O. Henry is the pen name of American writer William Sydney Porter (September 11, 1862 – June 5, 1910). O. Henry short stories are known for wit, wordplay, warm characterization and clever twist endings. Porter grew up in North Carolina, then moved to Texas in the 1880s. Like many writers, this short story author wasn't very good with money. That was a problem, because before he began writing stories, Porter began working at the First National Bank of Austin as a teller and bookkeeper. The bank was operated informally and Porter had trouble keeping track of his books. In 1894, some of the money that passed through his hands turned up missing. He lost his job, and at first it looked like the whole thing might blow over.

Porter and his family moved to Houston in 1895, where he started writing for the Post. His salary was only $25 a month, but it rose steadily as his popularity increased. Porter gathered ideas for his column by hanging out in hotel lobbies and observing and talking to people there. This was a technique he used throughout his writing career. While he was in Houston, the First National Bank of Austin was audited and the federal auditors found several discrepancies. They managed to get a federal indictment against Porter. Porter was subsequently arrested on charges of embezzlement, charges which he denied, in connection with his employment at the bank.

Porter's father-in-law posted bail to keep Porter out of jail, but the day before Porter was due to stand trial on July 7, 1896, he fled, first to New Orleans and later to Honduras. While he was in Honduras, Porter coined the term "banana republic", subsequently used to describe almost any small tropical dictatorship in Latin America. His wife was too sick to join him and six months later, he got word that his wife was dying, so he returned to the United States to be with her and face trial. Athol Estes Porter died on July 25, 1897 from tuberculosis (then known as consumption). Porter, having little to say in his own defense, was found guilty of embezzlement in February 1898, sentenced to five years jail, and imprisoned on March 25, 1898, at the Ohio Penitentiary in Columbus, Ohio.

It seemed like a terrible tragedy for him, yet it was a great day for American literature. From his jail cell, Porter began writing short stories and a New York daily paper eagerly published them. Porter had taken the pen name O. Henry, fearing that as he got progressively more famous somebody would dredge up his past and publicly humiliate him. From this low point in Porter's life, he began a remarkable comeback. Three years (released early on July 24, 1901, for good behavior) and about a dozen short stories later, he emerged from prison as O. Henry. He moved to New York City, where over the next ten years before his death in 1910, he published over 300 stories and gained worldwide acclaim as America's favorite short story writer.

While it didn't help support his proclaimed innocence that he had fled the country, his defenders depicted him as being basically honest, just not very good with money. There is some support for that claim. Read the first three lines of his most famous story, The Gift of the Magi, in which he describes an impossible set of change: "One dollar and eighty-seven cents. That was all. And 60 cents of it was in pennies... " "The Gift of the Magi" is about a young couple who are short of money but desperately want to buy each other Christmas gifts. Unbeknownst to Jim, Della sells her most valuable possession, her beautiful hair, in order to buy a platinum fob chain for Jim's watch; while unbeknownst to Della, Jim sells his own most valuable possession, his watch, to buy jeweled combs for Della's hair. The essential premise of this story has been copied, re-worked, parodied, and otherwise re-told countless times in the century since it was written.

O. Henry stories are famous for their surprise endings, to the point that such an ending is often referred to as an "O. Henry ending." Most of O. Henry's stories are set in his own time, the early years of the 20th century. Many take place in New York City, and deal with ordinary people: clerks, policemen, waitresses. His stories are also well known for witty narration. O. Henry's work provides one of the best English examples of catching the entire flavor of an age. Whether roaming the cattle-lands of Texas, exploring the art of the "gentle grafter," or investigating the tensions of class and wealth in turn-of-the-century New York, O. Henry had an inimitable hand for isolating some element of society and describing it with an incredible economy and grace of language.

Henry's best known work is perhaps the much anthologized The Ransom of Red Chief, published in the collection Whirligigs in 1910. O. Henry's humorous, energetic style shows the influence of Mark Twain and Ambrose Bierce. The story tells about two kidnappers, who make off with the young son of a prominent man. They find out that the child is a real nuisance. In the end they agree to pay the boy's father to take him back. "Sam," says Bill, "I suppose you'll think I'm a renegade. but I couldn't help it. I'm a grown person with masculine proclivities and habits of self-defense, but there is a time when all systems of egotism and predominance fail. The boy is gone. I sent him home. All is off. There was martyrs in old times," goes on Bill, "that suffered death rather than give up the particular graft they enjoyed. None of 'em ever was subjugated to such supernatural tortures as I have been. I tried to be faithful to our articles of depredation; but there came a limit."

Some of his least-known, yet best work resides in the collection Cabbages and Kings, a series of stories which each explore some individual aspects of life in a paralytically sleepy Central American town while each advancing some aspect of the larger plot and relating back one to another in a complex structure which slowly explicates its own background even as it painstakingly erects a town which is one of the most detailed literary creations of the period.

The Four Million is another collection of stories. It opens with a reference to Ward McAllister's "assertion that there were only 'Four Hundred' people in New York City who were really worth noticing. But a wiser man has arisen—the census taker—and his larger estimate of human interest has been preferred in marking out the field of these little stories of the 'Four Million.'" To O. Henry, everyone in New York counted. He had an obvious affection for the city, which he called "Bagdad-on-the-Subway," and many of his stories are set there.