Murder Makes the Wheels Go Round

by Emma Lathen

  40 floors above the Street, Exchange Place to be literal not Wall Street, in the vast conference room of the Sloan Guaranty Trust, John Putnam Thatcher, Senior VP, was at his wintriest although it happened to be a particularly pleasant April day. Much as he disliked meetings, he was attending one.

  It was true that Thatcher was, ex officio, a member of the Sloan Review Committee. But as a rule he liked to interpret this as synonymous with in absentia, and let subordinates shoulder the burden of regular Tuesday discussions with the underwriters. Nevertheless today he himself sat at the head of the table, waiting for the representatives from Waymark-Sims to appear. The reasons for this departure from normalcy were still not altogether clear to him, but Thatcher, whose instincts along these lines were highly developed, had sensed dark forces at work since earlier in the week.

  First, Walter Bowman, his research chief, had waylaid him in the corridor to urge him to attend today’s meeting.

  “Why,” John asked, bracing himself for Bowman’s usual hard sell. Instead Bowman, huge, jovial, and forthright by nature, had muttered something about hot prospects, and then suddenly recalled an appointment in his office. The next day, Brad Withers, President of the Sloan, Thatcher’s nominal boss, and a man usually far removed not to say insulated from day to day workings, forwarded an unintelligible memo to John’s office. Careful reading suggested that it was meant to convey the President’s belief that Waymark-Sims had something interesting to present to the Sloan, together with his desire for Thatcher to attend the meeting.

  Then ancient Bartlett Sims, encountered by chance at the Downtown Club, had favored John with a disjointed speech about the dangers of financial men becoming overly conservative. Sims himself still affected a pocket watch, complete with a vest and an across the vest watch chain.

  All of this would have been enough to make anyone wary. John confidently expected the worst. The door opened. Charlie Trinkam, one of the senior trust officers, ushered in Hugh Waymark, exuding enthusiasm, and one of his associates, Arnold Berman. Berman, a round, untidy man with a shiny bald head, looked doleful. After a quick round of handshaking Waymark shot his cuffs out and spread his papers. The meeting began.

  Waymark said he wanted to come in person because the investment opportunity he was about to discuss promised to be the most profitable in his firm’s history. Over at his shop everyone was sold on it he continued. He thought he could safely say the same for the Sloan people who were already in the know.

  Trinkam who never let personal extravagances interfere with financial orthodoxy cast an inquiring glance at Bowman. Bowman, John noticed appreciatively, was avoiding his colleagues’ eyes by rapt absorption in his papers on the table. Waymark continued.

  “We’re thinking in terms of offering three million five of the common,” he said impressively. “If the market holds up, we should be able to get at least 55 for it. Of course we haven’t worked out all the fine print.” To a degree this was intelligible to his listeners. Waymark-Sims was planning to underwrite 3.5 million shares of common stock to be issued by the corporation. The corporation would hand over the shares, get the money it wanted promptly, and go about its business of producing bigger and better widgets. Waymark-Sims would make a healthy profit by marketing the stock as advantageously as possible, in this case at $55 per share. Hundreds of millions of dollars argued a very big widget maker and a commitment so large that Waymark-Sims had to split the pie by forming a syndicate, including it hoped, with the Sloan.

  “Fascinating,” Charlie said, and followed up ironically, “and are you planning to tell us what you are talking about, Hugh?” John waited for the answer with mild interest. Hugh’s shrouded approach had already confirmed his worst fears. Only the spine-chilling particulars remained.

  Hugh smiled, took a deep breath, pressed forward, and announced, “Michigan Motors. That’s what we are talking about, Charlie. And this is going to be big. Out in Detroit the Big Three is a thing of the past. It’s going to be the Big Four soon, with MM right up there with the others. Here, look at these figures.”

  He shoved sales charts, diagrams, and a sheaf of reports across the table, still developing his theme. The Plantagenet was fast becoming America’s leading prestige car. No compact was selling better than the Drake. Why in the middle priced market...

  But even professional underwriters are not immune to atmosphere. First Hugh’s voice lost its practiced conviction, and then trailed away altogether. There was a long pregnant silence.

  “Now let’s see,” Thatcher said in a thoughtful tone that made Bowman regard him with quick suspicion. “Exactly when was Michigan Motors convicted of rigging government bids and price fixing?”

  Rightly assuming the question to be rhetorical, his companions did not reply.

  “I seem to recall that it was last October, wasn’t it?” Thatcher mused aloud. That was pure malice. Neither he nor anyone else in the room could have forgotten. The largest antitrust case in American history had been covered with the loving attention normally reserved for a spacecraft launching or a Hollywood matrimonial fracas. October had been a riot of fascinating headlines:

  Auto conspiracy charged by govt

  Multibillion dollar price fixing of cards

  Rigged bids in defense contracts

  9 auto execs go on trial

  And resulting in:

  Govt produces records of March 15 plotting

  Car conspirators guilty

  9 auto execs get six months

  “Yes it was October,” Charlie said, incurring a reproachful look from Waymark. “I was just coming back from Toronto when the government produced photo copies of that meeting in March, remember Walter?

  “I remember,” Bowman said somewhat plaintively.

  In a game attempt to steer the conversation out of these undesirable channels, Hugh flicked some papers and said, “Of course I don’t deny that the trial was important. But what’s past is past. MM has a great future.”

  Unfortunately this merely prodded Charlie into further reminiscence. “That’s just it, Hugh. Is it past? MM was the ringleader of the whole price fixing plot, after all. Don’t you remember?”

  Hugh, who remembered perfectly well, opened his mouth to retort, but Charlie continued. “And even worse, the tipoff to the Justice Department came from inside MM.” He was referring, Thatcher recalled, to the information that had first alerted the DOJ to the conspiracy, then enabled it to document every clandestine meeting in March, April, and May with photos, witnesses, and receipted bills from several luxurious mountain resorts in secluded areas.

  “That’s a company with a past,” Charlie was saying. “But I’m not so sure about the future. They broke the law, they got caught, just like the others. But MM has an inside informer willing to pull the rug out from under them.”

  “Nicely put,” John concluded.

  Hugh hurried into rebuttal. In the next 10 minutes John learned that Detroit, pained by this reminder of the dangers of federal intervention into business, had been carrying on bravely since the jail doors closed behind 9 of its top executives. Almost immediately advertising agencies from New York to LA had begun working overtime on erasing the old corporate images and projecting new ones. It had been a winter of heavy snow and record breaking top management shakeups.

  “What did that entail at MM?” Charlie interrupted to ask. He had adopted a rollicking view of the meeting and any Sloan involvement with Michigan Motors.

  Hugh glanced at his associate. Obediently Berman, who had been balefully studying his cigar, hitched himself forward and spoke. It was not with Hugh’s vigor but with a mild philosophical skepticism, more in tune with John and Charlie’s perspective.

  “There’s a new president; a capable competent accountant, Frank Krebbel. He was formerly the controller and had nothing to do with the price fixing. He has a good head on his shoulders.” Berman came to a halt, having decided he had nothing useful to add. He leaned back in his chair; Hugh looked disappointed.
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br />   “Who was the former president? Oh yes, Eberhart. Did they get him on the antitrust violations,” Charlie asked with every outward sign of interest.

  With a sad smile Berman replied, “They couldn’t prove a thing. But he had to resign. The Judge did not say good things about him.”

  Hugh appeared pained. Before he could speak, Charlie asked, “Is this new president the extent of the management shakeup?”

  In confidential tones Hugh spoke of sweeping internal reforms, how a once demoralized staff had become enthusiastic again, and focused now entirely on building great cars. He spoke in broad terms. Hugh took this in good part and explained that Berman had just returned from MM and had the facts at his fingertips.

  “MM has 3 people in jail, just like the other 2 firms involved, the Head of Plantagenet, his assistant, and one more. “

  Charlie interrupted again, “Wasn’t the Head supposedly the brains behind the deal?”

  Berman nodded, “Ray Jensen. One of the real whiz kids of the industry. He set up the March 15th meeting.”

  “Yes, yes,” Hugh said impatiently, but Berman could not be hurried.

  “Jensen went to jail along with his assistant, a kid called Dunn. The other MM man in the clink is Buck Holzinger, who ran the Buccaneer line of compacts. They have been in jail since October; a couple of other division managers had to resign. Not enough evidence to indict them, but enough to suspect. I supposed you could call that a sweeping management turnover.”

  John listened to this careful recital and decided it was a shade too careful. “Does that mean Jensen and Holzinger are out of the company for good or just for the duration of their sentences?”

  There was another long silence. “That,” Berman said, inspecting a long cigar ash with a ghost of a smile, “hasn’t been decided yet.”

  This elicited a bleat from Waymark. “They were fired. They’re both out of the company for good.”

  Berman corrected him gently. “At the other companies the big boys who went to jail got the bounce. But MM hasn’t announced any decisions yet. That has raised a lot of talk.”

  “I guess it has,” said Charlie with his usual ironic humor. “And things must be just dandy for the guys running Plantagenet and Buccaneer now. I have to hand it to you, Hugh. You’ve got a beaut on your hands. All of this and an unidentified informer too.”

  “Now, now,” Hugh said, getting his second wind. “Just because a public announcement hasn’t been made doesn’t mean there isn’t a clear policy in the front office. I assure you that out at MM the difficulties associated with the trial are over. That includes the informant.”

  Bowman, who had heroically held himself in check, never an easy thing for him, now broke in for the first time. “Hugh is absolutely right. The antitrust trial and convictions are history now.” Ignoring Charlie’s sardonic smile, he picked up steam. “Let’s forget about price fixing. Just look at these earnings’ estimates. MM is a darn good buy.

  At this point, despite his good intentions, Thatcher yielded to temptation. He discovered a previous engagement.

  Chapter 2

  Universal Joint

  Thatcher escaped to his sixth floor office, pausing only to inform Miss Corsa, his secretary, that he wanted to be undisturbed for the remainder of the afternoon, particularly by Walter Bowman.

  “Yes, Mr. Thatcher,” she replied. Miss Corsa celebrated the arrival of spring with a chaste bunch of violets on her desk instead of on her person. As usual, she looked trim and efficient in a navy blue dress. John decided to put her efficiency to work.

  “Miss Corsa, are you prepared to do some stealing for me?”

  Patiently Miss Corsa waited for more.

  “I want you to get the Michigan Motors file from Research before Bowman and his people have a chance to doctor it.”

  “Oh, they wouldn’t do that, Mr. Thatcher.” Her tone was reproving as it often was when he made one of his little jokes.

  “You never know,” he replied, proceeding into his office. He had complete confidence in Miss Corsa’s ability to abstract the files from Research before the meeting upstairs ended, and a similar respect for Walter’s capacity to submerge any material unfavorable to the company he was selling to the Investment Committee.

  Both feelings were justified. Miss Corsa, supremely indifferent, produced a bulging folder within 20 minutes. And 15 minutes more told Thatcher that many of the enclosed clippings would be ruthlessly pruned from the inevitably optimistic Bowman research report on MM. The contents were in rough chronological order; first, September articles describing rumors of a gigantic antitrust case in the offing, then the bombshell with its screaming October headlines. Thatcher flicked through the accounts of the trial, through thumbnail profiles of the defendants, MM’s Ray Jensen was the “lantern jawed hard-nosed boss” of the Plantagenet Division, Buck Holzinger was “the glad hander from Buccaneer,” and Orin Dunn was the “pale but composed” member of the team, and then on to the summing up from the bench. Events unfolded largely as John recalled. The DOJ had struck in October, charging MM with price fixing and rigged bids. Detroit had countered with a nolo plea or not accepting or denying responsibility but agreeing to accept punishment.

  At this point in the MM saga the party started to get livelier. The US Solicitor General appeared in Court in person; the nolo plea, which could have saved the auto industry untold millions in treble damages was rejected by the DOJ. Detroit muttered resentfully about vindictive public officials in high places, insiders said the DOJ must have a sure thing, and something else happened.

  Overnight 50 million Americans suddenly realized what this legal palaver about artificially maintained prices meant for them, that they might have been suckered into paying more for last year’s car than they otherwise would have. Avidly an outraged public read about bids to the government, price collusion, bellboys who had borne refreshments to price fixers, and finally about what even the Wall Street Journal called “a prosecution blockbuster” with copies of Ray Jensen’s handwritten notes covering the March 15 meeting, including a detailed explanation of the famous code system used by the conspirators to exchange price information and allocate government contracts.

  The court decision was a foregone conclusion. The next set of clippings, with photographs, showed the convicted felons, including a scowling Jensen and Holzinger, with his jocularity impaired, being led behind prison bars. Then came a playful account of Christmas gifts from the UAW to the imprisoned: gift-wrapped Monopoly sets. Thereafter the press coverage had abated until early April when Bowman’s research hit another covey of clippings.

  Early retirement for Muldoon

  Blakesly to relocate

  McKay off payroll, prexy announces

  They added up to a clean sweep of the executive conspirators by seemingly virtuous corporations with the exception of MM. The firms involved proclaimed: (1) they had not known their employees were violating the Sherman Antitrust Act, the Clayton Act, or even local parking ordinances, (2) they could not countenance such malefactions.

  John smiled. He well recalled the judge’s tart observations when the ex-president of MM, Stuart Eberhart, had delivered himself of similar sentiments in the courtroom. No, Charlie was right. MM did not emerge happily from the great price fixing conspiracy, if indeed it had emerged at all.

  Turning over several woolly-headed statements on Ethics in Business by pastors, educators, and other social commentators, John finally came across a suggestive small item:

  Speculation is Rife at MM

  Industry sources are buzzing with questions about the future of Ray Jensen and Buck Holzinger at MM. MM is keeping its plans to itself.

  The article had a recent date.

  Upstairs Charlie and Walter were deep into profit and sales projections with Hugh. It was a tribute to the single-mindedness of financial people. John closed the folder at about the same time as this was going on. Until he knew who had tipped off the DOJ to the conspiracy, and until he learned what MM pl
anned to do with its erring executives, he did not think that projections were a sound enough basis for a Sloan investment.

  As it happened, John’s eminently sensible point of view was being presented some 700 miles away in Detroit. “We have to make some sort of announcement if we want to go ahead with a new issue, you know,” said Frank Krebbel, the new MM president, dispassionately.

  “It is a shame to rake the whole thing up again,” replied Lionel French, Chairman, with his usual ponderous air of regret. They were in conference in the president’s office, which was as vast at the Sloan conference room with even more Danish furniture. In silence Krebbel looked down at his desk. His neutral appearance covered his formidable energy. He had spent long months to pull MM through a very bad time. Now, despite the dislocations and disruptions, he had the satisfaction of knowing that sales and production were again flowing smoothly. Car buyers were enthusiastic about the new models and the marketing people predicted a record year.

  The only clouds he could see on MM’s horizon were the forthcoming union negotiations and the Chairman’s slow recovery from the shock of the antitrust conviction.

  “We should make some sort of announcement,” Krebbel concluded. French indicated dignified distaste. Krebbel continued, “Yes, I know it is a shame. But Ray and Buck are getting out of jail early next month. We’ve put this off long enough. It doesn’t do us any good to have rumors flying around, particularly because we are trying to raise capital.”

  French drummed his fingers on the corner of the desk. “Darn unfair,” he said aloud. All this trouble because some secretary went running to the DOJ.”

  Krebbel suppressed a sigh. Patiently he said, “It wasn’t a secretary, Lionel. We’ve checked out the clerical staff. It was someone with Ray’s notes, someone who knew all about all the meetings. Someone at a high executive level. I’ve always thought it should be cleared up.”