FOR $1.87:

Nestled away on 18th St. near Gramercy Park, just a couple blocks from the bustling Union Square holiday markets, Pete's Tavern welcomes tipplers with an awning reading "The Tavern O. Henry Made Famous." The writer lived across the street at 55 Irving Place in a first floor apartment featuring three large windows where he could look out at his second home across the street, which was then named Healy's Cafe. (First opened in 1864, the bar would be renamed Pete's in 1922 after Peter Belles purchased the establishment, which today claims itself as the longest continuous tavern in New York City. During Prohibition, the flower shop in front led to the booze in the back, likely protected from police raids by its nearby proximity to Tammany Hall.)

The hard-drinking Henry became a regular at Healy's and was said to consider it an extension of his office at the New York World, who hired him for $100 a week for a single story. Healy's even made it into O. Henry's story 'The Lost Blend,' but in disguise as "Kenealy's," perhaps to keep his favorite watering hole to himself.

According to biographer David Stuart, in late autumn 1905, a new World editor decided Henry's salary far exceeded his output and ordered him fired. Unbeknownst to Henry, the World still wanted him to write up until his contract expired in December. So it came as a shock to Henry when, shortly before the World's big Christmas special edition came out on December 10, an office boy knocked on his apartment door looking for a contribution. The lackey wasn't leaving without a story so O. Henry sat down and banged out "Gift of the Magi" in "two feverish hours" according to the faded plaque outside his apartment building. It fit Henry's pattern of writing overnight, on deadline, and delivering at the last minute, but usually with pristine copy that didn't require much editorial heavy lifting.

On the whole, "Gift of the Magi" encapsulates the best of what O. Henry stories accomplish, a brief lived-in human experience. One that is often, for good, bad, or in-between, given over to an unwanted fate, only to be rescued through a combination of sentimentality and his patented surprise ending.

"O. Henry had a strong sense of form; if you read a story of his blind, you'd be able to identify it as an O. Henry story by the movement of the action, leading up to his famous trick--the twist at the end," says Furman. "The twist is really a wringing out of the plot elements and revealing something that was there all along but the reader hadn't noticed. He was less interested in style than in getting a reaction from his reader. That performative aspect of his stories and his relationship to the reader as audience has appeal to writers now."

Despite the plaque on 55 Irving Place, the question of where O. Henry scribbled down his masterwork remains an open one. Folklore handed down from generations of the tavern's owners claims it was authored inside Pete's--a sacred booth includes multiple pictures and a handwritten letter O. Henry wrote as William Sydney Porter deferring on a dinner invitation--but at least one dissenter claims it was authored in Henry's apartment. Written in 1936, The Quiet Lodger of Irving Place is a series of reminisces about O. Henry's time in New York City by his friend and colleague William Wash Williams. In it, Williams says "Gift of the Magi" was written in the room O. Henry rented. No official documentation exists either way, but what truly matters is the story has become synonymous with Pete's Tavern, the New York City holiday season, and the wonderfully brighly festooned intersection of the two.

"Some of the decorations we have are over 50 years old, so I'd say the Christmas season has always been important to us here at Pete's," says general manager and tavern historian Gary Egan, who started working there as a waiter and bartender in 1987. "Every year, five of us put up all the lights and decorations. We close early and go from midnight to eight in the morning for three weeks straight. And at home, I make gallons and gallons of eggnog and bring it in. It's brutal."

Tweet   @brothersjudd