receivership, wiped out, done.'
'Add a few more big names since then,' Alex reminded him.
The same thought was in both their minds: After Supranational, would First Mercantile American Bank be added to the list?
Patterton's ruddy face had gone pale. He appealed to Alex, 'Where do we stand?' No pretense of leadership now. The bank president was leaning heavily on the younger man.
'A lot depends on how much longer Supranational stays afloat. If they can hang on for several months, our sales of their stock today might be ignored, and the breach of the Federal Reserve Act with the loan may not be investigated closely. If the breakup happens quickly, we're in serious trouble with the SEC for not revealing what we know, with the Comptroller of Currency over abuse of trust, and, over the loan, with the Fed Reserve. Then, I need hardly remind you, we're facing an outright loss of fifty million dollars, and you know what that will do to this year's earnings statement, so there'll be angry shareholders howling for someone's head. On top of that there could be lawsuits against directors.'
'Jesus!' Patterton repeated, 'Jesus H. Christ!' He took out a handkerchief and mopped his face and egg-like dome.
Alex went on relentlessly, 'There's something else well have to consider publicity. If Supranational goes under there will be investigations. But even before that the press will be on to the story and do probing of their own. Some of the financial reporters are pretty good at it. When the questioning starts, it's unlikely our bank will escape attention, and the extent of our losses will become known and publicized. That kind of news can make depositors uneasy. It could cause heavy withdrawals.' 'You mean a run on the bank! That's unthinkable.'
'No, it isn't. It's happened elsewhere remember Franklin in New York. If you're a depositor, the only thing you care about is whether your money's safe. If you think it might not be, you take it out fast.'
Patterton drank more water, then slumped into his chair. If possible, he looked even paler than before.
'What I suggest,' Alex said, 'is that you call the money policy committee together immediately and we concentrate, during the next few days, on attaining maximum liquidity. That way, we'll be prepared if there's a sudden drain on cash.' Patterton nodded. 'All right.'
'Apart from that there's not much else to do but pray.' For the first time since coming in, Alex smiled. 'Maybe we should get Roscoe working on that.'
'Roscoe!' Patterton said, as if suddenly reminded. 'He studied the Supranational figures, recommended the loan, assured us everything was great.'
'Roscoe wasn't alone,' Alex pointed out. 'You and the board supported him. And plenty of others studied the figures and drew the same conclusion.' 'You didn't.'
'I was uneasy; suspicious, maybe. But I had no idea SuNatCo was in the mess it is.'
Patterton picked up the telephone he had used earlier. 'Ask Mr. Heyward to come in.' A pause, then Patterton snapped, 'I don't care if God is with him. I need him now.' He slammed down the instrument and mopped his face again.
The office door opened softly and Heyward came in. He said, 'Good morning, Jerome,' and nodded to Alex coolly. Patterton growled, 'Close the door.'
Looking surprised, Heyward did. 'They said it was urgent. If it isn't, I'd like to…' 'Tell him about Supranational, Alex,' Patterton said. Heyward's face froze.
Quietly, matter-of-factly, Alex repeated the substance of the fax report. His anger of last night and this morning anger at shortsighted foolishness and greed which had brought the bank to the edge of disaster had left him now. He felt only sorrow that so much was about to be lost, and so much effort wasted. He remembered with regret how other worthwhile projects had been cut back so that money could be channeled to the Supranational loan. At least, he thought, Ben Rosselli, by death, had been spared this moment.
Roscoe Heyward surprised him. Alex had expected antagonism, perhaps bluster. There was none. Instead, Heyward listened quietly, interjecting a question here and there, but made no other comments. Alex suspected that what he was saying amplified other information Heyward had received himself, or guessed at. There was a silence when Alex was done.
Patterton, who had recovered some of his aplomb, said, 'We'll have a meeting of the money policy committee this afternoon to discuss liquidity. Meanwhile, Roscoe, get in touch with Supranational to see what, if anything, we can salvage of our loan.'
'It's a demand loan,' Heyward said. 'We can call it any time.'
'Then do it now. Do it verbally today and follow up in writing. There isn't much hope SuNatCo will have fifty million dollars cash on hand; not even a sound company keeps that kind of money in the till. But they may have something, though I'm not hopeful. Either way, we'll go through the motions.'
'I'll call Quartermain at once,' Heyward said. 'May I take that report?' Patterton glanced at Alex.
'I've no objection,' Alex said, 'but I'd suggest we don't make copies. And the fewer people who know of this, the better.'
Heyward nodded agreement. He seemed restless, anxious to get away.
11
Alex Vandervoort had been partly right in supposing Roscoe Heyward to have some information of his own. Rumors had reached Heyward that Supranational was having problems and he had learned, in the past few days, that some of SuNatCo's commercial paper was meeting resistance from investors. Heyward had also attended a Supranational board meeting his first and sensed that information supplied to directors was less than complete and frank. But, as a 'new boy,' he had withheld questions, intending to begin probing later. Subsequent to the meeting he had observed a decline in Supranational's share price and decided, only yesterday, to advise the bank's trust department to 'lighten up' its holdings as a precaution. Unfortunately when Patterton summoned him this morning he had still not put the intention into effect. Yet nothing Heyward had heard or guessed suggested the situation was as urgent or as bad as the report, produced by Vandervoort, portrayed it.
Yet having heard the gist of the report, Heyward did not dispute it. Grim and jolting as it was, instinct told him that as Vandervoort put it everything hung together.
It was the reason Heyward had stayed mostly silent while with the other two, knowing at this stage there was little to be said. But his mind had been active, with alarm signals flashing while he weighed ideas, eventualities, and possible escape routes for himself. There were several actions which needed to be taken quickly, though first he would complete his personal knowledge by studying the Jax report. Back in his office, Heyward hurried through some remaining business with a visitor, then settled down to read.
He soon realized that Alex Vandervoort had been accurate in summarizing the report's highlights and the documentary evidence. What Vandervoort had not mentioned were some details of Big George Quartermain's lobbying in Washington for a government-guaranteed loan to keep Supranational solvent. Appeals for such a loan had been made to members of Congress, and at the Department of Commerce and the White House. At one point, it was stated, Quartermain took Vice-President Byron Stonebridge on a trip to the Bahamas with the objective of enlisting the Vice-President's support for the loan idea. Later, Stonebridge discussed the possibility at Cabinet level, but the consensus was against it.
Heyward thought bitterly: Now he knew what Big George and the Vice-President were discussing the night they had walked, deep in conversation, in the garden of the Bahamas house. And while, in the end, the Washington political machine made one of its wiser decisions in rejecting a loan to Supranational, First Mercantile American Bank on Roscoe's urging had bestowed one eagerly. Big George had proved himself the maestro of the soft sell. Heyward could hear him saying, even now: If fifty million is bigger than you people can handle, let's forget the whole thing. I'll give it to Chase. It was an an ancient, conman's ploy and Heyward the shrewd, experienced banker had fallen for it.
One thing, at least, was to the good. In the reference to the Vice-President's journey to the Bahamas, details were sketchy and obviously little was known about the trip. Nor, to Heyward's great relief, did the report refer to Q-Investments.
Heyward wondered if Jerome Patterton had remembered the additional loan, totaling two million dollars, committed by FMA to Q-Investments, the private speculators' group headed by Big George. Probably not. Nor did Alex Vandervoort have any knowledge of it, though he was bound to find out soon. What was more important, though, was to ensure that Heyward's own acceptance of 'bonus' Q-lnvestments shares should never be discovered. He wished fervently he had returned them to G. G. Quartermain, as he had at first intended. Well, it
