Kane & Abel (1979) (45 page)

Abel set up his headquarters in the Chicago Richmond annexe, and decided to open a small restaurant on the ground floor. It made sense to be based near his backer and his banker rather than to settle in one of the hotels in the South. And, just as important, Zaphia was in Chicago, and Abel was beginning to feel confident that, given time, he could replace the pimply youth.

By the time he was ready to travel to New York to recruit more staff, Zaphia assured him she no longer had any interest in the pimply boyfriend. The night before his departure they made love for the second time. After their first experience in the lifeboat, his attentive care and gentle expertise took her by surprise.

‘How many girls have there been since the
Black Arrow?’
she teased.

‘None that I really cared for,’ he replied.

‘Enough of them for you to forget
me.’

‘I never forgot you,’ he said untruthfully. He leant over and kissed her again, as it wasn’t a conversation he wished to continue.

Kane and Cabot’s net loss in 1929 ended up at over $7 million, which turned out to be about par for a bank its size. Many smaller establishments had gone under, and William found himself conducting a sustained holding operation that kept him under constant pressure.

When Franklin D. Roosevelt was elected President of the United States on a ticket of relief, recovery and reform, William feared that the New Deal would have little to offer Kane and Cabot. Business picked up slowly, and William found himself planning tentatively for expansion.

Meanwhile, Tony Simmons completed several successful takeovers in London, and made a better than expected profit for Kane and Cabot during his first two years. His achievements looked all the more impressive when measured against those of William, who had barely been able to break even during the recession.

In the autumn Alan Lloyd called Simmons back to Boston to make a full report to the board on the bank’s activities in London. At that meeting Simmons was able to announce that the year’s figures for the London office would show a profit of over a million dollars for the first time. He also let it be known that he intended to put his name forward for the chairmanship when Alan retired. William was completely taken by surprise, as he had dismissed Simmons’s chances when he had disappeared across the Atlantic under a small cloud. It seemed inexplicable that that cloud had been blown away, not by Simmons’s acuity, but simply because the British economy had been less paralysed than America’s. The abruptness of Tony Simmons’s return to favour left William with little time in which to persuade the board that they should support him before his opponent’s momentum for the chairmanship became unstoppable.

Kate listened sympathetically to William’s problems, often offering a shrewd observation, and only occasionally admonishing him for being too gloomy. Matthew, acting as William’s eyes and ears, reported that the board was split between those who considered William too young to hold such a responsible position, and those who blamed Simmons for the extent of the bank’s losses in 1929. It seemed that most of the non-executive members of the board, who had not worked directly with William, were more influenced by the age difference between the two contenders than by any other factor. Again and again Matthew heard the words, ‘William’s time will come.’ Once, tentatively, he played the role of devil’s advocate.

‘With your holdings in the bank, William, you could appoint three more members of the board and get yourself comfortably elected.’

William dismissed the idea as unworthy of consideration. He wanted to become chairman solely on merit. That, after all, was how his father had gained the position, and he knew that it was nothing less than Kate would expect of him.

In January 1932, Alan Lloyd circulated to every board member notice of a meeting that would be held on his sixty-fifth birthday. Its sole purpose, he informed them, was to elect his successor. As the day for the crucial meeting drew nearer, Matthew found himself carrying the investment department almost single-handedly, while William devoted himself to his campaign to capture the chairmanship.

When Abel arrived in New York, the first thing he did was to look up George Novak. He was not surprised to find him out of work and living in a garret on East Third Street. Abel had forgotten what the houses in this neighbourhood, some shared by twenty families, were like. The smell of stale food permeated every room, toilets didn’t flush and beds were slept in by at least three different people every twenty-four hours. The bakery had been closed down, and George’s uncle was now employed in a large mill on the outskirts of New York. The mill couldn’t afford to take on George as well. When Abel offered him a job, George leapt at the chance to join his old friend at the Richmond Group - in any capacity.

Abel recruited several other Poles who George assured him would work any hours, and despite their personal difficulties were scrupulously honest, among them a pastry chef, a desk clerk and a headwaiter. Most hotels on the East Coast had cut their staff to a bare minimum, which had made it easy for him to pick up experienced people, three of whom had worked with him at the Plaza.

The following week, Abel and George set out on a tour of all the hotels in the group. Abel asked Zaphia to join them, even offering her the chance to work in any hotel she chose, but she refused to leave Chicago, the only place in America where she felt at home. As a compromise, she moved across to Abel’s rooms at the Richmond annexe whenever he was in Chicago. George, who had acquired middle-class morals along with his American citizenship, pressed the advantages of matrimony on Abel, although he didn’t seem to have heeded the advice himself.

It came as no surprise to Abel that the other hotels in the group were still being incompetently, and in most cases dishonestly, run, but most of the staff, fearful for their jobs in a time of widespread unemployment, welcomed him as the potential saviour of the group’s fortunes. He did not find it necessary to fire staff in the grand manner he had adopted when he had first arrived in Chicago. In some cases Abel found that simply moving personnel from one hotel to another stopped the rot. Most of those who knew of his reputation and feared the reprisals had already departed. But some heads still had to roll, and they were invariably attached to the necks of employees who had worked for the group for years and who could not, or would not, change their ways simply because Davis Leroy was no longer in charge.

All seventeen members of the board were present to celebrate Alan Lloyd’s sixty-fifth birthday. The meeting was opened by the chairman, who delivered a farewell speech lasting only fourteen minutes, which William thought would never come to an end. Tony Simmons was nervously tapping a yellow legal pad with his pen, occasionally glancing across at William. Neither was listening to Alan’s words. At last Alan sat down, to loud applause, or as loud as is appropriate for sixteen Boston bankers. When the clapping had died away, Alan rose for the last time as chairman of Kane and Cabot.

‘And now, gentlemen, we must elect my successor. The board is presented with two outstanding candidates, the chairman of our overseas division, Mr Tony Simmons, and the director of the American investment department, Mr William Kane. They are both well known to you, gentlemen, and I have no intention of speaking at length on their respective merits. Instead I have invited each candidate to address the board on his plans for the future of Kane and Cabot were he to be elected chairman.’

William rose first, as had been decided the previous day by the toss of a coin. He spoke for twenty minutes, explaining in detail that it would be his intention to broaden the bank’s base by moving into fields where Kane and Cabot had not previously ventured. He also wanted to forge stronger links with New York, and mentioned the possibility of opening a holding company that specialized in commercial banking. Some of the older board members shook their heads, making no attempt to hide their disapproval. He finished by saying that he wanted the bank to expand, challenging the new generation of financiers now leading America. He hoped that Kane and Cabot would enter the second half of the twentieth century as one of the largest financial institutions in the country. When he sat down he was buoyed by the murmurs of approbation, and he leaned back to listen to his rival’s speech.

When Tony Simmons rose, he took a far more conservative line, and emphasized his age and experience, which William accepted was his trump card. The bank should consolidate its position for the next few years, he said, moving only into carefully selected investments, and sticking to the traditional modes of banking that had earned the bank the reputation it currently enjoyed. He had learned his lesson during the crash of ‘29, and his main concern, he added - to laughter - was to be certain that Kane and Cabot entered the second half of the twentieth century. When Simmons sat down, William had no way of knowing in whose favour the board might swing, though he believed the majority would be more inclined to opt for expansion than standing still.

Alan Lloyd informed the directors that neither he nor the two contestants would be voting. The other fourteen members were passed ballot papers, which they duly filled in and handed back to Alan, who began to count them slowly. William found he could not look up from his doodle-covered pad, which also bore the imprint of his sweating hand. When Alan had completed the task of counting, a hush came over the boardroom.

He announced six votes for Kane and six votes for Simmons, with two abstentions. A babble of conversation broke out around the table, and Alan called for order. William took a deep breath in the silence that followed, not knowing what the chairman would do next.

Alan Lloyd paused before saying, ‘I feel that the appropriate course of action, given the circumstances, is to take a second vote. If either of the members who abstained on the first ballot now finds himself able to support a candidate, that might give one of the contestants an overall majority.’

The little slips were passed out again. William could not bear even to watch this time, although he could not avoid hearing the steel-nibbed pens as they scratched their votes. Once again the ballots were returned to Alan Lloyd. Once again he opened them slowly one by one, but this time he called out the votes.

‘William Kane. Tony Simmons. Tony Simmons. Tony Simmons.’

Three votes to one for Simmons.

‘William Kane. William Kane. Tony Simmons. William Kane. William Kane. William Kane.’

Six votes to four in favour of William.

‘Tony Simmons. Tony Simmons. William Kane.’

Seven votes to six in favour of William. It seemed to William that Alan took a lifetime to open the final voting slip.