As a result, O’Brien had now revised his earlier estimate that licensing procedures would take six to seven years. “The way things are going,” he reported yesterday, “it could be eight years, even ten, before we get permission to start construction. Assuming we ever do.”
As to other proposed generating plants, including Devil’s Gate pumped storage and Fincastle geothermal, progress was equally, dispiritingly slow.
And all the while, as Eric Humphrey, Nim, and others in the GSP & L hierarchy realized, a day of reckoning was drawing closer; a day when public demands for electric power would surpass by far what could be produced with existing facilities. On that day and beyond, the unbuilt plants of Tunipah, Fincastle, Devil’s Gate, et al, would be desperately, but vainly, longed for.
Water was the second reason for the chairman’s concern.
Despite two winter storms with accompanying rainfall, seasonal precipitation in California so far had been alarmingly small. Reservoirs, depleted by an earlier drought, were far below normal levels for the third week of December. And snow, which usually fell heavily in the Sierra Nevada and elsewhere, had been exceptionally light or nonexistent.
In a good precipitation year, winter snow was money in the bank for a huge public utility like Golden State Power & Light. When the snow melted in the spring, great rivers and streams cascaded downward, filling reservoirs which would fuel a vast network of hydroelectric power stations during the summer ahead.
Now, according to estimates which Eric Humphrey had been given, hydroelectric power next year might be reduced by twenty-five percent because of the lack of runoff water.
Then oil.
For Golden State Power & Light, as well as other public utilities along both coasts, oil loomed as the largest question mark, the biggest potential worry of them all.
Only that morning, in the Chronicle-West, a syndicated business columnist had summed up the situation:
The danger about oil has been creeping up, like a tiger in the grass, while we haven’t noticed or maybe didn’t want to.
It began with the decline of the U.S. dollar several years ago—our once respected “greenback,” but no longer strong, no longer “good as gold” because the dollar’s gold backing was canceled out during the Nixon presidency.
Then, while the dollar plunged because of ineptitude and politics in Washington, the oil exporting nations of the Middle East, North and West Africa, Indonesia and Venezuela raised their dollar prices in an attempt to stay even.
That didn’t work. The dollar continues to sink like the setting sun, worth less and less in terms of real value because the U.S. has paid (and goes on paying) far more for imported oil than it earns from exports. And, as more dollars departed for Saudi Arabia, Iran and elsewhere, more were printed by the U.S. Treasury—depleting the dollar’s value even further.
After that we witnessed some interim experiments—payment for oil through a “basket of currencies” was one. (That’s a highfalutin name for a mixture including deutschemarks, guilders, French and Swiss francs, pounds sterling, yen and dollars.) But that, too, proved ineffective because the ailing dollar and pound tipped the basket downward.
Finally, the oil nations demanded payment in the only money which, in this world’s long history, has never failed to keep its value—gold.
The United States refused. It still does. (Of course you can see the Treasury’s viewpoint. The U.S. doesn’t have that much gold left, having squandered enormous amounts in futile attempts to “demonetize” gold. In fact, there’s only sufficient in Fort Knox and the Fed Reserve banks to pay one year’s oil bill with a bit left over.)
Instead the U.S. Treasury, which for more than a decade has relied on printing-press money—backed by nothing—to pay its way, has offered to run the presses faster and produce more paper dollars.
But this time the oil nations have been adamant. They have said, in effect, “If we want paper money we can print our own—without giving away our oil to get it.” And, like the mythical Chinese laundryman who insisted, “No tickee, no washee,” they now threaten: “No gold, no oil.”
So, it seems, an impasse is imminent.
True, the oil has not stopped flowing—yet! Equally true: It could be a year or more before it does.
Meanwhile, discussions between governments are continuing, so a compromise is possible.
We’ll wait and see.
The general uncertainty about oil was an ominous, overhanging cloud for GSP & L because nearly half of the company’s generating capacity was dependent on oil fuel, the bulk of it imported.
Natural gas, which used to be available to generate electricity, was already in short supply.
Thus, the prospect of an oil, gas and water shortage simultaneously was something which Eric Humphrey, Nim, and other executives preferred not to think about—and shuddered when they did.
“Is there any chance, do you think,” Eric Humphrey asked Paul Sherman Yale, “of the Governor’s changing his mind and coming out with an endorsement of our Tunipah plans? After all, with an ongoing oil and gas crisis, and with nuclear still in limbo, what stronger argument is there for a coal-burning plant?”
Mr. Justice Yale had joined Humphrey and Nim shortly after Nim’s report on theft of service. The previous day, GSP & L’s new and distinguished spokesman had been in Sacramento at the state capitol.
“The Governor acknowledges that argument,” Yale said, “and he’s vacillating. I saw him yesterday and urged him to make a pro-Tunipah statement. I’d say the chances are sixty-forty that he will.”
“I’m pleased to hear it.” Humphrey noticeably brightened and Nim thought: Once more the chairman’s wisdom in hiring Paul Yale was being demonstrated. Yale seemed able to walk into the Governor’s office without advance notice whenever he chose and the same was true of his access to senior legislators.
“I can tell you, gentlemen,” Yale said, “that there’s plenty of worrying in Sacramento about oil. Those I talked with yesterday, including the Governor, see gasoline rationing as inevitable soon, whether the present crisis is settled or not.”
“Personally,” Humphrey said, “I’d consider that a good thing. The way North Americans have used cars, especially big cars, squandering gasoline as if there were no tomorrow, has been gross and disgusting. The Europeans—rightly so—believe we’re irresponsible.”
Nim resisted an impulse to remind the chairman about his own big car. Instead, he told Yale, “I hope Sacramento realizes that producing electricity is a much more economical use of oil than in an automobile.”
Paul Sherman Yale smiled. “I assure you I lose no opportunity—public and private—to make that clear.”
Nim remembered that Yale had made that point publicly a week ago. It was on a TV program, Meet the State Press, where, considering the short time since his appointment, the former Associate Justice showed himself adroitly knowledgeable about GSP & L affairs. Watching the show at home, Nim had again felt regret at not being the utility’s policy spokesman any more. But honesty made him admit that Yale did the job superbly.
Eric Humphrey’s mind had swung back to their discussion about oil. “I sometimes think if I were an Arab I’d refuse paper dollars for my oil and demand gold, or at least a gold-backed currency. I wonder if the United States will give in and use some of our gold, even though it would not last long.”
“Do we even have as much gold as we’re supposed to?” Nim asked. “There seems some doubt about it.”
Humphrey looked surprised. Mr. Justice Yale didn’t; a soft smile played around his lips.
“I subscribe to a financial newsletter—The International Harry Schultz Letter,” Nim said. “There are often things in there which prove to be true but newspapers don’t seem to want to publish. Schultz has been writing about two men—a Washington lawyer, Dr. Peter Beter, who used to be counsel for the United States Export-Import Bank, and Edward Durell, an American industrialist. Both are shouting ‘fraud’ about Fort Knox gold, claimi
ng there may be a lot less there than the world believes.”
Paul Sherman Yale nodded. “Quite a few in Washington have heard of both men, but not many will admit it. Incidentally, I subscribe to Schultz’s letter too.”
“What Beter and Durell argue,” Nim explained to Humphrey, “is that Fort Knox gold hasn’t been audited properly since 1953. They also claim that most of the remaining gold is impure—from melted-down coins containing silver, copper and antimony, which President Roosevelt called in when gold ownership for Americans was made illegal. That alone would mark the gold holdings down by twenty percent, possibly more.”
“I’ve not heard that before,” Humphrey said. “It’s interesting.”
Nim went on, “There’s more. It’s believed that in the 1960 dollar crisis a whole lot of U.S. gold was used to support the dollar, with the intention it would be replaced. It never was.”
“In that case,” Humphrey asked, “why keep it a secret?”
Paul Yale interjected, “That’s easy to answer. If the rest of the world believed the United States doesn’t have the gold it claims to, there would be a fresh run on the dollar—panic selling.” He added thoughtfully, “I’ve heard rumors in Washington about that missing gold. They say every new Treasury Secretary is sworn to secrecy, then told the facts. One thing is clear: The government won’t permit an independent audit of Fort Knox gold.” He shrugged. “I have no means of knowing if any of what Beter and Durell claim is true. But stranger things have happened, especially in Washington.”
Eric Humphrey sighed. “There are days,” he told Yale, “when I find myself wishing my assistant were less well informed, that he read less widely, and once in a while reined in that searching mind of his. As if I didn’t have enough to worry about—Tunipah, coal, water, gas, oil—now he’s added gold.”
9
In the chairman’s mahogany-paneled office in the Sequoia Club’s Cable Hill headquarters, Laura Bo Carmichael hesitated, her pen poised over a check in front of her. It was for twenty-five thousand dollars.
The check was drawn on the club’s special projects account. It was payable to: power & light for people.
The money would be the second installment of the total—fifty thousand dollars—pledged to Davey Birdsong’s organization last August, five months ago. The first payment had been made immediately following the confidential agreement between the Sequoia Club and p & lfp. Now the second half was due.
The signature of Roderick Pritchett, the Sequoia Club’s manager-secretary, was already on the check, one line below where the chairman’s was required. With a squiggle of Laura Bo’s pen—her signature was usually unreadable-she could make the check official. Yet still she hesitated.
The decision to ally the Sequoia Club with p & Ifp had plagued her with doubts, immediately after it was made and ever since.
These doubts were reinforced at the Tunipah hearings where Davey Birdsong, she thought, had behaved abominably. All of Laura Bo’s intellect rebelled against what she saw as his cheap, shoddy tactics, his clownish playing to the gallery, his cynical appeal to the lowest levels of intelligence.
Now she asked herself again: Had she been wrong in casting the deciding vote which approved the alliance and made the money available? Had the respected Sequoia Club debased and dishonored itself by an association, for which—if the truth became public, as it might—Laura Bo, as chairman, would be held responsible?
Shouldn’t she have sided, after all, with Priscilla Quinn, who had laid her opinion about Birdsong on the line? Laura Bo could remember—clearly and uncomfortably—Priscilla’s words: “All my instincts are against trusting him … I have principles, something that disgusting man appears to lack.” And afterward: “I think you will all regret that vote. I wish my dissent to be recorded.”
Laura Bo Carmichael regretted her vote already.
She put her pen down, the check still unsigned, and reached for an intercom handset. When the manager-secretary answered, she asked, “Roderick, could you come in, please?”
“It occurs to me,” she told him a few minutes later, “that we might reconsider making this second payment. If the first was a mistake, then at least we need not compound it.”
Pritchett, dapper and well groomed as usual, seemed surprised. He took off his rimless glasses and polished them with a handkerchief, a time-honored, time-consuming tactic.
“Has it occurred to you, Madam Chairman,” he said, replacing the glasses, “that if we withheld those funds we would be violating an agreement, honorably entered into, and fulfilled—so far—by the other side?”
“But has it been fulfilled? What did we get for the first twenty-five thousand—Birdsong’s histrionics at the Tunipah hearings?”
“I’d say,” Pritchett said, picking his way carefully among the words, “that Birdsong has achieved a good deal more than histrionics. His tactics, while rough—certainly rougher than we could resort to ourselves—have been shrewd. So far he has caused most of the media’s attention to be focused on opposition to Tunipah while the arguments of Golden State Power have received only trifling attention. He also succeeded in demolishing their key witness, Goldman—first by provoking him, then standing back while Goldman antagonized everyone in sight, including his own company.”
“I felt sorry for him,” Laura Bo said. “I’ve known Nim Goldman for a long time and, while he may be misguided, he’s honest and sincere. He did not deserve what happened.”
Pritchett said primly, “In these kind of contests some of those involved—and their reputations—are apt to get bruised. The important thing, from the point of view of the Sequoia Club, is to win. Where Tunipah is concerned I believe we will.”
“And I’ve never believed,” Laura Bo responded, “in winning at all costs. I listened to that argument many years ago. To my dying day I will regret not contesting it.”
The manager-secretary felt like sighing but restrained himself. He had encountered Mrs. Carmichael’s recurring guilt about Hiroshima-Nagasaki many times before and had learned to cope with it. Nimbly backtracking, he assured her, “My choice of words was unfortunate. What I should have said is that the agreement with Birdsong will help attain our objectives, which are admirable, as we both know.”
“But where is all that money going?”
“Some of it to Birdsong himself, of course. After all, he’s putting in many hours personally—still attending those hearings every day, cross-examining new witnesses, at the same time keeping himself and opposition to Tunipah in the news. Then there are his supporters. He’s managed to pack the hearing room with them continuously; that alone gives an impression of strong, spontaneous opposition to Tunipah from the public.”
“Are you suggesting it is not spontaneous? That Birdsong pays those people to be there?”
“Not all.” Again Pritchett chose his words warily; he knew how it was being done because he had talked to Birdsong, but was reluctant to be specific. “Let’s say some of those people have expenses, they have to absent themselves from work, and so on. Also those same supporters, or others Birdsong recruited, staged demonstrations at the Golden State Power & Light annual meeting. He told us about his plans there, if you remember, when we met.”
Laura Bo Carmichael appeared shocked. “Paid demonstrators! A paid disruption of an annual meeting! All of it with our money. I do not like it.”
“May I remind you of something, Madam Chairman,” Pritchett remonstrated. “We entered into this arrangement with p & lfp with our eyes open. When our committee met—Mr. Irwin Saunders, Mrs. Quinn, you, me—we were aware that Birdsong’s methods might be, well … unorthodox compared with our own. A few days ago I went over my notes of that August meeting and we agreed there could be certain things ‘we’d be better off not knowing.’ Those, incidentally, were Mr. Saunders’ exact words.”
“But did Irwin, at that time, understand Birdsong’s methods?”
“I think,” Pritchett said drily, “as an experienced lawyer he had a pret
ty good idea.”
The point was valid. As his friends and enemies knew, Irwin Saunders was a rough-and-tumble fighter in the courts and was not noted for ethical niceties. Perhaps more accurately than anyone, he had judged in advance how Birdsong would work.
The manager-secretary, though not mentioning it to Laura Bo, was also concerned about another matter involving lawyer Saunders.
Roderick Pritchett was due to retire soon. Saunders was the influential chairman of the Sequoia Club’s finance committee, which would decide how large a pension—or how small—Pritchett would receive.
The club’s pensions for retired staff were neither automatic nor fixed, but based on years of service and the committee’s opinion of an individual’s performance. Roderick Pritchett, who knew he had had his critics across the years, particularly wanted to look good to Saunders in these final months, and the Tunipah hearings and Davey Birdsong could be critical factors.
He told Laura Bo, “Mr. Saunders is delighted with Bird-song’s efforts in opposing Tunipah. He telephoned to say so and reminded me that Birdsong promised ‘continual harassment of Golden State Power & Light on a broad front.’ The p & lfp has delivered on that. Another thing agreed to was no violence—you may recall I raised that point specifically. Birdsong has also kept his promise there.”
Laura Bo asked, “And have you heard from Priscilla Quinn?”
“No.” Roderick Pritchett smiled. “But, of course, Mrs. Quinn would be elated, even triumphant, if you backed down now and refused to make that second payment. I imagine she would go around telling everyone she was right and you were wrong.”
It was a shrewd thrust. Both of them knew it.
If the original decision were reversed at this late stage, it would be remembered that Laura Bo Carmichael had cast the pivotal vote; therefore her embarrassment would be acute, not least because of the accompanying admission that twenty-five thousand dollars of the club’s money had been spent unwisely. And Priscilla Quinn’s sharp tongue would make the most of that.