At first Mercantile American 5 страница

He had worried, too, about whether he should go to Juanita again; wondered if-she would want to see hunt Butthen he decided that at least one more visit was necessary, and when he came she was matter-of-fact and businesslike, as if what had happened on the last occasion had been put behind her.

She listened to his report, then he told her of his doubts. "I'm just not finding out anything important. Okay, so I deal with Jules LaRocca and the guy who sold me those counterfeit twenties, but both are small fry. Also, when I ask LaRocca questions such as where the fake driver's license came from he clams up tight and gets suspicious. I've no more idea now than when I started of any bigger people in the rackets, or what goes on beyond the DoubleSeven."

"You cannot find out everything in a month," Juanita said.

"Perhaps there isn't anything to be found at least, not what Wainwright wants."

"Perhaps not. But if so, it is not your fault. Besides, it is possible you have discovered more than you know. There is the forged money you have given me, the license number of the car you drove…" "Which was probably stolen."

"Let Mr. Sherlock Holmes Wainwright find that out." A thought struck Juanita. "What about your airline ticket? The one they gave you to come back?" "I used it." "There is always a copy that you keep."

"Maybe I…" Miles felt in his jacket pocket; he had worn the same suit when he went to Louisville. The airline envelope was there, the ticket counterfoil inside.

Juanita took both. "Perhaps it will tell somebody something And I will get your forty dollars back that you paid for the bad money." "You're taking good care of me." "'por qui? It appears someone must."

Estela, who had been visiting a friend in a nearby apartment, came in. "Hullo," she said, "are you going to stay again?" "Not today," he told her. "I'll be leaving soon." Juanita asked sharply, "Why do you need to?"

"No reason. I just thought…" "Then you will have dinner here. Estela will like it."

"Oh, good," Estela said. She asked Miles, "Will you read me a story?"

When he said he would, she brought a book and perched herself happily on his knee.

After dinner, before Estela said good night and went to bed, he read to her again. ~

"You are a kind person, Miles," Juanita said as she emerged from the bedroom, closing the door behind her. While she had been helping Estela into bed, he had risen to go, but she motioned to him, "No, stay. There is something I wish to say."

As before, they sat beside each other on the living-room sofa. Juanita spoke slowly, choosing her words.

"Last time, after you had gone, I regretted the harsh things I thought and said while you were here. One should not judge too much, yet that is what I did. I know that in prison you suffered. I have not been there, but perhaps can guess how bad it was, and how can anyone know unless they themselves were there what they might do? As to the man you spoke of, Karl, if he was kind when so much else was cruel, that is what should matter most."

Juanita stopped, considered, then went on, "For a woman, it is hard to understand how men could love each other in the way you said, and do to each other what you did. Yet I know there are women who love each other in that way, as well as men, and perhaps when all is said, love like that is better than none, better than to hate. So wipe out, please, the hurtful words I spoke, and go on remembering your Karl, admitting to yourself you loved him." She raised her eyes and looked at Miles directly. "You did love him, didn't you?" "Yes," he said; his voice was low. "I loved him."

Juanita nodded. "Then it is better said. Perhaps now you will love other men. I do not know. I do not understand these things only that love is better, wherever it is found."

'Thank you, Juanita." Miles saw that she was crying and found his own face wet with tears.

They stayed silent a long time listening to the Saturday evening hum of traffic and voices from the street outside. Then both began to talk as friends, closer than they had ever been before. They talked on, forgetting time, and where they were; talked far into the night, about themselves, their experiences, lessons learned, their once-held dreams, their present hopes, objectives they might yet attain. They talked until drowsiness eclipsed their voices. Then, still beside each other, holding hands, they drifted into sleep.

Miles awoke first. His body was uncomfortable and cramped… but there was something else which filled him with excitement.

Gently he awakened Juanita, guiding her from the sofa to the rug in front of it where he placed cushions for their pillows. Tenderly and lovingly he undressed her, then himself, and after that he kissed, embraced and confidently mounted her, thrusting himself strongly forward, gloriously inward, while Juanita seized and clasped hired and cried aloud with joy. ~ "I love you, Miles Carino mio, I love your"

Then he knew that, through her, he had found his manhood once again.

"I'll ask you two questions," Alex Vandervoort said. He spoke less crisply than usual; his mind was preoccupied and somewhat dazed by what he had just read. "First,..

how in God's name did you get all this information? Second, how reliable is it?"

"If you don't mind," Vernon Jax acknowledged, "I'll answer those in reverse order."

They were in Alex's office suite in FMA Headquarters Tower, in the late afternoon. It was quiet outside. Most of the staff from the 36th door had already gone home.

The private investigator whom, a month ago, Alex had retained to make an independent study of Supranational Corporation an "outside snooping job," as they agreed had stayed quietly seated, reading an afternoon newspaper, while Alex studied the seventy-page report, induding an appendix of photocopied documents, which Jax had brought in personally.

Today, Vernon Jax was, if anything, more unimpressive in appearance than the last time. The shiny blue suit he was wearing might have been donated to the Salvation Army and rejected. His socks drooped around his ankles, above shoes even less cared for than before. What hair remained on his balding head stuck out untidily like well-used Brillo pads. Just the same, it was equally clear that what Jax lacked in sartorial style he made up in espionage skill.

"About reliability," he said. "If you're asking me whether the facts I've listed could be used, in their present form, as evidence in court, the answer's no. But I'm satisfied the information's all authentic, and I haven't included anything which wasn't checked with at least two good sources, in some cases three. Another thing, my reputation for getting at the truth is my most important business asset. It's a good reputation. I intend to keep it that way.

"Now then, how do I do it? Well, people I work for usually ask me that, and I suppose you're entitled to an explanation, even though I'll be holding some things back which come under the heading of 'trade secrets' and 'protecting sources.'

"I worked for the U. S. Treasury Department for twenty years, most of it as an IRS investigator, and I've kept my contacts green, not only there but in a lot of other places. Not many know it, Mr. Vandervoort, but a way investigators work is by trading confidential information, and in my business you never know when you'll need someone else or they'll need you. You help another man this week, sooner or later he'll come through for you. That way, too, you build up debts and credits, and the payoffs in tip-offs and intelligence go both ways. So what I'm selling when you hire me is not just my financial savvy, which I like to think is pretty fair, but a web of contacts. Some of them might surprise you."

"I've had all the surprises I need today," Alex said. He touched the report in front of him.

"Anyway," fax said, "that's how I got a lot of what's in there. The rest was drudgery, patience, and knowing which rocks to look under." "I see."

'There's one other thing I'd like to clear up, Mr. Vandervoort, and I guess you'd call it personal pride. I've watched you look me over both times we've met, and you haven't much cared for what you've seen. Well, that's the way I prefer people to see me because a man who's nondescript and down-at-the-heel isn't as likely to be noticed or taken seriously by those he's trying to investigate. It works another way, too, because people I talk to don't think I'm important and they aren't on guard. If I looked anything like you, they would be. So that's the reason, but I'll also tell you this: The day you invite me to your daughter's wedding I'll be as well turned out as any other guest."

"If I should ever have a daughter," Alex said, "I’ll bear that in mind."

When fax had gone, he studied the shocking report again. It was, he thought, fraught with the gravest implications for First Mercantile American Bank. The mighty edifice of Supranational Corporation SuNatCo was crumbling and about to topple.

Lewis D'Orsey, Alex recalled, had spoken of rumors about "big losses which haven't been reported… sharp accounting practices among subsidiaries

… Big George Quartermain shopping for a Lockheed-type subsidy." Vernon Jax had confirmed them all and discovered much, much more.

It was too late to do anything today, Alex decided. He had overnight to consider how the information should be used.

Jerome Patterton's normally ruddy face suffused an even deeper red. He protested, "Dammit! what you're asking is ridiculous."

"I'm not asking." Alex Vandervoort's voice was tight with anger which had simmered since last night. "I'm telling you do it"

"Asking, telling what's the difference? You want me to take - an arbitrary action without substantial reason."

"I'll give you plenty of reasons later. Strong ones. Right now there isn't time."

- They were in the FMA president's suite where Alex had been waiting when Patterton arrived this morning.

"The New York stock market has already been open fifty minutes," Alex warned. "We've lost that much time, we're losing more. Because you're the only one who can give an order to the trust department to sell every share of Supranational we're holding."

"I won't!" Patterton's voice rose. "Besides, what the devil is this? Who do you think you are, storming in here, giving orders…"

Alex glanced over his shoulder. The office door was open. He walked to close it, then returned.

"I'll tell you who I am, Jerome. I'm the guy who warned you, and warned the board; against in-depth

involvement with SuNatCo. I fought against heavy trust department buying of the shares, but no one including you would listen. Now Supranational is caving in." Alex leaned across the desk and slammed a fist down hard. His face, eyes blazing, was close to Patterton's. "Don't you understand? Supranational can bring this bank down with it."

Patterton was shaken. He sat down heavily behind the desk. "But is SuNatCo in real trouble? And are you sure?

"If I weren't, do you think I'd be here, behaving this way? Don't you understand I'm giving you a chance to salvage something out of what will be catastrophic anyway?" Alex pointed to his wrist watch. "It's now an hour since the market opening. Jerome, get on a phone and give that order!"

Muscles around the bank president's face twitched nervously. Never strong or decisive, he reacted to situations rather than created them. Strong influence often swayed him, as Alex's was doing now.

"For God's sake, Alex, for your sake, I hope you know what you're doing." Patterton reached for one of two telephones beside his desk, hesitated, then picked it up.

"Get me Mitchell in Trust… No, I'll wait… Mitch? This is Jerome. Listen carefully. I want you to give a sell order immediately on all the Supranational stock we hold

… Yes, sell. Every share." Patterton listened, then said impatiently, "Yes, I know what it'll do to the market, and I know the price is down already. I saw yesterday's quote. We'll take a loss. But still sell… Yes, I do know it's irregular." Hs eyes sought Alex's as if for reassurance. The hand holding the telephone trembled as he said, "There's no time to hold meetings. So do it! Don't waste..." Patterton grimaced, listening. "Yes, I accept responsibility."

When he had hung up the telephone, Patterton poured and drank a glass of water. He told Alex, "You heard what I said. The stock is already down. Our seeing win depress it more. We'll be taking a big beating."

"You're wrong," Alex corrected him. "Our trust clients people who trusted us win take the beating. And itwould be bigger still if we'd waited. Even now we're not out of the woods. A week from now the SEC may disallow those sales." "Disallow? Why?"

"They may rule we had insider knowledge which we should have reported, and which would have halted trading in the stock." "What kind of knowledge?" 'What Supranational is about to be bankrupt."

"Jesus!" Patterton got up from his desk and took a turn away. He muttered to himself, "SuNatCo! Jesus Christ, SuNatCot" Swinging back on Alex, he demanded, "What about our loan? Fifty million."

"I checked. Almost the full extent of the credit has been drawn." "The compensating balance?" "Is down to less than a million."

There was a silence in which Patterton sighed deeply. He was suddenly calm. "You said you had strong reasons. You obviously know something. You'd better tell me what."

"It might be simpler if you read this." Alex laid the Jax report on the president's desk.

"I'll read it later," Patterton said. "Right now, you tell me what it is and what's in it."

Alex explained the rumors about Supranational which Lewis D'Orsey had passed on, and Alex's decision to employ an investigator Vernon Jax.

"What Jax has reported, in total hangs together," Alex declared. "Last night and this morning I've been phoning around, confirming some of his separate statements. All of them check out. The fact is, a good deal of what's been learned could have been discovered by anyone through patient digging except that no one did it or, until now, put the pieces together. On top of that, Jax has obtained confidential information, including documents, I presume by”

Patterton interrupted peevishly, "Okay, okay. Never mind all that. Tell me what the meat is." "I'll give you it in five words: Supranational is out of money. For the past three years the corporation has had enormous losses and survived on prestige and credit. There's been tremendous borrowing to pay off debts; borrowing again to repay those debts; then borrowing still more, and so on. What they've lacked is real cash money."

Patterton protested, "But SuNatCo has reported excellent earnings, year after year, and never missed a dividend."

"It now appears the past few dividends have been paid from borrowings. The rest is fancy accounting. We all know how it can be done. Plenty of the biggest, most reputable companies use the same methods."

The bank president weighed the statement, then said gloomily. "There used to be a time when an accountant's endorsement on a financial statement spelled integrity. Not any more."

"In here" Alex touched the report on the desk between them "are examples of what we're talking about. Among the worst is Greenapastures Land Development. That's a SuNatCo subsidiary." "I know, I know."

"Then you may also know that Greenapastures has big land holdings in Texas, Arizona, Canada. Most of the land tracts are remote, maybe a generation from development. What Greenapastures has been doing is making sales to speculators, accepting small down payments with hedged agreements, and pushing payment of the fun price away into the future. On two deals, final payments totaling eighty million dollars are due forty years from now wed into the twenty-first century. Those payments may never be made. Yet on Greenapastures and Supranational balance sheets, that eighty million is shown as current earnings. Those are just two deals. There are more, only smaller, utilizing the same kind of Chinese accounting. Also, what's happened in one SuNatCo subsidiary has been repeated in others."

Alex paused, then added, "What all of it has done, of course, is make everything look great on paper and push up unrealistically the market price of Supranational shares."

"Somebody's made a fortune," Patterton said sourly. "Unfortunately it wasn't us. Do we have-any idea of the extent of SuNatCo borrowing?"

"Yes. It seems that fax managed to get a look at some tax records which show interest deductions. His estimate of short-term indebtedness, including subsidiaries, is a billion dollars. Of that, five hundred million appears to be bank loans. The rest is mainly ninety-day commercial paper, which they've rolled over."

Commercial paper, as both men knew, were IOUs bearing interest but backed only by a borrower's reputation. "Rolling over" was issuing still more IOUs to repay the earlier ones, plus interest.

"But they're dose to the limit of borrowing," Alex said. "Or so Jax believes. One of the things I confirmed myself is that buyers of commercial paper are beginning to be wary."

Patterton mused, "It's the way Penn Central fell apart. Everybody believed the railroad was blue chip the safest stock to buy and hold, along with IBM and General Motors. Suddenly, one day, Penn Central was in receivership, wiped out, done."

"Add a few more big names since then," Alex reminded him.

The same thought was in both their minds: After Supranational, would First Mercantile American Bank be added to the list?

Patterton's ruddy face had gone pale. He appealed to Alex, "Where do we stand?" No pretense of leadership now. The bank president was leaning heavily on the younger man.

"A lot depends on how much longer Supranational stays afloat. If they can hang on for several months, our sales of their stock today might be ignored, and the breach of the Federal Reserve Act with the loan may not be investigated closely. If the breakup happens quickly, we're in serious trouble with the SEC for not revealing what we know, with the Comptroller of Currency over abuse of trust, and, over the loan, with the Fed Reserve. Then, I need hardly remind you, we're facing an outright loss offifty million dollars, and you know what that will do to this year's earnings statement, so there'll be angry shareholders howling for someone's head. On top of that there could be lawsuits against directors."

"Jesus!" Patterton repeated, "Jesus H. Christ!" He took out a handkerchief and mopped his face and egg-like dome.

Alex went on relentlessly, "There's something else well have to consider publicity. If Supranational goes under there will be investigations. But even before that the press will be on to the story and do probing of their own. Some of the financial reporters are pretty good at it. When the questioning starts, it's unlikely our bank will escape attention, and the extent of our losses will become known and publicized. That kind of news can make depositors uneasy. It could cause heavy withdrawals." "You mean a run on the bank! That's unthinkable."

"No, it isn't. It's happened elsewhere remember Franklin in New York. If you're a depositor, the only thing you care about is whether your money's safe. If you think it might not be, you take it out fast."

Patterton drank more water, then slumped into his chair. If possible, he looked even paler than before.

"What I suggest," Alex said, "is that you call the money policy committee together immediately and we concentrate, during the next few days, on attaining maximum liquidity. That way, we'll be prepared if there's a sudden drain on cash." Patterton nodded. "All right."

"Apart from that there's not much else to do but pray." For the first time since coming in, Alex smiled. "Maybe we should get Roscoe working on that."

"Roscoe!" Patterton said, as if suddenly reminded. "He studied the Supranational figures, recommended the loan, assured us everything was great."

"Roscoe wasn't alone," Alex pointed out. "You and the board supported him. And plenty of others studied the figures and drew the same conclusion." "You didn't."

"I was uneasy; suspicious, maybe. But I had no idea SuNatCo was in the mess it is."

Patterton picked up the telephone he had used earlier. "Ask Mr. Heyward to come in." A pause, then Patterton snapped, "I don't care if God is with him. I need him now." He slammed down the instrument and mopped his face again.

The office door opened softly and Heyward came in. He said, "Good morning, Jerome," and nodded to Alex coolly. Patterton growled, "Close the door."

Looking surprised, Heyward did. "They said it was urgent. If it isn't, I'd like to…" "Tell him about Supranational, Alex," Patterton said. Heyward's face froze.

Quietly, matter-of-factly, Alex repeated the substance of the fax report. His anger of last night and this morning anger at shortsighted foolishness and greed which had brought the bank to the edge of disaster had left him now. He felt only sorrow that so much was about to be lost, and so much effort wasted. He remembered with regret how other worthwhile projects had been cut back so that money could be channeled to the Supranational loan. At least, he thought, Ben Rosselli, by death, had been spared this moment.

Roscoe Heyward surprised him. Alex had expected antagonism, perhaps bluster. There was none. Instead, Heyward listened quietly, interjecting a question here and there, but made no other comments. Alex suspected that what he was saying amplified other information Heyward had received himself, or guessed at. There was a silence when Alex was done.

Patterton, who had recovered some of his aplomb, said, "We'll have a meeting of the money policy committee this afternoon to discuss liquidity. Meanwhile, Roscoe, get in touch with Supranational to see what, if anything, we can salvage of our loan."

"It's a demand loan," Heyward said. "We can call it any time."

'Then do it now. Do it verbally today and follow up in writing. There isn't much hope SuNatCo will have fiftymillion dollars cash on hand; not even a sound company keeps that kind of money in the till. But they may have something, though I'm not hopeful. Either way, we'll go through the motions."

"I'll call Quartermain at once," Heyward said. "May I take that report?" Patterton glanced at Alex.

"I've no objection," Alex said, "but I'd suggest we don't make copies. And the fewer people who know of this, the better."

Heyward nodded agreement. He seemed restless, anxious to get away.

Alex Vandervoort had been partly right in supposing Roscoe Heyward to have some information of his own. Rumors had reached Heyward that Supranational was having problems and he had learned, in the past few days, that some of SuNatCo's commercial paper was meeting resistance from investors. Heyward had also attended a Supranational board meeting his first and sensed that information supplied to directors was less than complete and frank. But, as a "new boy," he had withheld questions, intending to begin probing later. Subsequent to the meeting he had observed a decline in Supranational's share price and decided, only yesterday, to advise the bank's trust department to "lighten up" its holdings as a precaution. Unfortunately when Patterton summoned him this morning he had still not put the intention into effect. Yet nothing Heyward had heard or guessed suggested thesituation was as urgent or as bad as the report, produced by Vandervoort, portrayed it.

Yet having heard the gist of the report, Heyward did not dispute it. Grim and jolting as it was, instinct told him that as Vandervoort put it everything hung together.

It was the reason Heyward had stayed mostly silent while with the other two, knowing at this stage there was little to be said. But his mind had been active, with alarm signals flashing while he weighed ideas, eventualities, and possible escape routes for himself. There were several actions which needed to be taken quickly, though first he would complete his personal knowledge by studying the Jax report. Back in his office, Heyward hurried through some remaining business with a visitor, then settled down to read.

He soon realized that Alex Vandervoort had been accurate in summarizing the report's highlights and the documentary evidence. What Vandervoort had not mentioned were some details of Big George Quartermain's lobbying in Washington for a government-guaranteed loan to keep Supranational solvent. Appeals for such a loan had been made to members of Congress, and at the Department of Commerce and the White House. At one point, it was stated, Quartermain took Vice-President Byron Stonebridge on a trip to the Bahamas with the objective of enlisting the Vice-President's support for the loan idea. Later, Stonebridge discussed the possibility at Cabinet level, but the consensus was against it.

Heyward thought bitterly: Now he knew what Big George and the Vice-President were discussing the night they had walked, deep in conversation, in the garden of the Bahamas house. And while, in the end, the Washington political machine made one of its wiser decisions in rejecting a loan to Supranational, First Mercantile American Bank on Roscoe's urging had bestowed one eagerly. Big George had proved himself the maestro of the soft sell. Heyward could hear him saying, even now: If fifty million is bigger than you people can handle, let's forget the whole thing. I'll give it to Chase. It was an an ancient, conman's ploy and Heyward the shrewd, experienced banker had fallen for it.

One thing, at least, was to the good. In the reference to the Vice-President's journey to the Bahamas, details were sketchy and obviously little was known about the trip. Nor, to Heyward's great relief, did the report refer to Q-Investments.

Heyward wondered if Jerome Patterton had remembered the additional loan, totaling two million dollars, committed by FMA to Q-Investments, the private speculators' group headed by Big George. Probably not. Nor did Alex Vandervoort have any knowledge of it, though he was bound to find out soon. What was more important, though, was to ensure that Heyward's own acceptance of "bonus" Q-lnvestments shares should never be discovered. He wished fervently he had returned them to G. G. Quartermain, as he had at first intended. Well, it was too late for that now, but what he could do was remove the share certificates from his safe deposit box and shred them. That would be safest. Fortunately, they were nominee certificates, not registered in his name.

For the moment, Heyward realized, he was ignoring the competitiveness between himself and Alex Vandervoort, concentrating instead on survival. He had no illusions about what the collapse of Supranational would do to his own standing in the bank and with the board. He would be a pariah the focus of everybody's blame. But perhaps, even now, with quick action and some luck, it was not too late for a recovery. If the loan money was regained, he might become a hero.

The first order of business was to get in touch with Supranational. He instructed his secretary, Mrs. Callaghan, to get G. G. Quartermain on the telephone.

Several minutes later she reported, "Mr. Quartermain is out of the country. His office is vague about where he is. They won't give any other information."

It was an inauspicious start and Heyward snapped, "Then get Inchbeck." He had had several conversations with Stanley Inchbeck, Supranational's comptroller, since they first met in the Bahamas.

Inchbeck's voice, with its nasal New York accent, came briskly on the line. "Roscoe, what can I do?"

"I've been trying to locate George. Your people don't seem to…" "He's in Costa Rica." "I'd like to speak to him. Is there a number I can call?" "No. He left instructions he doesn't want calls." "This is urgent." "Then tell me."

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