He leaned forward in his chair earnestly and I stared at him fascinated. The man was stripping himself bare before our eyes. We could see the gradual disintegration of his spirit and his pride.
“Before the market crashed in ’29 I was sitting on top of the world. When I got those theaters from you, my dreams were complete. I had more theaters than anybody in the picture business, I grossed more each year than any other company. I was smart all right. Too smart.” He laughed bitterly. “I forgot when you can do the biggest business, you can also lose the most money. And that’s just what happened. I lost the most money. A year after the market crashed, our theaters were worth exactly half what we had paid for them. Even the theaters we bought from you. You don’t know how lucky you were to sell them just at that time.”
I started to speak but he held up his hand. “I’m not blaming you, Johnny,” he said quickly. “You didn’t know what was going to happen any more than I did. I wanted them and I bought them. We wound up ’29 with an eleven-million-dollar loss. I thought ’30 would be better, but it wasn’t. It was worse. We lost close to sixteen million dollars and the first six months of this year didn’t show much improvement. Our loss came to seven million.”
He looked at me. “Maybe you think I’m crazy to come to you and expect you to lend me a million and a half after what I just told you?” He waited for a minute and then, when I didn’t answer, he continued: “I’m not asking the money for the business, Johnny, it’s for myself.”
I looked puzzled. He read the expression on my face correctly. “You see, Johnny,” he explained, “it’s not like it was in the old days, when Willie Borden was boss and could do what he wanted with his own business. Today it’s different. Willie Borden doesn’t own Borden Pictures any more. Sure, he’s president of the company, but he doesn’t really run it. A group of directors run it. Men elected by stockholders who don’t know from nothing about the business give the orders and Willie Borden has to carry them out. And if he doesn’t want to carry them out, he can quit.”
He stopped for a few seconds and rested his head wearily against the back of the chair; then he leaned toward me again. His tone was full of subtle irony. “Even the great Borden Company cannot afford to lose thirty-four million dollars without being embarrassed in some ways. Sure, they still got twenty million in cash and seventy million in other assets, but somebody has to be the goat. Somebody has to be held up before the stockholders and crucified so that they can say: ‘See, it was all his fault. He was to blame!’ And who is this goat going to be? None other than little Willie Borden, who started with nothing, from a pushcart on Rivington Street, and made all this great company possible. So they got the bright idea. They would arrange to issue new stock and call in the old. Certificates of equal value would be given for each share of old stock, only there was a trick in it. A hidden trick. Now they got over two million shares outstanding. They would give two million shares for the two million shares that were out, but they had an ace up their sleeve. Instead of issuing just two million shares, they would issue four million.”
He took a deep breath. “They would put an additional two million shares on the market. It made no difference to them that the market could not absorb the extra shares, because they had a plan. There was an agreement between Willie Borden and the Borden Pictures Company to the effect that Willie Borden was entitled to own outright up to twenty-five percent of the stock outstanding and that he was to have first option on any new offerings that affect his percentage. If he did not exercise this option, then these shares would be offered on the market. Very clever.” He shook his head. “Very clever. They knew that Willie Borden did not have the five million necessary to buy up to twenty-five percent of the additional stock offered. They knew just how much he had. They figured first to reduce his holdings to about half of what they were and then to start blaming him publicly for the debacle. His reduced holdings would not give him enough votes at the stockholders’ meetings to carry any weight. Especially if almost all the other votes were proxied the other way. But they forgot one important thing. Willie Borden was in the picture business before they even heard about it and he has many friends. Friends who would not want Willie Borden to get a screwing.”
He looked at me. “With the help of my friends, I managed to get together three and a half million dollars. And it is to you I turn for the rest. I know your position well, I know how precarious it is, how uncertain tomorrow can be, but I have nowhere else to turn.”
His voice faded out in the room and we were quiet. At last Peter shifted in his seat behind the massive desk and said uncomfortably: “Nu, Johnny, what do you say now?”
I looked from him to Borden and then back to him. I smiled slowly. “Like you always say, Peter, what good is money if you can’t use it to help your friends?”
Borden sprang from his seat and came toward us. He grabbed for our hands excitedly. There was a new life, a new brightness in his face. He smiled happily. “I won’t forget it, I promise,” he said. “It’s only a loan. I’ll pay you back within a year!”
Borden left the office with our check in his pocket. After he had gone, Peter and I sat and looked at each other. At last Peter took his watch out of his pocket and looked at it and sighed. He put the watch back in his pocket and said to me: “Got a date for lunch, Johnny?”
I had a date, but I could cancel it. “No,” I answered. “I’ll be with you in a minute. I just have something on my desk to clean up.”
I went back into my office and made a phone call that killed my previous appointment, then went back and joined him.
Peter was very quiet throughout luncheon. I could see he was thinking. I did not disturb him. He didn’t open up until we had reached our coffee and he had lighted up one of those big cigars of his. Then he looked at me thoughtfully. He spoke to me, but he was really thinking aloud.
“You know,” he said, pointing his cigar at me, “what this means?” I shook my head and he continued. “It means a new era is coming to the picture business. I saw it coming years ago when I warned Willie not to have anything to do with those people in Wall Street. You see, deep inside them they don’t like us. Because we’re new, because we made a big business without them, and because we’re Jewish.” He pulled his eyebrows down and squinted at me to see the effect of his words.
I kept my face blank and didn’t answer. I didn’t agree with him, but at the same time I didn’t want to argue with him just now. It was simply a matter of money the way I saw it. The fact that they were Jewish was only incidental.
He took my silence for acquiescence. He leaned forward in his seat and spoke in a low voice across the table. “And now, with what’s happening to Borden and with what’s happening to others, I know I was right. The anti-Semiten are out to steal the picture business away from us.”
I looked at him. For a moment I felt sorry for him. He couldn’t understand. His attitudes had been forced upon him by years of persecution, of deprivation, of living in crowded dirty ghettos. The history of the Jews was filled with oppression. It was only natural those years should instill in him their fears and effects.
But he must realize deep inside him that he was wrong. The picture business was no more a Jewish business than the banking business, or the insurance business. If our own company was any criterion, that would be the truth. Of the three of us who started it, only Peter was Jewish. Joe Turner was Irish-Catholic. I was a Methodist as far as I knew. And the three of us got exactly nowhere until an Italian loaned us the money.
Peter paid the check and got to his feet. As we walked to the door of the restaurant slowly, he whispered to me: “We’ll have to watch our step very carefully now, Johnny. They’ll be out to get us!”
I got back to my office very perturbed over Peter’s attitude. I lit a cigarette and leaned back in my chair thinking. An attitude such as he expressed could very well becloud a man’s judgment and bring him harm. At last I shook my head and decided to forget it. Probably Peter only spoke that way because he was upset over what was happening to his friend.
Borden was as good as his word. Within three months he had repaid his loan. But the struggle went on.
The pattern had become clearly established by now. It was the old struggle for control. Which would dominate the industry, financial power or production power? The eyes of the industry were on the fight that was going on in the Borden Companies. The trade papers ran daily reports on the latest developments and were very careful to be impartial. They didn’t know whom they would be doing business with when the fight was over and they didn’t want to prejudice their daily bread and butter.
By the end of 1931 the Borden Companies had lost an additional six million dollars and a group of stockholders instituted suit against William Borden and several of the principal stockholders and officers of the company, charging mismanagement and appropriation of company funds and acting in a manner prejudicial to the best interests of that company. They asked that a receiver be appointed to examine the company and control it until its difficulties were cleared up and the company was once more returned to a sound and profitable basis.
It was common gossip in the industry that several of the very people named as defendants in the suit were secretly aiding in its prosecution in order to remove Borden from a position of control. The case was finally brought to court early in 1932.
Bill Borden had taken the stand early in the hearings and revealed the fact that he had been serving as president for the past two years without one cent as compensation. He further disclosed that he had not drawn any reimbursement for expenses during that time, paying all expenses from his own pocket. He made public a list of recommendations he had submitted to the board throughout the past few years which would have enabled them to reduce their operating expenses and save them millions of dollars. The board had rejected those recommendations summarily as they had any other suggestions he had made.
The complainants on the other hand had an equally long list of abuses they presented to the court. One of the items mentioned was Borden’s purchase of our theaters without consultation with the board. I knew it was a lot of poppycock, as he had approval from his board a year prior to the actual purchase. Borden pointed this out to them. They countered with the charge that the approval given was for that specific time, and if it came up again, the entire matter should have been resubmitted.
I remember the day the decision was handed down in the Borden case. I remember it well for many reasons. It was the day after the inauguration of President Roosevelt and I could still thrill, twenty-four hours after I had heard his voice over the radio, saying the very same words I now read in the morning papers: “The only thing we have to fear is fear itself.”
It had been only that morning that I had spoken to Peter and he had assured me that Borden couldn’t lose. The phone in my office rang and I picked it up.
“Peter is calling,” Jane’s voice told me.
“Okay,” I said, “put him on.” I wondered what he wanted. I looked at my watch. It was nine thirty. That made it six thirty on the coast and it was a little early even for Peter to call.
Peter’s voice came on. “Hello, Johnny?”
“Yes, Peter,” I said. “What gets you up so early this morning?”
“I wanted to make sure you called me as soon as you get word of the decision in the Borden case,” he said.
“That’s today, isn’t it?” I asked.
“Yes,” he replied. “And I want you to keep watch on what’s happening and call me as soon as you get some word.”
“I’ll do that, Peter,” I promised. I hesitated a moment. “How do you think it will turn out?” I asked.
“Willie will win,” he said confidently.
“What makes you think so?” I asked him. I wasn’t so sure.
His voice sounded surprised that I should doubt him. “Why, I just spoke to Willie Borden this morning before I talked to you and he told me that he can’t miss.”
After a few more words we hung up. I looked down at my desk. I hoped Bill would win, but the other side had thrown up a hell of a case. And they had better connections too.
I called Bannon in newsreel and told him to have the trial covered. I didn’t want any pictures, I just wanted a man to report to me the moment a decision was handed down.
At two o’clock in the afternoon I was on the phone, talking to Peter, with the decision of the court already a matter of record.
Peter came on the phone briskly. His voice was confident and full of snap. “Well, Johnny”—I could almost see him smiling—“what was it?”
I tried to keep my voice as unemotional as possible. “He lost,” I said succinctly. “Gerard Powell, of Powell & Company, was appointed temporary receiver.”
I could hear Peter’s breath rush out against the phone. For a moment there was silence. “Peter,” I said quickly, “are you there? Did you hear me?”
Then his voice came back on. It was very low and very crushed. “I heard you,” he said, and then the phone went dead in my hands.
I flashed the operator. “Was my call disconnected?” I asked.
“No, Mr. Edge,” she replied in that snotty tone that comes automatically to telephone operators when their efficiency is doubted, “Mr. Kessler has hung up.”
I put the phone down and stared at my desk. This morning Borden had told Peter he was sure he would win the case. I wondered how he felt now. It couldn’t be too bad for him, he was still a wealthy man.
I didn’t have long to wait to find out. The next morning he committed suicide.
I had just returned from lunch and was settling in my chair when the phone rang. I picked it up.
It was Irving Bannon. “Johnny,” his voice was excited, “Bill Borden just committed suicide!”
For a moment I was numb, my mind was spinning like a top in my frozen body. At last I managed to speak. “Are you sure, Irving?” I asked. I still couldn’t believe it.
“It just came over the Teletype,” he answered.
“Where? How did it happen?”