Jacques was sitting in Morgan’s office when Morgan, Mike, and Claudine entered, on break from the meeting. “Where the hell have you been?” asked Claudine. “Why weren’t you in that conference room taking your beating along with the rest of us?”
Reaching into his briefcase, Jacques extracted a letter of credit drawn on the Stone City Bank in the amount of one billion dollars. He passed it to Claudine, who carefully studied it before passing it to the others.
“Jacques, is this the result of the idea you were talking about in Geneva? Perhaps you wouldn’t mind explaining to us where you happened to find a billion dollars?”
Morgan stepped in. “Claudine, maybe I should explain. The idea was Jacques’s. He correctly assumed our old friend Erhart Schmidt and his co-investors would jump at the opportunity to convert part or all of their two-billion-dollar gold bearer bonds into interest-bearing energy bonds.
“The problem he faced was that of determining whether the Fed would agree to the exchange. Resolving the financial issues was not the problem. Determining what legal authority was required to execute the agreement was much more difficult. Finally, we concluded there was no precedent that set this authority. Obtaining Presidential approval was our only remaining option.
“Interestingly enough, securing the President’s cooperation was the easiest part of the process. It seems he was more than willing to assist Cecelia and her colleagues in completing her mission, provided we maintain some semblance of control over the Germans by limiting the exchange to half of their gold bearer bonds, or one billion dollars.
“Once we were able to arm Jacques with the necessary authority, there wasn’t much time remaining for him to travel to South Africa, obtain Schmidt and his other investors’ consent, and return in time for this meeting.”
“Wait a minute, Morgan,” said Claudine. “You knew about this and didn’t inform the rest of us?”
“Until we knew that he would make it back in time, Jacques, Roger, and I all agreed it was best for us to remain silent. In fact, his plane didn’t land until eleven o’clock this morning. I had a team waiting for him, and apparently they have been busy completing the documentation required to produce that letter of credit.”
Mike, who had been patiently listening to the conversation, finally said, “I don’t know why we’re getting so excited! With Jacques’s contribution, our total commitment’s only total thirteen billion dollars—we’re still two billion short!”
At four o’clock, the meeting was reconvened. With Jacques seated at his designated place at the table, only two chairs remained unoccupied.
The Treasury Secretary noted his presence. “Good afternoon, Mr. Roth. Glad you were able to join us. Do you bring any new information?”
“Yes, sir,” said Jacques. “I would like to add another billion dollars to the pot. Here is a letter of credit; I think you will find everything in order.”
“Wait a minute,” learned counsel said. “Do you expect us to believe you can come breezing in here and calmly introduce another billion-dollar letter of credit? How can we be convinced this isn’t some sort of internal Stone City Bank trick that can be unraveled once the deal has been closed?”
The brazen nature of the lawyer’s charge not only surprised Morgan and his friends but also embarrassed the Oil Club members sitting at the table.
Attempting to mediate, Malone asked, “Do I interpret your comment to mean you would like to review the underlying documentation before we accept this offer?”
A prepared Jacques laid out each of the supporting documents required to trace the note conversion, the Treasury Department agreement, and Stone City Bank’s step-by-step documentation, executed contracts, and notary public stamps and signatures.
As they waited for the lawyers to complete their examination, Morgan Stone’s executive assistant entered the room. “Excuse me, Mr. Stone, but Mr. Chang and a Mr. Lee are in the lobby asking to see you.”
Before anyone else could react, Cecelia pushed back her chair and disappeared through the door. A few minutes later she returned.
“Gentlemen, I would like to introduce my father, Ivan Chang, the honorable Tai-Pan of the House of Chang. Accompanying him is Mr. Ted Lee, president of the Bank of Hong Kong. They have something to say that I think you will find of interest.”
“Mr. Secretary,” Tai-Pan began, “please forgive our disheveled appearance. We have traveled a long way, and we didn’t have time to change. I have in my possession a one-half-billion-dollar letter of credit drawn on the Bank of Hong Kong. Mr. Lee, president of the bank, has accompanied me in the event that any of you have questions regarding the authenticity of this document.”
The time required for learned counsel and the rest of the attorneys to examine Ted Lee’s documents gave Cecelia an opportunity to consult with her father in hushed tones. “Father, you and Ted nearly scared us to death. Mike and I read an article in the San Francisco Chronicle about a military-escorted gold train that had been organized to transport people and their possessions from Nanking to Shanghai. Then, a few days later, another article described a flotilla of a thousand junks that unexpectedly sailed into the Shanghai harbor. That’s when I developed the suspicion that you two might have taken your ‘special’ junk and sailed for Shanghai to help rescue the Nationalist Chinese gold bullion.”
“Cecelia, my dear daughter,” Tai-Pan replied, “we were nowhere near Shanghai. When it appeared that the Communists might move on Nanking, we had to move quickly. It’s true; a thousand junks sailed to Shanghai. The trains arrived, with their heavy crates. Once they were placed in the junks, the diversionary plan was in place. The Communist navy must have opened the crates on the first forty junks before they convinced themselves that the crates contained rocks, not gold. By that time, the Nationalist gold was already being transported from Nanking to Hong Kong and Taipei.”
“If the crates were just full of rocks, how were you able to smuggle all that gold out of China?” asked Cecelia.
“Immediately following Chairman Wang’s decision to invest in your bonds, we were approached by Chiang’s personal pilot, George Liao. He suggested that we consider moving the gold by air. He convinced us there were still thousands of old DC-3s left over from the war that were still floating around China. People in the United States are not generally aware of the massive airlift that was organized to supply American, British, Indian, and Chinese troops, intent upon preserving Burma’s back door into India. Tens of thousands of DC-3s were organized to fly what was called ‘the Hump.’ It’s a little known fact that more planes were lost in the Burma operation than were lost in the entire European campaign.
“Well,” continued Tai-Pan, “Liao, working under a shroud of secrecy, managed to organize ninety-seven of these old DC-3s still in private charter service to move the gold. Have you ever calculated how much one billion dollars of gold weighs? At thirty-two dollars per ounce, one ton of gold is equivalent to thirty-two thousand ounces, or one million dollars. That means a half billion dollars of gold weighs 488 tons. A DC-3 was designed to carry approximately five tons of payload. Ninety-seven planes, making one trip, were required to carry the half billion dollars of gold from Nanking to either Hong Kong or Taipei.
“To minimize their risk, each plane departed Nanking at random times. The flights were equally divided between Hong Kong and Taipei. The first plane to land in Hong Kong was Chiang’s personal DC-3, flown by Liao. We watched as he made his final approach and our trucks went out to meet him. You should have seen the look on his face when he climbed down from that plane. You talk about pride; he knew his plan had helped to preserve the future of their country.
“As soon as the gold was safely deposited in the Bank of Hong Kong vaults, Ted and I were on our way to New York with letters of credit in hand. Our biggest concern was whether we would get here in time.”
This time it was Jack Hardy who was on his feet. “Mr. Chairman, Mr. Secretary, it’s four thirty and all of the seats have been filled. By the official count, Mr. Stone’s group is still two billion dollars short of meeting its minimum stipulation. Unless there are any more offers, I respectfully request you rule that the stipulations of the bill have not been satisfied.”