The next act lasted less than five minutes. First, Albert opened his cardboard box and stacked certificates, each worth 100 shares of the Bank of Sicily and America, on the table. Luckman came over to that side of the table, examined a few of the certificates, gave a look of satisfaction to his boss, and again took his place.
“Satisfied?” asked Sir Robert.
“Yes,” answered George Foreman.
Then Foreman extracted a simple cashier’s check in the amount of $60,000,000 and no cents from the briefcase which Donald Luckman helped him open.
“As I understand it,” said Sir Robert after the check had been handed to him, “the sixty million is to be deposited to a joint-site account in the names of Mr. Joseph L. Fiore and Mr. Albert P. Fiore. Is that correct, gentlemen?”
Albert said, “Yes.”
“And both parties agree,” continued Sir Robert, “on the condition of the object which is herewith changing hands.” He waved a copy of Donald Luckman’s audit report on the Swiss Bank which had been lying on the table in front of him since the start of the proceedings.
Both Foreman and Fiore said yes at the same time.
Sir Robert beamed. “Now I will call in two of my assistants who have the documentation prepared for signature. I assume both parties are now prepared to execute them?”
Both parties were. And did.
After Sir Robert had mumbled his final benediction, Doc and Albert rose to shake hands all around the conference table. But as they approached George Foreman, he abruptly turned his back. So Donald Luckman did the same, leaving Doc and Albert with nothing more to do but leave.
Thus it was that at 3:35 on Friday, May 13, the banking careers of Doc Smythe and Albert Fiore came to a rather ignominious end.
“Bastards,” said Doc, as they climbed into a taxi in Lombard Street. But he had the widest of possible grins on his face when he said it.
A half hour later, after the obligatory sherry with Sir Robert, George Foreman and Donald Luckman also left the bank. Their spirits were high as their opulent Bentley took them back toward the not so opulent London Hilton.
Next stop was Foreman’s suite on the top floor of the hotel, but Luckman got off first on the 12th floor. He wanted to pick up his wife and a dossier. He found the dossier, but not the wife. Because, as he found out a few minutes later, she was up in the Foremans’ suite. And everybody was once again back on the Debbie and Marjory, George and Donald basis. George was playing bartender.
“My boy,” he said, “you have done a truly remarkable job. That audit report was a masterpiece.”
Donald blushed, and muttered something appropriate. Then he handed Foreman the dossier he had just picked up. “I thought you should have this right away. It will provide the basis for the closing with Frank Cook on Wednesday.” Foreman glanced at it.
“Aha,” he said, “the silver mine.”
“Yes. It contains the full geologist’s survey, plus a rundown on the week to week development of the mine. Output, refining throughput, shipments. Stuff I really don’t know that much about.”
“Has Frank Cook also got this?”
“Yes. His man Topping copied everything earlier this week. I’m sure Mr. Cook has had ample time to study it.”
“Well, I’ll do the same, Donald, because this time, I’ll have to handle things alone.”
“Oh?”
“Yes. I want you to get back to Lugano immediately. Or at least by tomorrow. You’re boss of that bank, now, and I want you to make that quite clear to everyone right away Monday morning. The first thing you must do is change that name. By the way, have all of those crooks given their resignations?”
“As I understand it, they have been left with a man named Marvin Skinner. In Lugano.”
“Well, get them. And get that Skinner out of there. I don’t want any of them to ever show their faces in that bank again.”
“Yes, sir.”
Marjory’s nasal voice cut in. “George,” she said, “that’s enough business. You hear?”
“Yes, Marjory.”
“Except for one thing. Debbie is not going to Switzerland. She’s staying here in London with me for a while. Isn’t that right, dear.”
Debbie nodded.
“You see, George, while you men were working, we’ve been busy too. Planning. Tonight we’re all going out. We’ve got four tickets to The Sound of Music. Isn’t that marvelous? And tomorrow night we’re going to The Black and White Minstrel Show. You know how I love serious music, George. On Monday, Debbie and I are going shopping, first Harrod’s, then . . .” And on she droned.
Debbie just sat there, sipping gin. She continued doing so during the intermission at the theater. And also at the dinner, which followed the show. At Trader Vic’s. Marjory Foreman had insisted they eat there, since she knew Vic back home, and also knew how thrilled he would be to hear that they had eaten at his place in London. By the time Debbie got to bed she was bombed. The next morning, Saturday, she didn’t even hear her husband leave for the airport. At noon she telephoned Marjory Foreman. She felt awful, she reported. Probably too much excitement. She planned on just cooping herself up for twenty-four hours to recover.
Marjory understood.
“Have a good rest, my dear,” she said. “You know how much George and I love you. You just take care of yourself. And when you feel better, just call or leave a message.”
During the next hours Debbie did call. But not Marjory. She telephoned at least fifteen times to one London luxury hotel after the other. Until she finally found Doc Smythe. He arrived an hour later.
They spent twenty-three of the next twenty-four hours in bed; the other hour they ate: a huge platter of Scottish smoked salmon, two dozen snails, accompanied by a magnum of Veuve Cliquot. Room service protested that it would be next to impossible to cook snails at ten on Sunday morning. But the promise of a dollar a snail gratuity produced almost instant garlic. At noon Debbie and Doc went back to bed, after she had left a telephone message for Marjory not to expect to see her until Monday.
Albert Fiore also spent the entire weekend in his hotel room. With an electronic calculator.
18
THE next day, Monday, May 16, 1968, will be remembered by a lot of silver speculators. By some fondly, but by most with more than a slight shudder. For that was the day when silver rose to the highest level thus far in the twentieth century: $2.64 an ounce. And if you would have taken a poll of investors, whether in New York, Chicago, London, or Zurich—in fact, anywhere where the smart money boys either lived or operated—you would have ended up with a remarkable consensus: the price could only go in one direction in the future. Up!
At this juncture, the smart money boys were not alone. They had been joined by half the crackpots in the United States, as well as a few from abroad, all trying to make a fortune in silver. And they were succeeding!
Like Albert had predicted, after the market slump in January and February, when the price had retreated to $2.00 an ounce, a revival had set in. A new bull market got underway. Back to $2.10, then $2.20, up to $2.35, then $2.50. A new high. Wow! The word spread: Don’t fool around in the stock market. Go where the action is. Commodities! Buy a silver futures contract for 10,000 ounces. At $2.00 an ounce, it represented $20,000 worth of action. And all yours! Well, not exactly. Because the smart investor buys on margin. Just put down 10 percent with your friendly broker, just $2,000, and the 10,000 ounces are still more or less, all yours. But it is not like a charge account at Sears, or Diners Club. Here you get the real thing—precious metal! Not a crummy washing machine that wears out. Or a fleeting vacation for two in rainy Bermuda. No. Silver bullion. It lasts forever. And talk about performance! Those 10,000 ounces you bought in February at $2.00 an ounce are worth $25,000 in May at $2.50 an ounce. You just got yourself a $5,000 profit in two months on a lousy $2,000 investment. That’s 150 percent in two months. That’s 75 percent a month. That’s 18¾ percent a week; that’s 2.68 percent a day! By Christmas you ma
y be rich. All silver had to do was to go up to $3.00 an ounce.
If it went to $5.00 you’d be filthy rich. At $10 an ounce you could retire!
How could one lose? Because the experts all were saying: the world’s running out of silver. Consumption was growing; production was stagnant; stockpiles were dwindling. The price had to go up.
Of such are American dreams made. Because the entire essence of America is the hope to first make money—then make money with money—then make lots of money with lots of money. The Germans, the Japanese, the Swiss are, of course, not very far behind in this regard these days. But in the beginning you first have to have that big break. Saving will get you nowhere. Mutual funds are too slow—you might just as well buy life insurance. Stocks? You win some, you lose some, and that’s about all. Bonds? Forget it! What is necessary is that first big hit. The one that converts the thousands into ten thousands into hundred thousands. Then, hell, once you’re working with digits like that, easy street is just around the corner.
That’s the dream of the fellows who follow the ponies, and those who play the numbers. And those who rob banks. But that’s all for the working classes. The educated man uses his brains, capitalizes on his education, takes advantage of his connections, studies his charts, researches his fundamentals, calls his broker, and goes on margin. In the commodities market. With soybeans, wheat, frozen orange juice, plywoods, pork bellies. One works with the exotica of the investment world. That is not for peons. Oh, no. It is for dentists, airline pilots, IBM salesmen, the men of distinction who own McDonald’s franchises.
And in the spring of 1968 the word was out. Buy silver futures today, and tomorrow will be yours. Teeth decayed, airline schedules were disrupted, computers went haywire, hamburgers went without onions, as men throughout America became mesmerized with the silver price. Up two points! That’s another two thousand in the bank. Limit up! That’s ten points, ten more cents an ounce, ten thousand more profit. All in one day! So buy another contract with the profits. And yet another. On margin. It was a chance in a lifetime to really score. And after that, the easy life.
All that had to happen was that the price of silver kept going up. Which it did.
For one more day. Then it got zapped.
The beginning of the end of the Great Silver Bull Market occurred in London on the morning of May 16 at 9 A.M.sharp. Albert Fiore, accompanied by Doc Smythe, were the first customers of Winthrop’s Bank. Their request was unusual. They wanted to withdraw $60 million. Immediately. They had to wait until 10:15 for Sir Robert Winthrop to arrive. Only he could handle something like this. Upsmanship is the name of the game in merchant banking. So when the request was repeated, his response was an unhesitating “No problem.” Of course, it was not taken out in cash. Instead telegraphic transfers were made to a dozen different banking institutions around the world: to the Bahamas, the Cayman Islands, Liechtenstein, Luxembourg, Liberia, Beirut, Singapore, Hong Kong. What with time zones and banks being as slow as they are, Albert could not start spending any of this money, which, technically, belonged to his father, although it was a joint account, until the next day. But he and Doc could lay the groundwork. They did by visiting four commodity brokerage houses. All of these operated in both London and New York. One had a direct line with Chicago, another specialized in the exotic markets of the Near and Far East. They all had one thing in common: none worked with Frank Cook or any of his organizations.
The next day, May 17, was sunny and warm, a day when it felt really good to be alive and well in England. At eleven, Doc Smythe and Albert Fiore took a taxi from the Carlton Tower to the City of London. Their destination was Whittington Avenue. At first they had the driver puzzled, something most difficult to accomplish with cabbies in London. Then he remembered: it was that short street that led off Cornhill to the Leadenborough produce market.
It turned out to be a picturesque corner of London, with its narrow passage, open-air stalls, and old-fashioned shops, among them: A. Cook Purveyor of Choice Fruits and Vegetables; Filters High Class Butchers; Ashdown Oysters; and The Lamb Tavern. Most peculiarly, right in the middle of all this, mounted on a high pole, is a wooden plaque citing the Bylaws, Rules, Orders, and Regulations of the Leadenhall Market, Number 20, of which reads:
It shall be the duty of the Clerk of the Market to remove or cause to be removed from the market any person whom he shall find engaged in betting or whom he shall have reason to believe frequents the said market for the purpose of betting, or to be a reputed thief, or an idle or disorderly person, or a rogue and vagabond, and any such person resisting his removal shall be liable to a penalty not exceeding £5.
This is peculiar since the London Metal Exchange is situated not more than twenty yards away, a place where some of the most sophisticated rogues on earth practice their art of gambling on a scale which would make even the elder statesmen among croupiers in Las Vegas cringe in fear. Millions upon millions of pounds are “placed” daily, on bets that the prices of world metals—copper, tin, lead, zinc, and silver—will go up, if the bettor is a bull, or down, if the bettor is a bear. The biggest action in this May of 1968 was, of course, in silver. And almost all the bettors were bulls.
The LME, as it is fondly known to gamblers worldwide, prides itself on being located on the site of the old Roman Forum. It has no sign above its entrance, just a simple metal plaque beside the modest doorway. Visitors are only allowed in with the permission of the secretariat, provided they are sponsored by one of the members of the exchange.
The arrangements which made it possible for Doc and Albert to attend that day had been done so discreetly that no sponsor was put into the register. They were simply guests of the house. Silver is traded between the hours of 12:05 and 12:10 in the first morning session, then again between 13:00 and 13:05. The buyers and sellers scream offers at each other in a completely demented fashion during these five minutes, and out of it emerges a set price at which silver changes hands—the so-called silver fixing, which is determined by a committee of three members who seek to match up all the buy and sell orders at a “fair” price. Whatever happens in the morning in the LME in London sets the price pattern that is followed around the world during the next 24 hours—first in New York, Chicago, San Francisco, then Hong Kong and beyond.
During the first session, the silver price leaped up a final time. One broker—known by everyone on the ring to be the representative of the Frank Cook group—was the major cause. He was buying all the silver in sight, it seemed. The price hit $2.70. The experts concurred that the next stop on the way up would be at least $3.00 an ounce.
But at the 13:00 session, four huge sellers appeared. They weren’t selling physical silver. They were selling silver for future delivery— well, well into the future. In the afternoon sessions—at 15:55 and again at 16:30 it was the same story. Frank Cook’s broker was the buyer; those same four brokers were the sellers. The price stalled. It never went beyond that $2.70 mark.
The next day, it, in fact, retreated to $2.60 an ounce in the first fixing.
Doc and Albert were there again to watch the action, standing quietly in the far corner of the trading room. Just after the bell had rung at 12:05, announcing the beginning of the first round of trading, another guest arrived on the floor: Mr. Nicholas Topping. He took a beeline toward Doc.
“What the fuck are you guys doing here?” he demanded.
“The language!” replied Doc.
“You heard,” stated Topping, almost shaking with anger.
“Heard what?”
“Come on, don’t give me that stuff again, Doc.”
“Look, Topping, I’m not giving you anything. What happened?”
“That son-of-a-bitch is pulling a fast one.”
“Which son-of-a-bitch,” inquired Doc, delicately.
“The fucking Chairman of that fucking California bank.”
“What’d he do?”
“We had agreed to finalize the purchase of that silver property this morn
ing. At ten. Right?”
“If you say so, Nickie.”
“He backed off. He wants double the price agreed to with Mr. Cook. Double!”
“Too bad.”
“Too bad! You know damn well it’s more than just too bad. We’ve got our necks stuck way out in this silver market, on the long side and we’re acquiring more every day.”
“Yes, we heard.”
“We also heard something. You bastards started selling yesterday.”
“What makes you think that?”
“Want me to tell you the names of the brokers, and exactly how much each has done for you during the past 24 hours?”
“Nick, the lack of discretion in professional circles in England these days is appalling. I’m disgusted.”
“But what has us puzzled is this: How could you have known?”
“Known what?”
“That Foreman and that California bank were going to pull shit on us.”
“We didn’t.”
“Then why start selling silver like crazy?”
“Because we think the price is going to go down.”
“Why?”
“Because an enormous amount of silver is going to be hitting the market during the next months, even years.”
“Because you figured that that bank is going to continue to operate that mine in Iran and cash in. Flood the market with silver and leave Frank Cook holding the bag. Right?”
“No. That is not the reason.”
“What is?”
“That is for Frank Cook’s ears only.”
“O.K. When?”
“Tonight.”
“What time?”
“Say, eight.”
“Where?”
The Silver Bears Page 21