Kane & Abel (1979) Read online

  ‘Thank you,’ said William. He returned to his office, and immediately picked up the telephone on his desk.

  ‘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.’