THE NEW SCHEME
Larssen had spoken part truth when he told Olive over the tea-table that
he had the glimmering of a plan in his mind. But its object was by no
means what he had led her to believe. It was a scheme of an audacity in
keeping with his previous impersonations of the "dead" Clifford
Matheson, and its single objective was the attainment of his personal
ambitions. Even his own son was to be used to help in the gaining of
that one end.
The new scheme, in its essential, held the simplicity of genius. He
would, single-handed, float the Hudson Bay company with Matheson's name
at the head of the prospectus, whether Matheson assented or not.
The first move was to evade the spirit of his own written compact:
"Until May 3rd, I fix up nothing with the underwriters." To get round
this obstacle, he decided on the audacious plan of underwriting the
entire issue _himself_. That is to say, he would give an absolute
guarantee that if any portion of the five million pounds were not
subscribed for by the general public, he himself would pay cash for and
take up those shares. It was a huge risk. In the ordinary course of
business no single finance house in London, the world's financial
centre, would take on its shoulders the guaranteeing of a five million
pound issue. Lars Larssen proposed to do it. In order to provide the
requisite security, he would have to mortgage his ships and his private
investments. He would be dicing with nine-tenths of his entire fortune.
The second move was to prevent interference, while the issue was being
offered to the public, from those who knew anything of the inner history
of the flotation--Matheson, Olive, Elaine, and Dean. Arthur Dean could
easily be kept out of the way. Elaine would no doubt be still confined
to the surgical home at Wiesbaden. Matheson and his wife were problems
of much more difficulty. In whatever part of Europe Matheson might be,
he would be certain to hear of the flotation. The point was to delay his
knowledge of it for two or three days. After that, interference on his
part could not undo what had been done. "One cannot unscramble an egg."
For the success of the first move, it was essential to have the willing
co-operation of Sir Francis. Consequently Larssen was particularly
cordial and gracious to him that evening at the Leadenhall Street
offices, passing him compliments about his business abilities, which
found their mark unerringly.
Presently the shipowner got down to the crux of the matter, taking out
the draft prospectus from the drawer in his desk and smoothing it out to
show the signature of Clifford Matheson.
"As you see, I sent it to Clifford to O.K.," he said.
Sir Francis looked at the signature through his pair of business
eyeglasses, and nodded an official confirmation.
Larssen continued: "There's no alteration necessary--Clifford passes it
as it stands. But I've thought of one point which I reckon would add
very considerable weight in its appeal to the public."
"What's that?"
"The underwriting. There are a few blank lines here"--he turned over to
a page of small type--"where the details of the underwriting
arrangements were to be filled in. We were negotiating on a 4 per cent.
basis, you remember. On some of it we should have had to offer an
overriding commission of another 1 per cent. Say 4-1/2 per cent. on the
average--that's £225,000 on the round five million shares. A big sum for
the company to pay out!"
"I don't see how we can avoid it."
"We might cut it out altogether and state that 'No part of this issue
has been underwritten.' That sounds like confidence on our part."
Sir Francis shook his head emphatically. "It might do in the States, but
it won't do over here. Our public wouldn't like it. It's not the thing."
Larssen knew this latter was an overwhelming reason to the baronet's
mind.
"Very well; pass that suggestion," said he. "Here's a far better one.
Suppose we could get the underwriting done at 3 per cent. straight. That
would save the company £75,000."
"What house would take it on at that?"
"_I_ would."
"_You!_" exclaimed the amazed Sir Francis.
"Why not?" quietly replied the shipowner.
"But----!" The baronet paused in perplexity.
"Well, what's the particular 'but'?"
"We--the company--would have to ask you for the fullest security."
"Of course."
"Security up to the whole five million pounds."
"Of course."
"But----But I don't quite see your reason for the suggestion."
"My reason is just this," answered Larssen earnestly. "I want that
prospectus to breathe out confidence in every line and every word. I
want the whole five millions taken up by the public, and not left partly
on the underwriters' shoulders. I want to do everything I can to make
the public realise that they're being offered the squarest deal that
ever was. What better plan could you have than getting the
vendor--myself--to guarantee the whole issue at a mere 3 per cent.
cover? No financial house of any standing would look at it for a trifle
of 3 per cent. But I stand in and take the whole risk--the whole five
million risk--and give you securities on my ships that bears looking
into with a microscope."
Sir Francis gasped his admiration of the daring offer.
"That's pluck!" he exclaimed.
"Well, what do you say? Are you agreeable, for one?"
"Certainly--certainly!"
"Then will you bring St Aubyn and Carleton-Wingate here, and get their
consent? Say to-morrow morning?"
"That's very short notice."
"You can get them on the telephone. If they're here to-morrow morning
and consent--there ought to be no difficulty about that--you three
Directors can sick the lawyers on to me at once and fix up the security
deeds in a day or so."
"You ought to have been born an Englishman!" said the baronet
admiringly.
"One point occurs to me. Let's keep this matter close until the
prospectus is actually launched. I don't want any Stock Exchange
'wreckers!' trying to stick a knife into my back. You know some of their
tricks?"
"Certainly--certainly!"
"I don't think I'd even mention it to your daughter. Women--even the
best of them--can't help talking."
"Women are not meant for business," agreed the baronet sententiously.