House of All Nations (60 page)

He looked expectantly at Jules. Jules looked blankly, with some reproach at Léon. Léon turned to Michel, ‘Did you get it, Michel? If you didn't, tell me, and I'll go over it again. I don't care how often I go over it, you must get it, head and tail and—and—feathers, cockscomb—otherwise it's no good. It's no good botching a thing like this, bungling it would be—catastrophic; and they might get the idea all upside-down and even so—steal it—all wrong—'

‘Explain it to me,' Jules said petulantly to Michel. Michel stepped forward, with his hands in his pockets, his rounded torso and thighs potent in his much-worn suit. ‘I'll just go over it rapidly and explain it as I see it and Léon can correct me.'

Léon said eagerly, ‘Yes, go on, go on, my boy.'

‘This is Léon's scheme. Russia is pressing her wheat on the market for sale at any price to get cash, so that she will not have to pay forty-eight per cent per annum, or four per cent per month for credit. Therefore, even if the market did not go up, they, nevertheless, by obtaining cash (from our consortium) for withholding their wheat, are obtaining cash with which they pay for machines and heavy manufactured goods which they need for the Five-Year Plan. Their bills would be unloaded on the U.S.A. indirectly, since the U.S.A. would accept bills from wheat-importing countries, which, in turn, are holding Russian bills. That's the concealed third play, you see. So that Russia would then receive the benefit from obtaining cash on her bills, she would save forty-eight per cent per annum in usury charges; whereas she can only expect to obtain a relatively small amount of cash by selling since she would have to dump her wheat and get low prices. Her object, in any case, is to get cash and save the losses due to this enormous payment of interest. Hence, four things would result:

‘One: Russia could keep her wheat for her own people. This would raise her standard of living and make the Five-Year Plan safer.

‘Two: by keeping her wheat off the market, it would
double the value
of wheat and thereby her prospects, since it doubles the potential value of her wheat production in another crop, next season.

‘Three: it would make her credit-worthy by changing the rate of interest from forty-eight per cent per annum down to four per cent per annum, the normal rate, thus enabling her in the future to obtain credit far more easily …'

Léon was walking up and down the room; beads of perspiration were standing out on his dome; he was congested, and yet listened with great passion to Alphendéry's exposition. Jules was still the pale prince, elegantly and indifferently reposing in his great chair but a very faintly discernible sneer had tightened his long nostrils.

‘Fourth,' said Alphendéry, taking in the indisposition of his audience and throwing his glances to entrap them both, ‘fourth,' he repeated energetically, ‘it would enable the German government—if I understood Léon's idea—to turn Russian bills, which she now holds, into cash, or its equivalent in American wheat; instead of nursing bills she now holds for her machinery export to Russia. Old bills. This is advantageous to the economy of Germany and will save her from the necessity of taking up a thing like Hitlerism, whose shadow is now over Europe from her frontiers. For there would be no need for it: she would have the food and the cash.'

‘I don't care about saving Russia or Germany: where's the profit in it?' pouted Jules. ‘I like my own idea better. You make them the proposition, they hand you the wheat, you get the dough, you hide it, and you default.'

Léon said hastily, ‘No, you've given me a few ideas, Michel, but that's not the way to put it. Save Russia paying the usury, that's good: I want to see Russia do good, well—h'm—but Germany—it's not that. Let's put it this way. You listen, Jules. I'm putting it this way for you.'

‘I'm listening,' said Alphendéry patiently, humbly.

‘What you say is right, right, but that's not it, Michel. It comes in, but—you see, lots of countries are anxious to buy wheat but can't buy. Russia would have been prepared to—given—poor countries American wheat instead of—exchange—of dollars—in exchange of goods which Russia was crying for, for which they give bills at forty per cent premium. Chicago wheat is now thirty-nine cents. Say it will be forty-one cents then and—say ten cents carrying charges …'

Alphendéry advanced with his hand held up. ‘Wait, Léon, you haven't put it clearly. Your shorthand is all right for grain dealers. Let me—'

Léon laughed, in his beautiful husky voice. ‘My shorthand— Go ahead,' he was subdued, holding himself in. ‘I want to get it straight. We must. We must work it all out.'

‘What Léon means is this,' said Alphendéry, turning half-about and facing Jules, who fixed fatigued eyes upon him. ‘The market is dead, the financial crash has put most countries into a position where although they require wheat, they have no money to pay and mighty little credit. But if Russia could give to these poor countries American wheat (because the banks in these very countries which have accepted Russian bills would pledge their bills with the American authorities and obtain wheat), then, in effect, Russia would be giving wheat to these poor countries who would no longer need to acquire dollars with which to pay for the wheat, since they would be buying this wheat by discounting Russian bills with the American bankers. Is that clear?'

‘Sure,' said Jules, irritably.

‘Russia will then be able to get from them the goods she is crying for, for her Five-Year Plan; since these poor countries could (if they did not have to part with foreign exchange to acquire American wheat), could be in a position to give her (I mean Russia) credit for the purchases from themselves; since the bills that Russia would give would be credit-worthy, that is, could be turned into cash by these poor countries by their rediscounting these very Russian bills at a nominal rate of interest with the American Federal Reserve Bank, through giving their endorsement to those Russian bills.'

‘What small countries?' asked Jules impertinently.

‘Why—Czechoslovakia, Germany (poor countries, not small countries), Austria, Finland …'

Léon blurted, with discomfiture, ‘What do you think of it, Jules? You see, we need your façade; the consortium needs the bank's façade … Tell me, really, what you think of it, Michel? Well?'

‘Henri, it's brilliant, brilliant: you've grown even in my estimation,' said Alphendéry with great enthusiasm. ‘You're a genius, but it needs to be worked out. We'll go over it.'

Jules laughed good-naturedly, having observed that Léon was tired. ‘It reminds me of my first bank. I opened my first bank in the war zone during the war. Didn't charge the generals anything and gave the privates exchange. You know, Michel. What did I know about banking? Spent six months in a bank in my life and walked out on them, couldn't believe their humdrum—knew it wasn't like that! One day a lady I knew walked in and gave me a giro transfer. I'd never seen one before in my life. So I said to her, “Just take a seat for a moment; I've got to make a verification, pardon me,” and I hurried with it into the lavatory. I've always found out since I was a kid that when you can't understand a thing if you take it into the lavatory and perch on the … er … sit down a while, you can always figure it out. I did that, and presently I said to myself, “This must be a transfer from one bank to another by means of numbers in an account without a check”; and that's what it was, and that's what I did.' He looked seriously at them. ‘You'll write it out for me, Michel, in notes, and I'll study it.' He laughed delightfully, exquisitely, humanely. He got up to take a little exercise over his Persian carpet. ‘It sounds all right, Léon. Let's go over it again, after lunch. I'll do my best to think it over and stew in it. How much do you think you'll make for yourself, I don't mean Russia and the poor countries. I mean, what can we steal?'

Léon worriedly planted himself in front of Jules. ‘No, don't you see? The plan—we can make any amount of money, any we want to—two-three millions sterling, say ten million-twelve million dollars—that is, two hundred fifty million francs maybe, properly managed.'

Jules opened his eyes, lost his fatigue, and went back to his chair. ‘How? How do you think you can do that, Léon?'

Léon laughed. ‘It's a temporary stave-off—the crisis—for them; for us, it would stave off the crisis forever, I think: we three will be in on it. On the third consortium. We'll make our fortune! Only don't let it out! No Bomba, that feller—or anyone who'll spill the beans.' He took a turn across the room, smiled at Jules. ‘Listen, Jules, I think I've got it—the way you can understand it; I'm getting it in order. It's a concentric technique.' He smiled at Alphendéry for a moment, murmured something like ‘technique of a
yiddisher Kopf
,' went on to Jules.

‘If I don't put it right, you'll get everything but the point. No one knows how he sounds to others. This is the plan. We buy fifty million bushels at a flat price. Contract with the American government. We get an option on another fifty million bushels on a scale-up, ten million at forty-two, ten million at forty-four cents, so on. That's an incentive to them to tighten their hands. If our plan is successful and the market goes up—it must, unless there's a leak—so much the better, we could exercise the option and sell it ourselves. It's a cinch … we don't have to exercise the option. To sell short—we'll always be able to buy it in.' He looked at Jules confidently: this was A.B.C. to Léon.

Alphendéry rushed in, ‘You see, we have two choices: either we have confidence that we can resell large quantities at the market-price, that is, if, say, the market goes to fifty-three cents we can exercise our option to buy the wheat at fifty-two cents, or if we distrust the market, and it rises to seventy-five cents, we have then the privilege of selling short, knowing we will always have the supply (on option from the government) so that if the market goes down to sixty cents we make a profit of fifteen cents per bushel without using our option, and if, on the other hand, the market goes up to one dollar, we can be short sellers (knowing we have the supply), and if we are pressed for delivery, then we can exercise our option, which we had been afraid to exercise on the run-up, because we had no confidence. We could dispose of it when we were long of it, by having exercised our option to buy it at fifty-two cents. We tender this wheat in execution of our sale at seventy-five cents, even when it is at a dollar! Perfect! By no possibility can we lose!'

‘Let me explain, let me explain,' cried Léon irascibly.

‘All right,' said Alphendéry humbly. ‘I am only trying to make the process clear.'

‘Jules knows how to sell short,' cried Léon, ‘a child could understand it,' he continued violently. Then again, succinctly, waving his arm, he went on, ‘We could make ten cents a bushel on one hundred million bushels, or ten million dollars on the way up and the same amount on the way down. Easy. I could do it. This is the only proposition I ever had where I could talk in telephone numbers. It's possible. That's the beauty of it. It's honest. No finagling. The supply is there! On contract.' He calmed himself. ‘Say, at fifty cents we sell two million bushels, at fifty-two cents, we sell two million, at fifty-four cents, we sell twenty-one million bushels, and so on every two-cent rise in the market …' He peered at Jules, took a turn up and down the room, wrestling with his ideas. He came back to them and planted himself in their midst, most serious.

‘The bugbear of Russian supplies hanging over the market has almost compelled the miller to hang off and to pursue a hand-to-mouth policy—Russia really oughtn't to sell wheat, despite her bumper crop, but she needs goods for the infant Five-Year Plan. Then her bills are trickled through at forty per cent. She's got to get the goods. You see the beauty of this is—everyone's boycotting Russia. You can't boycott a tiger, even if you're not an animal trainer—don't like it. We've got the brains to see that Russia exists, she is living, hitting round. She has to eat, she has to consume. No good shutting your eyes to her: use her, use her, she's the new possibility. Use her to make money. The munitions makers never hesitated a moment. Let us be as smart. And we're selling wheat. Things people need to keep alive. It's more decent, too. That's where our bright idea comes in. We don't groan about Russia—we take Russia into account! You see, Europe needs wheat—she's crying for it, starving for it, but you've got to have something in exchange. The American tariffs pull their punches. There's no question of credit at all.
Valuta is cracking
! That's it, Jules! You see, valuta is cracking, credit is dead. The Credit-Anstalt failed a month ago. Europe is dead. Now, I'll put it to you, this way. My
schematism
is this. There's a genuine home for wheat, no need for American silos to be stuffed to cracking and mice to eat it up. Russia is to be a
buyer, not a seller
. That'll give everybody confidence that nobody has now. Then Russia will
buy in the trade
, through the trade, that looks genuine and it gives the trade confidence. ‘Things are looking better!' We only want them to accept her bills till her gold production goes up. It won't be so long …'

Jules, whose face had hardened by now, through this constant dinning in and rehashing of the various elements of the first plan, had absorbed some of the facts of the situation. The idea of profit, profit, ached in his jaw. He now said rapidly, ‘You mean, you and I form a consortium and buy one hundred million bushels from the U.S.A.?'

‘Yes,' said Léon. ‘Now, we've got to get the details clear. Yes, that is the first. Then there is the second consortium. A consortium of international grain merchants to sell wheat to the Russians. We also have to be a third consortium to resell the Russian purchases of wheat to Germany, et cetera, for goods that Russia needs. But this is secret: this is just between us and mustn't go down on paper.'