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Project Management: A Managerial Approach, 9th
edition Instructor’s Resource Guide
Copyright ©2015 John Wiley & Sons, Inc. Chapter 7 - 1
Chapter 7
Budgeting: Estimating Costs and Risks
CHAPTER OVERVIEW
Overview – This chapter describes the process of estimating and then assembling the
project budget. The budget is an important part of the planning process as it describes
the plan for allocating project resources. Once the budget is set, it is used as part of the
project control mechanism during execution.
7.1 Estimating Project Budgets – The budgeting process involves the forecasting of the
level and type of resources needed to complete the project. Many organizations will
have well worn (and reasonably accurate) methods for creating the initial project
estimate based on past experience. It is important to remember, however, that
because every project is unique the estimating process always has some level of
uncertainty associate with it. The PM must understand the organization’s accounting
practices to the extent that they are imposed on the project budgeting and control
process.
• Top-Down Budgeting – This is the technique of developing a budget by
comparing this project to past ones using the judgment and experience of top
and middle management. Typically an overall budget is assigned to the project to
be distributed to the individual tasks. If the projects being used for comparison
are similar enough, this process can result in a fairly accurate total number. The
process of distributing the total can create a lot of conflict among the
management team.
• Bottom-Up Budgeting – This is the process of developing budgets by asking the
people who will perform the individual tasks for their estimates. These individual
numbers are then rolled up to a summary for presentation to management. It’s
important in this process to follow a good WBS to ensure that no tasks are
overlooked. Unfortunately, this process can lead to game playing when
individuals pad their estimates in anticipation of management cuts.
• Work Element Costing – Using the bottom-up estimates, costs can be applied t o
each WBS element. These are typically calculated by taking the labor hour
estimate and “dollarizing” it using appropriate labor and overhead rates. To be
accurate, the estimator needs to understand the relationship between the labor
estimate and the actual number of hours that will be charged to the project
because of personal time and inefficiencies. A similar process must be used if
machine time or other resources are charged to the project.
• An Iterative Budgeting Process – Negotiation-in-Action – Typically the budgeting
process requires some negotiation between the subordinate, who develops the
WBS plans for the tasks for which he is responsible, and the supervisor who
reviews these plans. This is a time-consuming process. At the same time the PM

is negotiating with the several subordinates responsible for the pieces of the
PM’s WBS. It is worth emphasizing that ethics is just as important in negotiations
within an organization as in negotiations between an organization and an outside
party.
• Comments on the Budget Request Process – The bottom-up process differs from
the departmental budgeting process many organizations use. The primary
difference is that the departmental process typically comes with guidelines (either
formal or informal) on how much budget change is considerably acceptable.
• Cost Category Budgeting vs. Project/Activity Budgeting – Organizations may
budget and collect cost by functional activity. This makes it very difficult to
monitor project costs when they are distributed among a variety of different
organizational units. Project budgeting on the other hand collects project cost
using the WBS. This allows the PM to monitor cost in a manner that supports
overall project objectives.
7.2 Improving the Process of Cost Estimation – Estimates by nature are always wrong.
It’s important to build contingencies into the process or to account for uncertainty in
some other way. One way to do this is to use the PERT process of developing likely,
optimistic, and pessimistic estimates. In addition, the PM must understand whether
overhead cost is part of the estimate or not.
• Learning Curves – Studies and common sense have shown that as people
repeat a task they get better at it. This idea is formalized in the concept of the
learning curve, which states that each time the output doubles the worker hours
per unit decrease to a fixed percentage of their previous value. This effect is
important because the estimator must determine the impact learning had on past
projects (and their rates) and predict its impact on the one being estimated.
• A Special Case of Learning – Technological Shock – Projects that involve new
technologies or processes are very difficult to estimate because past
performance is not a useful guide. This is true not only because the rates are not
applicable, but because there is typically a lengthy startup process before steady
state performance is achieved.
• Other Factors – A number of other factors influence the project budget:
i) Changes in resource costs due to factors like inflation
ii) Waste and spoilage
iii) The fact that people, as resources are not freely interchangeable with each
other. The project may require five people, but if they are not the right people,
the number available is irrelevant.
iv) Projects cannot be put back on schedule by adding an infinite number of
resources. For intellectual projects like software development, the addition of
more people may actually slow the project down. Even for more mundane
tasks like painting a building there is a limit as to how many people can be
added to the project with benefit.
• On Making Better Estimates – Data can be collected on the quality of project
estimates by using statistical techniques. The estimate is compared to the actual,

and statistics like the Mean Absolute Ratio (MAR) and the Tracking Signal can
be calculated. These are all used to detect bias or nonrandom error in the
estimate.
7.3 Risk Estimation – Project aspects such as duration of activities, amount of resources
to utilize, value estimation etc., are very uncertain in a typical project. It is important
to manage this ambiguity to allow the project manager to make better decisions
when the situation arises. This is done through risk estimation and analysis, a
technique that describes uncertainty in a way, that it becomes possible, although
with a few reasonable assumptions, to make project activity decisions in an insightful
manner.
• General Simulation Analysis – A very useful tool to evaluate projects in
conceptual stage is simulation combined with sensitivity analysis. A through
estimation of the various tasks is made and the uncertainty associated with each
task is included. Simulation runs then show the likelihood of realizing various
levels of costs and benefits. Investigation of the model may also expose the
major sources of uncertainty.
TEACHING TIPS
Estimating and budgeting are dry subjects. Students who actually have to perform this
process on real projects, however, will be very interested in practical guidance beyond
the scope of this chapter. Here are some tips based on my experience.
The estimating process has to be defined in writing in advance of preparing the estimate.
The definition needs to include:
• Key project parameters and assumptions.
• Rules for how to allocate cost among different categories to ensure everything is
covered and nothing is duplicated. This is necessary even if there is a WBS, as
different people will interpret it differently.
• A sound method for identifying each “official” version of the estimate. It will
change and it’s easy to get confused as to what the current issued version is
versus the current working version.
• An airtight method of documenting the data and assumptions that serves as a
backup for each element of the estimate. The sound logic used during
development will quickly be forgotten. A year later someone will ask about a
number and nobody will know.
The estimating process for the next project must be considered in the collection of actual
data from the current project. This is particularly true if any kind of rate-based estimate is
used. As silly as it sounds, people discover that during a project they did not collect the
data necessary to develop or update rates. This discovery is usually made during the
estimating process for the next project when it is too late.

An excellent source of very practical advice on the estimating process is the NASA Cost
Estimating Handbook, available on the web at: http://ceh.nasa.gov/
PROJECT MANAGEMENT IN PRACTICE
Pathfinder Mission to Mars—on a Shoestring
Question 1: How did a change in philosophy make such a drastic difference in
project cost?
In 1976, cost was not a constraint, performance was. In the subsequent project,
performance was subordinated to the project’s cost goals.
Question 2: Why was the mission scope so limited? Why even spend the money
to go to Mars with such limited objectives?
Due to economic considerations and political realities, the mission was expected to hold
costs down to a minimum level while still achieving a level of performance that would be
a public relations success with at least some science accomplished. This project serves
as an example of why projects sometimes are selected for nonfinancial reasons. A low-
cost project was viewed as having the potential to demonstrate to the political
stakeholders that NASA could launch cost-effective space missions.
Question 3: Describe their “de-scope,” “lien list,” and “cash reserve” approaches.
1) De-scope: Performance objectives were ranked and could be cut from the
bottom, if necessary, to meet the cost objectives set for the project.
2) Lien list: This was a list of potential changes to the project that were anticipated
or discovered along the way. By recognizing these as potentially costly changes,
and managing the list, cost growth could be controlled.
3) Cash reserve: Costs would be squeezed at the start of the project. The intention
was to release funds, only if they could not be squeezed out of the project.
Question 4: Recent design-to-cost interplanetary projects have also had some
spectacular failures. Is this the natural result of this new philosophy?
NASA has done considerable soul searching on this subject after the loss of the Mars
Climate Orbiter. The excellent white paper (available at
ftp://ftp.hq.nasa.gov/pub/pao/reports/1999/MCO_report.pdf) concluded that the drive to
reduce cost was definitely a contributing factor in the incident. The danger is (and was)
that scope vital to the success of the mission could be ignored in the name of cost
cutting. This is not the result of underhanded scheming, but a natural consequence of
overworked people believing that, what they can’t get to will probably come out okay just
the same.
Convention Security: Project Success through Budget Recovery
Question 1: How is a project for an event like a multi-day convention different
from a project like building a house?
Managing a convention is different from managing the construction of a house, since
there are fewer chances of changes in the architecture of a house than in the

requirements of a convention. Managing a convention usually requires ad-hoc changes
in the plans, since there is no primary decision maker and there had to be compromises
and disagreements. This is unlike building a house which is much simpler to manage in
comparison to a multi-day convention.
Question 2: Does 72 different risk factors seem like a lot to plan for? How
important was CSP’s contingency planning for this project?
Planning for 72 different risk factors is indeed a humungous task. It usually happens that
managing one risk factor changes the risk level of some other factor. Managing so many
factors to an acceptable level at the same time requires a lot of careful attention,
exercise, and experience. CSP’s contingency planning was very important in this case
since it was not the primary decision maker. The team knew in advance that they will
have to work with other agencies and they planned accordingly to take care of any
changes. If they wouldn’t have planned for this, the convention was surely at risk.
Question 3: How does not being in control of decisions and plans affect the
project manager?
It is very difficult for a manager to not be in control of decisions and plans, since that is
what the task of manager is. He is used to taking actions and decisions based on his
experience, but certain situations demand more control of oneself than that of the
situation. When there are multiple parties and stakeholders, one person is not
responsible for everything and the manager is aware of this. He carefully makes his
plans and modifies his activities to be able to meld his decisions with others, if the need
arrives. A project manager not only manages a project but also manages a team and
knows what decisions are to be taken in different circumstances.
Question 4: Does being off by 150% in the estimate for human resources required
for a project surprise you? What do you think happened? How do you think they
managed to accommodate this change without exceeding the budget?
It is definitely surprising to being off by 150% in the estimate. I believe that CSP under-
estimated the number of troopers that were required or was not aware of the level of
security required. However, they did think of multiple plans with alternate contingencies
to account for different types of changes in their plan of action. When the need arrived,
they were able to make these changes by careful use of project management tools and
practices to avoid any budget increases. Indeed, one of the major reasons for not
exceeding the project budget was the development of multiple plans with alternate
arrangements for different situations.
Managing Costs at Massachusetts’ Neighborhood Health Plan
Question 1: Wouldn’t higher eligibility requirements for subscribers cut NHP’s
health care costs? Why did this exacerbate NHP’s situation?
Reducing the patient load did not reduce the providers’ fixed cost for insurance and
facilities. Therefore, fewer patients had to absorb the same costs, but the revenues were
reduced. Profit therefore is dependent on changes in volume of demand. This made it
difficult for them as volume decreased.
Question 2: Explain the trade-off between hospital utilization and contract rates.

This scenario can be a complex one to evaluate financially. Visualize a scenario where a
patient’s stay generates sufficient revenue to cover the variable costs associated with
the stay. Once variable costs have been met, the remaining revenue can be used to
offset fixed costs. Once the level of utilization has covered the fixed costs, the hospital
begins to make a profit. However, suppose that the patient does not pay enough
revenue to cover the variable costs associated with the treatment received, any level of
hospital utilization will create a loss of profit.
Question 3: How did changing from a line item pay plan to an episode plan allow
comparisons and save costs?
The pay-per-episode plan establishes a standard cost that can be easily audited. In a
pay-by-line-item plan, it is much more difficult to detect and disallow inappropriate
additions to the bill being issued by the hospital. The hospital has an incentive to add
line items to help offset its fixed expenditures, so that it can recognize an operating
profit.
Habitat for Humanity Wins a Big One
Question 1: Did LHH seem to have a “de-scope” plan?
LHH did not seem to have a plan to de-scope, or reduce the scope of the plan. They
seemed to only consider that they would get all of the money from the LCHTC that was
proposed or nothing at all.
Question 2: Did LHH seem to understand the County Committee’s budget
allocation process?
It seems apparent that LHH did not understand the time issue with the County
Committee’s budget allocation process. LHH appeared to do everything else correctly,
but as shown by their strategy to contact the committee members individually when they
didn’t hear a response soon, they may not have understood how long budget allocations
take.
Question 3: How did the concept of partnering (Chapter 4) apply in this example?
Why do you think the Committee was insensitive to this opportunity?
LHH should have considered partnering with the County, which would have provided the
County with more incentive to approve the request.
The Emanon Aircraft Corporation
Question 1: How did inflating the material costs solve purchasing’s “lateness”
problem?
By inflating the estimated cost of the materials, the purchasing official may be ordering
extra material in the inventory to avoid any scarcity. This didn’t actually solve the
purchasing lateness problem, but increased the working capital requirements and the
financing costs associated with sustaining the extra capital as raw materials inventory.
The working capital appears to be chargeable to the project as an indirect cost (bulk
purchase allocated over the period’s units of output). In reality, the project is only seeing
a portion of the net impact to net free cashflow.
Question 2: What alternatives were available to Emanon besides demoting the
purchasing manager?

Rather than demoting the manager, Emanon could have issued warnings to the
purchasing official to avoid such issues in the future. Also, they could have penalized the
official monetarily in proportion to the penalty paid by the corporation. Another option
could have been to affect his yearly appraisal.
Question 3: What should Emanon do now?
Emanon now knows that the reason behind losing the competition was the increased
expected material costs. It should now work with its purchasing department to bring the
cost down to what is required and ensure that multiple checks are performed at different
levels of the purchasing department, so that the costs estimated are as close to actual
costs as possible with a minimal overhead for unexpected circumstances.
Simulating the Failure of California’s Levees
Question 1: What would be involved in changing the simulation threat from
hurricanes to earthquakes?
In order to change the simulation threat from hurricanes to earthquakes, the simulation
model would have to be modified by the scientists to account for the movement of the
ground in addition to the influx of water. The base model from New Orleans would be a
good start for the simulation, but additional parameters would need to be included.
Question 2: What process do you think would be used to analyze the simulation
results?
Hopefully the engineers could take historical data to run through the simulation to see
how accurately the simulation output matched historical results. Students may come up
with a variety of answers.
MATERIAL REVIEW QUESTIONS
Question 1: What are the advantages of top-down budgeting? Of bottom-up
budgeting? What is the most important task for top management to do in bottom-
up budgeting?
Refer to Section 7.1 in the text.
1) Advantages of top-down budgeting include:
a) Management can develop aggregated budgets that are reasonably accurate if
they are based on comparable projects.
b) It is not necessary to know about each task in order to develop a top-down
estimate.
2) Advantages of bottom-up budgeting include:
a) Individuals closer to the work are apt to have a more accurate idea of resource
requirements than their superiors or others not personally involved.
b) The resource requirements needed to complete tasks within work packages will
be more accurate than when other budgeting techniques are used.
c) Active participation of the stakeholders will tend to increase the acceptance and
support for the budget. The act of participating in bottom-up budget preparation

can help increase the emotional investment of stakeholders for adhering to the
cost baseline.
d) Bottom-up budgeting can help train managers to understand important
dimensions of project success. For example, junior managers will learn more
about how resource consumption will affect profitability and future cash flows.
3) Senior management should check to ensure that all major cost elements have been
included in the bottom-up budget.
Question 2: In preparing a budget, what indirect costs should be considered?
Refer to Section 7.2 in the text. An indirect cost is a cost that cannot be directly traced
back to the production of an output. For accounting purposes, two rules of thumb are
often used when classifying a cost as direct or indirect. In order to fall into the direct cost
category, the cost must be physically observable (it can be seen and measured when an
output is made) and it must be economically feasible to track the cost during production
of each output. If this is not true, then the cost will usually be captured in bulk as an
indirect cost and allocated back to the units of output that were created during a fixed
period of time (accounting period, for example). Examples of indirect costs that a project
manager should consider include:
1) Sales, general, and administrative expenses (SG&A)
2) Contract penalties
3) Contingency allowances
4) Waste and reduction to fair market value (defects, spoilage, and obsolescence)
5) Turnover costs (replacement and training of personnel)
Question 3: Describe the purpose and use of a tracking signal.
Refer to Section 7.2 in the text. The tracking signal is used to measure an estimator’s
relative (to the MAD or MAR) bias. Bias is detected as patterns of variation that are not
random. The textbook provides two examples of a tracking signal (TS).
Question 4: Describe the top-down budgeting process.
Refer to Section 7.1 in the text. Initially, few details may exist regarding how the work
should be accomplished. In such cases, senior management sets a top-down budget by
comparing the new project with similar ones done in the past. Then the budgets can be
cascaded to and validated by the lower levels of management. During this process of
cascading, the decomposition of required outputs into families of related work packages
should help to confirm the feasibility of the initial estimate.
Question 5: What is a variance?
Refer to Section 7.2 in the text, Table 7-1, and the glossary. There are many potential
perspectives that can be used to explain the concept of variance. At the most basic
level, a variance is the difference between a planned value and an actual value.
Because variances measure the uncertainties that are present in a management system
such as a project plan, variances may be random or nonrandom. If the project manager
observes random variation, the variance may be acceptable. If the project manager

observes nonrandom variation, it should be treated as an exception and investigated to
see if corrective action is required to restore stability to the performance levels observed
while executing the project plan.
Question 6: Describe the learning curve phenomenon.
Refer to Section 7.2 in the text. There is a cliché that “practice makes perfect.” In the
basic learning curve, each time the number of repetitions for a task is doubled, a
predictable percentage of improvement in productivity will be observed. If 100 hours
were required to complete task “A” on the first cycle, a 90% learning curve would mean
that only 90 hours would be necessary on the second cycle. On the fourth cycle, only 81
hours would be needed to complete that repetition of task “A.”
Question 7: How might you determine if cost estimates are biased?
Refer to Section 7.2 in the text. With respect to a cost estimate, it is not desirable to
either over or underestimate costs. When a distribution of estimates is unbiased, the
over estimates and the underestimates will tend to cancel each other out, resulting in
little bias. The text provides a very good explanation of mean absolute ratio (MAR) and
mean absolute deviation (MAD). A tracking signal (TS) is used to detect if estimates are
biased, and how much relative are the estimates to the natural variation (or error), that
is, the MAD.
Question 8: What is “program budgeting”?
Refer to Section 7.1 in the text. Program budgeting describes the process of developing
and maintaining budgets that are broken down by actual task in a specific project. A
variant is to show budgets for a series of projects that are related to a specific program.
Question 9: What is the difference between project and category oriented
budgets?
This question is meant to make the students understand the distinction between
“categories” and “activities.” Categories are generic groups of activities such as
“transporting materials,” while activities are specific tasks in a project/program such as
“move steel rods from location A to location B on Sept. 3.”
Refer to Section 7.1 in the text. In category-oriented budgets, expenses are categorized
into cost sub-accounts such as supplies, labor, electricity, gas, and telephone, and
grouped for the organizational level being reported, even sometimes a specific project.
In project-oriented budgets, expenses are categorized into the project tasks that
consume various types of resources.
Question 10: How does a risk analysis operate? How does a manager interpret the
results?
To perform risk analysis, a manager makes certain assumptions about the parameters
and variables associated with a project decision. This is then checked with the risk
profile or the uncertainty that is present with these variables. This helps in the estimation
of risk profiles or probability distributions of the outcomes of the decisions. Generally a

project involves multiple parameters and variables and thus simulation is preferred over
tedious analytical methods. This simulation/analytical process reveals the distribution of
various outcomes and this risk profile is used to assess the value of the decision along
with various other factors.
CLASS DISCUSSION QUESTIONS
Question 11: Discuss ways in which to keep budget planning from becoming a
game.
Refer to Section 7.1 in the text. This is a tough issue which should be able to generate
an interesting class discussion. The process is a “game” when the participants perceive
it as a zero sum game with management decisions made in an arbitrary and capricious
manner. Management can try a few things to defuse the situation such as:
1) Use open and honest discussions about resource allocation decisions that are
based upon principles of shared interest and collegial management.
2) Refrain from mandating across-the-board budget cuts when faced with cost
containment problems.
3) Use the four dimensions of project success to foster rational and consistent
resource allocation decisions in a manner that links project management
strategies to overall business success.
Question 12: List some of the pitfalls in cost estimating. What steps can a
manager take to correct cost overruns?
Refer to Sections 7.1 and 7.2 in the text.
1) Uncertainty: By nature projects are unique; therefore, any estimate made beforehand
about project outcomes is uncertain. Estimates are just that; they are always wrong.
2) Assumptions: An assumption is the answer to a question that is otherwise unknown
or too expensive to get a timely answer. There is nothing wrong with assumptions;
they are a part of the game in creating estimates in the face of uncertainty. One
danger with assumptions is that they present an opportunity for biases to be
embedded in the project. One particularly dangerous assumption is that the data
from past projects can be blindly applied to the estimates for new projects. If the new
project is different enough in process or product, old data can only be used with a
grain of salt. It’s important to keep in mind that using old data uncritically can make
the estimate too high as well as too low.
3) Learning Curves: Experience can influence productivity. The estimator may need to
consider the effects of experience using techniques such as the learning curve.
4) Bad Data: Data about past performance may have been captured incorrectly and/or
reported inaccurately. The estimator should validate the accuracy of historical data
with respect to representing what the data should represent.
5) Missing Scope: The most accurate estimate will be fatally flawed, if it does not
account for all the work the project has to do. This could be due to a poor estimating
process or uncertainty about the actual work scope.

Before managers can correct cost overruns, they must detect them. This means that
there has to be a detailed plan that is measured on a regular basis. When overruns are
detected, the manager needs to evaluate the root cause with the help of the team.
Corrective action may include reducing staff, reducing scope, or increasing the budget.
Question 13: Why do consulting firms frequently subsidize some projects? Is this
ethical?
Refer to Section 7.2 in the text. It’s ethical for companies to take a deliberate loss on a
project for several reasons:
• The company is investing in a new business area.
• The company is sharing costs with a partner in support of a future big win-win
situation. For example this might be undercharging on a project supporting
another company’s proposal preparation.
• The project represents a charitable donation.
• The company would otherwise have no work at all, but wishes to retain its staff.
It is unethical for a company to knowingly underbid a contract with the intent of making
the money back through later changes. The U.S Government has named this practice as
“defective pricing” and goes to great length to prevent it and punish the perpetrators.
Question 14: What steps can be taken to make controlling costs easier? Can these
steps also be used to control other project parameters, such as scope?
In order to control costs, it is essential to have a project plan that is organized according
to the way the project actually will be managed. To develop such a plan, use the WBS to
decompose project deliverables from the scope statement into sets of deliverable-
oriented work packages linked to cost centers in the project’s budget. By linking the
control mechanisms to the work packages, the manager will have a much better chance
of detecting overruns when something can still be done about them. This is also true for
other parameters such as schedule and progress (performance). As painful as it sounds,
it is better to measure cost, schedule, and progress more frequently than less. The
longer it takes to detect a variance, the bigger it will be and the harder to correct.
Question 15: Which budgeting method is likely to be used with which type of
organizational structure?
Refer to Section 7.1 in the text. Functional organizations will tend to prefer activity-
oriented budgets. Project based organizations would prefer to have program-oriented
budgets. In these two forms, the vertical hierarchy is the driving factor behind budgeting
tendencies. However, the matrix form may exhibit tendencies toward using both types of
budgets. The weak matrix form would be expected to exhibit functional preferences,
while the strong matrix (project matrix) would tend to exhibit project preferences more
predominately.
Question 16: What are some potential problems with the top-down and bottom-up
budgeting processes? What are some ways of dealing with these potential
problems?

Refer to Section 7.1 in the text.
1) Top-Down Budget Problems: Top-down budgets are often developed from
analogies, parametric models, and/or business intuition. Budgets based on
analogies are only useful, if the new project is similar enough to the old ones. If
parametric models are used, the estimator may neglect to include important cost
elements and/or the parameters in the model may not reflect the current process.
If the model is derived from business intuition, the estimates will tend to be overly
optimistic. In all cases, the use of bottom-up estimating techniques to confirm the
top-down estimate is recommended.
2) Bottom-up Budget Problems: Bottom-up budgets should be developed using the
WBS to organize estimates by cost center. However, the WBS format may make
it difficult to capture indirect costs in a manner that will be credible to members of
the various functions actually doing the work. Moreover, the bottom-up estimate
is even more likely than a top-down estimate to leave out some important cost
elements. This could be because the estimating process is poorly organized or
because the project is different enough that the scope is “unknown” to the
estimators. Bottom-up budgets should be compared with top-down budgets as a
sanity check.
Question 17: How is the budget planning process like a game?
There are natural differences between management and workers. Managers are often
measured by cost performance, which may be tied to bonuses. Workers on the other
hand do not like their performance to be monitored, particularly in a direct and frequent
manner. When asked how long it will take to do something, they will typically give a
“comfortable” answer, especially if they are experienced. Workers who have been
around the track a few times become firm believers in Murphy’s Law and give estimates
based on the worst case. One other factor that I have observed is technical folk’s
reluctance to accept the realities of the capitalist system. They will insist till the cows
come home that a project will take so many hours, regardless of whether anybody can
afford the deliverable at the resulting price. The game part comes in when the two
parties begin to anticipate each other’s actions. The workers inflate their estimates in
anticipation of management cutting them. Managers cut the estimates because they
know that (surprise!) they have been inflated, and the vicious circle starts.
Question 18: Would any of the conflict resolution methods described in the
previous chapter be useful in the budget planning process? Which?
Refer to the answer of Question 16 in this book and to Chapter 6 in the textbook. The
technique used during conflict resolution (budget planning process) will be contingent
upon the situation. Confrontation (interdisciplinary problem-solving) would be the
preferred approach for this author. However, compromises may be appropriate in
scenarios where both parties have equal power and an acceptable outcome can be
attained. The other conflict resolution strategies should see infrequent use during
budgeting processes. For example:

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148
But the horses caught the scent of the bear and began
to whinny and stamp their hoofs in terror. The big
Kodiak’s ears went up and he lifted his head, probing
the air with his sensitive snout. Slowly he reared up on
his hind legs.
Jerry couldn’t restrain a gasp of astonishment and
wonder. “Wow! Will you look at the size of him! He must
be ten feet tall if he’s an inch.”
When the bear stood erect, Sandy could see a red,
matted spot on his left shoulder. “Someone shot him all
right,” he said. He pressed his lips firmly together and
lifted the big rifle to his shoulder. “Well, here goes.”
Then he added, “You take a bead on him too, Jerry, in
case I miss.”
“I’m so jittery, I don’t think I could hit the side of a
barn,” Jerry answered breathlessly. Nevertheless, he
brought up his rifle.
“It’s an easy shot,” Sandy told him. “Only about forty
yards. I’ll try for a head shot. You aim just below the left
shoulder. And take off your mittens, idiot.”
Sandy squinted down the long barrel, fixing the sight on
a spot directly between the bear’s eyes. Very gently he
squeezed the trigger. There was a tremendous explosion
and a numbing blow against his shoulder that sent him
somersaulting backward off the boulder. He lay there
stunned for an instant. Then Jerry grabbed the front of
his parka and pulled him to his feet.
“What a recoil,” Sandy mumbled.
“Forget the recoil!” Jerry was hopping up and down in
excitement. “You got him! Look! One-shot Steele, that’s

149
you. Bet you could have made a chump out of Buffalo
Bill.”
Sandy focused his bleary eyes across the ravine. The
Kodiak was just a big mound of motionless fur sprawled
out on the ground.
“Come on!” Jerry pulled at Sandy’s arm. “Let’s hurry
over there so we can make like big-game hunters when
those other guys show up.” Using his rifle as a staff, he
started down the slope into the ravine.
Sandy caught up to him at the bottom and grabbed the
rifle away from him. “Don’t ever do anything like that
again!” he snapped. “You dope! You might have blown
your head off—or at least your hand. This is a loaded
gun. You’ve got to have respect for it. Never point it at
yourself or anyone else.”
Jerry flushed and dropped his eyes. “Yeah, you’re right.
It was a dopey thing to do. I’m so crazy excited I
forgot.”
“Okay.” Sandy handed the rifle back to him and they
crashed through the brush and brambles that grew
among the trunks of the birches. Scrambling up the far
slope, Sandy was aware of a heavy weight banging
against his right hip. He slipped his hand into his pocket
on that side and touched the cold metal grip of the Colt
automatic. He had forgotten about it when he packed
the heavy parka away after the sled race.
He had just withdrawn his hand from his pocket when
Jerry, who was in the lead, reached the top of the
ravine. As his eyes cleared the rim, he stopped short
and let out a wild yell. Then the bear lumbered into full
view, looming over Jerry like a cat over a very small

150
151
mouse. The monster’s red-rimmed eyes blazed with
hatred and Sandy could see pink foam gleaming on the
long, bared fangs. It came to him as an incredible shock
that here they were face to face with the most
dangerous living thing in all the world—a wounded,
pain-crazed Kodiak bear.
“Jerry! The gun! Shoot!” Sandy spat the words out
jerkily.
Obeying mechanically, Jerry swung the long barrel up
and fired in the same motion. The slug plowed
harmlessly between the bear’s legs, kicking up dirt and
gravel. But it turned out to be a lifesaving shot. Caught
off balance, Jerry was kicked off his feet by the booming
recoil and went tumbling head over heels down the
steep grade. At the same time Sandy drew out the big
.45 pistol and cocked it. Then, as the bear dropped to
all fours, with the obvious intention of attacking, Sandy
fired at its hairy throat. The Army Colt .45-caliber packs
a tremendous wallop. At such close range, it knocked
the giant Kodiak back on its haunches.
Sandy pumped the last bullet into the bear’s midsection,
then turned and ran down the slope. Jerry was just
getting to his feet when he reached the bottom of the
ravine. “Find a tall tree and climb it,” Sandy yelled.
“Come on!”
Together they stumbled into the woods. Sandy
remembered that on their way over they had passed
one gnarled birch with a trunk as big around as a man’s
waist. In the manner of so many trees of this species, it
had branched out into three thick, sturdy limbs at a
height of about four feet. Without breaking his stride,
Sandy leaped up, planted one foot in the crotch and

152
clawed and shinnied his way up through the branches.
He kept climbing until the limb began to bend beneath
his weight. Then, with his heart fluttering like a
frightened bird, he looked down, half expecting to see
his friend in the embrace of the great bear. There was
no trace of either Jerry or the Kodiak.
“Here I am,” Jerry’s voice rang out, so startlingly close
that Sandy almost lost his hold on the branch. The sight
of Jerry swaying back and forth on an adjacent limb at
least five feet above him, arms and legs wrapped tightly
around it like a monkey, made him weak with relief. In
spite of their precarious position, he had to smile.
Jerry was appalled. “He’s hysterical. Stark, raving mad,”
he cried. “Sandy! Snap out of it.”
“I’m fine,” Sandy said. “It’s just that I didn’t expect to
see you up there.”
“Where did you think I’d be? Back there, Indian-
wrestling with old Smokey so you could escape?”
“I don’t know how you got up there so fast. I didn’t
even see you pass me.”
“Brother,” Jerry said huffily, “if you had been as close to
that critter as I was you’d be back in Valley View by
now.”
As yet there was still no sign of the bear on the ground
below them. Sandy searched the rocky shelf where they
had encountered him, but it was empty. The clatter of
horses’ hoofs drew his attention back to the side of the
ravine they had come from. Professor Stern and the
other two men came galloping into view and reined in
their horses.

153
“Here, in the tree!” Sandy hailed them. “We’re up in the
tree.”
Stern’s face reflected his relief—and not a little
amazement. “What on earth are you doing in a tree?
And what were those shots we heard?”
“We shot the bear. Then he came to life again and
chased us up here.” Sensing the professor’s
understandable confusion, he grinned. “I guess that
sounds pretty wild, doesn’t it?”
“Indeed it does,” Stern admitted. “But never mind that.
Where is the bear now?”
“I don’t know.”
Thorsen and Chris Hanson were already starting down
into the ravine, rifles ported for action. Stem
dismounted and followed them. Cautiously the men
made their way through the trees. Before they reached
the far side of the ravine the boys lost sight of them.
After several minutes of complete silence, Sandy began
to get anxious.
“Maybe that old bear was hiding behind a tree,” Jerry
suggested, “and clobbered each one of them as they
went by him, like the Indians used to do.”
Finally they heard Stern’s voice calling to them. “You
guys can come down now.”
Sandy was puzzled. “That’s funny. I guess the bear got
away after all.” He slid hurriedly to the ground.

154
When they emerged from the birch grove, both boys
stopped dead. Sandy shut his eyes tight, opened them,
shut them, and opened them again. He couldn’t believe
what he saw. The three men were standing at the
bottom of the slope, all flashing broad grins. At their
feet was the mountainous carcass of the bear.
“You—you sure he’s dead?” Sandy stammered.
“Yeah,” Jerry said. “He’s a tricky one.”
Thorsen jabbed his toe into the shaggy body. “Quite
dead, I assure you, my young friends.”
“We had just reached the end of the ravine when we
heard the shots,” Professor Stern said. “Now tell us what
happened.”
Both talking at once, the boys recited the story of their
escapade with the big Kodiak.
“You remember that old movie King Kong, where the
girl first sees this giant gorilla?” Jerry asked. “Well,
that’s how I felt when this thing came at me. Oh broth-
er!” He shuddered.
Sandy took out the black Colt pistol. “And this is what
saved our lives.”
Thorsen took it from him and examined it admiringly. “A
true gem. Do you know how this gun was developed?
During the Philippine Insurrection, American troops
were being demoralized by fierce Moro tribesmen,
savage warriors who carried wicked bolo knives. The
Moros would pop up out of the jungle without warning
and attack the soldiers at such close quarters that it was
impossible for them to use their rifles. And the Moros

155
156
were so physically powerful that the average pistol
couldn’t stop them. Even with a half dozen bullets in
them, they could decapitate an enemy with their bolos
before they died. The Army Colt .45 was designed
especially to stop them. And it did the job well—with
one slug.”
“It certainly stopped this monster,” said Chris Hanson.
“But it was a very lucky shot,” Professor Stern tempered
his praise. “The first shot you fired with the rifle creased
his skull and stunned him. He was probably still whoozy
when you ran into him, or you might not have had a
chance to get in a second shot. Your last shot severed
the jugular vein. It was a very lucky shot,” he
emphasized.
“You don’t have to convince me, Professor,” Sandy said
soberly. “As of now I am a retired bear hunter.”

157
CHAPTER THIRTEEN
The Ghost Mine
Two days later the Sterns and the Hansons came down
to the airstrip to see the boys off. Professor Stern
promised to send the bearskin to Valley View as soon as
it was cured. “It will make a nice trophy to spread out in
front of your fireplace,” he told Sandy.
“I think I’ll donate it to our local boys’ club,” Sandy said.
“And every time a new fellow joins up, he’ll have an
excuse to tell what a big hero he is,” Jerry joked.
Sandy laughed. “I bet I looked like a big hero up in that
tree all right.”
Russ Parker appeared in the doorway of the plane. “All
revved up and ready to go. You fellows set?”
The boys said their last goodbyes and climbed into the
cabin.
Mrs. Stern waved and yelled, “Thanks again for refilling
my freezer.”
“We’ll eat it up the next time we come,” Jerry said.

158
Parker slammed the door and bolted it, then went
forward to the cockpit. “Fasten your safety belts,” he
ordered. The little plane took off smoothly and climbed
over the bay. Through the window next to him, Sandy
caught a last glimpse of the twin domes of the Russian
church and the ancient sea wall with its great iron rings
where the fur traders used to tie up their ships. The sun
sparkled on the blue water and glinted briefly off the
metal oil tanks of the U.S. naval base far across the bay.
Parker leveled off at 10,000 feet and set a northeast
course.
Sandy unbuckled his seat belt and went up front to the
cockpit. “How long will it take to fly to Cordova?” he
inquired.
“With this tail wind no more than two hours,” Parker
said. “We should be landing a little after ten. Your dad
and the professor want to fly back to Juneau this
afternoon.”
Sandy nodded. “From there we’re taking a commercial
airline back to Seattle.”
Parker put the ship on automatic pilot and turned
sideways in the seat. “Not driving back down the
highway?”
“No. Professor Crowell decided the trip was too rugged
in the winter. He’s leaving his dogs up here until spring.
Anyway, Jerry and I have to get back to school, so we
were planning to fly back in any case.”
Listening to the conversation with one ear, Jerry looked
up from the book he was reading. “Hey, Sandy, back in
Valley View the guys are just steeling themselves for a
session with Miss Remson in English Four. Isn’t that

159
great? And here we are three thousand miles away and
two miles in the air. Think we’re safe from her?”
“Sure,” Sandy said. “And Miss Remson would probably
be just as glad if you stayed that far away from her.”
Parker pointed out a range of mountains just visible on
the northwest horizon. “Too bad you don’t have time to
visit the Valley of Ten Thousand Smokes.”
“That’s an interesting name. What is it?”
“Before Mount Katmai erupted in 1912 it was a fertile
farm region. Then the whole top of the mountain blew
off—two cubic miles of rock vaporized into thin air. One
hundred miles away in Kodiak they had to shovel the
dust and ashes off the roof tops.”
Sandy whistled. “That’s as bad as having an H-bomb
drop in your back yard.”
“Maybe worse,” Parker said grimly. “Then the entire
floor of the valley erupted into little fumaroles, or
volcanic potholes, that spewed out molten sand.
Thousands of them. That’s where they got the name
Ten Thousand Smokes. Today there are only seven of
them that are still active, but the valley is a desert
wasteland.”
Sandy squinted through the windshield, imagining he
could see a thin ribbon of smoke rising from one of the
peaks. “What happened to old Mount Katmai? Is it still
active?”
“Well, the experts think it’s still boiling way down inside.
There’s a big lake in the crater now, but it never
freezes. I’ve heard it’s warm enough to swim in.”

160
Jerry, who had come forward to listen to the story, was
wonderstruck. “Why, I bet you could land a plane on the
lake and find out,” he said.
“It’s a thought,” Parker agreed, not too enthusiastically.
“Maybe some day I’ll try it.”
For the remainder of the trip, he captivated the boys
with other tales about the big land, and almost before
they knew it they were approaching Cordova. The traffic
was light and the tower gave them immediate clearance
to land.
A quarter of an hour after the plane touched down, they
were on their way to town in the auto of a radio
technician who was going off duty. Russ Parker
remained at the field to give the Norseman a thorough
inspection before the afternoon flight to Juneau. “We’ll
take off about one, I guess,” he told them as they were
leaving.
The considerate radio man dropped them off in front of
the old-fashioned hotel where Dr. Steele had said they
would be staying. The clerk at the desk informed them
that the geologists were still registered, but that he had
not seen them since the previous morning.
“Are you certain they didn’t come back when you were
off duty?” Sandy asked him.
“Positive,” the clerk declared. “The chambermaid said
their beds haven’t been slept in.”
Sandy looked at Jerry helplessly. “Well, I guess we’ll just
have to wait for them.”

161
162
The clerk gave them a passkey to one of the two
adjoining rooms occupied by Dr. Steele and his party.
When they entered the room, the boys were surprised
to see that the geologists hadn’t even started to pack.
Clothing, books and toilet articles were scattered
everywhere.
Jerry looked at his wrist watch. “We’re never going to
take off for Juneau at one o’clock at this rate. It’s after
eleven now. Are you sure you didn’t get the days mixed
up, Sandy? Maybe your father wasn’t expecting us until
tomorrow.”
A little seed of fear began to grow inside of Sandy. “No,
he said the third. Professor Crowell told Russ he wanted
to fly to Juneau today, too. I can’t understand it, Jerry.
If Dad didn’t expect to be here when we got back from
Kodiak, he would have left word for us. Anyway, they
couldn’t have been planning to make any overnight
trips. They didn’t take razors, toothbrushes or anything;
my dad shaves every morning even when he’s on a
fishing trip miles from civilization. I don’t like it, Jerry.”
Jerry’s face turned pale under its perpetual tan. “Sandy,
you don’t think those enemy agents...?” He left the
sentence unfinished.
Before Sandy could reply, the telephone on the stand
between the twin beds jangled harshly. The boys looked
at each other hopefully.
“Maybe that’s Dad calling.” Sandy threw himself across
one of the beds and picked up the receiver eagerly. But
it was Russ Parker phoning from the airfield.
“I don’t think it’s anything to worry about,” Parker said,
“but I just found out that your dad and his friends

163
chartered a plane yesterday morning to fly out to
McCarthy. That’s an old ghost town near the abandoned
Kennecott copper mine. When they didn’t show back
last night, the authorities figured they had been forced
down somewhere with engine trouble. Search planes
have been combing the area all morning, but there’s no
sign of the plane, crashed or otherwise.”
“What do you think we should do, Russ?” Sandy asked
in a tight voice.
“I dunno. I sort of thought we might fly out that way
ourselves and have a look.”
“That’s a good idea, Russ. Jerry and I will be out as
soon as we can hitch a ride. Thanks for calling.” He
slammed down the receiver and related the latest
development to Jerry. Minutes later they were on their
way.
As they swooped low across the small ghost town of
McCarthy, Parker banked the plane sharply and
indicated the unblemished expanses of white around the
town. “No one has set down here since before the last
snow,” he said.
“Is there anywhere else they might have landed?”
Sandy asked.
“Maybe up at the mine proper. We’ll fly up that way and
have a look.”
“Imagine having a ghost town up here,” Jerry marveled.
“I thought they were exclusive to the old American
West. It’s kind of spooky, everyone packing up and
leaving a place. Almost as if it was haunted.”

164
“Ghost towns are haunted in a sense,” Sandy said. “By
poverty and hunger. They’re towns that build up around
mines and have no other livelihood. If the mines close
down they’re doomed.”
“Any community that puts all its eggs in one basket runs
the risk of becoming a ghost town,” Parker put in.
“Why did the Kennecott mine shut down?” Sandy asked
curiously.
“The ore just ran out,” Parker said. “Here we are now.”
Below them Sandy saw a sprawling shedlike structure
that seemed to be hanging on the side of a hill. “That’s
the main building,” Parker said. “See those long wires
that look like trolley cables? They used to send the ore
down from the shafts by cable car. Then it was loaded
on trains and shipped to Cordova to be put on ships.”
On a level plateau below the Kennecott mine, they
spotted the long twin ski marks of a plane. There were
two sets, one set almost parallel to the other.
“No doubt about it,” Parker said. “A plane landed here
recently. And it took off again.” He brought the
Norseman’s nose up and began climbing.
“But if they took off again, where did they go?” Sandy
was sick with fear. The idea of his father lying badly
injured—or worse—in the wreckage of a crashed plane
terrified him. “If—if they had cracked up, the search
planes would have found them by now, wouldn’t they?”
Parker chewed thoughtfully on his underlip. “I would
think so. Unless they wandered outlandishly far off
course. But there isn’t any reason why they should

165
have. The last two days and nights have been perfect
for flying.” Ominously, he added, “But we can’t discount
that possibility altogether. There’s so much territory to
cover even with an air search that a small plane might
be missed. In Canada they insist that private planes
follow well-traveled routes like the Alaska Highway
instead of flying the beam, for that very reason. If you
have to make a forced landing, there’s a better chance
you’ll be found promptly.”
“Listen,” Sandy implored the pilot, “let’s land here and
look around. Maybe we’ll find a clue or something to
show where they went.”
Parker shrugged. “Sure, if it’ll make you feel any better.
But if they were here, they definitely took off again.”
Parker landed the Norseman smoothly, cutting across
the ski tracks of the other plane. He taxied to the far
end of the clearing, turning her about in position for a
take-off, then cut the engines. The plane settled heavily
in the snow.
“Looks pretty deep out there,” Parker estimated. “We
better dig out snowshoes from the baggage
compartment.”
They had landed about a quarter of a mile away from
the main building of the mine, and because of the boys’
inexperience on snowshoes it was a slow walk.
“I feel just like a duck,” Jerry grumbled as he brought
up the rear, flopping along in the clumsy, webbed
footgear. “Overgrown tennis rackets, that’s all they are.”
“You’re not supposed to try and walk the way you do in
shoes,” Sandy instructed him. “You just shuffle along.”

166
167
At last they stood beneath the big ramshackle structure.
It was spooky, Sandy had to admit to himself, just as
Jerry said. Once this building had been the nerve center
of a booming industry, buzzing with activity and life.
Now it stood on the hillside, gaunt, decaying and silent.
Before many more years it would become a rickety
skeleton.
He shuddered as Parker led them up on the moldy
loading platform and into the tomblike dampness of the
shed. “We can go on up to the main building through
here. There are stairs right inside.” They passed through
a doorway into a room illuminated only by the slivers of
daylight that penetrated the cracked boards.
Suddenly, Russ Parker did an about-face and began
talking. “Well, here we are.” Only he seemed to be
talking to someone in back of them.
Sandy whirled quickly and saw that the doorway was
blocked by a huge man wearing a stocking cap and a
plaid mackinaw. His face was hidden in shadow. But the
big Lüger pistol in his right hand was very plain to see.

168
CHAPTER FOURTEEN
The Plot Revealed
In his other hand the stranger carried a square electric
lantern. He turned the powerful beam on Sandy and
Jerry. “Did you have any trouble with them, Parker?”
“Not a bit,” Parker said. “The Steele boy suggested
himself that we land here. And of course there was no
trouble at all persuading him to fly out here with me.”
The boys looked from Parker to the other man in
bewilderment. “Russ,” Sandy pleaded, “tell us what’s
going on. Who is this guy?” He turned on the stranger
belligerently. “Do you know where my father is?”
“My name is Kruger,” the man snapped. “And, yes, I do
know where your father is. Now, turn around and march
up those stairs.” He waved the pistol at them
threateningly.
As the boys started up the stairs, the men fell behind
and lowered their voices. “How do you like that!” Jerry
declared. “Russ Parker is in with these characters.”
“I can hardly believe it,” Sandy said miserably. “Anyhow,
at least I know Dad is okay—so far,” he amended.

169
“No conversation, please,” Kruger ordered sharply.
“Parker, you sneak,” Sandy said bitterly, “you won’t get
away with this. The authorities know my dad and his
friends are missing. And when we don’t show back at
the airfield there’ll be even more search planes combing
this area.”
The pilot began to laugh. “No one knows your father
and the others are missing. No one at all. By now the
hotel has received a telegram from Skagway saying that
Professor Crowell and his party returned there on urgent
business and that someone will pick up their luggage
and pay their hotel bill.”
Sandy was confused. “But—but what about the people
at the airport? You said there were search planes out
looking for the missing plane.”
“There is no missing plane. Yesterday morning four men
rented a plane. Last evening the plane returned—with
four men. There was another crew on duty at the
airport. They couldn’t suspect that the passengers were
four different men.”
Kruger seemed to enjoy the boys’ discomfort. “By the
time the American authorities discover that any of you
are missing you will be well out of reach in Siberia.”
“Across that narrow stretch of water we were talking
about,” Parker taunted them. “The Bering Strait.”
The man with the gun took them through a series of
tunnels that slanted up steeply through the
mountainside. The ascent was severe, and every ten
minutes or so they would stop to rest. When they
emerged into the open again, Sandy saw that they were

170
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at the site of the main diggings. The terrain was
pockmarked with shafts and tunnels. Rusty train tracks
disappeared into the gloomy mine tunnels, and
abandoned dump cars tilted up through the snow drifts
about the entrances. Far below, the main building of the
Kennecott mine squatted at the foot of the mountain;
from this perspective it reminded Sandy of a miniature
cardboard house sitting on a floor of cotton beneath a
Christmas tree. They followed a path around a bend to
the mouth of a huge tunnel. To one side of it a flaking,
rusted cable car rocked gently from a metal cable that
was equally rusted. It scraped and screeched
monotonously at the slightest gust of wind.
“In here,” Kruger ordered. “This was one of the main
shafts of the mine.”
They walked along the rail ties back about one hundred
yards, where a rectangle of yellow light splashed into
the corridor from a doorway in one wall of the tunnel.
Kruger motioned them through the doorway into a big
chamber that evidently had served as a locker room for
the miners. Rotting wooden benches and tin lockers
cluttered up the room, many of them overturned, all of
them sagging. A large gasoline lantern burned on a long
wooden table in the middle of the room. On either side
of the table sat a strange man with a rifle across his
knees. Across the table, seated all in a row on a bench,
their hands and feet tied, were Dr. Steele, Professor
Crowell, Lou Mayer and Tagish Charley.
“Dad!” Sandy burst out. “Am I glad to see you! Are you
okay?”
Dr. Steele managed a strained smile. “I’m all right, Son.
We all are. But I can’t say I’m glad to see you boys.” He

172
turned to one of the men with the rifles. “Did you have
to drag them into it, Strak? They’re only boys. They
don’t even know what this is all about.”
The man he addressed, a short, intense fellow who
moved with the quick, nervous motions of a squirrel,
stood up and walked toward the new arrivals. He
stopped in front of Sandy and stroked his prominent
clean-shaven chin.
“So this is your son, Dr. Steele? A fine-looking lad.” He
spoke careful, formal English. “I, too, regret that he and
the other youth had to become involved. But we
couldn’t take any chances. They would have notified the
police that you were missing and....”
“Don’t be a fool!” Professor Crowell snapped. “The
police will discover our absence soon enough.”
Strak smiled patiently. “I disagree. Secrecy has been the
keynote of your project. Only a few people in both your
governments—high officials—know your real purpose in
coming to Alaska. By the time they discover you are
missing, we will all be safely out of the country.”
“Of course, Dr. Steele, you could spare your son and his
friend a lot of unnecessary hardship by co-operating
with us,” Kruger said. “Just the answer to one simple
question....”
“You’re wasting your time,” Dr. Steele said flatly.
“Have it your own way.” Strak sighed wearily. “You will
tell us, you know. That is certain. Today, tomorrow, next
week or six months from now. We can wait.”

173
Kruger pushed the boys toward the bench where the
other hostages were seated. “Parker, help me tie these
two up.”
When the boys were securely bound, Strak motioned
Parker to follow him. “Come, Parker. Let us go outside.
We have a few things to discuss in private.”
“You want Malik and me to stay here and guard the
prisoners?” Kruger asked.
Strak hesitated a moment, then shook his head. “No,
come along. You should all hear this.” He glanced at the
prisoners. “I don’t think they’ll get loose.” He smiled.
“And even if they did, where would they go? We’ll be up
at the entrance—the only entrance.”
The four men left the room and their footsteps echoed
off down the tunnel. In the dim light of the lantern Dr.
Steele’s face was drawn and pale.
“I’ll never forgive myself, getting you boys mixed up in
this,” he said. “Once I knew they were on to us, that we
hadn’t deceived them into thinking this was an innocent
geological expedition, I should have sent you back to
California on the first plane.”
“Don’t blame yourself, Dad,” Sandy said quietly. “I
wouldn’t have left you, knowing that you were in some
kind of serious trouble.”
“That goes for me too, sir,” Jerry backed him up.
“What I don’t understand,” Sandy said, “is how they
caught you.”

174
“We walked right into their hands,” Professor Crowell
explained. “Parker knew we were coming up to the
Kennecott mine and tipped them off. They flew up
ahead of us, hid their plane in the trees and covered up
the ski tracks. When we arrived they were waiting for
us.”
“A whole gang of them,” Lou Mayer put in. “Seven of
them, armed to the teeth. Four of them took our plane
back to Cordova so the people at the airport wouldn’t
report us missing.”
“I know,” Sandy said grimly. “They took care of the
hotel too. By the time the authorities get suspicious it
will be too late. The one called Kruger says we’ll be in
Russia by then.”
Dr. Steele and Professor Crowell looked at each other
hopelessly. “Unless we tell them what they want to
know,” Dr. Steele said.
Sandy’s eyes were puzzled. “Just what are they after? I
guess you can tell us now.”
Dr. Steele smiled wanly. “I guess we can.” He paused
before he went on. “Although he’s better known as a
geologist, Professor Crowell is one of Canada’s leading
physicists. During World War Two he was assigned to
rocket research work for the Canadian Army and
continued to specialize in this field after the war.
“About six months ago an old Yukon prospector
submitted an ore sample to a government assay office
at Whitehorse. He said he had been prospecting on the
Alaskan border and struck what he believed was a vein
of gold. An analysis of the sample revealed traces of
copper, but no gold. But much more important, it

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