‘I forgot to tell you, Alan. I’ve met the woman I’m going to marry.’
‘Does she know yet?’
‘No.’
‘I see,’ said Alan. ‘Then your marriage will closely resemble your banking career. Anyone directly involved will be informed after you’ve made your decision.’
William laughed, picked up the other phone and put in a sell order on the rest of his stock. Tony Simmons was standing in the doorway when he put the telephone down. From the expression on his face, it appeared that he thought William had gone quite mad.
‘You could lose your shirt if you dump all your stocks with the market in its present state.’
‘I’ll lose a lot more than my shirt if I hold onto them,’ replied William.
The loss he suffered during the following week was over $1 million, which would have buried a less confident man. William reinvested his capital in any material that had a sharp edge: gold, silver, nickel and tin.
At a board meeting the following day, he also lost - by 8 votes to 6 - his proposal to immediately liquidate the bank’s stocks. Tony Simmons convinced the board that it would be irresponsible not to hold out a little longer. The only small victory William notched up was persuading his fellow directors that the bank should not buy any more shares.
The market rose a few points the following day, which gave William the opportunity to sell most of what was left of his own stock. By the end of the week, when the index had risen steadily for four days in a row, William was even beginning to wonder if he had been over-reacting, but all his past experience and instinct told him he had made the right decision. Alan Lloyd said nothing; the money William was losing was not his business, and in any case, he was looking forward to a quiet retirement.
On October 22, the market suffered further heavy losses and William again begged Alan to get out while he still had 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 collapsed in an avalanche of selling, and it didn’t matter what the bank tried to dispose of, because there were no longer any buyers in the market. During the next week the dumping of stock turned into a stampede as every small investor in America put in a sell order as they tried to get out as quickly as possible. Such was the panic that the ticker tape machine could not keep pace with the transactions. Only when the Exchange opened the next morning, after the clerks had worked all through the night, did traders know how much the market had lost.
William had sold off nearly all the stock in his trust, and his personal loss was proportionately far smaller than the bank’s. After losing more than $3 million in four days, even Tony Simmons had taken to acting on William’s advice.
On October 29, Black Tuesday, as it came to be known, the market started to fall again. 16,610,030 shares were traded. The truth, though few would admit it, was that every financial establishment in America was insolvent. If every one of their customers had demanded cash - or if they in turn had tried to call in all their loans - the whole banking system would have collapsed overnight.
A board meeting held on November 9th 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 the day before. It was the eleventh suicide in Boston banking circles in two weeks, and the dead man had been a close personal friend of Alan Lloyd’s. Alan went on to announce that Kane and Cabot had now lost nearly $4 million. Almost all the bank’s small investors had gone under, and most of the larger ones were having impossible cash flow problems.
Angry mobs had begun to gather outside banks in Wall Street, and the elderly guards had to be replaced by Pinkerton agents.
‘Another week of this,’ said Alan, ‘and every one of us will be 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 any major American bank. Tony Simmons also offered his resignation, but once again his fellow directors didn’t even call for a vote. As Simmons no longer appeared to be the obvious candidate to succeed Alan Lloyd, William kept a magnanimous silence.
As a compromise, Simmons was dispatched to London to take overall charge of the bank’s operations in Europe. Out of harm’s way, thought William, after the board had appointed him as the new Investment Director. He immediately invited Matthew Lester to join him as his deputy. This time Alan Lloyd didn’t even raise an eyebrow, which made William wonder if he should have insisted that Matthew also be invited to join the board; but the moment had passed.
Matthew wasn’t able to join the bank until early in the spring, which was the earliest his father felt able to release him. Lester’s hadn’t been without its own troubles.
The winter of 1929 could not have been worse, and William tried to remain dispassionate as he watched small and large firms alike, run by Bostonians he had known all his life, go under. He even began to wonder if Kane and Cabot could survive.
At Christmas he spent a glorious week in Florida with Kate, helping her pack her belongings in trunks and tea chests - ‘The ones Kane and Cabot let me keep,’ she teased - for her return to Boston. William’s Christmas presents filled another tea chest, making her feel quite guilty about his generosity.
‘What can a penniless widow hope to give you in return?’ she mocked.
William returned to Boston in high spirits, hoping his time with Kate heralded the start of a better year.
27
ABEL STROLLED INTO the dining room of the hotel and was surprised to find Melanie sitting at her father’s table. She wasn’t looking her usual well-groomed self, and appeared tired and apprehensive. He nearly walked over to ask her if everything was all right but, remembering their last meeting, decided against it. On the way back to his office he found Davis Leroy standing by the reception desk. He had on the checked jacket he had been wearing the first time Abel had seen him at the Plaza.
‘Is Melanie in the dining room?’ Davis asked.
‘Yes, she is,’ said Abel. ‘I didn’t realize you were coming into town today, Davis. I’ll get the Presidential Suite ready for you immediately.’
‘Only for one night, Abel, and I’d like to have a private word with you later.’
‘Of course.’
Abel didn’t like the sound of ‘private’, wondering if Melanie had complained to her father about him. Was that why he had found it impossible to talk to Davis during the past few days?
Leroy hurried past him into the dining room, while Abel went over to the reception desk to check whether the Presidential Suite was available. Half the rooms in the hotel were unoccupied, so it came as no surprise that it was free. He booked Davis in, and then waited by the reception desk for over an hour. He saw Melanie leave the dining room, her face red, as if she’d been crying. Her father came out a few minutes later.
‘Get yourself a bottle of bourbon, Abel - don’t tell me we don’t have one - and then join me in my suite.’
Abel picked up a couple of bottles from his safe and joined Leroy on the seventeenth floor, still wondering if Melanie had complained about him.
‘Open the bottle and pour me a very large one, Abel,’ Leroy instructed.
Once again Abel felt the fear of the unknown. His palms began to sweat. Surely he was not going to be fired for wanting to marry the boss’s daughter? He and Leroy had been friends for over a year now, close friends, he thought.
‘And you’d better fill your glass as well, Abel.’
Abel carried out his boss’s instructions, but only toyed with his drink while he waited for Leroy to speak.
‘Abel, I’m wiped out.’ Leroy paused, took a gulp and then poured himself another drink.
Abel didn’t speak, partly because he couldn’t think what to say. After taking a swig of bourbon, he managed, ‘But you still own eleven hotels.’
‘Used to own,’ said Davis Leroy. ‘Have to put it in the past tense now, Abel. I no longer own any of them; the b
ank took possession last Thursday.’
‘But they belong to you - they’ve been in your family for two generations,’ said Abel.
‘That’s true, but they aren’t any longer. Now they belong to a bank. There’s no reason why you shouldn’t know the whole truth, Abel; after all, the same thing’s happening to almost everyone in America right now, big or small. About ten years ago I borrowed two million dollars from the bank, using the hotels as collateral. I invested the money right across the board in stocks and bonds, fairly conservatively and in well-established companies. I built the capital up to nearly five million, which was one of the reasons the hotel losses never bothered me too much - they were tax deductible against the profits I was making in the market. Today I couldn’t give those shares away. We may as well use them as toilet paper in the hotels. For the last three weeks I’ve been selling as fast as I can, but there are no buyers out there. The bank foreclosed on my loan last Thursday. Most people who are affected by the crash only have pieces of paper to cover their losses, but in my case, the bank that backed me held the deeds of the hotels as security against the original loan. So when the bottom dropped out of the market, they immediately took possession of the properties. The bastards are going to sell them just as soon as they can find a buyer.’
‘That’s madness,’ said Abel. ‘They’ll get nothing for them right now, but if they got behind us, we could show them a worthwhile return on their investment.’
‘I know you could, Abel, but they’ve got my past record to throw back in my face. I went up to their head office in Boston and told them about you. I assured them I’d devote all my time to the group if they would just support us in the short term, but they weren’t interested. They fobbed me off with some smooth young puppy who had all the textbook answers about cash flows, no capital base and credit restrictions.’ Leroy paused to take a swig of bourbon. ‘Right now, the best thing we can do is get ourselves drunk, because I am finished, penniless, bankrupt.’
‘Then so am I,’ said Abel quietly.
‘No, you have a great future ahead of you, son. Whoever takes over this group can’t make a move without you.’
‘You forget that I own twenty-five per cent of the group.’
Davis Leroy stared at him.
‘Oh my God, Abel. I hope you didn’t put all your money into me.’ His voice was becoming thick.
‘Every last cent,’ said Abel. ‘But I don’t regret it, Davis. Better to lose with a wise man than win with a fool.’ He poured himself another drink.
Tears were filling Leroy’s eyes. ‘You know, Abel, you’re the best friend I’ve ever had. You knock my hotel into shape, you invest your own money, I make you penniless, and you don’t even complain. And then for good measure my daughter refuses to marry you.’
‘You didn’t mind me asking her?’ said Abel, more confident than he would have been before his third bourbon.
‘Silly, stuck up snob doesn’t know a good thing when she sees it. She wants to marry some horse-breeding gentleman from the South with at least a couple of Confederate generals in his family tree, or if she marries a northerner, his great-great-great grandfather will have come over on the Mayflower. If everyone who claims they had a relative on that boat were ever on board together, the damn thing would have sunk long before it left England. Too bad I don’t have another daughter for you, Abel. I sure would have been proud to have you as a son-in-law. You and I would have made a great team, but I still reckon you can beat them all by yourself. You’re young - you still have everything ahead of you.’
At twenty-four, Abel suddenly felt very old.
‘Thank you for your confidence, Davis,’ he said. ‘Who gives a damn for the stock market anyway? You know you’re the best friend I ever had.’
Abel poured himself another bourbon, and swallowed it in one gulp. Between them they finished both bottles by the early morning. When Davis fell asleep in his chair, Abel managed to stagger down to his room on the tenth floor, undress and collapse onto his bed.
He was awakened from a deep sleep by a loud banging on the door. His head was going round and round, but the banging went on and on, louder and louder. Somehow he managed to grope his way to the door. It was a bellboy.
‘Come quickly, Mr Rosnovski, come quickly,’ the boy said as he ran down the hall.
Abel threw on a dressing gown and slippers and staggered down the corridor to join the bellboy, who was holding the elevator door open for him.
‘Quickly, Mr Rosnovski,’ the boy repeated.
‘What’s the hurry?’ demanded Abel, his head still throbbing as the elevator moved slowly down.
‘Someone has jumped out the window.’
Abel sobered up immediately. ‘A guest?’
‘Yes, I think so,’ said the bellboy, ‘but I’m not sure.’
The elevator came to a stop on the ground floor. Abel thrust back the iron gates and ran out into the street. Police cars were already surrounding the hotel, headlights on, sirens wailing. He wouldn’t have recognized the broken body lying on the sidewalk if it had not been for the checked jacket. A policeman was taking down details. A man in plainclothes walked across to join Abel.
‘You the manager?’
‘Yes, I am.’
‘Do you have any idea who this man might be?’
‘Yes,’ said Abel, slurring the word. ‘His name is Davis Leroy.’
‘Do you know where he’s from, or how we can contact his next of kin?’
Abel averted his eyes from Davis’s body and answered automatically.
‘He’s from Dallas. Miss Melanie Leroy is his next of kin, his daughter. She’s a student living on the university campus.’
‘We’ll get someone right over to her.’
‘No, don’t do that. I’ll go and see her myself,’ said Abel.
‘Thank you, sir. It’s always better if they don’t hear the news from a stranger.’
‘What a terrible, unnecessary thing,’ said Abel, his eyes drawn back to the body of his friend.
‘He’s the seventh one in Chicago today,’ said the officer flatly as he closed his little black notebook. ‘We’ll need to check his room later. Don’t rent it again until we give you an all-clear.’ The policeman strolled towards an ambulance as it screeched to a halt.
Abel watched the stretcher-bearers remove what was left of Davis Leroy from the sidewalk. He suddenly felt cold, sank to his knees and was violently sick in the gutter. Once again he had lost his closest friend. Perhaps if I’d drunk less and thought more, I might have been able to save him. He picked himself up, returned to his room, took a long, cold shower and somehow managed to get dressed. He ordered some black coffee and then reluctantly returned to the Presidential Suite. Other than a couple of empty bourbon bottles, there seemed to be no sign of the drama that had taken place only a few minutes earlier. Then he saw the letters on the side table by a bed that had not been slept in. The first was addressed to Melanie, the second to a lawyer in Dallas and the third to Abel Rosnovski. He tore it open, his hands shaking almost uncontrollably.
Dear Abel,
I’m taking the only way out after the bank’s decision. There’s nothing left for me to live for, and I’m too old to start over. I want you to know I believe you’re the one person who might make something out of this terrible mess.
I’ve made a new will in which I’ve left you my 75 per cent of the stock in the Richmond Group. I realize it’s worthless, but it will at least secure your position as the legal owner of the group. As you had the guts to buy 25 per cent with your own money, you deserve the right to see if you can make some deal with the bank. I’ve left everything else to Melanie. Please be the one who tells her.
I would have been proud to have you as a son-in-law, partner.
Your friend,
Davis
Abel read the letter again before placing it in his wallet.
He drove slowly over to the university campus soon after first light. He broke the news as gently as
he could to Melanie. He sat nervously on the couch, not knowing what he could add to the stark message of death. She took it surprisingly well, almost as if she had known it might happen, although she was obviously moved. But there were no tears in front of Abel - perhaps later, when he wasn’t there. He felt sorry for her for the first time in his life.
28
ON JANUARY 4, 1930, Abel Rosnovski boarded a train for Boston. He took a taxi from the station to Kane and Cabot, and arrived at the bank a few minutes early. He sat in a reception room that was larger and more ornate than any bedroom in the Chicago Richmond. He started reading The Wall Street Journal, which was trying to assure its readers that 1930 was going to be a better year. He doubted it. A prim middle-aged woman entered the room.
‘Mr Kane will see you now, Mr Rosnovski.’
Abel rose and followed her down a long corridor into a small oak-panelled room. Behind a large leather-topped desk sat a tall, good-looking man who must, Abel thought, have been about the same age as himself. His eyes were as blue as Abel’s but that was the only similarity. There was a picture on the wall behind him of an older man, whom the young man behind the desk greatly resembled. I’ll bet that’s Dad, Abel thought bitterly. You can be sure he’ll survive the collapse; banks always seem to win, whatever happens.
‘My name is William Kane,’ said the man, rising and extending his hand. ‘Please have a seat, Mr Rosnovski.’
‘Thank you,’ said Abel coolly, shaking his hand.
‘Perhaps you will allow me to apprise you of the current situation as I see it,’ said William.
‘Of course.’
‘Mr Leroy’s tragic and premature death …’ William began, hating the pomposity of his words.
Caused by your callous attitude, thought Abel.
‘… appears to have left you with the immediate responsibility of running the Richmond Group until the bank is in a position to find a buyer. Although all of the shares in the group are now in your name, the property, in the form of eleven hotels, which was held as collateral for the late Mr Leroy’s loan of two million dollars, is legally in our possession. If you wish to disassociate yourself from the whole process, we will understand.’