"What appeals to me as a banker," Roscoe Heyward said, "is the idea of discipline at last in money and government."
G. G. Quartermain signed the bar chit and stood up. "And you'll see it. That I promise you." They drove to the tenth tee.
Big George called over to the Vice-President, "By, you've been playing way over your head and it's your honor. Tee it up and let's see some disciplined and economic golf. You're only one-up and there are nine tough holes to go."
Big George and Roscoe Heyward waited on the cart path while Harold Austin looked over his lie on the fourteenth hole; after general searching, a Secret-Service man had located his ball beneath a hibiscus bush. Big George had relaxed since he and Heyward had taken two holes and were now one-up. As they sat in the cart, the subject which Heyward had been hoping for was raised. It happened with surprising casualness. "So your bank would like some Supranational business."
"The thought had occurred to us." Heyward tried to match the other's casualness.
"I'm extending Supranational's foreign communications holdings by buying control of small, key telephone and broadcast companies. Some owned by governments, others private. We do it quietly, paying off local politicians where we have to; that way we avoid nationalistic fuss. Supranational provides advanced technology, efficient service, which small countries can't afford, and standardization for global linkage. There's good profitability for ourselves. In three more years we'll control through subsidiaries, forty-five percent of communications linkages, worldwide. No one else comes close. It's important to America; it'll be vital in the kind of industrial-military liaison we were talking about."
"Yes," Heyward agreed, "I can see the significance of that."
"From your bank I'd want a credit line of fifty million dollars. Of course, at prime."
"Naturally, whatever we arranged would be at prime." Heyward had known that any loan to Supranational would be at the bank's best interest rate. In banking it was axiomatic that the richest customers paid least for borrowed money; highest interest rates were for the poor. "What we would have to review," he pointed out, "is our bank's legal limitation under Federal law."
"Legal limit, hell There are ways around that, methods used every day. You know it as well as I do." "Yes, I'm aware that there are ways and means."
What both men were speaking of, and fully understood, was a U.S. banking regulation forbidding any bank to loan more than ten percent of its capital and paid-in surplus to a single debtor. The purpose was to guard against bank failure and protect depositors from loss. Inthe case of First Mercantile American, a fifty-million dollar loan to Supranational would substantially exceed that limit.
'The way to beat the regulation," Big George said, "is for you to split the loan among our subsidiary companies. Then we'll reallocate it as and where we need."
Roscoe Heyward mused, "It could be done that way." He was aware that the proposal violated the spirit of the law while remaining technically within it. But he also knew that what Big George had said was true: Such methods were in everyday use by the biggest, most prestigious banks.
Yet even with that problem handled, the size of the proposed commitment staggered him. He had envisaged twenty or twenty-five million as a starting point, with the sum increasing perhaps as relationships between Supranational and the bank developed.
As if reading his mind, Big George said flatly, "I never deal in small amounts. If fifty million is bigger than you people can handle, let's forget the whole thing. I'll give it to Chase."
The elusive, important business which Heyward had come here hoping to capture seemed suddenly to be slipping away. He said emphatically, "No, no. It's not too large."
Mentally he reviewed other FMA commitments. No one knew them better. Yes, fifty million to SuNatCo could be managed. It would necessitate turning off taps within the bank cutting back drastically on smaller loans and mortgages, but this could be handled. A large single loan to a client like Supranational would be immensely more profitable than a host of small loans, costly to process and collect.
"I intend to recommend the line of credit strongly to our board," Heyward said decisively, "and I'm certain they'll agree." His golfing partner acknowledged curtly, "Good."
"Of course, it would strengthen my position if I could inform our directors that we would have some bank represensation on the Supranational boards"
Big George drove the golf cart up to his ball, which he studied before replying. "That might be arranged. If it was, I'd expect your trust department to invest heavily in our stock. It's time some fresh buying pushed the price up."
With growing confidence, Heyward said, 'the subject could be explored, along with other matters. Obviously Supranational will have an active account with us now, and there's the question of a compensating balance…"
They were, Heyward knew, going through a banker-client ritualistic dance. What it symbolized was a fact of banking-corporate life: You scratch my back, I'll scratch yours.
G. G. Quartermain, jerking an iron from his alligator bag, said irritably, "Don't bother me with details. My financial man, Inchbeck, will be here today. He'll fly back with us tomorrow. You two can get together then." Plainly, the brief business session was concluded.
By this time the Honorable Harold's erratic game seemed to have affected his partner. "You're psyching me," Byron Stonebridge complained at one point. At another: "Dammit, Harold, that slice of yours is contagious as smallpox. Anyone you play with should be vaccinated." And for whatever reason, the Vice-President's swing, shots and poise began to go awry for costly strokes.
Since Austin did not improve, even with the chiding, by the seventeenth hole Big George and short-but-straight Roscoe remained one up in the lead. This suited G. G. Quartermain and he crunched his tee shot on eighteen about two hundred and seventy yards, straight down the middle, then proceeded to birdie the hole, giving his side the match.
Big George was jovial at his victory and clasped Byron Stonebridge around the shoulders. "I guess that makes my credit balance in Washington even better than before."
"Depends on what you want," the Vice-President said. He added pointedly, "And how discreet you are."
Over drinks in the men's locker room, the Honorable Harold and Stonebridge each paid G. G. Quartermain a hundred dollars a bet they had agreed on before the game began. Heyward had demurred from betting, so was not included in the payoff.
It was Big George who said magnanimously, "I like the way you played, partner." He appealed to the others. "I think Roscoe ought to get some recognition. Don't you two?"
As they nodded, Big George slapped his knee. "I got it, A seat on the Supranational board. Howzat for a prize?" Heyward smiled. "I'm sure you're joking."
Momentarily, the smile left the SuNatCo chairman's face. "About Supranational I never joke."
It was then Heyward realized that this was Big George's way of implementing their earlier conversation. If he agreed, of course, it would mean accepting the other obligations…
His hesitation lasted seconds only. "If you do mean it, I'll be delighted to accept." "It will be announced next week."
The offer was so swift and staggering that Heyward still had difficulty believing. He had expected that someone else from among the directors of First Mercantile American Bank would be invited to join the board of Supranational. To be chosen himself, and personally by G. G. Quartermain, was an accolade of accolades. The SuNatCo board' as composed now, read like a blue ribboned Who's Who of business and finance.
As if reading his mind, Big George chuckled. "Among other things, you can keep an eye on your bank's money."
Heyward saw the Honorable Harold glance his way questioningly. As Heyward gave a small slight nod, his fellow FMA director beamed.