A Dangerous Fortune - Ken Follett [186]
As anticipated, the opposition came from Hugh. It was Hugh who had told Edward the truth about Peter Middleton, and his motive had surely been to prevent this loan issue. “I’ve been looking at what has happened to the last few South American issues we’ve handled,” he said, and he handed round copies of a table.
Micky studied the table while Hugh continued. “The interest rate offered has gone up from six percent three years ago to seven and a half percent last year. Despite that increase, the number of bonds remaining unsold has been higher each time.”
Micky knew enough about finance to understand what that meant: investors were finding South American bonds less and less attractive. Hugh’s calm exposition and relentless logic made Micky fume.
Hugh went on: “Also, in each of the last three issues, the bank has been obliged to buy bonds in the open market to keep the price up artificially.” Which meant, Micky realized, that the figures in the table understated the problem.
“The consequence of our persistence in this saturated market is that we now hold almost a million pounds’ worth of Cordova bonds. Our bank is gravely overexposed to that one sector.”
It was a powerful argument. Trying to stay cool, Micky reflected that if he were a partner he would now vote against the issue. But it would not be decided purely by the financial reasoning. There was more at stake here than money.
For a few seconds no one spoke. Edward looked angry, but he was restraining himself, knowing it would appear better if one of the other partners contradicted Hugh.
At last Sir Harry said: “Point taken, Hugh, but I think you may be overstating the case a little.”
George Hartshorn concurred. “We’re all agreed that the plan itself is sound. The risk is small and the profits are considerable. I think we should accept.”
Micky had known in advance that those two would support Edward. He was waiting for Young William’s verdict.
But it was Samuel who spoke next. “I understand that you’re all reluctant to veto the first major proposal brought in by a new Senior Partner,” he said. His tone suggested that they were not enemies divided into opposing camps, but reasonable men who could not help but agree given a little goodwill. “Perhaps you’re not inclined to place much reliance on the views of two partners who have already announced their resignations. But I’ve been in the business twice as long as anyone else in this room, and Hugh is probably the most successful young banker in the world, and we both feel this project is more dangerous than it looks. Don’t let personal considerations lead you to dismiss that advice out of hand.”
Samuel was eloquent, Micky thought, but his position had been known in advance. Everyone now looked at Young William.
At last he spoke. “South American bonds have always seemed more risky,” he began. “If we had allowed ourselves to be frightened of them we would have missed out on a great deal of profitable business during the last few years.” This sounded good, Micky thought. William went on: “I don’t think there’s going to be a financial collapse. Cordova has gone from strength to strength under President Garcia. I believe we can anticipate increasing profits from our business there in future. We should be looking for more such business, not less.”
Micky let his breath out in a long, silent sigh of relief. He had won.
Edward said: “Four partners in favor, then, and two against.”
“Just a minute,” said Hugh.
God forbid that Hugh should have something up his sleeve, Micky thought. He clenched his jaw. He wanted to cry out a protest but he had to suppress his feelings.
Edward looked crossly at Hugh. “What is it? You’re outvoted.”
“A vote has always been a last resort in this room,” Hugh said. “When there is disagreement between the partners we try to reach a compromise that everyone can assent to.”
Micky could see that Edward was ready to squash this idea, but William said: “What have you got in mind, Hugh?”
“Let me ask Edward something,” Hugh said. “Are you confident that we can