Noble House

There was another silence. Linbar Struan, thirty-four, very good-looking with sandy hair and blue eyes with a devil-may-care glint to theni, persisted, "Are you sure you wouldn't like coffee? Tea perhaps?"
"No thanks. Then you accept our proposal as it stands?"
Phillip Chen coughed and said, "In principle we agree to want to be in business with Par-Con in several areas. The Heads of Agreement indicate that. As to the polyurethane factories . . ."
She listened to his generalizations, then once more tried to get to the specifics—the whole reason for this meeting. But the going was very hard and she could feel them squirming. This's the worst it's ever been. Perhaps it's because they're English, and I've never dealt with the English before.
"Is there anything specific that needs clarifying?" she asked. "If there's anything you don't understand . . ."
Gavallan said, "We understand very well. You present us with figures which are lopsided. We're financing the building of the factories. You provide the machines but their cost is amortized over three years which'll mess up any cash flow and mean no profits for five years at least."
"I'm told it is your custom in Hong Kong to amortize the full cost of a building over a three-year period," she replied equally sharply, glad to be challenged. "We're just proposing to follow your custom. If you want five—or ten years—you may have them, provided the same applies to the building."
"You're not paying for the machines—they're on a lease basis and the monthly charge to the joint venture is high."
"What's your bank prime rate today, Mr. Gavallan?"
They consulted, then told her. She used her pocket slide rule for a few seconds. "At today's rate you'd save 17,000 HK a week per machine if you take our deal which, over the period we're talking . . ." Another quick calculation. ". . . would jump your end of the profits 32 percent over the best you could do—and we're talking in millions of dollars."
They stared at her in silence.
Andrew Gavallan cross-questioned her about the figures but she never faltered. Their dislike for her increased.
Silence.
She was sure they were fogged by her figures. What else can I say to convince them? she thought, her anxiety growing. Struan's will make a bundle if they get off their asses, we'll make a fortune and I'll get my drop dead money at long last. The foam part of the deal alone will make Struan's rich and Par-Con nearly $80,000 net a month over the next ten years and Line said I could have a piece.
"How much do you want?" he had asked her, just before they had left the States.
"51 percent," she had replied with a laugh, "since you're asking."
"3 percent."
"Come on, Line, I need my drop dead money."
"Pull off the whole package and you've got a stock option of 100,000 Par-Con at four dollars below market."
"You're on. But I want the foam company too," she had said, holding her breath. "I started it and I want that. 51 percent. For me."
"In return for what?"
"Struan's."
"Done."
Casey waited outwardly calm. When she judged the moment correct she said innocently, "Are we agreed then, that our proposal stands as is? We're fifty-fifty with you, what could be better than that?"
"I still say you're not providing 50 percent of the financing of the joint venture," Andrew Gavallan replied sharply. "You're providing the machines and materials on a lease carry-back so your risk's not equivalent to ours."
"But that's for our tax purposes and to lessen the amount of cash outlay, gentlemen. We're financing from cash flow. The figures add up the same. The fact that we get a depreciation allowance and various rebates is neither here nor there." Even more innocently, baiting the trap, she added, "We finance in the States, where we've the expertise. You finance in Hong Kong where you're the experts."
Quillan Gornt turned back from his office window. "I repeat, we can better any arrangement you can make with Struan's, Mr. Bart-lett. Any arrangement."
"You'd go dollar for dollar?"
"Dollar for dollar." The Englishman strolled back and sat behind his paperless desk and faced Bartlett again. They were on the top floor of the Rothwell-Gornt Building also fronting Connaught Road and the waterfront. Gornt was a thickset, hard-faced, bearded man, just under six feet, with graying black hair and graying bushy eyebrows and brown eyes. "It's no secret our companies are very serious rivals, but I assure you we can outbid them and outmatch them, and I'd arrange our side of the financing within the week. We could have a profitable partnership, you and I. I'd suggest we set up a joint company under Hong Kong law—the taxes here're really quite reasonable—15 percent of everything earned in Hong Kong, with the rest of the world free of all taxes." Gornt smiled. "Better than the U.S.A."
"Much better," Bartlett said. He was sitting in a high-backed leather chair. "Very much better."
"Is that why you're interested in Hong Kong?"
"One reason."
"What're the others?"
"There's no American outfit as big as mine here in strength yet, and there should be. This is the age of the Pacific. But you could benefit from our coming. We've a lot of expertise you don't have and a major say in areas of the U:S. market. On the other hand, Rothwell-Gornt—and Struan's—have the expertise we lack and a major say in the Asian markets."
"How can we cement a relationship?"
"First I have to find out what Struan's are after. I started negotiating with them, and I don't like changing airplanes in mid-ocean."
"I can tell you at once what they're after: profit for them and the hell with anyone else." Gornt's smile was hard.
"The deal we've discussed seems very fair."
"They're past masters at appearing to be very fair and putting up a half share, then selling out at their own choosing to skim the profit and yet retain control."
"That wouldn't be possible with us."
"They've been at it for almost a century and a half. They've learned a few tricks by now."
"So've you."
"Of course. But Struan's is very different from us. We own things and companies—they're percentagers. They've little more than a 5 percent holding in most of their subsidiaries yet they still exercise absolute control by special voting shares, or by making it mandatory in the Articles of Association that their tai-pan's also tai-pan of the subsidiary with overriding say."
"That sounds smart."
"It is. And they are. But we're better and straighter—and our contacts and influence in China and throughout the Pacific Rim, except for the U.S. and Canada, are stronger than theirs and growing stronger every day."
"Why?"
"Because our company operations originated in Shanghai—the greatest city in Asia—where we were dominant. Struan's has always concentrated on Hong Kong which, until recently, was almost a provincial backwater."
"But Shanghai's a dead issue and has been since the Commies closed off the Mainland in '49. There's no foreign trade going through Shanghai today—it's all through Canton."
"Yes. But it's the Shanghainese who left China and came south with money, brains and guts, who made Hong Kong what it is today and what it'll be tomorrow: the now and future metropolis of the whole Pacific."
"Better than Singapore?"
"Absolutely."
"Manila?"
"Absolutely."
"Tokyo?"
"That will ever only be for Japanese." Gornt's eyes sparkled, the lines on his face crinkled. "Hong Kong is the greatest city in Asia, Mr. Bartlett. Whoever masters it will eventually master Asia. … Of course I'm talking about trade, financing, shipping and big business."