‘I don’t think so.’
‘I do.’
‘How long will you be away?’
‘Back on Monday,’ he said.
‘Hope you have a good trip,’ she said, trying for lightness.
‘So do I.’
‘It hasn’t been a perfect day after all,’ she said. ‘You ruined it.’
The meeting was properly convened, with a written minute, so Jane knew it was official. Her confidence faltered just slightly when she entered Burnham’s office to find it empty, apart from himself. He greeted her without any familiarity, remaining behind his desk and gesturing her to a chair facing him.
‘There was the meeting of Court this morning,’ he said.
‘Yes,’ she said.
‘With a lot of discussion about the Russian and the East European loans.’
‘They’re not excessive, against the reserves.’
‘Not excessive,’ he agreed. ‘But we’re getting close to the permitted percentage margin.’
‘Are we going to issue a warning to the clearing banks?’
Burnham shook his head. ‘We’re going to establish a temporary monitoring unit, in addition to the normal supervisory system. I’ve been asked to head it.’
Jane sat, waiting.
‘I’d like you to be part of it,’ he said.
‘Is that a good idea?’
‘It’s a professional request,’ said Burnham. ‘I want you to join me because of your proven ability, nothing more.’
Jane paused, considering. ‘Professional,’ she insisted. ‘Absolutely nothing more.’
‘I’ve given you that assurance.’
‘I don’t want there to be any misunderstanding.’
‘There won’t be.’
She gave a further hesitation. ‘It’ll be an interesting exercise,’ she said.
Burnham smiled at her acceptance. ‘Let’s hope that’s all it is, an exercise,’ he said.
Chapter 19
His father suggested the Union Club again and Pike accepted because it was as good a meeting place as any and he was more concerned at his father’s reaction to the rejection he intended than with bothering to think of somewhere else. There wouldn’t be any indication of anger, Pike knew; not outwardly at least. But the man would be annoyed; he wasn’t used to having any request turned down and certainly not from his own family.
Pike arrived early but the permanently reserved table was already occupied. The older man smiled up at his arrival and said, ‘Clams are today’s special. I ordered for you. Martini, too.’
‘Thank you,’ said Pike.
Indicating the immediately attentive maitre d’, he continued, ‘George says the best thing to follow is the beef from the trolley.’
Pike nodded his agreement to the head waiter, wondering if his father had the slightest suspicion how irritating it all was. Jane had been right: it wasn’t surprising that thin bankers were rare.
‘How’s the IMF?’ he said. He might as well get it over with.
‘Just about to set an example.’
‘Who?’
‘France. Socialist programmes costing billions, as usual without the proper degree of planning. And as usual the approach has come to bail them out.’
‘How much?’
‘Ten billion. Sent the negotiating team to Paris last week.’
‘I saw it reported in the Journal,’ remembered Pike.
‘They’re already protesting, privately, at the terms. Unacceptable austerity measures, too fierce a deflation, all the predictable protests. But we’re not going to shift our position. We’d be fools to consider it. They’ve already gone through the $4,000,000,000 standby loan they raised internationally at the end of 1982. Their trade gap could go as high as $8,000,000,000.’
‘You’ve a strong argument,’ conceded Pike. When would the demand come? he wondered.
‘Russia has gone quiet,’ said the older man.
Pike recognized the lure. ‘Lot of loans being raised,’ he said.
The man smiled at his son’s awareness. ‘That’s what I hear, too,’ he said. ‘But not here.’
‘No,’ agreed Pike. ‘Europe and Asia.’
‘Necessary, with the sort of expansion they’ve gone into,’ said the IMF official. ‘Why do you think America’s being ignored?’
‘Interest rates higher than anywhere else.’
‘No other reason than that?’ said the man. ‘That’s almost too obvious.’
‘I can’t imagine any other,’ said Pike. He wished he could: he felt impotent.
‘For the sort of funding the Eastern bloc require now, I wouldn’t have thought rates would have been an overwhelming barrier.’
‘They would be if there’s the sort of control in Moscow that we’ve agreed upon,’ pointed out Pike. Suddenly realizing an advantage of his own, he added, ‘You’ve got a worldwide monitor, through the Fund. Any problems with payments on the new loans?’
‘They’re too diversified for us to get any full assessment,’ said the older man cautiously. ‘But I’d have expected to hear if there were difficulties. There’s not been the slightest suggestion.’
‘So world banking goes on its healthy way.’
‘Except that America isn’t involved,’ reminded his father. ‘And it has to be, if the President is going to get the economy moving.’
‘Seems to be a simple enough resolve,’ said Pike.
‘How are the clams?’
‘Fine.’
‘I ordered wine with the beef. Margaux.’
‘That’ll be good.’
‘Volger’s a damned fine man: didn’t try to hog the credit for himself on your early assessments.’
‘Lucky break,’ said Pike.
The wine arrived. The older man tasted it, nodded acceptance and said across the table. ‘Luck wasn’t involved. Your name’s Pike.’
Any moment now, thought the younger man.
‘Still like to keep ahead of this Russian change,’ said the IMF director.
‘It’ll become clearer in time,’ said Pike.
‘I don’t want to be told! I want to do the telling. It’s important to me, remember?’
Father and son looked directly at each other across the table, neither eating nor drinking.
‘It’s time I heard your answer.’
‘I know,’ said Pike. ‘I’ve thought a lot about it …’
‘I’ve changed my mind,’ stopped his father, holding up his hand in a halting gesture. ‘Not about wanting you, but about the function I’d want you to fulfil.’ He smiled and said with his unshakeable confidence, ‘So before you accept I think I should tell you what it is. Russia is important and they’ve made Europe important, so I think that’s the place to be.’
‘I don’t understand,’ said Pike, who thought he did but wanted to hear it from the other man.
‘I want you to go to Europe.’
‘Whereabouts in Europe?’
‘Wherever the information is quickest and best,’ said the man. ‘Either London or Paris, I would think.’ He leaned across, patting his son’s wrist. ‘Which I realize makes it difficult for you. So I’ll understand if you say no.’
‘Difficult?’ queried Pike, genuinely confused now.
‘With you and Janet: you are getting back together again, aren’t you?’
‘That’s not a difficulty,’ said Pike.
‘It certainly wouldn’t be, if you got married right away,’ agreed the older man, immediately enthusiastic. ‘Probably be the best thing, to make a fresh start initially somewhere away from America.’
‘I’m not thinking of remarrying Janet,’ announced Pike.
His father gazed again at him across the table, not responding at once. ‘But I understood …’
‘There was never anything to understand,’ said Pike, able for once to be more forceful with his father than he was with the woman. ‘She divorced me to marry someone else and that hasn’t worked. For which I feel sorry for her. We met afte
r the IMF meeting and we’ve seen each other a few times since. As friends. And that’s all it is. There’s no question of remarriage.’
‘I’m surprised,’ said the man, pushing his plate away disinterestedly. ‘Extremely surprised. Both families would have been very happy, you know.’
‘The most active participants wouldn’t,’ insisted Pike. Janet would have accepted if he’d asked her, he supposed. Another experiment.
‘Surprised and disappointed,’ said his father, lapsing into the habit of repetition.
‘The job has changed,’ reminded Pike.
‘But the obstacle I imagined isn’t there any more,’ said the older man, always quick to see an advantage.
‘Give me a little more time.’
‘How long?’
‘Until after the weekend.’
Jane met him at the airport and said she wasn’t hungry, so they went directly to her flat. They stayed in bed until midday on the Saturday, shopped briefly in Kensington High Street and went back to bed in the afternoon. She cooked a meal in her dressing-gown and they ate it watching television which they both found boring, so they went back to bed again. On the Sunday they drove to Hampstead Heath and walked until her nose became red with the cold and then they went to the Spaniards pub for sandwiches and beer.
‘Hardly a jet-setting weekend, is it?’ she said.
‘Have I complained?’
‘What would you have done if you hadn’t come here?’
He laughed. ‘You won’t believe me if I tell you.’
‘What?’
‘Gone up to Rhode Island,’ he said. ‘The French and Australian America Cup teams are practising. There were parties and stuff like that.’
‘Christ!’ she said.
‘I’d rather be here.’
‘I’m glad you are.’
‘I’ve been offered a new job.’
‘Where?’
‘With the IMF.’
‘Your father?’
He nodded. ‘He wants me in Europe.’
‘Europe!’
‘Paris, nominally. But in London a lot.’
She looked away from him, staring into her glass, lower lip trapped between her teeth.
‘Say something,’ he said.
‘I’m not sure what to say.’
‘Would you like me to be here?’
She looked up to him, serious-faced. ‘I can’t imagine anything I’d like more,’ she said.
‘I think I’d like it too,’ he said. What mattered more, he asked himself – the unquestionable opportunity at the IMF or Jane Rosen? A ridiculous question, he thought.
Epilogue
Janet’s apartment was at Riverside. She stood at the window with her back to him, staring out over the water. He thought the stance was overly theatrical.
‘When?’ she said.
‘As soon as I’ve cleared things up here: closed the apartment down, stuff like that.’
‘Am I being cleared up?’ She turned to face him and he was surprised at the sadness in her usually controlled face. Pike was suddenly angry at himself, an unaccustomed feeling. ‘No ties or commitments, remember?’ he said.
‘There weren’t at first: you let it go on.’
‘I didn’t make any promises.’
‘You did: by not making them.’
‘Maybe I was a bit of a bastard.’
‘Maybe!’ She laughed bitterly. ‘A belated admission, for no one else to hear,’ she said. ‘You’ve always been a bastard, Tom. I said I didn’t, because I didn’t want to frighten you away again, but I’ve always loved you. And you knew it. You fucked it up the first time, until I couldn’t stand it any more and I was labelled the whore. And now you’ve done it again. You let me believe and you let the families believe but it’s me who’ll be laughed at and you’ll go on being the golden boy, someone who can do no wrong….’ The laugh trembled, coming close to tears. ‘You’ve perfected it, haven’t you?’ she hurried on, determined to finish. ‘Never being wrong, I mean. You are a bastard, Tom: a rotten bastard who uses whatever and whoever is available, but the only one who’s important is Tom Pike jnr.’
Pike let the accusations wash over him, his self-anger evaporating. Overwrought and near hysterical, he thought. He stood abruptly, not wanting the farewell to degenerate any further. Another error, to have come to see her at all.
‘Goodbye Janet,’ he said.
‘What are you going to do?’ she demanded, shrill-voiced, as he walked away. ‘What are you going to do on that awful day when you make the mistake you’ve always been so frightened of?’
He turned, at the door. ‘Never make it,’ he said.
‘I’ve never been so optimistic’
Beryl Sprinkel, US Treasury
Undersecretary, at the September,
1982 meeting of the International
Monetary Fund, in Toronto.
Chapter 20
Through their individual European and Far-East subsidiaries all the major American banks knew within a month of loans being raised by the Eastern bloc, led by Moscow, although because the affiliate links were individual there was no facility through which they could gauge the extent or spread of the borrowing. Wall Street is, however, a small community. It took only a few more days of apparently casual enquiry between chairmen and directors in panelled luncheon clubs and discreet cocktail receptions for the conclusion that they were substantial. With that decision came several others. Predominant was that backed by the newly responsible Soviet Union, with its re-assessed and substantial gold reserves, the borrowings were sound. Of equal importance was the realization that it was the financial structures of the United States and not their separate corporations that were being excluded. The luncheon and cocktail party gatherings were unanimous in blaming the continued high interest rates within the United States as the reason.
The pressure upon Richard Volger, at the Federal Reserve, and William Bell, at the Treasury, began simultaneously. Under Jordan’s presidency the traditional independence of the Federal Reserve had been decreased and from the conference at which his board had been singled out for open praise Volger knew the diplomatic importance the President attached to the Eastern bloc developments.
At his own suggestion he flew to Washington for a private meeting with the Treasury Secretary. In the preceding six months, there had been a three per cent drop in the country’s inflation rate and Bell assessed this as proof that his tight money policy was at last succeeding. He therefore argued against any reduction in the discount rates. Volger had heard the rumours of Bell’s growing unpopularity within the White House and had no intention of going down in a sinking ship, in addition to which he considered the United States bankers’ concern justified.
It had been unusual for the President to chair the earlier Washington conference and Volger reminded Bell of it, not just to stress the President’s feeling about what Moscow was doing but to imply that it might have indicated the President’s lack of confidence in his own Secretary. It was a thought that had occurred to Bell at the time and, after an hour, he agreed to Volger’s suggestion that another conference of bankers should be called, this time with himself as chairman.
It was smaller than the original meeting, in the main conference room of the Treasury building across the street from the White House, limited apart from Bell and Federal Reserve bankers to representatives from every major United States Bank and financial institution.
Bell knew very well just how much he was threatened, both personally and professionally. Just as he knew that but for the goddamned Russians and their sudden financial moves, his monetary planning would have been proven right. Realistically, he doubted now that he would get his chance to be shown so: presidents demanded panacea policies that worked overnight and bankers were greedy bastards who’d climb international money mountains to pluck half a percentage point from beyond the snowline. But he set out to try, quoting from the reports he’d prepared since the earlier encounter with Volger the value o
f money-supply control and high discount rates to confront inflation, aware as he talked of the unresponsive faces confronting him across the table.
It was Chase Manhattan’s Hector Belcher who spoke first, when Bell threw the meeting open to debate. ‘Do you think a three per cent inflation drop justifies its cost?’ he demanded. ‘We’ve got the highest unemployment figure in years: destitute families wandering the cities like something out of a Steinbeck novel. There’s going to be a ripple effect from what’s happening because of the Soviets. They’re buying and because they’re buying things have to be manufactured. While we’re counting lay-offs in thousands and tens of thousands, the manufacturing industries in Europe and the Far East will be re-employing and re-equipping, to meet the demands.’
They were being damned clever, Bell realized: rehearsed almost. It was a political argument they were advancing – a home consumption political argument the President would seize with both hands – not an apparent demand to get into the lending scramble which was what they wanted.
‘We’re out of step,’ came in the Manufacturers’ Hanover chairman, Richard Railton. He splayed his hands, collapsing a finger as he made each point. ‘England is involved, along with every other country in Europe, Japan is involved, Australia is involved, Canada is involved, New Zealand is involved …’ The hand closed tight, Blair concluded, ‘Everyone except us.’
Bell turned for assistance to the Federal Reserve chairman, but Volger said unhelpfully, ‘I don’t think we can have any doubt about the security. There hasn’t been a repayment crisis for months now; not even a request for re-scheduling. That’s directly attributable to the new attitude of the Soviet Union.’
‘Look what’s happening to commodities,’ insisted Alan Mewsom from the Bank of America. ‘There’s not an underdeveloped Third World country not selling its products and suddenly things are working again.’
‘I don’t see the economic sense of maintaining high-interest rates that deprive our manufacturers of too expensive investment capital on the one hand and of the opportunity to expand overseas markets on the other,’ said Belcher, returning to his original point. ‘To me that seems a contradiction of the free enterprise economy America is supposed to epitomize: that’s not just hobbling the horse, that’s breaking its legs.’
Kremlin Conspiracy Page 17
