by T. E. Cruise
Gold looked around. All eyes were upon him. There was nothing like a forecast of gloom and doom to rivet an audience’s attention. Now was the time to make his move—
“As chairman it is my duty to do all I can on behalf of the stockholders to see to it that my company survives. Accordingly, I move that this board authorize a new issue of Sky-world stock—”
“Wait a minute!” Campbell shouted, jumping to his feet. “There’s no call for a new issue of stock—”
“—A new issue of a quarter of a million shares,” Gold pressed on, ignoring Campbell’s outburst, “which is, according to my calculations, the amount necessary to recapitalize a weakened Skyworld—”
“What you really want to do is erase the numerical advantage of the shares I now hold!” Campbell yelled in accusation. “What by-law gives you the right to pull this hornswoggle!”
“Page fifty-two, paragraph four, clause D—” Gold began innocently.
“Don’t quote me the goddamned rules,” Campbell bellowed. “I wrote the goddamned rules! Paragraph four states there’s got to be an emergency. There’s no emergency—”
“Tim, calm down,” Saunders interjected. “The chairman still has the floor.”
Gold waited a moment, to let it sink in that Campbell had lost his control. Hopefully, with any further displays of temper, Gold could bait Campbell into showing the others just what sort of chairman Tim would be under pressure…
“Thank you, Mister Saunders,” Gold politely said. “Now, then, to address Mister Campbell’s objection: The emergency is the threat poised by Mister Campbell’s proxy fight, and the disastrous course on which he means to take Sky-world should he win.”
“A question, if I may, Mister Chairman?” Campbell asked. He was back in his chair, and had regained his poise. “Isn’t it true that if we suddenly flood the market with a new issue of stock the price per share will drop, further weakening the company during your so-called time of peril?”
“I never said anything about putting those shares on the market,” Gold replied. “What I propose is an exchange: two hundred and fifty thousand shares of Skyworld to be exchanged for three hundred and seventy-five thousand shares of GAT. For every one share of its stock, Skyworld would receive one and a half shares of GAT. Since I am chairman of GAT’s board, and control fifty-one percent of its stock, I can assure you that GAT will look favorably on the transaction.”
“This is absurd!” Campbell sputtered.
“Is it?” Gold shrugged. “Since 1925 Skyworld has steadfastly stood behind GAT, the former ready to lend its financial strength to the latter in its endeavors to bring new and advanced aeronautical designs into reality. I’m sure you gentlemen have been following the stock market recently. You all know that Mister Campbell’s takeover threat has brought a measure of instability to the price of Skyworld. There have been troubling rumors swirling on Wall Street, rumors that there may have been some unethical windfalls being enjoyed by certain participants in this takeover battle.”
Gold pretended not to see Campbell’s glare. “On the other hand, GAT’s stock price has steadily risen. This is because the public knows that GAT made aviation history with the G-1 Yellowjacket and G-1a Dragonfly. This is because the public witnessed the United States Navy select GAT to supply that branch of the service with its new torpedo bomber, and because the public, like the rest of the world, anticipates the debut of GAT’s greatest triumph: the fabulous GC-1 Monarch, the commercial airliner of the future.”
Gold paused. “Skyworld has been a faithful friend to GAT in its times of trouble and strife. Now GAT stands ready to rescue Skyworld.”
“It won’t wash, Herman,” Campbell growled. His livid gaze swept the table. “I warn all of you, it won’t wash! The stockholders’ meeting is in four days. I’ll use the votes vested in me by proxy to throw the lot of you out—”
“That is no way to talk to fellow board members,” Saunders growled.
Gold was elated. “Excuse me, Mister Campbell,” he said coolly, “but proxy authorizations can be rescinded. Four days is enough time for the board to get the word out to the stockholders via press conferences, radio announcements, and newspaper ads. Our argument will be that a substantial interest in GAT will raise Skyworld’s stock price. Surely our stockholders will approve of that. Not to mention that GAT’s profits from the sale of the Monarch will prove to be just the sort of fallback resource Skyworld will need in the chaos following the rescinding of the Watres Act.”
“What rescission?” Campbell shouted in frustration. “What airplane? You haven’t even got a goddamned prototype yet!”
That much was true, Gold thought. But actually, the Monarch project was further along than Campbell knew. Since he’d moved his office out of the Burbank complex, Teddy’s team had solved the Monarch’s rudder-control problem when flying with one engine out. Work had immediately begun on a prototype. The completion date was less than five weeks away.
“Gentlemen, I’m sure you understand that I’m reluctant to go into the specifics,” Gold said. “This much I will say: Mister Campbell has been so immersed in his takeover campaign that he has been out of touch with what’s been going on at GAT.” Gold looked around. “Well, gentlemen, if there’s no more discussion, I suggest we take a vote on my proposal.”
Saunders looked at Campbell. “Any objection?”
“Hell, no. Let’s vote.” Campbell scowled. “And look, to save time concerning this nonsense, why not just go around the table with a voice vote?”
“That’s highly irregular,” Saunders worried, chewing on his cigar stub.
“That’s highly irregular?” Campbell burst out laughing.
“I certainly have no objection,” Gold said. “Considering my personal interest in the outcome, I defer to Mister Saunders, who has remained neutral during this conflict, to carry out the procedure.”
Gold sat down. Now it was out of his hands. He knew that of the eleven men on the board, three besides Hull Stiles belonged to Campbell’s takeover group. Gold knew how he himself would vote, which meant that he needed all five of the remaining votes to win. Campbell needed only one vote from the five in order to defeat Gold’s plan.
“A voice vote, then, on Mister Gold’s proposal,” Saunders said. “I will vote last. Mister Campbell, will you begin?”
“I vote no,” Campbell declared.
“Mister Stiles?”
Hull, pale, his eyes downcast, whispered, “No.”
That’s all right, old friend, Gold thought.
“No.” “Yes.” “No.” “No.” “Yes.”
The vote was moving quickly around the room: five to two in Campbell’s favor. Campbell’s faction, predictably, had voted in a block. Gold knew that those who’d so far voted for his proposal were doing so out of self-interest, not loyalty or friendship. GAT’s record on successfully marketing new planes was one of the best in the business. If the Monarch followed suit, the GAT holding that Gold was offering could easily triple in value.
“Yes.” “Yes.”
Five to four, Gold thought. He was careful to keep his hands, with his fingers crossed, hidden under the table.
Saunders looked at him. “Mister Gold?”
“Yes,” Gold said, making it five all. Saunders would break the tie.
“I vote aye, as well,” Saunders said. “The vote is six to five in favor of the proposal.”
Gold stood up. “Gentlemen, thank you for your support. I will at once set in motion—”
Campbell got to his feet. “It’s only fair to warn all of you I will challenge this in the courts.” He paused significantly. “And in the press.”
“I’m disappointed, Tim.” Gold shrugged. “But I can’t say that I’m surprised. You always did like to wash your dirty laundry in public.”
“And I’m going to crucify you at the stockholders’ meeting!” Campbell vowed.
“Maybe not,” Gold said calmly. “The new stock issue and subsequent exchange will muddy the wa
ters for a lot of investors. The fact that the board has endorsed it will carry a lot of weight. The stockholders may decide to, for the time being, stick with the status quo, just to see what might be shaking down. They might decide that there’s always time to make a change… Like during next year’s stockholders’ meeting.”
Gold paused. “But, of course, you don’t really have until next year, do you, Tim?”
Gold struggled to keep from grinning as Campbell stormed out.
(Two)
Gold Household
19 April 1933
Gold awoke at five-thirty in the morning; as usual, a few moments before the alarm clock on the night table was set to go off. He reset the clock for seven, when Erica, who was sound asleep and softly snoring beside him, wanted to wake up, and carefully got out of bed so as not to disturb her.
Gold showered and shaved, thinking all the while about the Skyworld stockholders’ meeting scheduled to begin at nine o’clock in the grand ballroom at the Swadsworth Hotel in downtown Los Angeles. He wrapped himself in a terry-cloth robe and went downstairs, where Ramona fetched him a cup of coffee. He took it into his study. He stared at the telephone on his desk for a moment. He took a deep breath and let it out, to calm himself, and then telephoned Tim Campbell.
A servant answered, and protested that Mister Campbell was sleeping. Gold identified himself and insisted that the servant wake Campbell up. It took a couple of minutes for Campbell to come on the line.
“My God, Herman! What do you want at this hour!”
“That was pretty fast work the way you got that judge to issue a court injunction against the new stock issue,” Gold said.
“That’s what you called to tell me?” Campbell complained, yawning. “Anyway, it was easy,” he said. “I didn’t even have to bribe the judge to get it done. Nobody can pull that kind of stunt in the market anymore, and you can thank your buddy Roosevelt for that. You heard the talk that he’s got some kind of permanent commission in mind to be a watchdog on Wall Street?”
“Yeah, I heard that,” Gold said.
“I pity a guy starting out today,” Campbell muttered. “There’s going to be too many rules getting in the way of things…”
“You’ve got to admit, I whipped your ass at that board meeting.”
Campbell was silent for a moment, but then he chuckled. “Yeah, you did, Herm. But you always did know how to work a crowd. God, you were good! You got balls, Herman. That’s what I love about you. I always will. Anyway, we’ll see whose ass gets whipped today.”
“Meaning mine? We’ll see…”
“Herman, please!” Campbell scoffed. “You’re beat and you don’t know it! The part I like is that you screwed yourself! That injunction I got against you made you look bad in the newspapers. The public hasn’t forgotten how they got fleeced by fast-talkers back in ‘29, you know. My getting a judge to come out against you evidently scared quite a few investors out of your fold. Skyworld stock has had a lot of activity the past couple of days, and guess who bought all he needed?”
“I bet you paid top dollar.”
“Who cares?” Campbell said. “There’s no doubt in my mind that at today’s meeting I’ll get enough votes to put me over the top. Skyworld is mine.”
“It sounds bad for me, Tim,” Gold admitted. “Listen, there’s some things I’d like to talk over with you, face-to-face. Why don’t we meet? Say, at eight? In the coffee shop at the Swadsworth?”
“You want to talk surrender, is that it?” Campbell chuckled.
“Maybe we could work something out between us before the meeting,” Gold said meekly. “Come on, for old times, what do you say?”
“Sure, Herman. See you at eight in the coffee shop,” Campbell said, and hung up. Gold broke the connection and immediately dialed Teddy Quinn’s number. Teddy answered on the first ring.
“He went for it,” Gold said.
“What time?” Teddy asked.
“Eight o’clock. When I’m done with him I’ll call you at Burbank.”
Gold hung up, and left the study. He bumped into Ramona, the housekeeper, on his way upstairs to get dressed.
“Señor Gold, you must eat! I’ll make you bacon and eggs—”
Gold gathered up the surprised maid and waltzed her around before continuing on his way upstairs. “No, thanks, Ramona. Today I’m going to have the new chairman of Sky-world for breakfast.”
Gold got to the coffee shop in the Swadsworth Hotel precisely at eight. Campbell wasn’t there, and Gold spent a few anxious minutes in a corner booth staring into his coffee as if it were a crystal ball in which he could portend the future. He worried that he’d misjudged Campbell’s desire to gloat… What if Campbell had decided not to show?
Campbell appeared at eight-fifteen. “Sorry, Herm,” he said nonchalantly as he slid into the booth, opposite Gold. “A couple of stockholders collared me in the lobby… to congratulate me,” he pointedly added.
“Hey, you won. You deserve to be congratulated.”
“Then you do admit that you’re beat,” Campbell pounced.
Gold sighed. “I’ve been thinking it over since we talked this morning.” He nodded in resignation. “Yeah, I’m beat, Tim.” He extended his hand across the table. “No hard feelings?”
Campbell shook hands. “None on my side, but hell, why would there be? I’m not the loser.” He smiled.
The waiter came, and Campbell ordered coffee. When they were alone Campbell lit a cigarette and said, “Surely you didn’t want to meet just to concede my victory?”
“No, I’ve come to make a deal with you. I know I can’t stop you, so why not let me get out of this with something left of my pride, just for old times’ sake?”
“What have you got in mind?” Campbell asked as the waiter appeared with his coffee.
“I’ve got twenty percent of Skyworld. Why don’t you buy me out?”
“Too late, Herman. I don’t need your stock,” Campbell said. “Maybe if you’d come to me all nice and polite like this a week ago I might have obliged you. But now…” He shook his head.
“You certainly don’t need me around cramping your style.”
“On the contrary,” Campbell replied. “I like the idea of having you around, witnessing everything I do, but helpless to stop me.” He laughed. “You want to sell, put your stock on the market. Otherwise, you can get in the backseat, keep your mouth shut, and come along for the ride.”
“Oh, sure.” Gold scowled. “You know it’s too late. The stock is dead in the water as of today. I’ll take a beating if I try and sell now.”
“You should have thought of that before you tried to take me on,” Campbell said.
Gold nodded sadly. “There is one other idea I had… I mean, I really wanted you to buy my stock,” Gold said dejectedly. “But beggars can’t be choosers, I guess…”
“You’ve got that right, pal.”
“You’ve won, no matter what, but wouldn’t it be worth your while not to have me making trouble that will weaken the airline further after this nasty public fight?”
“Get to the point, Herman. What do you want?”
“All right, here it is. You’re going to need new airplanes now that you’re a transcontinental airline. Why not contract for say, twenty of my new GC-ls?”
Campbell shrugged. “I don’t know, Herm. I was thinking of going with Boeing’s 247 airliner…”
“Come on, Tim,” Gold said. “We both know that there’s a couple of years’ waiting list for Boeing’s 247. They’ve got to fill their order for United before they can begin to build airplanes for anyone else. You really want to wait that long?”
“Well, no… But Lockheed has an interesting design…”
“Sure, the Electra, right?” Gold dismissed it with a wave. “It’s got only ten-passenger capacity, where my Monarch will carry twelve.” Gold shook his head. “It’s up to you, pal, if you want to cut off your own nose to spite your face.”
“I hear you,” Campbell s
aid. “Let’s say I went along with you on this. Are you willing to give me a price break?”
Gold shook his head. “Exactly the opposite, Tim. I’m going to charge you a premium—”
“I think this defeat has been too much for you,” Campbell said. “You’ve lost your mind.”
“Hear me out. We can work out the nuts and bolts later, but the gist of my idea is that Skyworld would contract for twenty GC-ls at a hiked price that would subsidize my manufacturing costs, enabling me to undersell the competition, getting orders for my new airplane from all the other airlines. My planes will be everywhere. That’s what I want. In exchange, I’ll subsidize Skyworld by sitting tight on the stock I own. In the long run, it could come out cheaper for Skyworld to play things my way.”
“That’s all I get out of this?” Campbell scowled.
“We both get good publicity out of it,” Gold said. “You’re the man who taught me the importance of a good public image. What better endorsement could a man have than having his former enemy buying his product? It’s got to mean that I’ve got the best airplane on the market!”
“And me?” Campbell demanded.
“Think of it. You and me together up on that stage; shaking hands, embracing, in front of all the stockholders.”
“That would play beautifully with the press,” Campbell admitted, slowly starting to smile. “But you’d have to do more. Like, say, graciously concede victory…” Campbell snapped his fingers. “I’ve got it! I want you to make a motion at the meeting that I be unanimously elected chairman!”
“You’ve got a deal,” Gold said, reaching across the table to shake hands.
The Swardsworth’s lobby had a marble floor, walls painted red and black, and a forest of potted palms beneath a high, gilded ceiling starry with crystal chandeliers. The lobby was crowded with stockholders on their way to the ballroom for the meeting. Gold made a detour to the public telephones and found a vacant booth. He dialed his Burbank switchboard, and asked to be put through to Teddy Quinn. Teddy’s secretary answered and said that Teddy was down on the factory floor, supervising the work on the Monarch prototype. Gold waited a few minutes until Teddy was located and came on the line.