Regan's Planet

FOUR

Of course, it takes money to build moons.

The United States had contributed a billion dollars. Soon after, Brazil voted to appropriate two hundred million dollars toward the expenses of the Fair. It was a beginning-but he had billions of dollars to go. He had to line up commitments from participating nations, and outright grants wherever he could get them.

He was deeply enmeshed in the operations of the Fair, now, and Global Factors, Inc., had receded to second place in his scheme of things. He kept in touch, and visited Denver as often as his pressing schedule would let him. But most of the work there remained in the hands of Regan’s deputy, Tim Field. Field was doing a good job-good enough so that Regan was thinking of awarding him the title of Factor in another year or so.

Regan had cannibalized his own Global Factors staff to help him with the Fair. By October, his organization sheet looked very much like that of Global Factors, a steeply rising pyramid with himself at the summit, two or three trusted lieutenants just below him, half a dozen capable decision-makers on the next rung, and a broader staff structure at the bottom. His own ferocious energies were insufficient to see him through the double task of running the Fair and running the world’s biggest corporation single-handedly.

The problem of money obsessed him.

‘We need six billion bucks right away,“ Hal Martinelli reported. ”The Brazilians will be dunning us next month for the next installment, and we’ve got to get moving on the official pavilions.“

‘How will we raise it?“ Lyle Henderson asked.

‘Bond issue,“ Regan snapped. ”Three percent bonds, maturing serially between 1993 and 1998. Pay them off out of the profits of the Fair.“

Henderson goggled. “Six billion bucks in bonds? Nobody’s ever floated an issue of that size before!”

‘Nobody’s ever built a satellite like ours before either,“ Regan retorted. ”We’ll do it. Don’t worry about that. We’ll sell those bonds if I have to buy every damn one of them myself.“

The customary way of floating a bond issue of any size- say, half a billion dollars-was, Regan knew, to form a syndicate of underwriters. The dozen big factoring firms would go into the syndicate, and those of the Wall Street investment banks that had survived the Panic of ‘76 and the subsequent readjustments in the capitalist system. The members of the syndicate would then turn around and peddle the bonds to all and sundry.

That was the tried and true system, centuries old. But Regan didn’t care for it right now. It was wasteful-for, on a six-billion-dollar bond issue, goodly millions would slip into the hands of the underwriters as recompense for their promotional activities.

‘We’ll form our own corporation,“ Regan said, ”and sell the bonds ourselves.“

He flew to Denver and called a meeting of Global Factors to explain what he had in mind. The Board of Directors filed glumly into the sumptuous board room, and Regan’s Uncle Bruce, as Chairman of the Board, called the meeting to order.

Bruce Regan was a sallow-faced, stoop-shouldered man in his early sixties, scowling and embittered. He had good reason to look bitter, his nephew thought. Old Bruce had founded Appalachian Acceptance Corporation and had held it together through the worst business convulsion since 1929. He had transformed it into Global Factors, Inc., and had helped to make it the world’s most powerful corporation. Along the way, Bruce Regan had taken a viper to his bosom-. his nephew Claude, now Factor Regan, who had quietly and cunningly achieved a foothold in the directorate and who had, in the fall of 1989, given Uncle Bruce the heave-ho from his own corporation.

Regan had felt unhappy about deposing his uncle, but that had not stopped him from doing it. Bruce Regan had the right ideas, but he was getting old, he was becoming a vacillator. The world situation was too precarious for vacillation now. New, hungry nations were getting into the take-off stages of their economies. They were crowding around the old powers like sharks, nibbling away.

Bruce Regan hadn’t understood that. In his eyes, the United States was still the world’s greatest and wealthiest country, because it was impossible for him to imagine it being any other way. Nigeria? Brazil? Israel? China? The Congo Federation? Upstarts! What did they know about business? How could they hurt the United States?

So Claude had had to topple Uncle Bruce. It was a pity, for he genuinely liked the old fellow. But Bruce had failed to see how best to meet the challenge of Asia, Africa, and Latin America. He was still Europe-oriented, twenty years after the fact. Claude could not afford to wait out his uncle’s life; Bruce was strong as a bull, and had a good twenty years left to him, at the minimum.

The proxy fight had been short and brutal. When the smoke cleared, Bruce Regan was Chairman of the Board-without any executive authority. He could still call himself Factor Regan, if he cared to, and he undeniably still owned twelve percent of the common stock of the company, which put him comfortably into the billionaire category. But power had departed from him.

Of the eleven men on the Global Factors Board of Directors, six were Claude Regan’s appointees. He owned them. The old guard faction comprised Uncle Bruce, Rex Bennett, and two other founders of the corporation. Claude himself was the eleventh man. He ran the show.

In token of that, Uncle Bruce speedily turned the meeting over to his nephew-not without a sour, sidelong glance of distaste.

Regan got quickly down to business. “You know about my plans for a World’s Fair bond issue. Six billion dollars bearing a three percent coupon. I’ve formed a corporation to underwrite the issue: Columbus Equities Corporation. Forty percent of the capital stock of Columbus Equities is being purchased by the 1992 Columbian Exposition, Inc., which is the corporation actually presenting the Fair. I’m offering Global Factors a chance to buy another forty percent of Columbus Equities.”

‘Who’ll own the rest?“ Rex Bennett asked.

‘I will,“ Regan answered. ”As a private investor, I’m taking twenty percent of the capital stock.“

‘In other words,“ Bruce Regan said slowly, ”the underwriting of these bonds will be handled jointly by the Exposition Corporation, by you as a private individual, and by Global Factors.“

‘That’s right,“ Regan said.

‘But neither you nor the Exposition corporation has any staff for distributing these bonds,“ Bruce Regan observed.

Regan nodded. “Right again.”

‘So it would seem that Global Factors will have to do one hundred percent of the donkey work-in exchange for being allowed forty percent of the profits.“

‘Wrong,“ Regan snapped. ”Global will contribute its financial contacts. I’ll contribute my individual money-raising talents. The Exposition corporation will contribute the prestige of the Fair itself. It’s eminently fairly divided.“

‘How much will Global have to pay for its interest in this underwriting outfit?“ Rex Bennett asked thinly.

‘I think a dollar a share is adequate,“ Regan replied. ”There are one hundred shares outstanding. Global can buy in for forty dollars.“

‘A nominal fee,“ Rex Bennett remarked. ”Fair enough for a dummy corporation. But what sort of profits can we hope for?“

Regan distributed mimeographed sheets. “I’ve worked it out on a basis of one percent for the underwriters. One percent of six billion bucks is sixty million. Of course, our expenses will have to come out of that. Say, ten million.”

‘The corporation stands to clear some fifty million on this bond issue?“ Bruce Regan said, startled.

‘Probably. Of which Global’s share will be forty percent. Twenty million.“

‘Suppose the bonds don’t all sell?“ someone asked.

‘They’ll sell,“ Regan said. ”Well? Shall we vote on acquiring stock in Columbus Equities?“

‘Wait,“ Rex Bennett said. ”I want to understand this. As underwriters, Columbus Equities will have to deliver a check for six billion to the 1992 Columbian Exposition Corporation. It’s then up to Columbus Equities to unload the bonds.“

‘Correct.“

‘But the capital of Columbus Equities will only be one hundred dollars, at the outset. How is it going to advance the money to 1992 Columbian if it doesn’t have it?“

Regan smiled. “Global Factors, as a forty percent stockholder in Columbus Equities, will advance the whole six billion. Obviously 1992 Columbian, though it also holds forty percent of the stock, doesn’t have the capital to make the advance. Nor do I. So Global will have to do it.”

‘Which is to say that Global is really assuming one hundred percent of the risk in hopes of gaining forty percent of the profits?“ Bennett persisted.

‘Yes,“ Regan said smoothly.

He sensed unrest in the room. It was pure flim-flam, and he had hoped to bull it through on the strength of his control of the directors. But these old men were being too coy with him. They resented his using Global Factors as though it were his own personal holding company. Regan began to think he might have overstepped himself. Could he hold together his seven-to-four majority on the board?

Tim Field-one of his own men-spoke up now. “Factor Regan, what assurance is there that Columbus Equities will be able to sell its six billion dollars’ worth of bonds? It’s only a three percent coupon, after all.”

Regan said, “In my estimation, Tim, there’s no risk. As of this moment, with the fund drive hardly under way, I have commitments for nearly a third of the total issue. It can’t miss, or I wouldn’t have involved Global in it at all. Global will have to extend the advance only for a very short while-and will pick up an easy twenty million for its trouble. I’ll stake my own good name that those bonds will be sold.”

‘Remember ’76,“ Rex Bennett grumbled.

Regan shrugged. He remembered, all right-the celebrated Philadelphia fiasco of 1976, the Bicentennial Exposition. That had been a much less ambitious fair; the bond issue floated in ‘73 had been a mere quarter of a billion. But then had come the Panic. The fair had never been held. The bondholders lost their entire investments.

‘Are you suggesting that people will shy away from these bonds because of the experience with the last major World’s Fair in this country?“

‘That’s what I’m suggesting, yes.“

‘Conditions have changed since 1976, Bennett It’s a brand new world. With the prestige of Global Factors behind these bonds, we’ll have no problems. I call for the vote.“

‘Seconded,“ Tim Field said.

They voted. Each board member nudged a stud in the table in front of him, and lights flashed on a panel set in the wall. Green lights for Yes, red lights for No. It was a straight division, Regan’s faction against his uncle’s. Seven green lights, three red ones. Bruce Regan, as Chairman, did not vote. There was no need for him to bother.

‘Motion carried,“ Bruce Regan said bleakly. ”All right. We now are committed to buy a forty percent interest in Columbus Equities. Is there anything else on the agenda, Claude?“

‘There is,“ Regan said. He took a deep breath. ”I now propose that Global Factors purchase one billion five hundred thousand dollars’ worth of World’s Fair bonds from Columbus Equities.“

The gasps that greeted this proposition were not altogether from the Bruce Regan faction of the board. Regan’s own men were gasping too, taken aback not so much by the magnitude of the sum as by the audacity of their chief.

Rex Bennett rose, his face livid, his lips trembling. The old banker pointed a shaky hand at Regan and said, “Just a moment ago you told us that you had obtained commitments for nearly a third of that total issue. Did you mean by that the commitment you just proposed?”

‘Yes,“ Regan said calmly. ”I did.“

‘But you had no such commitment! That commitment does not yet exist, and if I have anything to say about it, it never will exist! Regan, you’ve hoodwinked us into a gigantic swindle! You’ve talked us into advancing six billion dollars on the strength of a secret decision to throw away a billion and a half of our own money!“

‘I haven’t talked you into anything,“ Regan replied icily. ”You voted against the previous proposal. A majority of the board members supported it. That’s all.“

‘A billion and a half, Claude,“ Bruce Regan muttered in awe. ”We can’t afford to tie that much up at three percent!“

‘It’s a sounder investment than it looks on the surface,“ Regan said.

‘Explain yourself,“ Bennett snapped.

‘I’m afraid I can’t reveal what I mean at this time. But I tell you this: the billion and a half we put into the Fair now will be returned to us a hundredfold or better in the years to come.“

‘Nonsense,“ Bruce Regan husked. ”The Fair will run two years and close down. It’ll file for bankruptcy like every Fair in the past-and we’ll be out a billion and a half.“

‘No,“ Regan said. They were all talking at once, now, shouting, pounding the table. ”Listen to me! Will you take my word for it? Global Factors will not suffer! We’ll clear a fortune out of this!“

‘How? Explain!“

‘At a later date,“ Regan said crisply. ”I call for the vote.“

He waited for a seconder. There was long, brutal silence in the board room. Regan stared at the men of his faction- Field, Olcott, Harris, Slidell, Kennan, Orenstein. He had put them on the Board of Directors. He had made them rich men. If they failed him now, he was in serious trouble. His whole gaudy dream of a metal moon in the sky would come tumbling down-and with it, more likely than not, his control of Global Factors.

‘Seconded,“ Noel Slidell said after an endless wait.

Regan mentally ticked off the fact. Slidell would get paid back for that. He was the oldest of Regan’s appointees, fifty-two, not Regan’s generation at all. Yet he was willing to go along with Regan’s proposition. Out of boldness, Regan wondered? Foresight? Or simple fear of the boss?

They voted.

Regan eyed the panel. Three red lights glowed instantly- Bennett and his two cohorts. Two green lights-Claude Regan, Noel Slidell. As a seconder, Slidell had to vote in favor of the proposition.

What about the others?

One by one, the green lights appeared, two, three of them. Then, sickeningly, a red light. Someone had defected. Regan had no way of knowing which one; the vote was secret. Five in favor, four against, one man yet to be heard from. If he voted against, Bruce Regan would break the tie and the motion would be lost, and Claude Regan would be lost with it.

A green light!

‘The motion is carried,“ Bruce Regan whispered. He let the gavel drop to the table. The four old-guard members of the board stalked from the room. Regan remained, confronting his six supporters, wondering which one of them had cast the defecting vote that had come so close to undoing him. He could not tell. All six of them looked dazed by the rapid twists and turns of the meeting.

It had been a close one-but Regan had won.

Flushed with triumph, the Factor left the board room and the building, and headed for the privacy of home. A hundred feet below the ground, locked in his sanctuary, Claude Regan stared at his own pale, tension-drawn face, and suddenly began to laugh, and then to sing Novaes’ song of jubilation in wildly garbled Portuguese.