‘Mr Watson … please, this way,’ beamed Ernesto, and unhooked the rope for them so that they could sweep past the disconsolate queue and follow his gleaming black hair across the dining-room. The décor was French flamboyant, sparkling with ornate Versailles chandeliers and gilded wood work. There were flames everywhere, as everything from trout to prime ribs of beef was spectacularly set alight. The man who had created L’Ecstase, Henri Carvel, had always believed that the diner would pay more if you incinerated his food in front of his nose. ‘If in doubt,’ he used to say, ‘set fire to it.’
Robert and Effie were shown to a small, secluded table in the corner, next to a glowing-pink painting of a Renoiresque girl taking a bath in what looked to Effie like a frying-pan. ‘I can see why this is your favourite table,’ she said to Robert, as Ernesto snapped open her napkin for her.
‘Mr Watson would care for a glass of White Rock?’ asked Ernesto. ‘And for Mrs Brooks, perhaps some ice?’
When the waiter had brought their glasses, and Robert had poured out two malt whiskys from his hip flask, Effie sat back in her seat and stared at Robert in silence.
‘You’re worried about this $24 million loan, aren’t you?’ said Robert.
‘Of course. I didn’t know when we first agreed it that you were going to buy stock on a twenty-point margin. That means that Watson’s New York could be liable for loans totalling more than $120 million. That’s a fortune, by anybody’s standards, even yours.’
Robert took out a cigar, and a waiter hurried across to light it for him. While he puffed out smoke, steadying the waiter’s hand by clutching tightly at the poor man’s wrist, he watched Effie as though he were sizing her up in a game of poker.
‘How much do you know?’ he asked her, at last.
‘Probably not even the half of it. But enough to concern me.’
‘Watson’s New York are holding my bill.’
‘Do you really think that’s worth anything?’
‘Of course it is. It’s worth $24 million. Enough to cover all the loans which Watson’s New York have been supervising for us.’
‘Supposing the market falls, and the brokers want more margin?’
Robert shrugged. ‘In that case, I’ll provide more margin. I’m in this business to make money, Effie, not to lose it. Besides, the market’s not going to fall.’
Effie felt an almost irresistible urge to tell Robert how much she had already discovered about what he was doing, or what she thought he was doing. She even began to say, ‘I know –’ but she stopped herself, and placed her hand tightly over her mouth, and sat there unmoving while Robert stared at her from across the table.
Robert leaned forward. ‘You misjudge me, you know. You always have. You’ve always considered me to be the blackguard of the piece. All right, I arranged some loans to Germany; but nothing that made any difference to the outcome of the war. All right, I’ve outwitted one or two European banks, and taken over half a dozen more. But I’m a banker, Effie, not the director of a home for worn-out pit-ponies, or old ladies with arthritic joints. I have a duty to protect and nourish the money with which my customers entrust me, and my customers aren’t all piggish French shipping-owners, or fat Turkish tobacco-growers, or Jewish diamond-merchants with long fingernails and hooked-noses. Watson’s have thousands of ordinary accounts, held by ordinary men and women, and I have an equal duty to protect and nourish their money, too, by whatever legitimate means possible.’
Effie said, ‘That’s very touching. You made me a speech rather like that when you destroyed the Deutsche Kreditbank, and Karl von Ahlbeck with it.’
The waiter arrived, and Robert said, ‘I’m having the sardines in tomato sauce. How about you?’
‘I don’t think I’m very hungry,’ said Effie.
‘You must eat something. Have an artichoke.’
‘I’m not in the mood for picking things to pieces.’
‘You seem to be in the mood for picking me to pieces. I don’t understand you. What do you think I’ve done? I’ve invested a little European money into a small selection of American business, through the good offices of Watson’s New York and with your full knowledge and approval, as well as Dougal’s, and you’re treating me like some kind of financial ogre.’
‘What about the Poind Corporation?’ Effie couldn’t hold it back.
Robert looked at her narrowly. ‘What about it?’ he wanted to know.
‘With Caldwell’s paid assistance, you’ve set up a small group of holding companies, all held in turn by the Poind Corporation, to control the destinies of every one of the companies in your so-called portfolio. The value of the stocks in those companies is therefore completely artificial; you can puff them up or let them down whenever you feel like it.’
Robert nodded. ‘That’s right. Within the limits of what the market will stand, of course.’
‘But that means that you have complete control over the loans for which Watson’s New York are supposed to be responsible. And that means that you have complete control over my $20 million, over Dougal’s $77 million, and over all the other millions that are invested in Watson’s New York.’
‘That’s right,’ Robert agreed.
‘But the situation is intolerable, as well as illegal.’
‘What’s illegal about it? Your own employee arranged the investments for me.’
‘Dan Kress, that’s right. Poor stubborn Dan Kress. How much of a slice of this cake is Dan Kress going to get, when everything’s over and the smoke has all cleared away?’
The waiter brought Robert’s sardines, four plump silvery fish in thick tomato-and-onion sauce, rich with spices and garlic. Robert asked for another glass of White Rock.
Effie said, ‘I didn’t mean to tell you that I knew about any of this. I was prepared to keep the boat steady, and see how you handled it. But I’m afraid this is one time when I can’t possibly keep my mouth shut.’
‘I don’t see why you should,’ said Robert, cutting the head off one of his sardines with the edge of his fork. ‘I’ve always believed in complete straightforwardness between members of the family, complete openness, haven’t you?’
‘Robert,’ said Effie, ‘I want to know that you’re not going to use this set-up to bring down Watson’s New York.’
Robert glanced up at her, one agate eye. ‘Now, why on earth should I want to do anything like that? I want to use Watson’s New York for my own personal profit. Why should I destroy it?’
‘I want your guarantee.’
‘You have my guarantee. You have a foreign bill of exchange for $24 million, which any large bank like Morgans or Chase would pick up for the full amount, if you asked them nicely enough.’
‘The $24 million only covers 20 per cent of the full value of the common stock which Dan Kress has bought on our behalf.’
‘If Dan Kress has misread the future trends of the market, is that my fault? I’m just as liable to lose money as you are. In any case, Dan Kress is your employee, not mine Pin the blame on him, my dearie, not on me.’
‘Robert, I’m warning you –’
Robert beatifically raised a hand, the Pope of international finance. ‘Let me tell you something, Effie, before you start issuing warnings. This arrangement which seems to anger you so much is completely legal, and completely unassailable. If you believe that it gives me an undesirable measure of control over the destiny of my own money, then that is quite up to you. But you can do nothing whatsoever about it, nothing, and as you probably know already, your own husband was involved in setting it up with me, which rather implicates you, too, wouldn’t you say? If I were you, I would keep quite quiet about it, and do what you thought was good sense before: and not rock the boat. I’m going to do what I have to do, which is disperse and invest a large amount of European money on behalf of certain favoured clients of mine –’
‘All Germans,’ said Effie.
‘Some Germans,’ agreed Robert. ‘Some Britons, too, and quite a few Portuguese. But once
I’ve dispersed this money, everything can return to normal, and I hope that both sides of Watson’s Bank can continue to work together towards a flourishing future.’
Effie finished her drink. The waiter came over and asked if she had changed her mind, and would care for something ‘petite’ to eat; but she smiled and declined.
‘Well, Robert,’ she said. ‘You seem to have me cornered.’
‘A rather businesslike way of putting it,’ said Robert, with his mouth full, ‘but, accurate enough.’
Effie pushed back her chair, and stood up.
‘You’re not going?’ asked Robert.
Effie said nothing, but picked up one of his tomato-smothered sardines by the tail, dangled it above him for a moment, and then dropped it straight down the back of his neck. It left no trace of its sudden dive into the depths of his shirt but a small reddish splotch on his clean white collar.
Robert froze, and then abruptly coughed up a whole mouthful of half-chewed fish into his napkin.
‘You did something similar to somebody once,’ said Effie, trying hard to keep her voice steady. ‘It was the only thing that I admired about you at the time, and jt still is the only thing that I admire about you.’
She turned away then, and walked smartly across the restaurant, without looking back once. Robert, in crimson-faced fury, hurled a breadroll after her, as hard as a cricket-ball, but missed, and hit an elderly art dealer on the side of the head instead.
The following morning, the New York Daily News carried the gossip item ‘Scots Bankster KO’s Art Expert with Breadroll’.
Effie, reading the paper in bed, was interrupted by her telephone ringing. Charlene came in, picked it up for her, and said, ‘It’s Mr Caldwell, ma’am. He says he really needs to speak to you real critical.’
Effie took a breath, and then said, ‘Tell him I’m taking a shower.’
‘He sounds terrible upset, Miss Effie.’
‘I expect he is. He’s not the only one. Tell him I’m taking a shower.’
CHAPTER FORTY-ONE
Effie, despite what she felt about Mariella, drove down to Long Island later that day to talk to Dougal. As it turned out, Mariella was away, visiting a friend upstate, and so she and Dougal had the estate to themselves. They walked down to the bay, and threw pebbles at the water, and then sat on a dune amongst the rustling grass and shared a flask of Buchanan’s whisky. A yacht arched its way across the Peconic, as white and starched as a laundered sheet, and Effie was reminded of the day she had walked by the sea with Alisdair, long ago, on the curve of St Andrews Bay.
Dougal was wearing a large white cotton golfing cap, a Fair Isle sweater, and plus-fours, with Fair Isle socks. He was quiet, and a little diffident, but otherwise he gave every sign of being quite well. Effie wore a pink cloche hat, and a pink and beige cardigan, with a skirt the colour of pink chrysanthemums.
‘Caldwell tried to call me this morning,’ she announced.
Dougal tipped back the flask, and drank three good swallows of scotch. ‘Tried?’ he asked.
‘I didn’t speak to him.’
‘You should have done. He might have had something interesting to say.’
‘How could he have done?’ asked Effie. ‘We’re deadlocked, and you know it. This arrangement of Robert’s is like a time-bomb. We can’t touch any single part of it without it blowing up in our faces; and the terrible thing is that it’s going to blow up anyway. The only question is when.’
‘When Robert feels like it, I presume,’ said Dougal, squinting towards the ocean.’
‘Don’t you have any connections who could help?’ asked Effie. ‘Isn’t there anybody at Morgan’s who could untangle it for us?’
‘It’s too risky. And the trouble is, by buying up the loyalties of Caldwell and Dan Kress, Robert has made the whole thing look as if we‘re involved, too.’
‘But Morgan’s wouldn’t want to see Watson’s go down, would they? Nor would any of the other big banks.’
‘Of course not. But what do you think we’re going to say to them? “Oh, excuse me, we’ve innocently allowed our older brother to knot us up into the most incredible financial pretzel since the Harding Oil Scandals, and we’d really appreciate it if you’d untie us?” They might untie us, they probably would, but the price would be that they wouldn’t let us run our own damned bank any more. Would you, if you were them? Besides, this German money scares me. There are some very heavyweight interests involved in this; the Gene Tunneys of money, as one of my directors used to call them. I don’t want to go blithely dancing in to Morgan’s boardroom and pirouette on all the wrong toes.’
Effie said, ‘Jimmy Byrd called me again this morning. He says it’s possible that Robert may be waiting until early September. One of his informants believes that some very large German bills of exchange fall due on 1 September, and that Robert may want to include the proceeds of those bills in his plan.’
Dougal said, ‘I’m amazed what common knowledge this all is.’
Effie took the flask of whisky from him, and sipped a little from the neck. ‘It’s the ultimate arrogance, isn’t it? Robert has us so tied up that he doesn’t even have to worry about concealing what he’s doing.’
‘In my opinion, all we can do is wait,’ said Dougal. ‘I’m still digging for proof of misconduct, but it still doesn’t look very hopeful. Just think about it, I may be sitting here for the last time. In a day, or a week, or a month, I could be ruined.’
‘You have plenty of property, plenty of insurance.’
Dougal made a face. ‘Most of it’s mortgaged through the bank, for tax purposes. If I tried to pay it off outright now – now that I know what might happen at the bank – I’d be as guilty of embezzlement as Robert. I can keep my honesty, if nothing else.’
Effie said, ‘Alisdair’s due on the Mauretania in two weeks.’
‘Alisdair?’
‘Your son.’
Dougal looked away. The wind sighed and breathed through the grass on the sand-dunes. When he looked back, there were tears in his eyes. ‘I don’t suppose he’s mine,’ he said.
‘Prudence swore that he was.’
‘Maybe she said it only because she wanted money out of the Watson family. The baby could have been anybody’s.’
‘You can look at Alisdair, with that curly hair of his, and that chin, and swear to me that he couldn’t be yours?’
Dougal sniffed, reached for his handkerchief, and loudly blew his nose. ‘It’s all too damned late,’ he said. ‘That’s the trouble, I’ve always been too damned late.’
CHAPTER FORTY-TWO
Effie stayed in New York for the rest of September. She conferred with Dougal regularly, telephoning him every day and meeting him for lunch or dinner at least once a week. Dougal’s assistants kept on ferreting for discrediting proof about Robert’s financial arrangements, and about Poind in particular, but as the autumn began to approach, and the air grew colder, they began to realise that Robert was legally invulnerable.
Dougal’s lawyers advised him that he could conceivably sue Robert for nitpicking infringements of the loan agreement, such as late delivery of documents, and failure to provide adequate information about the investors involved. Such an action could have the effect of dragging out the larger issues before the court; but it would also be prohibitively expensive, and would probably have only a ten per cent chance of success. Worse than that, it would rattle public confidence in Watson’s New York and in the stock market in general, and alienate many of Dougal’s closest supporters.
Effie waited for Caldwell to telephone her again, feeling calmer now, and much better prepared to speak to him; but he didn’t call. She telephoned Los Angeles herself several times, but Caldwell was never at home. Kitty said that he was staying with friends in Coldwater Canyon. One evening Effie sat down and wrote him a long, tranquil letter, reviewing the happiness and the fun they had shared together, and asking him to get in touch. But she didn’t mail it. It stood propped on the mantelp
iece for days before she finally tore it up without re-reading it. She guessed, she knew, that Caldwell had worked with Robert for only one reason. Even before they had been married for a single month, he begun to feel overwhelmed by her, and Robert’s offer to set up this dubious arrangement of holding companies and bootleg loans had been the most immediate opportunity he had been given to diminish her strength and to restrict her influence, to make her more manageable. She was sure that he had loved her; she was fairly sure that he still did. He had worked desperately hard for her to build up the Commerce Bank. But from the very start he had been unable to accept the idea of living with a woman who was more personable and more influential than he was.
She quoted to herself the lines from The Ballad of Reading Saol which Mrs McCreith had once made her learn, ‘Yet each man kills the thing he loves … by each let this he heard … some do it with a hitter look … some with a flattering word … the coward does it with a kiss …’
Kay helped her through those days, simply by being bright and warm and obviously pleased to be with her. They went for drives together by the Hudson, took afternoon tea at the Plaza Hotel, and walked hand-in-hand in Central Park. One weekend the Rockefellers invited them up to Pocantico, and they spent the whole of Sunday afternoon playing a piano duet in the music-room, pleased with each other’s company. Kay was so grown-up now, so poised and so funny; and at night, when Effie went in to watch her sleeping, she prayed under her breath that Kay would never find out how she had been born, or why.
September was a glittering month for the New York stock market. The Dow-Jones average was way up and seemed set to climb even higher. On 3 September, American Telephone & Telegraph, quoted at 179 only a year and a half before, stood at 335; General Motors had climbed from 139 to 181; Electric Bond & Share were up from 89 to 203.
All over the United States, ordinary people were making small but spectacular fortunes. A nurse made $30,000 from stock-market tips given to her by grateful patients; an exactress gave up the stage to deal entirely in stocks; a young banker sold everything he had to buy stock in Niles-Bemend-Pond and was now set up for the rest of his life. But the soaring balloon of American business, inflated by very little more than public confidence and commercial credit, was already beginning to leak. At the absolute height of the market, over $750 million of its value came not from cash investment but from bootleg loans, and countless millions more were simply hot, Hoover-inflated air. The boom was kept aloft by nothing more than a national act of will, and by the concerted interests of a very small group of powerful speculators – men like John J. Raskob, W. C. Durant, the Fisher brothers, and Arthur Cutten, men who had bought into the market in 1928 in the certain knowledge that if they bought, prices would rise, and that if prices rose, the American public would be unable to resist the appeal of a surging market.
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