an opinion that had not much foundation, but he would not admit that
Caesar, by reasoning, could arrive at the glimmering of an inductive and
deductive method, where others saw no more than chance.

CAESAR BEGINS HIS TASK

With the money he made on the market, C