第 31 页

Kate, I find I am missing you already. And it's only a few hours. Please write and let me know when you will be coming to Boston.

Meanwhile I shall be getting back to the bank's business and find I can put you out of my mind for quite long periods (i.e. 10 ?5 minutes) at a stretch consecutively.

Love William

He had just dropped the envelope into the mail box on Charles Street when all thoughts of Kate were driven from his mind by the cry of a newsboy.

'Wall Street collapse!'

William seized a copy of the paper and scanned the lead story rapidly.

The market had plummeted overnight; some financiers viewed it as nothing more than a readjustment; William saw it as the beginning of the landslide that he had been predicting for months. He hurried to the bank and went straight to the chairman's office.

'I'm sure the market will steady up in the long run,' said Alan Lloyd soothingly.

'Never,' said William. 'The market is overloaded. Overloaded with small investors who thought they were in for a quick profit and are certain to run for their lives now. Don't you see the balloon is about to burst? I'm going to sell everything. By the end of the year, the bottom will have dropped out of this market, and I did warn you in February, AhuLl

'I still don't agree with you, William, but I'll call a full board meeting for tomorrow, so that we can discuss your views in more detail.'

'Thank you,' said William. He returned to his office and picked up the inter-office phone.

'Alan, I forgot to tell you. I've met the girl I'm going to marry.'

'Does she know yet?' asked Alan.

'No,' said William.

'I see,' said Alan. 'Then your marriage win closely resemble your banking career, William. Anyone directly involved will be informed only after you've made your decision!'

William laughed, picked up the other phone, and immediately placed his own major stock holdings on the market and went into cash. Tony Simmons had just come in, and stood at the open door watching William, thinking he had gone quite mad.

'You could lose your shirt overnight dumping all those shares with the market in its present state.'

'I'll lose a lot more if I hold on to them,' replied William.

The loss he was to make in the following week, over one million dollars, would have staggered a less confident man.

At the board meeting the next day he also lost, by eight votes to six, his proposal to liquidate the bank's stocks; Tony Simmons convinced the board that it would be irresponsible not to hold out for a little longer. The only small victory William notched up was to persuade his fellow directors that the bank should no longer be a buyer.

The market rose a little that day, which gave William the opportunity to sell some more of his own stock. By the end of the week, when the index had risen steadily for four days in a raw, William began to wonder if he had been over-reacting, but all his past training and instinct told him that he had made the right decision. Alan Lloyd said nothing; the money William was losing was not his, and he was looking forward to a quiet retirement.

On 22 October the market suffered more heavy losses and William again begged Alan Lloyd to get out while there was still a chance. This time Alan listened and allowed William to place a sell order on some of the bank's major stocks. The following day, the market fell again in an avalanche of selling, and it mattered little what holdings the bank tried to dispose of because there were no longer any buyers. The dumping of stock turned into a stampede, as every small investor in America put in a sell bid to try to get out from under. Such was the panic that the ticker tape could not keep pace with the transactions. Only when the Exchange opened in the morning, after the clerks had worked all night, did traders know for a fact how much they had lost the day before.

Alan Lloyd had a phone conversation with J. P. Morgan, and agreed that Kane and Cabot should join a group of banks who would try to shore up the national collapse in major stocks. William did not disapprove of this policy, on the grounds that if there had to be a group effort, Kane and Cabot should be responsibly involved in the action. And, of course, if it worked, all the banks would be better off. Richard Whitney, the vice-president of the New York Stock Exchange and the representative of the group Morgan had put together, went on the floor of the New York Stock Exchange and purchased thirty million dollars worth of blue-chip stocks the next day. The market began to hold. Twelve million, eight hundred and ninety-four thousand, six hundred and fifty shares were traded that day, and for the next two days the market held steady.

Everyone, from President Hoover to the runners in the brokerage houses, believed that the worst was behind them.

William had sold nearly all of his private stock and his personal loss was proportionately far smaller than the bank's, which had dropped over three million dollars in four days; even Tony Simmons had taken to following all of William's suggestions. On 29 October, Black Tuesday as the day came to be known, the market fell again. Sixteen million, six hundred and ten thousand and thirty shares were traded. Banks all over the country knew that the truth was, that they were now insolvent. If every one of their customers demanded cash - or if they in turn tried to call in all their loans - the whole banking system would collapse around their ears. A board meeting held on 9 November opened with one minute's silence in memory of John J. Riordan, president of the County Trust, and a director of Kane and Cabot, who had shot himself to death in his own home. It was the eleventh suicide in Boston banking circles in two weeks; the dead man had been a close personal friend of Alan Lloyd's. The chairman went on to announce that Kane and Cabot had themselves lost nearly four million dollars, the Morgan Group had failed in its effort to unite, and it was now expected that every bank should act in its own best interests. Nearly all the bank's small investors had gone under, and most of the larger ones were having impossible cash problems. Angry mobs had already gathered outside banks in New York and the elderly guards had had to be supplemented with Pinkertons. Another week like this, said Alan, and every one of us will he wiped out. He offered his resignation, but the directors would not hear of it. His position was no different from that of any other chairman of a major bank in America. Tony Simmons also offered his resignation, but once again his fellow directors would not consider it. Tony was no longer destined to take Alan Lloyd's place so William kept a magnanimous silence.

As a compromise, Simmons was sent to London to take charge of overseas investments. Out of harnes way, thought William, who now found himself appointed Director of Finance, in charge of all the bank's investments.

Immediately he invited Matthew Lester to join him as his number two. This time Alan Lloyd didn't even raise an eyebrow.

Matthew agreed to join William early in the New Year, which was as soon as his father could release him. They hadn't been without their own problems. William, therefore, ran the investment department on his own, until Matthew's arrival. The winter of 1929 turned out to be a depressing period for William, as he watched small firms and large firms alike, run by friends he had known all his life, go under, For some time he even wondered if the bank itself could survive.

At Christmas William spent a glorious week in Florida with Kate, helping her pack her belongings in tea chests ready for returning to Boston. 'The ones Kane and Cabot let me keep,' she teased.

William's Christmas presents filled another tea chest and Kate felt quite guilty about his generosity. 'What can a penniless widow hope to give you in return?' she mocked. William responded by bundling her into the remaining tea chest and labelling it 'William's present'.

He returned to Boston in high spirits, and hoped his stay with Kate augured the start of a better year. He settled down into Tony Simmons' old office to read the morning mail, knowing he would have to preside over the usual two or three liquidation meetings scheduled for that week.

He asked his secretary whom he was to see first.

'I'm afraid it's another bankruptcy, Mr. Kane.'

'Oh, yes, I remember the case,' said William. The name had meant nothing to him. 'I read over the file last night. A most unfortunate affair. What time is he due?'

'At ten o'clock, but the gentleman is already in the lobby waiting for you, sir.'

'Right, said William, 'please send him in. Let's get it over with.'

William opened his file again to remind himself quickly of the salient facts. There was a line drawn through the name of the original client, a Mr. Davis Leroy. It had been replaced by that of the morning's visitor, Mr. Abel Rosnovski.

William vividly remembered the last conversation he had had with Mr. Rosnovski, and was already regretting it.

16

It took Abel about three months to appreciate the full extent of the problems facing the Richmond Continental and why the hotel went on losing so much money. The simple conclu sion he came to after twelve weeks of keeping his eyes wide open, while at the same time allowing the rest of the staff to believe that he was half asleep, was that the hotel's profits were being stolen.

The Richmond staff was working a collusive system on a scale which even Abel had not previously come across. The system did not, however, take into account a new assistant manager who had, in the past, had to steal bread from the Russians to stay alive. Abel's first problem was not to let anybody know the extent of his discoveries until he had a chance to look into every part of the hotel. It didn't take him long to figure out that each department had perfected its own system for stealing.

Deception started at the front desk where the clerks were registering only eight out of every ten guests and pocketing the cash payments from the remaining two for themselves. The routine they were using was a simple one; anyone who had tried it at the Plaza in New York would have been discovered in a few minutes and fired. The head desk clerk would choose an elderly couple, who had booked in from another state for only one night. He would then discreetly make sure they had no business connections in the city, and simply fail to register them. If they paid cash the following morning, the money was pocketed and, provided they had not signed the register, there was no record of the guests ever having been in the hotel. Abel had long thought that all hotels should automatically have to register every guest. They were already doing so at the Plaza.

In the dining room, the system had been refined. Of course, the cash payments of any casual guest for lunch or dinner were already being taken. Abel had expected that, but it took him a little longer to check through the restaurant bills and establish that the front desk was working with the dining room staff to ensure that there were no restaurant bills for those guests whom they had already chosen not to register. Over and above that there was a steady trail of fie, titious breakages and repairs, missing equipment, disappearing food, lost bed linen, and even an occasional mattress had gone astray. After checking every department thoroughly and keeping his ears and eyes open, Abel concluded that over half of the Richmond's staff were involved in the conspiracy, and that no one department had a completely clean record.

When he had first come to the Richmond, Abel had wondered why the manager, Desmond Pacey, hadn't noticed what had been going on under his nose a long time before. He wrongly assumed the reason was that the man was lazy and could not be bothered to follow up complaints. Even Abel was slow to catch on to the fact that the lazy manager was the mastermind behind the entire operation, and the reason it worked so well. Pacey had worked for the Richmond group for over thirty years. There was not a single hotel in the group in which he had not held a senior position at one time or another, which made Abel fearful for the solvency of the other hotels. Moreover, Desmond Pacey was a personal friend of the hotels' owner, Davis Leroy. The Chicago Richmond was losing over thirty thousand dollars a year, a situation Abel knew could be redeemed overnight by firing half the staff, starting with Desmond Pacey. That posed a problem, because Davis Leroy had rarely fired anyone in thirty years. He simply tolerated the problems, hoping that in time they would go away.

As far as Abel could see, the Richmond hotel staff went on stealing the hotel blind until they reluctantly retired.

Abel knew that the only way he could reverse the hotel's fortunes was to have a show-down with Davis Leroy, and to that end, early in 1928, he boarded the express train from Illinois Central to St. Louis and the Missouri Pacific to Dallas. Under his arm was a two-hundred page report which he had taken three months to compile in his small room in the hotel annex. By the time he bad finished reading through the mass of evidence, Davis Leroy sat staring at him in dismay.

'These people are my friends,' were his first words as he closed the dossier. 'Some of them have been with me for thirty years. Hell, there's always been a little fiddling around in this business, but now you tell me they've been robbing me blind behind my back?'

'Some of them, I should ffiin~ for all of those thirty years,' said Abel.

'What in hell's name am I going to do about it?' said Leroy.

'I can stop the rot if you remove Desmond Pacey and give me carte blanche to sack anyone who has been involved in the thefts, starting tomorrow.'

'Well now, Abel, I wish the problem was as simple as that!'

'The problem is just that simple,' said Abel. 'And if you won't let me deal with the culprits, you can have my resignation as of this minute, because I have no interest in being a part of the most corruptly run hotel in America!'

'Couldn't we just demote Desmond Pacey to assistant manager? Then I could make you manager and the problem would come under your control!

'Never,' replied Abel. 'Pacey has over two years to go and has a firm hold over the entire Richmond staff, so that by the time I get him in line you'll be dead or bankrupt, or both, as I suspect all of your other hotels are being run in the same cavalier fashion. If you want the trend reversed in Chicago, you'll have to make a firm decision about Pacey right now, or you can go to the wall on your own. Take it or leave it.'