Today, bright sunshine from a cloudless winter sky shone through the wall-wide windows onto Jerome Patterton's pink, near-hairless head. Seated behind a desk, he wore a light patterned suit, a switch from his usual tweeds. A newspaper in front of him was folded open to the news story which had brought Alex here. On a sofa, in shadow, was Roscoe Heyward. The three exchanged good mornings. Patterton said, 'I asked Roscoe to stay because I had notion what the subject might be." He touched the paper "You've seen this, of course."
"I've seen it," Alex said. "I've also had Dick French in. He tells me that you and Roscoe discussed the press queries yesterday. So my first question is, why wasn't I informed? I'm as involved as anyone with Forum East."
"You should have been informed, Alex." Jerome Patterton seemed embarrassed. '`The truth is, I guess, we got a little rattled when the press calls showed there had been a leak." "A leak of what?"
It was Heyward who answered. "Of a proposal I’ll be bringing before the money policy committee next Monday. I'm suggesting a reduction of the bank's present commitment to Forum East by approximately fifty percent."
In view of the rumors which had surfaced, the confirmation was not surprising. What astounded Alex was the extent of the proposed incision.
He addressed Patterton. "Jerome, do I understand that you are in favor of this incredible piece of folly?"
A flush-suffused the president's face and egg-like head. "It's neither true nor untrue. I've reserved judgment until Monday. What Roscoe has been doing here yesterday and today is some advance lobbying."
"Right." Heyward added blandly, "An entirely legitimate tactic, Alex. And in case you object, let me remind you that on plenty of occasions you took your own ideas to Ben in advance of money policy meetings."
"If I did," Alex said, "they made a damn sight better sense than this one." "That, of course, is solely your opinion." "Not solely. Others share it."
Heyward was unruffled. "My own opinion is that we can put the bank's money to substantially better use." He turned toward Patterton. "Incidentally, Jerome, those rumors now circulating could be helpful to us if the proposal for a cutback is agreed to. At least the decision won't come as a sudden shock."
"If you see it that way," Alex said, "maybe it was you who leaked the rumors." "I assure you it was not." "Then how do you explain them?" Heyward shrugged. "Coincidence, I suppose."
Alex wondered: Was it coincidence? Or had someone close to Roscoe Heyward floated a trial balloon on his behalf? Yes. It might well be Harold Austin, the Honorable Harold, who, as head of an advertising agency, would have plenty of contacts with the press. It seemed unlikely, though, that anyone would ever find out.
Jerome Patterton raised his hands. "Both of you save any more arguments until Monday. We'll go over all of them then."
"Let's not fool ourselves," Alex Vandervoort insisted. "The point we are deciding today is how much profit is reasonable and how much is excessive."
Roscoe Heyward smiled. "Frankly, Alex, I've never considered any profit excessive."
"Nor have I," Tom Straughan put in. "I recognize, though' that making an exceptionally high profit is sometimes indiscreet and asking for trouble. It becomes known and criticized. At the end of the financial year we have to publish it."
"Which is another reason," Alex added, "why we should strike a balance between achieving profit and giving service."
"Profit is giving service to our shareholders," Heyward said. "That's the kind of service I put first."
The bank's money policy committee was in session in an executive conference room. The committee, which had four members, met every other Monday morning with Roscoe Heyward as chairman. The other members were Alex and two senior vice-president Straughan and Orville Young.
The committee's purpose was to decide the uses to which bank funds would be put. Major decisions were referred afterward to the board of directors for confirmation, though the board rarely changed what the committee recommended.
Individual sums discussed here were seldom less than in the tens of millions.
The president of the bank sat in, ex-officio, at the committee's more important meetings, voting only if it became necessary to break a tie. Jerome Patterton was here today, though so far he had not contributed to the discussion.
Being debated now was Roscoe Heyward's proposal for a drastic cut in Forum East financing.
Within the next few months, if Forum East was to continue as programmed, new construction loans and mortgage funds would be required. First Mercantile American's expected share of this financing was fifty million dollars. Heyward had proposed a reduction of that amount by half.
He had pointed out already, "We will make clear to all concerned that we are not opting out of Forum East, nor do we intend to. The explanation we will give is simply that in light of other commitments, we have adjusted the flow of funds. The project will not be halted. It will simply proceed more slowly than was planned."
"If you look at it in terms of need," Alex had protested, "progress is already slower than it should be. Retarding it still further is the worst thing we can do in every way."
"I am looking at it in terms of need," Heyward said 'the bank's need."
The riposte was uncharacteristically flip, perhaps, Alex thought, because Heyward was confident that today's decision would go the way he wanted. Alex was sure that Tom Straughan would join him in opposing Heyward. Straughan was the bank's chief economist young, studious, but with a broad spectrum of interests whom Alex had personally promoted over the heads of others.
But Orville Young, treasurer of First Mercantile American, was Heyward's man and would undoubtedly vote with him.
In FMA, as in any major bank, the true lines of power were seldom reflected in organizational charts. Real authority flowed sideways or in detours, depending on loyalties of individuals to other individuals, so that those who chose not to join in power struggles were bypassed or marooned in backwaters.
The power struggle between Alex Vandervoort and Roscoe Heyward was already well known. Because of it, some FMA executives had chosen sides, pinning their hopes for advancement on the victory of one adversary or the other. The split was also evident in the lineup of the money policy committee.
Ale, argued, "Our profit last year was thirteen percent. That's damned good for any business, as all of us know. This year the prospect's even better a fifteen percent return on investment, maybe sixteen. But should we strain for more?' - The treasurer, Orville Young, asked, "Why not?"
'I already answered that," Straughan shot back. "It's shortsighted."
"Let's remind ourselves of one thing," Alex urged. "In banking it's not hard to make large profits, and any bank that doesn't is manned by simpletons. In plenty of ways the cards are stacked in our favor. We've opportunists, using our own experience, and reasonable banking laws. The last is probably the most important. But the laws won't always be as reasonable that is, if we go on abusing the situation and abdicating community responsibility."
"I fail to see how staying in Forum East is abdicating," Roscoe Heyward said. "Even after the reduction I'm proposing, we'd still be committed substantially."
"Substantially, my foot. It would be minimal, just as the social contribution of American banks has always been minimal. In financing of low-income housing alone the record of this bank and every other is dismal. Why fool ourselves? For generations banking has ignored public problems. Even now we do the minimum we can get away with."
The chief economist, Straughan, shuffling papers, consulted some handwritten notes. "I intended to bring up the subject of home mortgages, Roscoe. Now Alex has, I'd like to point out that only twenty-five percent of our savings deposits are currently in mortgage loans. That's low. We could increase it to fifty percent of deposits without harming our liquidity position. I believe we should."