Lady of Fortune (84 page)

Although J.P. Morgan & Company and five other leading New York banks were able to slow down the panic by raising a $240 million emergency fund, the strain on Wall Street's banks and brokers was catastrophic. By the day's close, the ticker was running four hours and eight minutes behind the market, and over thirteen million shares had been sold, at a net loss of $11 billion.

By Friday, the market began to rally a little; but after the weekend, it plunged again, and this time the bankers could do nothing to stop it. On Tuesday, 29 October, the bottom fell out, and leading stocks dropped by $50 or $60 a share.

On Thursday, 31 October 1929, Watson's New York collapsed under the weight of loans that it had made to the Poind Corporation, and to US business all over America, and closed its doors for ever. Dan Kress went back to Chicago, to stay
with his eighty-year-old parents, and a year later suffered a mental breakdown which hospitalized him for the rest of his life.

Effie stayed in New York to arrange Dougal's funeral, and to help with the winding-up of Watson's New York, but she telephoned the Commerce Bank in Los Angeles every day, to ensure that the Crash wasn't affecting her own assets too seriously; and to bolster the confidences of her managers and her staff. She promised them that she would be back in California by the week after next, whatever happened.

From Caldwell, there was nothing, not even a note, and now the newspapers didn't even care about their separation, either: they were too busy with the Crash, and all the tragic stories of suicide and despair among ruined investors. Effie began to feel that her marriage was very long ago and very far away.

Dougal was buried at the Great Peconic Cemetery, on Long Island, on the day that his bank closed. Effie wore a black coat by Chanel, and a black veil sewn with seed-pearls. On the way back to Dougal's mansion, in the back of the glossy black Cadillac hearse, she sat with Mariella, who was shivering with cold and grief. The morning passed them by through curtains fringed with black silk.

Mariella held Effie's hand, but didn't look up at her. Effie said, ‘You can come and stay with me for a while, if you want to. That's if Robert doesn't mind.'

There was a very long silence. Then Mariella said, ‘Robert?'

‘I know about you and Robert,' said Effie, as gently as she could manage. ‘I have done, right from the very beginning.'

‘You didn't tell Dougal?'

‘Dougal knew too. He didn't mind very much. He thought it would be better if you were satisfied. He thought he stood more chance of keeping you that way.'

Mariella lifted her head and stared at Effie with a face as white as flour. ‘Oh, God,' she said.

‘What's the matter?' asked Effie. Mariella seemed to tense, so brittle and nervous that Effie felt that she might snap, like a woman made of glass.

Mariella opened her mouth, but no words came.

‘Mariella –' said Effie.

‘I thought he didn't know,' whispered Mariella. ‘I thought he–'

‘Mariella, please.'

Mariella leaned towards Effie, so close that Effie could feel the uncomfortable bones of her shoulder against her arm. ‘I was responsible,' she said. ‘I killed him. Robert showed me how to do it.'

‘Mariella, you're just being hysterical.'

‘Hysterical? I'll tell you how hysterical I am. I could draw – draw for you – do you have a pencil? – the braking system of a Cadillac touring-car – which has a hydraulic pipe – which you can nick – just nick – with a hacksaw blade … so that it leaks as you drive along –'

‘Mariella,' said Effie. She heard her own voice as if it had been spoken by somebody else. Then her whole world crashed in on her like chunks of black granite, the rumbling weight of a life that had been built with lies and excuses and evasions; buttresses of pretence; cliffs of self-delusion; ramparts of failure and omission.

It was very much later that night that she made a single telephone call to a man called Peruggio, an old friend of George ‘Spats' Sabatini. She spoke only four sentences to him, one of which was concerned with nearly $45,000. The man called Peruggio said, ‘Just frightened, huh? Okay,' and then hung up. Effie had met him only once, at a party in New Jersey, and all she could remember about him was his dove-grey spats.

On the following Monday afternoon, Effie caught
The Twentieth Century Limited
bound for La Salle Street Station, Chicago, with a ticket through to Los Angeles. She gave the conductor strict instructions that she was not to be disturbed; and then she showered and changed into a black silk negligee. All through the night she sat on her sofa working, with two packs of cigarettes and a bottle of whisky to keep her awake. Now and then she would put down her pencil and listen to the lonely tolling of the grade-crossing bells, as if they were bells which rang at wakes.

Effie no longer knew whether she was right or wrong; whether she was clever or incompetent. All of America's bankers had been shown up as fools by the stock-market Crash, including her, and by this time next year, over 5000 banks would have closed their doors.

She did know one thing for certain, though: that Robert had fatally overplayed his hand, and for the first time in his life had allowed his temper to get the better of his professional judgement. Although the market had been cracking already, it was Robert's impetuous selling of Poind Corporation stock that had finally brought on its disastrous collapse. He had probably been able to save most of the millions with which the Germans had entrusted him but he must have lost millions of his own money as well. The last news that Effie had received from James Beckman in Los Angeles was that over £12 million of Commerce Bank assets had been withdrawn by frightened depositors, and that the bank had taken over $5 million in broker's loans in order to help protect its clients.

The railroad journey to Los Angeles was long and lonely for her. It was like a journey across a dark and unmapped planet. When she arrived at Union Station, she was met by James Beckman and Tulsa Ward, her new secretary, but the feeling of loneliness persisted. It was a cool sunny California day. She sat in the back of the white Cadillac limousine wearing dark sunglasses, neat and mysterious in a cream linen suit.

‘I was real sorry to hear about your brother,' said James Beckman. ‘Everybody at the bank was very upset about it.'

Thank you,' nodded Effie. ‘Have you seen any sign of Caldwell?'

‘No, ma'am. He hasn't turned up at the bank since you left.'

‘I want to thank you for taking care of things while I was away. You did an excellent job.'

‘Only because the bank was properly set up, Mrs Brooks, and because it didn't have all its eggs in loans and securities. I'm afraid we're a good deal poorer than we were a couple of months ago, but we're still open, and we're re-building more and more public confidence all the time.'

Effie looked out at the wind-blown yuccas; at the scrub-measled Hollywood Hills. She thought of New York, grey and hysterical. She thought of Edinburgh, and the evening when she had bought John McDonald that enormous case of stuffed birds in Princes Street. The pictures had all faded now; the illusions had vanished. A whole world had been swallowed up overnight, that world in which Effie had believed she was somebody near-divine.

It was the realization that she was only just another ordinary
person that she found the hardest to accept. That, for her, was the real Crash.

James Beckman drove her back to Caledonia. The car flickered through the shadows of the palm trees. Kitty was waiting at the door, in a flouncy pink dress and a wide straw hat. She waved and laughed as Effie stepped out of the car.

Effie turned to James Beckman and said, ‘I feel as if I've never been here before. Can you understand that?'

That same morning, three time-zones to the east, Robert had left the Savoy-Plaza at 11 a.m., on his way to a luncheon meeting with Richard Whitney of J.P. Morgan & Company. He wore a long black overcoat and a Homburg hat, and he was smoking a freshly-lit cigar. He said, ‘Good morning, Jeffrey,' to the hotel doorman, and crossed Fifth Avenue diagonally to the corner of 58th Street. That was the last time he was seen alive.

Except, of course, for the moment two hours later when passers-by on Lexington Avenue at 43rd Street, beneath the barely-finished tower of the 77-storey Chrysler Building, the city's tallest, saw what appeared to be a large raven flapping down from the sky. It was only when the raven plummeted nearer to the ground that they realised it wasn't a raven at all, but a man in a black overcoat. He hit the roof of a parked Checker cab, and went straight through, instantly blanking out every one of the car's windows with blood.

The evening newspapers carried the headline DEPRESSED BANKSTER HURLS SELF OFF CHRYSLER BDLG. The deceased's sister, Mrs Effie Watson Brooks, was said to be ‘in deep shock, and unable to grant interviews.' The deceased's son, Mr Alisdair Watson, commented, ‘He was a fine and clever man who will be sadly missed by everyone who knew him.'

That evening, Effie went for a walk along the shore at Pacific Palisades, her hands deep in the pockets of her coat, her eyes invisible behind her dark glasses. She stood for a
long time by the very edge of the sea, watching the sun sink into the haze. She smoked a cigarette, but it tasted of nothing at all.

The ocean was roaring and seething so loudly that she didn't hear a second car draw up behind her own Pierce-Arrow; nor did she hear the car door slam, and the sound of footsteps approaching her across the sand. She did hear, though, when Caldwell said, ‘Effie?' in the quietest and most contrite of voices; and she turned to stare at him as if he were a mirage.

‘Effie?' he said again.

Effie and Caldwell were divorced on Wednesday, 13 May 1931, on the grounds of Caldwell's admitted adultery with a motion-picture actress named Childa Corinth. Effie was awarded the house and its contents, and sole custody of their only daughter Poppy. Caldwell remained with the San Francisco branch of the Commerce Bank until 1943, when he was appointed president of a fish-canning company in Marin County.

Alisdair returned to Edinburgh after the Wall Street Crash to manage Watson's Bank through the years of depression and banking crisis in the early ‘30s. In the spring of 1934, he came out to Los Angeles to discuss with Effie the setting-up of an improved international banking operation. On his return to New York, the Fokker Triplane in which he was flying accidentally struck power-lines after take-off, and all twenty-one passengers and crew were instantly killed.

After Alisdair's death, through eight different holding companies and an overseas board, Effie personally took over the running of Watson's Bank in London and Edinburgh; and renamed the Commerce Bank so that it now became Watson's Interbank.

Solitary, sharp-tongued, and increasingly eccentric, Effie devoted her life during the 1930s to building up her banks into one of the wealthiest and most progressive financial
empires that the world had ever known. In concert with other major banks, she helped to reconstruct American business after the Crash, and for several years she was a favoured guest at Roosevelt's White House. After the war, however, her politics turned sharply to the right. She became more and more of a recluse, although she kept her two daughters close to her, and pampered them as only a multi-millionairess was able to do. The Watson girls were easily the most eligible young ladies of the ‘30s and ‘40s, with their furs and their diamonds and their unimaginable inheritances.

Effie tried for years to discover where the German war profits which Robert had been bringing into the United States in 1929 had disappeared to. She paid Jimmy Byrd $75,000 a year for three years to go through the books of one major corporation after another, searching for unexplained influxes of foreign funds. She even travelled to Berlin in 1938 to talk to Herr Heinz Kruse, head of the Geldsmark Bank, about $15 million which had been transferred from the Ruhr to Brazil in 1921. Herr Kruse (smiling) could tell her nothing, but he did take her out that evening to a private dinner, where she was introduced to Herr Adolf Hitler and Reichs-marshal Herman Goering. She found Hitler tedious and twitchy, although Hitler himself was very impressed by her, and later wrote that ‘Frau Watson-Brook is just the kind of American we should nurture; confident, rich, and very charming, too!'

She never found out where the German money had gone, or how it had been juggled through the books of Watson's Bank. Robert had committed nothing to paper, and the secret of those scores of millions of dollars had died with him, on the sidewalk of 43rd Street. In 1947, a British financial inquiry under Lord Strether found some evidence that funds ‘in excess of $100 million US' had reached the German Reichsbank in the early stages of the war, and had greatly assisted Hitler's military build-up, particularly the development of the V2 rocket, which in Lord Strether's opinion was built ‘almost entirely on the strength of loans from foreign banks.' All the financial books of the V2 project, however, had been captured by the American forces at the end of the war, and, according to General Omar Bradley ‘accidentally destroyed.'

Kay was married in 1939 to Barnes Ralph Jr, the dashing
young millionaire who had terrorised New York in 1936 by flying his private airplane fifteen times around the Empire State Building, thereby winning himself a bottle of champagne and a $23,000 fine. Poppy was married in 1952 to Dick Mellor, the motion-picture producer, and divorced from him three years later. Her second marriage was to Fritz Langenhafter, the head of Schagen Electrical Industries, a man twenty-two years her senior. Between them, Kay and Poppy gave Effie five grandchildren.

The most alluring to Effie of all these grandchildren was Kay's second son Merritt. He looked so much like Alisdair that Effie could stare at him sometimes, over dinner, or when he was sunbathing beside her pool, and really believe that he
was
Alisdair. Merritt was always close to her, spending weekends with her during his school vacations, making gifts for her of bookmarks and magazine-racks during his handwork lessons. When he was twenty-three he graduated from the department of business at UCLA, and as a reward she gave him the presidency of Watson's West Coast Securities and a new Rolls-Royce tourer, in gold. By the time he was thirty-four, he was president of the whole US division of Watson's Interbank, and a major stockholder in five of Effie's holding companies.