Kane & Abel (1979) (57 page)

‘Tony, I agree with everything you’ve said, but I still want to keep a presence in Britain.’

‘Exactly proving my point. Kane and Cabot’s London branch might close, but we’d still have Lester’s. Then if London goes through a rough patch, it wouldn’t matter as much, because we’d be consolidated, and therefore stronger.’

‘But Roosevelt’s restrictions on merchant banks would mean we could only work out of one state. So a merger could only succeed if we ran the entire operation from New York, leaving Boston as nothing more than a branch office.’

‘I’d still back you,’ said Tony. ‘You might even consider taking Lester’s into commercial banking, which would solve the whole problem.’

‘No, Tony. FDR’s made it impossible for an honest man to do both. In any case, my father taught me that you can serve either a small group of rich people or a large group of poor people, but not both, so Lester’s will remain in traditional merchant banking as long as I’m chairman. But if we did decide to merge the banks, don’t you foresee other problems?’

‘Very few we couldn’t overcome, given goodwill on both sides. But you’d have to consider the implications carefully, William, because after a merger you’d become a minority shareholder, and would lose overall control of the new bank. That would leave you vulnerable to a takeover bid.’

‘I’ll take that risk, if it means I’d become chairman of one of the largest financial institutions in America.’

William returned to New York that evening, and immediately called a board meeting of Lester’s to outline Tony Simmons’s proposal. Once he found that the board approved of a merger in principle, he instructed each of the bank’s vice presidents to consider the full implications in greater detail.

The departmental heads took three months before they reported back to the board, and to a man they came to the same conclusion: a merger was no more than common sense, not least because the two banks were complementary in so many ways. Moreover, William’s shareholdings ensured that Lester’s would own 51 per cent of Kane and Cabot, making the merger simply a marriage of convenience. Some of the directors could not understand why William hadn’t thought of the idea before. Ted Leach was of the opinion that Charles Lester must have had it in his mind when he nominated William as his successor.

The details of the merger took over a year to complete as teams of lawyers were kept at work into the small hours preparing the necessary paperwork. In the exchange of shares, William ended up as the largest stockholder with 8 per cent of the new company, and was appointed the new bank’s president and chairman. Tony Simmons remained in Boston as one deputy chairman, with Ted Leach in New York as the other. The new merchant bank was renamed Lester, Kane and Company, but continued to be referred to as Lester’s.

William arranged a press conference in New York to announce the successful merger, and he chose Monday, December 8, 1941, to brief the financial world of his vision for the future. The press conference was cancelled when, hours before, the Japanese launched their attack on Pearl Harbor.

An embargoed press release had been sent to the newspapers some days before, but the news that America had declared war on Japan meant that the Tuesday-morning financial pages allocated the announcement of the merger only a few column inches. This lack of coverage, however, was not foremost in William’s mind.

He couldn’t work out how or when he was going to tell Kate that it was his intention to join up.

A
BEL STUDIED
the news item on the merger of Lester, Kane and Company in the financial section of the
Chicago Tribune
.

With all the space devoted to America entering the war, he would have missed the brief announcement had it not been accompanied by a small photograph of William Kane, so out of date that it looked as if he hadn’t changed since his meeting with Abel in Boston more than ten years before. Certainly he appeared too young to fit the journal’s description of him as the brilliant and incisive chairman of the newly formed Lester, Kane and Company. The article went on to predict: ‘The new company, a joining together of two old established family banks, could well become one of the most prestigious financial institutions in America.’ The
Trib
concluded that the stock would be divided between about twenty shareholders who were related to, or closely associated with the Lester and the Kane families. The largest shareholders would be Mr Kane with eight per cent, and the late Mr Lester’s daughter with six per cent.

Abel was delighted by this particular piece of information, realizing that it meant Kane must have sacrificed overall control of the bank to become chairman of a far larger institution. He read the item again, and couldn’t deny that William Kane had risen far higher in the world since they had crossed swords, but then so had he. And he still had an old score to settle with the newly designated chairman of Lester, Kane and Company.

So handsomely had the Baron Group’s fortunes prospered over the past decade that Abel had been able to repay all the loans to his backer within the stipulated ten-year period, securing him 100 per cent of the company.

Not only had he paid off the loan by the last quarter of 1939, but the profits for 1940 had passed the half-million mark. This milestone coincided with the opening of two new Barons, in Washington and San Francisco.

Although Abel had become a less attentive husband during this period, as much a result of Zaphia’s unwillingness to keep pace with his ambitions as anything else, he could not have been a more doting father. Zaphia, longing for a second child, finally goaded him into seeing his doctor. When he learned that because of a low sperm count, probably caused by sickness and malnutrition in his days as a prisoner of the Germans and the Russians, Florentyna would almost certainly be his only child, he gave up all hope of a son, and proceeded to lavish everything on his daughter.

Abel’s reputation as a hotelier was quickly spreading across America, and the press had taken to referring to him as ‘The Chicago Baron’. He no longer cared about the jokes behind his back. Wladek Koskiewicz had arrived and, more importantly, he was here to stay. The profits from his fourteen hotels for the last fiscal year were just short of a million dollars, and with this new surplus of capital, he decided the time had come for even further expansion.

Then the Japanese attacked Pearl Harbor.

Since that dreadful day of September 1, 1939, when the Nazis had marched into Poland, later to meet the Russians at Brest-Litovsk and once again divide his homeland between them, Abel had been sending large sums of money to the British Red Cross for the relief of his countrymen. He had waged a fierce battle, both within the Democratic Party and in the press, to push an unwilling America into the war, even if it meant being on the side of the Russians. His efforts so far had been fruitless, but on that Sunday in December, with every radio station across the country blaring out the details of the Japanese attack to an incredulous nation, Abel knew that America could no longer sit on the fence.

The following day he listened to President Roosevelt inform the nation that America was at war with Japan, and three days later, on December 11th, Hitler told the world that Germany and Italy had declared war on the United States.

Abel had every intention of assisting the Allied effort, but first he had a private declaration of war he wished to make, and to that end he placed a call to Curtis Fenton at the Continental Trust Bank. Over the years Abel had grown to trust Fenton’s judgement, and he had kept him on the board of the Baron Group long after he gained overall control, as he wished to retain a close link with the Continental Trust.

Fenton came on the line, with his usual formal but cautious manner.

‘How much spare cash am I holding in the group’s reserve account?’ asked Abel.

Fenton extracted the file marked ‘Number 6 Account’, recalling the days when he could have put all Mr Rosnovski’s affairs into one small file. He scanned some figures.

‘A little under two million dollars.’

‘Good,’ said Abel. ‘I want you to start taking an interest in a bank called Lester, Kane and Company. Find out the name of every shareholder, what percentage they hold, and if there are any conditions under which they’d be willing to sell. All this must be done without the knowledge of the bank’s chairman, Mr William Kane, and without any mention of my name.’

Fenton took a deep breath, but said nothing. He was glad that Abel could not see the look of anguish on his face. Why would he want to put money into anything to do with William Kane? Fenton had also read in
The Wall Street Journal
about the merging of the two famous family banks, although what with Pearl Harbor and his wife’s birthday, he had nearly missed the announcement. Rosnovski’s request jogged his memory - he must send a congratulatory wire to William Kane. He pencilled a note on the bottom of the Baron Group file while listening to Abel’s instructions.

‘When you have a full breakdown, I want to be briefed in person, nothing on paper.’

‘Yes, Mr Rosnovski.’

‘I’d also like you to add to your quarterly reports the details of every official statement issued by Lester’s, and to find out which companies they do business with.’

‘Certainly, Mr Rosnovski.’

‘Thank you, Mr Fenton. By the way, my market research team is advising me to open a new Baron in Montreal.’

‘The war doesn’t worry you, Mr Rosnovski?’

‘Good God, no. If the Germans reach Montreal we can all close down, Continental Trust included. In any case, we beat the bastards last time, and we’ll beat them again. The only difference is that this time I intend to be part of the action. Good day, Mr Fenton.’

Will I ever understand what goes on in the mind of Abel Rosnovski? Curtis Fenton wondered as he hung up the phone. His thoughts switched back to Mr Rosnovski’s other request, for the details on Lester’s stock. This worried him even more than his attitude to the Germans, as clearly he considered both as the enemy. Although William Kane no longer had any connection with Rosnovski, Fenton feared where it might end if Rosnovski obtained a substantial holding in the new bank. He decided against expressing his fears to Rosnovski for the time being, supposing the day would come when one of them would explain what they were up to.

Abel had wondered if he should tell Fenton why he wanted to buy stock in Lester’s, but came to the conclusion that the fewer people who knew, the better.

He put William Kane temporarily out of his mind and asked his secretary to find George, who he’d recently appointed a vice president of the Baron Group in charge of new acquisitions. George had progressed under Abel’s wing, and was now his most trusted lieutenant. Sitting in his office on the 42nd floor of the Chicago Baron, Abel looked down on Lake Michigan, but his thoughts were on Poland. He knew he could never live in his homeland again, but he still wanted his castle restored to him. He feared that he would never see the castle again, now that it was well inside Russian territory and under Stalin’s control. The idea of the Germans or the Russians once again occupying his magnificent castle made him want to— His thoughts were interrupted by George.

‘You wanted to see me, Abel?’

George was the only member of the group who called the Chicago Baron by his first name.

‘Yes, George. Do you think you could keep the hotels ticking over for a few months if I were to take a leave of absence?’

‘Sure can,’ said George. ‘Does this mean you’re finally going to take that vacation?’

‘No. I’m going to war.’

‘What?’ said George. ‘Who with?’

‘I’m flying to New York tomorrow morning to enlist in the army.’

‘You’re crazy - you could get yourself killed.’

‘That isn’t what I had in mind,’ replied Abel. ‘Killing some Germans is what I plan to do. The bastards didn’t get me the first time around, and I have no intention of letting them get me now.’

George continued to protest that America could win the war without Abel’s help. Zaphia protested too; she hated the very thought of war. Florentyna, almost eight years old, wasn’t quite sure what war meant, but she did understand that Daddy would have to go away for a very long time. She burst into tears.

Despite their combined protests, Abel took the first flight to New York the following day. All America seemed to be travelling in different directions, and he found the city full of young men in khaki or navy blue bidding farewell to parents, sweethearts and wives, assuring them - but not always believing - that now America had joined the war, it would be over in a few weeks.