The story begins with a description of Hester, the mother of the family (Paul's mother). She is referred to throughout the story as "mother and finally reveals her name." She is beautiful but unlucky. Though she married for love and has three healthy children, her marriage is unhappy because of her financial condition.
“Although they lived well, they were never totally happy in the house. There was never enough money. The mother had a small income, and the father had a small income, but not nearly enough for the social position which they had to keep up.”
The family lives in a pleasant house with a garden and servants. The house is filled with expensive modern toys, like a shining rocking horse. The house is always haunted by some hidden anxiety over a lack of money. Father can’t constitute enough money to support their lifestyle. Paul's mother has tried various jobs to make more money but failed. The house becomes haunted with the whispered phrase, "There must be more money!"
One day Paul asks his mother why they don't keep a car like Uncle Oscar does. She explains that they are certainly poor because they have no luck. Father is very unlucky in business, and she is unlucky for having married him. But, Paul makes some counter arguments and declares that he is lucky.
Paul realizes the fact that his mother never admits him as he is lucky. Hence, his primary concern turned to prove as he has enough luck and fortune. While his sisters were playing quietly, Paul rides his rocking horse furiously. Paul whips the rocking horse and commands it to take him to the right direction.
Later, Paul's mother and Uncle Oscar come into his room when Paul is in the midst of his wild rides. Paul's mother is anxious but Uncle Oscar encourages him. When Paul finishes the ride, he tells his mother and Uncle Oscar that he got the right path. When Oscar asked about the name of his horse, he replied that it has different names. Last week, for example, his horse was called Sansovino. Uncle Oscar knows that Sansovino was the name of the horse that won a major annual horse race called the Ascot. Uncle Oscar is a big fan of horse racing and pleased to learn that Paul too had a genuine interest on horse races.
Uncle Oscar decides to talk to Bassett, their young family gardener. Bassett admits that he and Paul discussed the matter regarding betting on horses. Uncle Oscar takes Paul for a drive in his car to learn more. After making Uncle Oscar promise not to tell, Paul reveals him that he and Bassett are partners in betting on horses. Paul gives Bassett money and tells him which horse to bet on. At first, Uncle Oscar thinks it's all a joke until Paul tells him how much money they are betting.
Uncle Oscar takes Paul to the next big horse race and places a bet for both of them on the horse of Paul's choice. The horse Paul chooses comes in first. Uncle Oscar still is doubtful about this mysterious act, but Paul offers to make him a partner.
Uncle Oscar takes Paul and Bassett to an afternoon horse race to talk. Bassett explains that about a year ago, they placed a bet on a horse and lost, but after that their luck turned. Paul says that as long as they're sure which horse to bet on, they win. Uncle Oscar is still not sure about it to believe them and asks to see the money. They drive home and Bassett shows him the cash. Uncle Oscar asks Paul how he knows which horse to bet on, and Paul gives a vague answer with a mysterious smile. Then, Uncle Oscar decides to become their partner.
As the next big horse race is approaching, Paul says he is sure that Lively Spark will win, even though that horse is not favored. The three place their bets, and Lively Spark comes in first. Paul wins £10,000 and Uncle Oscar wins £2,000. Uncle Oscar says this makes him nervous, and he asks Paul what he is going to do with all his money. Paul says he started this for his mother because she and father are unlucky.
Paul says he doesn't want his mother to know that he is lucky because she might try to stop him. So the two make a plan for Paul's mother to receive £5,000 from the family lawyer who will say it came from a relative and is to be paid out £1,000 at a time on her birthday for the next five years.
Paul's mother's birthday comes in November, and the house has been whispering more than ever. Paul's mother had been going into town to work as an artist but is dissatisfied by how little money she made. Paul is anxious to see his mother's reaction when she opens the birthday letter telling her about the money. When she opens the letter at breakfast, Paul's mother's face hardens. Later in the day, Uncle Oscar tells Paul that Paul's mother has asked the lawyer for getting the entire amount at once, and Paul decides she should have it.
Instead of paying off their debts, Paul's mother spends the money on expensive new furnishings and a tutor for Paul. As a result Paul hears the house go mad with screams for more money. In between studying Paul continues to bet on horses, but he isn't always sure of the winner and loses money. By summer Paul is wild-eyed with madness. Uncle Oscar tells him to stop all these playing with horses. Even Paul's mother is anxious about him and tells him she plans to send him to the seashore to rest. Paul tells her desperately that he can't possibly leave before the Derby race. Paul's mother is worried about his obsession with horse racing and tells him gambling has once done irrecoverable damage to her own family.
He tells her that nothing to worry about. Paul knows he has a secret in the house that he hasn't told anyone about, not even Bassett and Uncle Oscar. His secret is that when he rides his rocking horse, it sometimes reveals the name of the horse that will win the next big race.
As Derby race approaches, Paul grows more tense and his mother becomes anxious about him. Two nights before the Derby, she is at a big party in town and becomes overwhelmed with worry about Paul.
Paul's mother and father return from the party at about 2 a.m. Again caught with extreme anxiety, Paul's mother goes upstairs to check on Paul. She listens outside his door and hears a strange heavy noise that goes on and on. She can't identify the sound. She opens the door, switches on the light, and is frozen in fear and anxiety at the sight. Paul, in his green pajamas, is rocking wildly on his horse. When she cries out to him, he screams, "It's Malabar!" and then falls from the horse. Paul's mother rushes to hold him.
For three days Paul suffers from a brain fever and his mother stays by his side, heartbroken. Paul's mother asks everyone what Paul means by "Malabar." Uncle Oscar says it is the name of a horse running for the Derby, and then he speaks to Bassett and places a bet on Malabar.
On the evening of the third day, Paul dies. Bassett asks to speak to Paul. He whispers to Paul that Malabar won and Paul won over £80,000. Paul tells his mother about his rocking horse and how lucky he is. He dies that night. Uncle Oscar comforts his mother by telling him that she is now much richer.
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