Chapter 46
NO STONE UNTURNED
A tired yet happy Claudine was returning to Chamonix. Traveling along the highway she had taken so many times in the past, her mind was only half on her driving. She couldn’t wait to tell Jacques all the details of her meeting.
“Jacques, you won’t believe what happened!” she said as soon as she burst through the front door of the chalet. “I’ll bet we spent less than half the time talking about the investment economics of the bond program. Once Cecil and Ben understood the objectives of the fund, they began to talk about their own problems. There is no doubt, in my mind, that the successful implementation of our plan will help them resolve a number of these problems. When you suggested the best way to sell our program is to frame it in the context of solving their problems, you were absolutely correct.”
Claudine was so excited to tell Jacques everything she had learned that she had forgotten to pay attention to his ability to absorb what she was saying. Stopping to catch her breath, she was surprised when he asked, “Did they give you any indication what their investment range might be?”
Not expecting the question, Claudine asked, “Jacques, how much of my carrying on were you able to understand?”
“Everything you said seemed perfectly clear; why do you ask?”
Claudine and Jacques had settled into a comfortable routine at the chalet. Each morning, she would try to have breakfast prepared when he returned from his early morning walk into the village to retrieve all the local newspapers. Discussing their content and meaning was another part of his rehabilitation program.
Later in the day, she would accompany him back into the village while he concentrated on purchasing each of the items he had written on his daily shopping list. One of her favorite games was to ask him, “Where are you taking me to lunch today?” Watching him sort out the different restaurants, their menus, and when they had last been there represented another way she could measure his progress.
As much as Claudine liked shopping and dining with Jacques, it was the intimate atmosphere of preparing dinners and the more serious conversations afterward that she enjoyed the most. Confident that Jacques was rapidly recovering, she began to discuss the complexities of her meetings. After repeating the intellectually challenging conversations word for word, she would also give him her notes.
“Jacques, what does it all mean? Sometimes, I think they are speaking in some kind of code I’m expected to understand. The financial reserves of war-shattered banks can’t be all that great. Two and a half billion dollars is an enormous goal. What are we going to do if all our commitments fail to produce the minimum we need? What kind of a backup plan can we develop?”
“Rather than worry about a backup plan,” said Jacques, “I think we should concentrate on identifying every investment source we can and commit ourselves to calling on each one. At the end of the day we will have either met our goal or know we have left no stone unturned.
“One of the things I can do in your absence is to establish a prospect list. Don’t forget: someday I should be able to travel and help you by dividing up the work of calling on half of these prospects.”
Claudine’s next visit was to The Hague to speak with the Queen of the Netherlands, an old friend of the family’s and a longtime client of the Demaureux Bank. Claudine was scheduled to present her case to Victor Duits, the Queen’s personal financial advisor and Holland’s new representative in the emerging European community.
“Victor is an interesting man and a devoted historian, Claudine,” Jacques said as he helped his wife prepare for her trip. “Before the war, he and the Queen shared a similar conviction regarding the investment of the country’s surplus funds. They believed the United States was the most politically and economically stable country in the world, and they have always been comfortable investing in America’s government bonds.
“It’s important to remember that once they become convinced the bond issue will be supported by the full faith and credit of the United States, Victor will concentrate on learning how investing in our bond fund will generate increased yields.”
While Claudine was at The Hague meeting with Victor and the Queen, Jacques began to worry about her next meeting, which was with the Berlin National Bank. They had been informed that John von Heusen, an old nemesis of Jacques’s, would be attending. Before John had been appointed executive vice president of the bank, he had worked for one of New York City’s biggest banks. It was one of the money-center banks that had been particularly outspoken in its support of the Oil Club’s plan to control the future development of oil.
If it weren’t for our need to turn over every rock, Jacques thought as he sat in the empty chalet, this is a meeting I would have preferred her to skip. In New York, von Heusen had been very vocal in his opposition to the energy fund idea. Even worse, on at least one occasion in the past, the differences in his and Jacques’s opinions and their strong personalities created such an acrimonious atmosphere the deal they were working on failed to close. Jacques knew that this meeting could turn out to be very different from the positive meetings Claudine had enjoyed with the other bankers.
In Berlin, a week later, Claudine sat in the expansive conference room of the Berlin National Bank. The meeting had started badly, just as Jacques had warned her it might. Almost before the introductory pleasantries had been completed, the bank’s chairman said, “As you know, Mrs. Roth, there are many of us in Europe who don’t share America’s concerns about monopolistic practices. As a matter of fact, we prefer the greater sense of control and economic stability they appear to introduce. Knowing our feelings, perhaps you might wish to explain why it’s in our best interests to join you in your quest to oppose the major oil companies?”
Flashing her most engaging smile, Claudine launched into her reply. “The short answer to your question is that we are not opposed to the efforts of the individual major oil companies to compete for new oil concessions; it’s their collective plan to control ninety percent of the future production that concerns us. The concentration of so much power in such a small number of hands could create a new and very threatening form of economic colonialism.”
Despite the frowns of the men in the room, including that of John von Heusen, Claudine forged ahead. “We have just finished fighting a war of which the imperial pursuit of oil was one of the major contributing causes. We are of the belief that economic colonialism can produce the same concentration of power that Hitler and the Japanese were attempting to achieve during the last war. These efforts on the part of the Oil Club, left uncontrolled, could result in a collection of power we will all regret. There are those of us who believe something needs to be done while there is still time.
“As a net importer of oil,” Claudine continued, “you may wish to consider what is required, long term, to ensure an adequate and reliable supply of affordable oil. Do you really want to be dependent on an oligopolistic oil industry capable of establishing its own production quotas and managing prices?”
Speaking up for the first time, von Heusen said, “If you listen to our banking friends in New York who represent many of the major oil companies as clients, they want to restrict new oil field financing to the members of the Oil Club. Unless Claudine and her friends can generate the support they are seeking from the unaligned financial community, that could very well become the case.” Claudine was shocked he hadn’t immediately contradicted her. In fact, she realized his face had softened, and that his tone was almost supportive.
“On the other hand,” von Heusen continued, “I’m not so sure the big banks’ position is as firm as they would have you believe. I’ve sat in meetings where these bankers discussed privately, among themselves, their feelings about the pressure Big Oil is applying on them. They are very resentful. If they were to become convinced that your efforts to replace their funding capacity could succeed, you might be surprised by what they do.”
“Claudine, I think you have made your point,” the ch
airman said. “You and von Heusen appear to agree on the strategic purpose of your plan. I will be interested in what John has to say once he becomes familiar with the fine print. May I suggest that we take a break and reconvene when we have completed our homework?”
Claudine couldn’t remember when she had been more excited about returning home. From the way he was talking during their nightly phone calls, she could sense that Jacques was extremely concerned about the outcome of the Berlin meeting. She knew he’d be especially relieved to hear of von Heusen’s change of heart. He also seemed to be making progress in his recovery; each day he was venturing farther on his daily walks, and his mental health and physical condition seemed to be rapidly improving.
Maybe the day is coming when he can accompany me on trips, she thought as her car sped toward Chamonix. If it turns out he can handle the pressure of traveling with me, it shouldn’t be too much longer before we can begin to divide up the load.
It doesn’t seem fair that he has to rely on my descriptions of how our plan is being so well received. He needs to understand, if it weren’t for the respect all these bankers have for him, none of this would be possible.
Chapter 47
MESSAGE FROM CECELIA
After four cities, twelve meetings, and six days in Canada, Natalie and David, exhausted, boarded the flight that would eventually take them from Seattle to Sydney. With plenty of time to rest and collect their thoughts, it was only natural for them to speculate on the results of their meetings.
“Did you notice a difference between our meetings in Vancouver and Calgary?” David asked Natalie. “Do you realize no one asked you any questions in Vancouver? You don’t suppose that they were being more formal and polite because they were concerned about incurring your wrath? Or maybe they’ve learned you’re a serious student and don’t want you to ask them any difficult questions. It will be interesting to see what happens in Australia.”
Natalie nodded in agreement. “David,” she said, “since I have no experience, I’m not sure that I should be asking this question, but didn’t you find it strange that all of the bankers promised to give our proposal serious and prompt consideration, but no one has given us a direct answer?”
“If I had to guess,” said David, “I wouldn’t be surprised to learn they are all talking to each other and that they won’t have an answer for us until we have completed our tour. Bankers are a strange lot. Rarely do they move on their own; they are more comfortable moving together. I have often thought that by being a part of a ‘standard’ investment they feel more comfortable if anything goes wrong.”
“Does that mean if something goes wrong in one meeting it could undo all the good we have accomplished in all the other meetings?”
“You’ve met all these bankers,” said David. “How many of them are prepared to stand up and argue for what they believe? I have always been convinced they are looking for reasons not to do something, rather than the other way around.”
“Well if that is the case, maybe we should begin to prepare for our next meeting,” Natalie said. “Let me tell you just a little bit about the land down under.”
A message was waiting for David and Natalie when they checked in at Sydney’s Victorian-Excelsior Hotel:
David,
Imperative we talk. There are problems developing in Indonesia between the Dutch colonists, the major oil companies, and the country’s new independent government. Your experience and familiarity with the British and Dutch oil companies may be needed. Call me as soon as possible.
—Cecelia
Dead tired, Natalie was debating whether to unpack or climb into bed for some much-needed rest when she heard a knock on her hotel door.
“Don’t bother to unpack,” David said as he came through the door. “I’ve just finished talking with Cecelia, and our presence is needed in Jakarta. The Dutch are threatening to take over the government with the 110,000 troops they have garrisoned in Indonesia. They’re desperate to protect their oil interests, and Cecelia thinks things could get very ugly soon.”
An envelope with the White House seal clasped in David’s hand caught Natalie’s attention. She had David read her the short note: “Sir David, I would appreciate any assistance you can provide Cecelia with her most delicate task in Indonesia.”
An interesting contingent was waiting to greet Natalie and David at the U.S. government’s private terminal when the American military plane landed in Jakarta. Cecelia and Ted, accompanied by representatives of the new Indonesian government, the regional executives of the British and Dutch oil companies, and officials of the prewar Dutch colonial government, were congregated at the end of the red carpet.
They had all been looking forward to David’s arrival; the negotiations between parties had failed to reach any positive outcome. For days, the group had been unable to satisfy the Dutch demand for its historical oil interest, and the Dutch were still refusing to recognize Indonesia’s independence. And the stakes were high. A breakdown in negotiations could signal the release of the Dutch troops and the outbreak of a bloody, costly war.
Each of the parties hoped that Sir David Marcus, with all his Middle Eastern oil experience, would find a way to break their logjam.
For the next two days, there was rigorous debate. It was during the third day that they had a breakthrough. Quite unexpectedly, David asked, “Let me get this straight, is it the Dutch position that you are claiming ownership of all petroleum resources in Indonesia, developed and yet-to-be-developed?” Armed with copies of contracts and recently renegotiated operating agreements, David proceeded to demonstrate a clear precedent for separating the two classes of petroleum resources.
Speaking directly to the Dutch representatives, he asked, “So, if your position is that you claim only the ownership of the oil reserves you have developed, then I think the world is prepared to recognize your claim and make whatever arrangements are necessary to protect your interests.
“If, on the other hand, you are claiming an interest in the yet-to-be-developed reserves that may exist in Indonesia, then the world will perceive your actions as nothing more than economic imperialism. In that case, all will agree that you must be stopped.”
Caught without an answer, the lead negotiator for the Dutch oil company said, “Prior to my talking with my people, would it be appropriate if I asked what your solution would be if we were to recognize the difference you are suggesting?”
All eyes turned toward David. Afterward, they would all agree that watching David respond to the question was like observing a great hunter measuring his prey for the final shot.
“If your people are willing to limit their claims to your historical assets,” he said, fixing his gaze on the flustered Dutch negotiator, “I’m quite certain suitable arrangements can be made to protect your interests and at the same time preserve the sovereignty of Indonesia’s new government. Provided that you can be satisfied with protecting your historical petroleum interests, the rest of the world would be interested in learning what other objectives you hope to achieve by demanding recolonization of Indonesia. Unless there is some other problem we have failed to understand, we would consider any effort your government and its garrison of troops might make to restore your political control over Indonesia as an act military imperialism. Do you really believe the United States and the United Nations can be persuaded to support that type of action?”
Not to be boxed in so easily, the Dutch lead negotiator asked, “How can the world expect British and Dutch oil companies to explore and develop any new reserves that may exist without political and military control?”
“Who said anything about granting Dutch or British oil companies the exclusive right to develop new reserves?” David shot back. “We’re talking about you protecting your historical interests, as I just explained.”
The Dutch negotiator was now thoroughly agitated. “If not us, who else? Who has the resources needed to develop new fields and bring the product to market? Nice try, Sir Da
vid! Maybe it’s you who should be talking to your people. Perhaps the time has come for us to teach you some of the simple truths of our industry. You may not appreciate our position, but unless you are willing to recognize new Dutch colonial rule, not another drop of oil will ever be developed in Indonesia!”
David smiled calmly before replying. “It may come as a surprise, but learning to dance with the devil will soon no longer be a precondition for a sovereign country wanting to develop its oil. My friends and I, in cooperation with the world’s private investment markets, are in the process of organizing a fifteen-billion-dollar international energy development fund. Upon its completion, countries like Indonesia will be able to entertain competitive bidding from independent as well as the major oil companies, none of which will require the installation of a colonial government.”
David continued, speaking with a sincere passion Natalie had only seen glimpses of before. “Couldn’t all these problems be resolved by an agreement which calls for the Dutch historical petroleum interests to be recognized and protected by the new Indonesian government in return for both the British and Dutch governments agreeing to recognize the legitimacy of Indonesian independence?
“At the heart of the agreement would be the separation of political interests and petroleum interests. Provided the Indonesian government is prepared to pledge all of the legal and military protection necessary, I fail to comprehend why the installment of colonial rule is necessary. The Dutch garrison is no longer needed and should be free to leave.”
As the discussion continued, the Dutch stood firm on their desire to retain political control. They understood they would have the opportunity to compete with any other company for the development rights to future reserves, but ensuring the protection of their historical petroleum interests without having the benefit of government control remained a central concern. Recognition of their rights by a new provisional government wasn’t good enough. Something else needed to be added to the agreement.
Crude Deception Page 22
