The Billion Dollar Sure Thing

by Paul E. Erdman

  THE

  BILLION DOLLAR SURE THING

  PAUL E. ERDMAN

  DOVER PUBLICATIONS, INC.

  MINEOLA, NEW YORK

  Copyright

  Copyright © 1973 by Paul E. Erdman

  All rights reserved.

  Bibliographical Note

  This Dover edition, first published in 2018, is an unabridged republication of the work originally published by Charles Scribner’s Sons, New York, in 1973.

  Library of Congress Cataloging-in-Publication Data

  Names: Erdman, Paul, 1932–2007, author.

  Title: The billion dollar sure thing / Paul E. Erdman.

  Description: Mineola, New York : Dover Publications, Inc., 2018. | “This Dover edition, first published in 2018, is an unabridged republication of the work originally published by Charles Scribner’s Sons, New York, in 1973.

  Identifiers: LCCN 2018031753| ISBN 9780486828114 | ISBN 0486828115

  Subjects: LCSH: International finance—Fiction. | Banks and banking—Fiction. | Conspiracies—Fiction. | Switzerland—Fiction. | LCGFT: Political fiction.

  Classification: LCC PS3555.R4 B55 2018 | DDC 813/.54—dc23

  LC record available at https://lccn.loc.gov/2018031753

  Manufactured in the United States by LSC Communications

  82811501 2018

  www.doverpublications.com

  THE

  BILLION DOLLAR SURE THING

  Contents

  Prologue

  Chapter 1

  Chapter 2

  Chapter 3

  Chapter 4

  Chapter 5

  Chapter 6

  Chapter 7

  Chapter 8

  Chapter 9

  Chapter 10

  Chapter 11

  Chapter 12

  Chapter 13

  Chapter 14

  Chapter 15

  Chapter 16

  Chapter 17

  Chapter 18

  Chapter 19

  Chapter 20

  Prologue

  IT was just after seven in the evening of Monday, October 27. The fall weather had been fantastic all over Europe that year, and was still holding. The trees in the small park adjacent to the cathedral had not yet lost all of their leaves. But the brown leaves that remained rustled in the light breeze coming over the Rhine from the hills of the Black Forest, darkly brooding on the horizon.

  The cathedral of Basel did not rank among the most famous of Europe. Its interior had been completely gutted—including even the stained-glass windows—in the hurricane of the Reformation which had swept through in 1529. But the church’s twin towers and ancient red stone façade remained a symbol for the city which, since medieval times, had served as a metropolis of trade and culture for the Germanic peoples in the surrounding area of the upper Rhine basin. Today these people live in three different countries—Switzerland, Germany, and France. And Basel, the centre of the Christian world during the Council of 1431, later the cosmopolitan home away from home of Erasmus of Rotterdam, of Hans Holbein, of Nietzsche, had sunk into provincialism. In fact, the last of the city’s greats, Karl Barth, had claimed that his fellow citizens were about to become the village idiots of Europe. (Sic transit gloria Basiliensis.)

  Such thoughts could not have been further from the mind of the man sitting under the trees. Sammy Bechot was a professional safecracker. This should not necessarily reflect negatively upon all professional thieves. They also have their moments for reflection, even Sammy. But not during working hours.

  Sammy Bechot was twenty-seven years old; he could claim 137 successful jobs to his credit—and two rather unsuccessful ones. The latter had led, unfortunately, to prolonged involuntary pauses in his career development. They had also required Sammy to change his technique. His approach to safes had become known throughout Europe. The intricate pattern of borings he left were as sure an identification as ten clear fingerprints. Less devoted types might have despaired. Sammy, however, had persevered and had developed a new methodology which, due to its simple beauty, would have brought recognition, even acclaim, had he been active in a more acceptable field.

  Sammy rose just as the tower clock struck the quarter hour, and what emerged from the shadows was not the crew-cut technician one might have expected. Rather, a chubby, longhaired man, burdened down with the standard equipment of modern troubadors. Sammy, with electrical guitar, amplifier, and loudspeaker, crossed the cathedral square and disappeared into the narrow Rittergasse. At the fifth house on the left, lying dark behind a small garden enclosed with iron grillwork, Sammy rested. The street was deserted. Dinner time.

  Suddenly Sammy darted down the Rittergasse. It ended at the steep steps which descended to the banks of the Rhine below. A favourite walk for evening lovers. But it was a bit early for that. Within seconds, Sammy, baggage and all, had clambered over the grillwork into the garden, and, after the quick elimination of a pane of glass and the turn of a lock, he moved into the deserted house. It took him seven minutes to locate the wall safe.

  He laid the guitar case aside but unpacked the amplifier and plugged it in. He then unravelled two electrical cords. He used the first to connect the loudspeaker to the amplifier. The second wire normally led from the amplifier to the guitar. Sammy, however, employing a rather peculiar attachment on its end, fastened it to the combination dial. He put the amplifier to full power. The resulting hum indicated that all systems were go.

  Sammy patiently began to turn the safe dial. Slowly, slowly. “Ping.” The first tumbler was identified, loud, crisp, and clear, through the loudspeaker. And now in the other direction.

  “Ping.” The second.

  The combination was revealing its secrets in an almost perfect high C. Every time he applied his innovation Sammy could not help but glow with an inner pride. Absolutely foolproof.

  The safe door was soon open. It took Bechot no more than thirty seconds to locate what he was looking for. A dossier with a red cover.

  Five minutes later Sammy had disappeared into the city. Unknown to him, he had just triggered a process which would lead the world toward one of the most sensational financial happenings of the century: either a total crash of the U.S. dollar or a setup which would allow for the biggest private financial coup in history.

  Or both.

  Imagine what a Papa Kennedy, a Bernard Baruch, or even a Karl Marx would have done with a situation like this! And all Sammy was going to get for his night’s work was 10,000 Swiss francs.

  Oh, to be either Irish or Jewish!

  1

  THE president of the United States did not suffer from such disadvantages of birth. He claimed both Irish and Jewish blood, a contention which, though never proven, was of itself sufficient to carry New York State regularly for his party. Sceptics pointed out that the man was neither rich nor drunk very often. The behaviour of his crony and secretary of the treasury, Henry Crosby, they said, was much more in keeping with such ancestry; he never refused a drink, and he had been the roughest and thus most successful banker in the history of Ohio before assuming public office. What was proven was that these two men represented as potent a political pair as Washington had seen in many a year. Henry Crosby’s brash imagination, tempered by the president’s cool judgment, was known to be the source of most of the administration’s successful policy innovations.

  Their connection with Sammy Bechot? None, of course. Except for the fact that it was a meeting between Crosby and the president which had led to the creation of that ominous dossier with the red cover. It had happened on September 29. That morning Crosby had burst into the presidential office for their usual ten o’clock appointment and, unilaterally waiving all greeting formalities, ex
claimed:

  “Those bastards in Rome are out to screw us. And by God, this time I think they’re going to get away with it!”

  “Henry,” replied the president, “take a seat and take it easy. What problem could we possibly have with the Italians that could get you into such a state?”

  “Italians, hell,” replied Crosby, “It’s the Germans, the Japs, and of course those fuckin’ Frenchmen.”

  The president’s eyebrows rose but he did not appear unduly alarmed. For he realized that Crosby had a thing about most foreigners and that his lack of appreciation of offshore cultures was absolute where the French were concerned. The origin of this, as the insiders knew, had been a dinner party in San Francisco back in the fall of 1957, given in honour of visiting General Charles de Gaulle. The Midwestern banker Crosby, liked for his money if not for his manners, had been included among the guests summoned by the Western Establishment. Not one to pass up an opportunity, he had broken into a circle of people conversing with the great man during the preliminary cocktails to inquire about the future of what he had termed “the eternally sick French franc.”

  The general had first blessed him with the iciest of stares, then had spoken to the aide at his side: “Qui a fait entrer ce cochon?”

  Then he had turned and strode across the room. The rather pronounced lull in the conversation which he left behind had been first broken by the startled Crosby: “What’d he say?”

  A refined lady from Atherton, who obviously felt a closer spiritual affinity to Colombey-les-deux-Eglises than Columbus, Ohio, offered a translation: “Monsieur le general inquired,” she said, “‘who let that pig in?’”

  After that Crosby’s views on France were something less than strictly objective and everybody in Washington knew it. With this obviously in mind the president said, “Henry, surely you’re overreacting. But to what is still a total mystery to me.”

  Crosby, by now seated, seemed to have regained control of his emotions and answered, “Mr. President, you know that the annual meeting of the International Monetary Fund is taking place in Rome this week. Well, some of our so-called friends there have decided to gang up against the dollar. They plan to present us with a fait accompli.”

  Now the president’s face did cloud over. The monetary issue, and the international weakness of the dollar, had been plaguing him ever since he had taken office. The problem had become critical with the breakdown of the gold-dollar link which had occurred in 1971. Until that time the world’s monetary system had functioned reasonably well. Under the rules established at the close of World War II when the IMF was founded, each nation had related its currency—marks, yens, francs, pesetas—to the U.S. dollar. Thus one Swiss franc had been “worth” about 23 cents, one German mark approximately 28 cents, and so forth. Everyone agreed that the dollar was the natural benchmark for all other currencies. For one, it was the currency of the largest and most powerful economic unit in the world. For another, the dollar was the only currency which was officially and directly tied to that most ancient medium of exchange and store of value—gold. Since 1934, by law, one U.S. dollar was worth 1/35 of an ounce of gold. The United States had declared to one and all throughout the world that any foreign government which wanted to cash in dollars for gold, or vice versa, could do so at the rate of $35 per ounce.

  All this was very agreeable, since it meant that everybody in the world could look toward one standard of value, the American dollar. And for those really sticky types who did not especially hanker for newfangled money, there was always the ultimate comfort that if not they, at least their governments, could always get the real thing—gold.

  In August 1971 this thought occurred to some of the more tricky Europeans who suspected that the dollar was getting a bit dicey. So they decided to opt for gold. The Belgians, the Swiss, the French of course, and even the Vatican. As you can imagine, this moment was more than just slightly awkward for the United States. How could it pay off over $65 billion in debts, when there was only $10 billion of gold left in Fort Knox?

  The president’s advisors came up with what appeared to be a clever solution. The United States simply announced that the dollar was no longer convertible into gold. As simple as that. Payment was just stopped on all those IOUs which the United States had been issuing to the world in the form of dollar bills for many years past. Having done that, the American government proceeded to tell other nations that it was up to them collectively to find a solution to the world monetary crisis. A few months later the finance ministers of the eleven most powerful nations in the world met in Washington for just that purpose. But as so often before, the wise men of the world played midwife to a mouse. European governments and Japan agreed to revalue their currencies by a few percentage points if the United States devalued the dollar a few percentage points by raising the price of gold from $35 to $38 an ounce. With great pomp and ceremony at the Smithsonian Institution an agreement to this effect was signed, and with a huge sigh of relief the world went back to work as usual.

  But there was an extremely serious flaw in the entire Washington settlement, which the U.S. president termed the greatest monetary agreement in the history of the world. It solved nothing. The dollar remained greatly overvalued. Convertibility of the dollar into gold was not restored. It could not be restored at $38 an ounce. If it had been, within hours the entire $10 billion worth of bullion in Fort Knox would have disappeared into the hands of foreign governments. The fact remained that there were still 65 billion unwanted dollars floating around the world, with more going out all the time, which anybody in his right mind would have exchanged for U.S. gold with the speed of light at the price of $38 an ounce. For the free market price of gold was moving inexorably toward $80 an ounce!

  Inevitably, new crises occurred. In February of 1973, as a result of yet another run on the dollar, Uncle Sam had no choice but to devalue again, by raising the official price of gold to $42.22 an ounce. But, as before, it was just a temporary patchwork job. The dollar was still not convertible; it was still overvalued.

  So the malaise lingered on—until the IMF meeting in Rome.

  “Henry, what precisely happened?” asked the president.

  “Well, I sent my undersecretary to the meeting with the usual instruction. Just keep the lid on. Do nothing, promise nothing. Stall. Tell ’em we’re working on it.”

  “Which he did, I suppose.”

  “Of course. And in the public sessions everyone could not have been more sympathetic toward our position. They all agreed that time would heal.”

  “So?”

  “So behind this public smokescreen, the French in their usual underhanded fashion, worked out a deal.”

  “Go on.”

  “The French first got to the Germans and convinced them that the time had come for the Common Market to take charge of the world monetary system. Together they bullied the rest of the member countries into going along with the plan. The Japs, our great friends in the East, got wind of it and joined the club immediately.”

  “And their plan?”

  “They will jointly tie their currencies directly to gold. At a higher price, of course. And all their currencies will be freely convertible into gold. Now you know what that means for us.”

  “That the dollar becomes a satellite currency.”

  “Right. In about the same class as the Polish zloty.”

  “Those dirty bastards.”

  “I’ve been telling you that for years.”

  “All right,” responded the president, now irritated, “but first tell me how you know all this.”

  “Our man in the German Ministry of Finance. He was asked to help work out the draft agreement. I’ve got it here. And as you’ll see, it’s already been initialled.”

  Crosby reached into his briefcase and produced a bundle of Xeroxed documents.

  “There can be absolutely no doubt of their authenticity.”

  “O.K., Henry,” said the president, after taking just a cursory glance a
t the papers. “I believe you. What’s their timing?”

  “On January 2 they’ll be making a joint announcement from Paris. They plan to make the whole thing operational immediately the next day.”

  “But how in the world do they expect to get away with it? Surely they must realize that we will hear of this?”

  “They probably do. But they figure, and correctly so, that they’ve got us over a barrel.”

  “But are we? I’m not so sure,” said the president.

  “What do you mean? You know as well as I do—”

  “I know this: I’m not going to let the dollar become the laughingstock of the world. I’m not going to let Europe and Japan take over the international monetary system at our expense. God knows what they’ll try to take over next.”

  “But how?”

  “Quite simply. We’ll make a pre-emptive strike. We’ll put the official gold price right up to $125 an ounce and simultaneously return to full dollar-gold convertibility. And well before January 2.”

  “But,” reasoned Crosby, “what will we do if there’s a run on gold? There are by now $75 billion out there that would become potentially convertible. I hardly need remind you that our gold supplies—”

  “Look, Henry,” said the president, “Franklin Roosevelt was in the same position in 1934 when he raised the gold price from $20.67 to $35 an ounce. But he figured that the new price would attract a lot more sellers than buyers. And that’s exactly what happened. On dollars you can earn interest, good interest. On gold you cannot.”

  “Yes,” said Crosby, “but the problem will be the speculators.”

  “I disagree,” replied the president. “Look, it’s now more than forty years since Roosevelt made that last big hike in the price of gold. You can be damn sure that when I announce this I’ll let the world know that I do not expect another change will be necessary before the year 2000.”

  “Mr. President,” said Henry Crosby, “you’ve got it! Goddammit, you’ve really got it! And everybody thinks you’re some kind of a nitwit where economics is concerned. Brother, I would just love to see the faces of those Frenchmen when they hear about this!”