‘Give me six months, sir, and if you still feel the same way, I won’t put up a fight.’
There was a long silence before Cork-Smith spoke again: ‘Charles Lester was right: you are the son of Richard Kane.’
‘Will you continue to serve this bank, sir?’
‘I will, young man. There’s no fool like an old fool, don’t you know.’
Rupert Cork-Smith rose slowly with the aid of his stick. William jumped up to help him, but was waved away.
‘Good luck, my boy. You can rely on my total support.’
‘Thank you, sir.’
When he opened the door, William saw Peter Parfitt waiting in the corridor. As Cork-Smith left, the two men did not speak.
Parfitt blustered in. ‘Well, I tried, and I lost. A man can’t do more,’ he said, laughing. ‘No hard feelings, Bill?’ He extended his hand.
‘There are no hard feelings, Mr Parfitt,’ said William, not offering him a seat. ‘As you rightly say, you tried, and you lost. You will now resign as a director of this bank.’
‘I’ll do what?’ said Parfitt incredulously.
‘Resign,’ said William.
‘That’s a bit rough, isn’t it, Bill? My action wasn’t personal. I simply felt—’
‘I don’t want you in my bank, Mr Parfitt. You’ll leave tonight and never set foot on the premises again.’
‘And if I say I won’t go? I own a good many shares in the bank and I still have a lot of support on the board. What’s more, I could take you to court.’
‘I would recommend that you read the bank’s bylaws, Mr Parfitt.’ William picked up the small leather-bound book that was lying on the desk and turned over a few pages. Having found a paragraph he had marked that morning, he read aloud. ‘“The chairman has the right to remove any office holder in whom he has lost confidence.” I have lost confidence in you, Mr Parfitt, and you will therefore resign. You will receive two years’ pay, and any other benefits to which you are entitled. If, on the other hand, you force me to remove you, you will leave the bank with nothing other than your stock and your reputation, whatever that is worth. The choice is yours.’
‘Won’t you give me a second chance?’
‘I gave you a chance last week when you invited me to dinner, and you lied and dissembled. Those are not traits I am looking for in my deputy chairman. Will it be resignation, or do I have to throw you out, Mr Parfitt?’
‘Damn you, Kane. I’ll resign.’
‘Good. Then you’ll sit down and write the letter now.’
‘No. I’ll let you have it in the morning, in my own good time.’
‘Now - or I’ll fire you,’ said William.
Parfitt hesitated, then sank heavily into a chair. William handed him a sheet of the bank’s headed paper and proffered a pen. Parfitt took out his own pen and started writing. When the letter was finished, William picked it up and read it through carefully.
‘Good day, Mr Parfitt.’
Parfitt left without another word. William allowed himself a smile as Ted Leach entered the room.
‘You asked to see me, Mr Chairman?’
‘Yes,’ said William. ‘I want to appoint you as the bank’s new deputy chairman. Mr Parfitt felt he had to resign.’
‘Oh, I’m surprised to hear that. I would have thought …’
William passed him the letter. Leach read it and then looked back at William.
‘I shall be delighted to be deputy chairman. Thank you for your confidence in me.’
‘Good. I’d be obliged if you would arrange for me to meet every director during the next few days. I’ll be at my desk at eight o’clock tomorrow morning.’
‘Yes, Mr Chairman.’
‘Perhaps you will also be kind enough to give Mr Parfitt’s letter of resignation to the company secretary?’
‘As you wish, Mr Chairman.’
‘My name is William - that was another mistake Mr Parfitt made.’
Leach smiled tentatively. ‘I’ll see you tomorrow morning’ - he hesitated - ‘William.’
After he’d left, William sat in Charles Lester’s chair and whirled himself around in an uncharacteristic burst of sheer glee until he was dizzy. He then looked out of the window onto Wall Street, elated by the bustling crowds and the sight of the leading banks and brokerage houses of America. This was where he’d wanted to be all his life.
‘And who, pray, are you?’ demanded a female voice from behind him.
He swivelled around to find a primly dressed middle-aged woman looking at him irately.
‘I might ask you the same question,’ said William.
‘I am the chairman’s secretary,’ the woman said stiffly.
‘And I,’ said William, ‘am the chairman.’
William moved to New York the following Monday, but it was some weeks before Kate and the family were able to join him. First he had to find a house suitable for the new chairman of Lester’s Bank, and more importantly a school that could guarantee Richard a place first at St Paul’s, and later at Harvard.
For the next three months, as William tried to extricate himself from Boston as well as carrying out his job in New York, he wished that every day had forty-eight hours. He found the umbilical cord was harder to sever than he’d anticipated. Tony Simmons was fully supportive, and William began to appreciate why Alan Lloyd had backed him to be chairman of Kane and Cabot. For the first time he was even willing to admit that Alan might have been right.
Kate’s life in New York was soon fully occupied. Virginia could almost toddle across a room and find her way into William’s study before Kate could catch up with her, and all Richard wanted was a new Windbreaker so he would be like every other boy in New York. As the wife of the chairman of a New York bank Kate was expected to give cocktail parties and private dinners regularly, subtly making sure that directors and major clients always had a chance to have a private word with William, so they could seek his advice or voice their opinions. She handled these occasions with great charm and diplomacy, and William was eternally grateful to the liquidation department of Kane and Cabot for supplying him with his greatest asset.
When Kate informed him that she was going to have another baby, all he could ask was, ‘When did I find the time?’ Virginia was thrilled by the news, not fully understanding why Mummy was getting so fat, and Richard refused to discuss it.
When William faced his first AGM a month later, his position as chairman was unanimously confirmed. William tried not to smile when Mr Cohen reminded him that several of the shareholders wouldn’t inherit a dime if they failed to vote for him. William was surprised to see Peter Parfitt seated in the back row, arms folded, and even more surprised to see Susan Lester seated next to him. When it came to the vote their arms remained folded.
Kate gave birth to their third child at the end of William’s first year as chairman of Lester’s, a second girl, whom they named Lucy. William taught Virginia how to rock Lucy’s cradle; while Richard, now ready to enter the first grade at the Buckley School, used the new arrival as the opportunity to talk his father into buying him a new baseball bat. Lucy, unable to make any articulate demands, nevertheless became the third woman who could twist William around her little finger.
In William’s first year as chairman of Lester’s the bank’s profits were slightly up, and he assured the shareholders who attended his second AGM that he could see no reason why there shouldn’t be an even greater improvement next year.
38
ON SEPTEMBER 1, 1939, German troops marched into Poland.
One of William’s first reactions was to think of Abel Rosnovski. The new Baron hotel on Park Avenue was already becoming the toast of New York, and the quarterly reports from Thomas Cohen showed that Rosnovski was going from strength to strength. But his latest ideas for expansion into Europe might now have to be put on hold for some time. Cohen could still find no direct association between Rosnovski and Henry Osborne.
William had never thought that America would inv
olve herself in another European war, but he kept the London branch of Lester’s open to indicate which side he was on, and never for one moment considered selling off his twelve thousand acres in Hampshire and Lincolnshire. Tony Simmons, on the other hand, informed William that he intended to close Kane and Cabot’s London branch.
The two chairmen now met regularly, on relaxed and friendly terms since they no longer had any reason to see themselves as rivals. Each had come to use the other as a sounding board for new ideas. As Tony had predicted, Kane and Cabot had lost some of its more important clients when William became the chairman of Lester’s, but William always kept Tony fully informed whenever an old client expressed a desire to move his account, and he never solicited anyone to join him. When they sat down at a corner table of Locke-Ober’s for their monthly lunch, Tony lost no time in repeating his intention to close the London branch of Kane and Cabot.
‘But why?’ asked William.
‘My first reason is simple,’ said Tony as he sipped his imported Burgundy, not giving a moment’s thought to the likelihood that German boots were about to trample on the grapes in most of the vineyards of France. ‘I think the bank will lose money if we don’t cut our losses and get out of England.’
‘Of course you might lose a little money,’said William, ‘but we must be seen to be supporting the British.’
‘Why?’ asked Tony. ‘We’re a bank, not a supporters’ club.’
‘Britain’s not a baseball team, Tony; it’s a nation of people to whom we owe our entire heritage …’
‘You should take up politics,’ said Tony. ‘I’m beginning to think your talents are wasted in banking. Nevertheless, there’s another, far more important reason why we should close the branch. If the Germans were to march into Britain the way they have into Poland and France - and in Joe Kennedy’s opinion, that is exactly what they plan to do - the bank will be taken over and we would lose every penny we have in London.’
‘Over my dead body,’ said William. ‘If Hitler puts so much as a foot on British soil, America will enter the war the same day, whatever our ambassador in London says.’
‘Never,’ said Tony. ‘FDR has said again and again, “All aid short of war.” And in any case, the America Firsters would raise an almighty hue and cry.’
‘Never listen to a politician who says never,’ said William. ‘Especially Roosevelt. When he says “never”, that only means not today, or at least not this morning. You only have to remember that Woodrow Wilson never stopped saying “never” in 1916.’
Tony laughed. ‘When are you going to run for the Senate, William?’
‘Never,’ said William with a smile.
‘I respect your feelings, William, but I want out.’
‘You’re the chairman,’ replied William. ‘If the board backs you, you can close the London branch tomorrow. I would never use my position to act against a majority decision, as you well know.’
‘Until you merge Kane and Cabot with Lester’s. Then it would become your decision.’
‘I’ve told you before, Tony, I’d never attempt to do that while you’re chairman.’
‘But I think we ought to merge.’
‘What?’ said William, spilling some Burgundy on the tablecloth, unable to believe what he’d just heard. ‘Good heavens, Tony, I’ll say one thing for you, you’re never predictable.’
‘I have the best interests of the bank at heart, as always, William. Think about the present situation for a moment. New York is now, more than ever, the centre of US finance, and when England is invaded by Hitler, it will become the centre of world finance. In fact, I’d go further and say that given those circumstances the dollar will replace the pound as the world’s leading currency. That’s where Kane and Cabot needs to be. And if we merged we’d create a more broadly based institution, because our specialties are complementary. Kane and Cabot has always done a great deal of ship and heavy-industry financing, while Lester’s does very little. Conversely, you do a lot of underwriting, and we hardly touch it. Not to mention the fact that in several European cities we’re unnecessarily duplicating offices.’
‘Tony, I agree with everything you’ve said, but I still want to keep a presence in Britain.’
‘Exactly proving my point. Kane and Cabot’s London branch might close, but we’d still have Lester’s. Then if London goes through a rough patch, it wouldn’t matter as much, because we’d be consolidated, and therefore stronger.’
‘But Roosevelt’s restrictions on merchant banks would mean we could only work out of one state. So a merger could only succeed if we ran the entire operation from New York, leaving Boston as nothing more than a branch office.’
‘I’d still back you,’ said Tony. ‘You might even consider taking Lester’s into commercial banking, which would solve the whole problem.’
‘No, Tony. FDR’s made it impossible for an honest man to do both. In any case, my father taught me that you can serve either a small group of rich people or a large group of poor people, but not both, so Lester’s will remain in traditional merchant banking as long as I’m chairman. But if we did decide to merge the banks, don’t you foresee other problems?’
‘Very few we couldn’t overcome, given goodwill on both sides. But you’d have to consider the implications carefully, William, because after a merger you’d become a minority shareholder, and would lose overall control of the new bank. That would leave you vulnerable to a takeover bid.’
‘I’ll take that risk, if it means I’d become chairman of one of the largest financial institutions in America.’
William returned to New York that evening, and immediately called a board meeting of Lester’s to outline Tony Simmons’s proposal. Once he found that the board approved of a merger in principle, he instructed each of the bank’s vice presidents to consider the full implications in greater detail.
The departmental heads took three months before they reported back to the board, and to a man they came to the same conclusion: a merger was no more than common sense, not least because the two banks were complementary in so many ways. Moreover, William’s shareholdings ensured that Lester’s would own 51 per cent of Kane and Cabot, making the merger simply a marriage of convenience. Some of the directors could not understand why William hadn’t thought of the idea before. Ted Leach was of the opinion that Charles Lester must have had it in his mind when he nominated William as his successor.
The details of the merger took over a year to complete as teams of lawyers were kept at work into the small hours preparing the necessary paperwork. In the exchange of shares, William ended up as the largest stockholder with 8 per cent of the new company, and was appointed the new bank’s president and chairman. Tony Simmons remained in Boston as one deputy chairman, with Ted Leach in New York as the other. The new merchant bank was renamed Lester, Kane and Company, but continued to be referred to as Lester’s.
William arranged a press conference in New York to announce the successful merger, and he chose Monday, December 8, 1941, to brief the financial world of his vision for the future. The press conference was cancelled when, hours before, the Japanese launched their attack on Pearl Harbor.
An embargoed press release had been sent to the newspapers some days before, but the news that America had declared war on Japan meant that the Tuesday-morning financial pages allocated the announcement of the merger only a few column inches. This lack of coverage, however, was not foremost in William’s mind.
He couldn’t work out how or when he was going to tell Kate that it was his intention to join up.
PART FIVE
1941-1948
39
ABEL STUDIED the news item on the merger of Lester, Kane and Company in the financial section of the Chicago Tribune.
With all the space devoted to America entering the war, he would have missed the brief announcement had it not been accompanied by a small photograph of William Kane, so out of date that it looked as if he hadn’t changed since his meeting with Abe
l in Boston more than ten years before. Certainly he appeared too young to fit the journal’s description of him as the brilliant and incisive chairman of the newly formed Lester, Kane and Company. The article went on to predict: ‘The new company, a joining together of two old established family banks, could well become one of the most prestigious financial institutions in America.’ The Trib concluded that the stock would be divided between about twenty shareholders who were related to, or closely associated with the Lester and the Kane families. The largest shareholders would be Mr Kane with eight per cent, and the late Mr Lester’s daughter with six per cent.
Abel was delighted by this particular piece of information, realizing that it meant Kane must have sacrificed overall control of the bank to become chairman of a far larger institution. He read the item again, and couldn’t deny that William Kane had risen far higher in the world since they had crossed swords, but then so had he. And he still had an old score to settle with the newly designated chairman of Lester, Kane and Company.
So handsomely had the Baron Group’s fortunes prospered over the past decade that Abel had been able to repay all the loans to his backer within the stipulated ten-year period, securing him 100 per cent of the company.
Not only had he paid off the loan by the last quarter of 1939, but the profits for 1940 had passed the half-million mark. This milestone coincided with the opening of two new Barons, in Washington and San Francisco.
Although Abel had become a less attentive husband during this period, as much a result of Zaphia’s unwillingness to keep pace with his ambitions as anything else, he could not have been a more doting father. Zaphia, longing for a second child, finally goaded him into seeing his doctor. When he learned that because of a low sperm count, probably caused by sickness and malnutrition in his days as a prisoner of the Germans and the Russians, Florentyna would almost certainly be his only child, he gave up all hope of a son, and proceeded to lavish everything on his daughter.