however, the whole organisation remained a sock, and a sock it is to this day. Remember that, and you’ll understand a lot about how banks work.”

“For reasons best known to itself, the sock left Lombardy early in the fourteenth century and migrated to the cities of the Hanseatic League, where it went to live with some people called Fugger. They were kind to the sock and fed it lots of silver pennies, until almost all the silver pennies in the world were either in the sock permanently or else indefeasibly linked to it by a series of binding legal agreements. The more people tried to take money out of the sock, the more money ended up in there, and although everyone complained bitterly about this state of affairs, none of them realised that the only way to break the vicious circle was not to take money out of the sock in the first place. Even now,” said Mr Gleeson, “the lesson has not been learned which is why the economic infrastructure of the developed nations is completely up the pictures.”

“Anyway,” continued Mr Gleeson, “the Fuggers were industrious men, and they weren’t content to let the sock do all the work. They were forever trying to think up new ideas for getting even more silver pennies from people, and one of them hit on a very simple but extremely effective concept. It was basically a form of gambling, and it went something like this.”

“The Fuggers would think of something that was extremely unlikely to happen, and then they would persuade someone to wager them money that it would. Now the proper term for this arrangement is a sucker bet, but the Fuggers wanted to find a respectable name for it, so they called it Insurance. It caught on, just as they knew it would, and soon it became so respectable that they were able to get people to make a new bet every year, and they called this sort of bet a premium. But although everyone was soon convinced that the bets were totally respectable, the Fuggers were perfectionists and wanted to make absolutely sure, so they took to writing the bets out on extremely long pieces of parchment, frequently in Latin. This practice survives to this day; we call them policies, and usually they’re so completely and utterly respectable that it takes a couple of trained lawyers to understand what they mean.”

Jane nodded instinctively, for she had just renewed her car insurance. Mr Gleeson went on.

“Well,” he said, “if we can just fast-forward for a bit, the House of Fugger became Fugger and Company, which in turn became the Lombard National Bank, which turned into the National Lombard Bank plc. The name has changed, but the sock remains the same. In fact, you would be forgiven for thinking that the sock is the only truly immortal entity in the world. You would be wrong.”

Mr Gleeson paused and opened the top drawer of his desk, from which he extracted a packet of digestive biscuits. He offered one to Jane, who refused, and then ate one himself. Once he had cleared his mouth of crumbs, he continued.

“Back we go to the sixteenth century. We are in Cadiz, one of the most important seaports in the world. If you are tired of Cadiz, you are tired of life and so on. Naturally, there is a Fugger office in the High Street, offering low-interest overdrafts, mortgages (the word mortgage literally means “dead hand”, which I find terribly evocative, don’t you?), bottomry loans, whatever they were, and the inevitable life insurance. It is a Thursday.”

“Into the Fugger office walks a relatively prosperous sea captain in his early thirties. He has become rather concerned about the risks involved in his profession now that the seas are full of English pirates, and he wants to take out some insurance on his ship. This is perfectly natural, because his ship is his living, and if somebody puts a culverin ball through its bows, our sea-captain will be out of a job.”

“The manager of this particular Fugger office is well versed in the basic tenets of his trade, and the fundamental rule of insurance is, Don’t take bad risks—that, by the way, is what an insurer calls a sucker bet when you offer it to him. There is a severe risk that what the sea-captain fears so much will actually come to pass. Therefore, regretfully, the manager has to refuse to insure the ship. But he is nothing if not a tryer; it hurts him severely if someone walk out of his office without making at least a small bet, and so he suggests to the sea- captain that he might do worse than take out a little life insurance.”

Again Mr Gleeson paused, and Jane noticed to her amazement that he was quivering slightly. Mr Gleeson must have noticed her noticing, for he smiled.

“This is the good bit,” he said, “don’t go away. I remember when I was told it. By rights, of course, I should never have been told it at all. You see, the story is handed down from generation to generation of managing directors of the House of Fugger or whatever they’re calling it this week. Fortunately, the managing directors of the bank had always died in their beds with plenty of notice from the medical authorities, and so there was always time to pass the story on. The way I got to hear it was extremely fortuitous, a complete break with tradition, you might say. You see, I was at Oxford with the son of the then managing director, and I was staying with the family one long vacation. We all went out rough shooting and there was a terrible accident, the old man got shot. No time to get a doctor, he just rolled over and with his dying breath blurted the whole horrible thing out. I happened to be there, and so of course I heard it. I wasn’t even qualified then, but of course I became the bank’s chief auditor on the spot, just as my friend became the next managing director, because of what we had heard. You see, the system is that the whole board knows there’s a secret, but only the MD knows what the secret is. I’ve introduced the same system at Moss Berwick, but it doesn’t seem to have worked so well there.”

“So what is the secret, exactly?” Jane asked.

“I’m coming to that,” said the senior partner. “I was just trying to put it off for as long as possible, because it’s so…so silly, I suppose is what you’d have to call it, if you were going to be savagely honest. I’ve lived with this for thirty years, my entire life and phenomenal successes in my career are built around it and I’ve never ever told anyone before.”

Jane looked him in the eye. She was sorry for him. “Go on,” she said.

“Thank you,” said Mr Gleeson. He was probably quite nice when you got to know him, should you live that long. “The policy that the manager sold Captain Vanderdecker—the sea-captain’s name was Vanderdecker—was a perfectly standard policy specially designed to meet the needs, or rather the gullibility, of sea-captains. You had the choice of paying regular premiums or a single lump-sum premium—the sea-captains found it difficult to pay regular premiums in those days, you see, because they rarely knew where they’d be at any given time from one year’s end to the next—and in return you got an assured sum on death. It wasn’t exactly a fortune, but it would tide your nearest and dearest over until the plague or the Inquisition finally finished her off, and since there was no income tax in those days it was guaranteed tax free.”

“The sting in the tail was this. Because sea-captaining was such a risky job in those days, it was a virtual certainty that the policyholder wouldn’t make sixty years of age. This is where the sucker-bet part of it comes in. Because of this actuarial semi-certainty, the policy contains the proviso that the sum assured—the payout—will increase by fifty per cent compound for every year that the life assured—the sucker—survives over the age of seventy-five. Seventy-five, mark you; those Fuggers were taking no chances. It made a marvellous selling point, and the age limitation only appeared in very tiny script on the back of the policy, just underneath the seal where you wouldn’t think of looking. They sold tens of thousands of those policies, and for every one sucker that made seventy-six, there were nine hundred and ninety-nine that didn’t.”

Mr Gleeson stopped talking and sat very still for a while, so still that Jane was afraid to interrupt him. It is very quiet indeed in a soundproofed office on the fifteenth floor of an office block at two in the morning.

“Talking of sucker bets,” Mr Gleeson finally said, “this one was the best of the lot. You see, Captain Vanderdecker didn’t die. He just went on living. Nobody knows why—there are all sorts of far-fetched stories which I won’t bore you with, because your credulity must be strained to breaking-point already. The fact remains that Vanderdecker didn’t die. He is still alive, over four hundred years later. Please bear in mind the fact that the interest is compound. We tried to calculate once what it must be now, but we couldn’t. There is, quite literally, not that much money in the whole world.”

“So, you see, if Vanderdecker dies, the whole thing will go into reverse. All the money which has gone into the sock—and that’s every penny there is—will have to come out again, and it will all go to Mr Vanderdecker’s estate. This is of course impossible, and so the bank would have to default—it would have to welch on a sucker bet. And that would be that. End of civilisation as we know it. You know as well as I do that the economies of the major economic powers are so volatile that the markets collapse every time the Mayor of Accrington gets a bad cold. The faintest hint that the National Lombard was about to go down and you wouldn’t be able to get five yards down Wall Street without being hit by a freefalling market-maker. And that is the basic story behind the Vanderdecker Policy.”

That same long, deafening silence came back again, until Jane could bear it no longer.

“But surely,” Jane said, “if Vanderdecker is going to live for ever, he’ll never die and the problem will never

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