Lady of Fortune (78 page)

Effie took out a handkerchief and wiped tears from her eyes. ‘Oh, Dougal,' she said, ‘I'm so sorry. If only you'd told me before.'

‘I don't suppose I would have been well enough. I caught an infection after the doctors sewed me up, hepatitis. That's why I've been so bad. The whole damned thing has been a mess from beginning to end.'

‘Is this why you looked to Robert?'

Dougal said, ‘Partly. At least he can keep Mariella happy for a while.'

‘Then you know?'

Dougal nodded. ‘I suppose I arranged it in a way, although Robert probably doesn't realize it, even now. I'm not saying that it's been easy. I've been jealous about it, angry about it, sick about it. But I'm not a fool, Effie. If Mariella can find herself some measure of relief and excitement and happiness with Robert; and if I can do business with him; then everything's fine. I knew, years ago, that I would never be able to beat him. So, I've accepted it. I've let him have his victory. He's got my wife, he's using my American facilities.'

‘But you're not going to let him ruin you, is that it?'

Dougal shrugged. ‘A short time ago, I may not have minded. But I'm a little better now. The doctors say that I'm over the nervous problems. I used to have; or almost.'

‘You have a son, too,' said Effie.

Dougal was turning over the cheque, and reaching into his inside pocket for his wallet. ‘I beg your pardon?' he asked her.

‘You have a son,' she told him.

Early that same afternoon, she met Jimmy Byrd, of Byrd Brooks Stein, Caldwell's old brokerage partner. Jimmy Byrd was two years younger than Caldwell, but in some ways far more mature. He was precise and painstaking where Caldwell was inspirational. He was carefull where Caldwell was imaginative. He wore $120-dollar silk suits, and neckties that looked as if they had been arranged by florists. His head was perfectly spherical, with shiny brown hair. His features could have been painted on a bannister-knob.

They left the office on Canal Street and walked. It was a stuffy, clamorous day. They walked as far as Bowling Green, and then sat down on one of the benches overlooking the statue of Abraham de Peyster, with the rearing buildings of New York capitalism all around them, and Broadway at their backs. Scruffy Wall Street pigeons strutted around their feet, hoping for crumbs. A window was open somewhere, and the voice of Rudy Vallee was crooning from a turned-up radio.

‘This is a pretty public place for us to confer, don't you
think?' asked Jimmy Byrd. He had a nasal Yale accent, and a way of patting the back of his neck when he was saying anything particularly thoughtful.

‘It's noisy,' said Effie. ‘It's so noisy that nobody will ever hear what we're saying except us. That's all that matters. I don't care if people know that we've met: I just don't want them to know
why.
”

Jimmy Byrd shrugged. ‘I'm not even sure what you want me to do. If your brother Robert has used any kind of horse-sense in setting up this arrangement, then you can guarantee that it's going to be pretty well impenetrable. He has a reputation for it, even on Wall Street. And look at some of the utility setups that are being put together these days – company X is partly owned by company Y which in turn is partly owned by company Z, and all three companies are partly owned by company W. Besides which, being
impenetrable
doesn't necessarily make it fraudulent. It may be
foolish
for all these European fellows to invest their ill-gotten profits through Watson's, but there are no laws which say you can't speculate with your money as stupidly as you want to.'

‘I'm not concerned in the slightest about Robert's European investors,' said Effie, in a sharp voice. ‘In fact, I'm beginning to believe that they may not even exist. What
does
concern me is that Dan Kress has arranged through Watson's New York for fifty-one US corporations to loan £24 million to nine different brokers to sell common stock at a 20-point margin in those same corporations back to Watson's in Edinburgh. Now, agreed, Robert has backed up the loan arrangement with a foreign bill for £24 million, but Watson's New York is still the responsible bank on the spot. Everything will be fine if the market continues to rise. I know, I know – everyone thinks the bull market is going to go sailing on upwards for ever. But supposing it
falls
, like it did in February; or like it did in June? The brokers are immediately going to demand more margin, and the corporations themselves are immediately going to want their loans called in to keep themselves solvent, and Dougal is going to be faced with the responsibility of taking over the loans himself against collateral that will be diving in value every minute of the day. Jimmy, why do you think I got out of New York banking? This whole glittering pyramid is going to collapse under its own weight, and it's going to take Watson's New York down with it.'

Jimmy Byrd puffed out his cheeks. ‘I know it's a pretty dubious kind of set-up,' he said, ‘but you must remember that almost anything goes these days. The bull market is producing a whole heap of bullshit, if you'll excuse my French. Did you know that Gerrard's Bank set up the Guard-National Investment Trust solely for the purpose of unloading $17 million of dud copper and utility securities they couldn't unload on the unsuspecting speculator in any other way?'

‘You mean Columbia Copper?'

‘That's right, and Illinois Electric.'

Effie said, ‘Dougal has already found out a great deal about this set-up that seems extremely suspicious. He doesn't have any proof, and he's having a very difficult time finding any; but it seems that these fifty-one corporations are all owned or partly controlled by three or four holding companies.'

‘Not unusual,' said Jimmy. He produced a small leather-covered notebook, and a silver-tipped pencil. ‘Can you give me any names?'

‘The Poind Corporation, the Balmoral Trust, the Unidexter Company.'

‘I know Unidexter. They're very reliable. I've never heard of Poind.'

‘It's an old Scottish word meaning ‘to impound, or confiscate'. Dougal thinks his older brother is playing a particularly tasteless joke on him.'

Jimmy Byrd put his notebook away again, and cleared his throat. ‘You realise what you're faced with if all of these corporations are intermingled,' he said. ‘Somebody would only have to start selling the stock short in those three or four holding companies, and all fifty-one companies would go down the pan in a single morning's trading.'

‘But if they're controlled and financed by Robert, how could he afford to do that?'

‘It's very easy. Well, it's not easy, but it's not difficult. He probably acquired the companies in the first place by picking on industries whose stock quotations were grossly over-inflated, and by buying a minimal amount of common stock in them on margin, through an anonymous broker. Then, all he would have to do would be to go to the company's board, and reveal who he was, and threaten to dump his stock at the lowest price you could think of, accompanied by the maximum
publicity. It wouldn't cost
him
anything. But come on, now – if you were a little old lady in Ohio, and
you
heard that Robert Watson was selling short the very same stock into which you'd put all of your life's savings – what would you do? You'd sell, quick. So Robert has probably persuaded the companies to invest substantially in his holding companies – purely on the pretext of improving the mobility of their capital, or whatever other fairy-story he could think of. And there you have it – for almost no outlay, a formidable interest in fifty-one major US corporations – not based on solid investment, but simply on the fact that almost all stocks are wildly over-priced.'

‘I still don't see what he would stand to gain – apart from the humiliation of his own brother.'

‘He would stand to gain a great deal. He's in control, you see. He can pull strings and do what he likes. He can sell his own holding-company stocks short, and topple the whole pyramid that he's created, and ruin Watson's New York in a matter of hours. Dougal's right to be worried that Robert might not honour his foreign bill until it's too late: even if Robert was dutiful enough to send a shipload of gold bullion over from Europe, $24 million would never be enough to salvage the bank if there was a really heavy run on its deposits. Remember – the way the market is at the moment, nobody's going to keep their money anywhere if they hear even the faintest rumour that a crash is coming. In any case, Robert could probably argue successfully in law that he was not obliged to honour the bill because Watson's New York had so seriously mismanged his clients' money.'

‘I think I know what he's after,' said Effie. ‘Apart from profit, I mean.'

‘It's obvious to
me
what he's after – supposing that any of this is true,' put in Jimmy Bryd. ‘He wants to take over Watson's New York as his US outlet, without paying very much for it. Once he's done that, he can start buying back the stock he sold short, and rebuilding confidence in his fifty-one companies, and getting back what he deliberately threw away. That's only guesswork, but from what Caldwell told me about him …'

‘It sounds like very good guesswork,' said Effie. ‘But what can we do?'

‘First, we need some proof,' Jimmy Byrd told her. ‘Then, we
need to sit down and see if there's any way we can use it as a lever against Robert. But we're walking on eggshells here. Robert has all the aces, and all we have to do is let him know that we suspect him, and we're finished. He can pick up the telephone, and sink the whole lot with one word. I can't even advise you to liquidate your own holdings in Watson's New York – not unless you want to see a serious run on stock prices. Look what happened when the Bank of Italy went down in June; thousands of speculators were ruined overnight.'

‘If you can just get me some more information on the Poind Corporation,' said Effie.

‘I'll try,' said Jimmy Byrd. ‘I can't promise anything.'

‘You know that I'll pay you well for it.'

‘Well, sure: Understood. Listen, would you like some coffee?'

‘I don't have the time,' said Effie. ‘I have my family to look after.'

On the way back to her apartment, sitting in the plush upholstery of her Pierce-Arrow with the curtains drawn, she thought of Dougal again. She hadn't been at all sure what Dougal had felt about her sudden revelation that Alisdair was not Robert's heir, but his. He had been so seriously distressed by having to tell her about his attempt at self-castration that the news about Alisdair had seemed to do nothing but perplex him. He had muttered a peculiar apology, something about the heat, then paid the check, and hurriedly left The Curb House as if he had just learned that the bank was on fire.

Kosczinski was humming a tune from
Show Boat
as he steered through the four o'clock downtown traffic. Effie thought to herself: perhaps I had no right to tell Dougal what I did. Perhaps, on the other hand, I should have told him years ago. She bit at the knuckle of her thumb, feeling guilty of the worst kinds of moral cowardice; feeling guilty of arrogance
and hypocrisy and, most shaming of all, of complacency. How could she have talked so patronizingly to Dougal about his failure to give Mariella children when she herself had failed to keep her own marriage together after only one year? How could she criticize the way in which Dougal had so naively accepted Robert's offer of financial co-operation when she herself had failed to face up to Robert time and time again? She was only here in America because Robert had used her to set up the Deutsche Kreditbank collapse. She had only retreated to California because she couldn't face the pressures of the bull market and the idea of working with Robert again.

She felt that it was her inability to confront Robert bravely enough that had brought the Watson family back to the very same crisis it had faced when her father had been alive, and her mother had been unable to stand up to
him
. Just as before, the Watsons were all viciously tangled up together by the unholy bonds of money and suspect morality, and by their own brand of flawed financial heroism. But that was all that tied them. They never once looked to one another with a love that sought no advantage. They believed, all three of them, Robert and Dougal and Effie (and probably Alisdair now, too) that being kind to each other meant nothing more than to speak to each other without anger, and to refrain from deliberately and nakedly exploiting each other to make money. Thomas Watson's father had run desperately down the streets of Edinburgh to seek sanctuary from his creditors, and had beaten young Thomas to instil in him the ruthlessness that would enable him to avoid the same degrading fate. The echoes of those tawsings could still be heard seventy years later, in 1929, and they threatened to shatter the Watson family into fragments, and shake down a financial edifice worth billions of dollars.

There were two messages waiting for Effie when she got back to her apartment. One was from Emily Truscott Hornweather, saying that she would adore to have tea later in the week; the other was from Jimmy Byrd calling from home. She went through to her study, sat on the pale pink upholstered sofa under a small painting of The
Children of the Médano Circus
by Picasso, and asked the operator for Jimmy Byrd's personal number Murray Hill 9-4158. Jimmy answered immediately and said, ‘Effie? Is that you?'

‘I've just got in. I had to stop to buy Kay some tennis socks.'

Tennis socks?'

‘She'll be back from New Hampshire next week.'

‘Oh, right. But listen. The first thing I did when I got back to the office was call a friend of mine at Sawyer, Fuchs & Weibart. I've known him for years, we go fishing together on Tyler Pond, Connecticut. He owes me a favour because of that Giannini business. I arranged to meet him back here at home because it was just that little bit more private, you understand?'