The last week of February 1940 was quiet. Too quiet for Elias Thorne.
The new offices of Continental were clean, painted, and respectable. Mrs. Gable, his long-time secretary, had set up the front desk. She answered the phone with a crisp, "Continental." The name sounded important, at least.
But the phone did not ring.
Elias sat in his large president's office, the door open. Down the hall, Arthur sat in his small advisor's office, the door also open. The silence between them was vast.
Elias was used to a busy law firm. Phones rang. Partners argued. Young associates ran down the halls with thick briefs. This... this was not a bank. It was a waiting room.
He got up and walked to Arthur's doorway. Arthur was not waiting. He was reading a thick, dull-looking book called Aeronautical Engineering Review.
"You're very calm," Elias said.
"We are waiting," Arthur said, turning a page. "Did you place the advertisement?"
"I did," Elias said, a little annoyed. "In the Times and the Wall Street Journal. 'Analyst wanted for new investment firm. Accounting or library science background preferred.' It was a strange request, Arthur. Most banks want men from Harvard with 'market experience.'"
"We are not most banks," Arthur said. "Market experience means 'a history of being wrong with everyone else.' I want someone who reads. Did anyone reply?"
"Three," Elias said, pulling a piece of paper from his pocket. "All of them... well, they are not the kind of men you see at Morgan."
"Good," Arthur said, closing his book. "When are they scheduled?"
"The first one is today. In... three minutes."
Right on time, Mrs. Gable buzzed Elias's desk. "Mr. Thorne? A Mr. Walter Hayes is here to see you."
"Send him in," Elias said.
He and Arthur walked to the small conference room.
Walter Hayes was a thin man, perhaps fifty years old. His suit was clean but rumpled, and a little shiny at the elbows. He wore thick glasses that made his eyes look larger. He was holding a worn leather briefcase in his lap with both hands, as if he was afraid it would fly away. He looked, Elias thought, like a man who had been defeated by life.
"Mr. Hayes," Elias said, sitting at the head of the table. "Thank you for coming. I am Elias Thorne, President of Continental. This is my associate, Mr. Vance."
Arthur sat silently to Elias's right. He did not look like an associate. He looked like a student.
"Mr. Thorne. A pleasure. A real pleasure," Walter said. His voice was soft.
"Your resume is... interesting," Elias began, trying to be polite. "You were an accountant at... Stearns & Miller?"
"Yes, sir. Until 1934. They... they went under. The Depression."
"And since then? For six years? It says here... 'Columbia University Library'?"
"That's right, sir," Walter said, sitting up a little straighter. "I work in the business and economics archive. I am not a full librarian, of course. I just... I file. I manage the periodicals. All the trade magazines, the government reports, the newspapers. I organize them."
Elias sighed. This was a waste of time. "Mr. Hayes... Walter. We are an investment bank. We are in the business of... of making deals. Of seeing opportunity. What do you know about the market?"
Walter shrank back a little. "The market? Oh, I... I don't know much, sir. It's... it's just noise, isn't it? People shouting. It goes up, it goes down. I... I wouldn't know why."
Elias was about to thank him for his time. This was a mistake.
Then, Arthur spoke. His voice was quiet, but it cut through the room.
"Mr. Hayes," Arthur said.
Walter turned, surprised. He seemed to be noticing Arthur for the first time.
"You don't like the market," Arthur said. "But do you like companies?"
Walter's eyes lit up, the magnified eyes of a man who loved facts. "Oh, yes, sir. Mr. Vance. Yes, I do. Companies are... they're real. They make things. They have assets. They have debts. They are... they are puzzles."
"Good," Arthur said. "What do you think of US Steel?"
Elias frowned. It was a simple, common question.
Walter Hayes, however, did not give a simple answer. He did not say "it's a good buy" or "it's overpriced."
He said, "US Steel is currently trading at $58 a share. This is based on their last quarterly report, which showed a profit. But that profit is wrong. They are using a new 'last-in, first-out' accounting method that hides their real inventory cost. It makes them look $1.2 million richer than they are."
Elias Thorne froze.
Walter Hayes was just warming up. "And, their main blast furnace in Gary, Indiana, is failing. The steel workers' union has filed three complaints. I read their newsletter. The furnace needs a full refit, which will cost at least three million dollars. They have not set aside any money for this. It is an 'unfunded liability.' So, no, sir. I do not 'like' US Steel. It is a sick company pretending to be healthy."
There was a total, stunned silence in the room.
Elias looked at Walter, then at Arthur.
Arthur was smiling. A cold, happy smile. He had found his man.
"Walter," Arthur said, his voice now friendly. "I have a question. How did you know about the union complaints?"
"Oh," Walter said, as if it were obvious. "I read their national newsletter. The Iron Age. It comes out every month. I read all the trade papers. The Railroader, Automotive News, The American Ship Builder. They tell you what's really happening, you see. The men who do the work... they know the truth. The men in the suits... they just read the Wall Street Journal."
Arthur stood up. "Mr. Hayes, you're hired."
Walter blinked. "I... I am? As what?"
"As the head of our new Research Division," Elias said, finding his voice. He now understood Arthur's plan completely.
"Head?" Walter stammered. "Division? Sir, there must be a mistake. I'm... I'm a librarian."
"No," Arthur said, walking around the table. He put his hand on Walter's shoulder. "You are a weapon. Walter, I want you to come and sit in my office."
Confused, Walter followed Arthur. Elias came, too, and stood in the doorway. Arthur sat at his desk and pointed to the visitor's chair.
"Walter," Arthur said, "I am going to tell you the secret of this bank. Continental is not like other banks. The other banks on Wall Street are built on 'relationships.' On 'gut feelings.' On what one rich man tells another rich man at a dinner party. They are built on sand."
He leaned forward. "Continental will be built on rock. It will be built on facts. Information, Walter, is our main weapon. Wall Street is a dark room, and all the bankers are blind. They are guessing. The man who walks into that room with a flashlight... he is king."
"Your job," Arthur continued, "is to be our flashlight. Your job is not to tell us what to buy. Your job is to tell us what is true. I don't want your opinions. I want your facts."
Walter was breathing fast. This was the job he had dreamed of his entire life. A job where his obsession with details was not a weakness, but a strength.
"I will give you any budget you need," Arthur said. "You will hire two, no, three more men just like you. Men who like reading, not talking. You will build a library. I want you to subscribe to every newspaper, from every major city in this country. I want every trade magazine. I want every government report, every patent filing, every union newsletter."
"I want you to build a file on every major company. And your division, your Research Division, will be the heart of this bank. It will be secret. You will report only to Mr. Thorne. You will never speak of your work to anyone else. Do you understand?"
"Yes," Walter said. His voice was no longer soft. It was firm. "Yes, Mr. Vance. I understand completely."
"Good," Arthur said. He opened his desk drawer and pulled out a single, blank file folder. He wrote one word on the tab.
"Here is your first assignment."
He handed the folder to Walter.
Walter opened it. It was empty. "Sir? What is the target?"
"A small, private company," Arthur said. "Out in Seattle. It is not on the stock market. The other banks are not watching it. They think it's a small, failing plane-maker."
"What is it called?" Walter asked.
"The Boeing Company," Arthur said.
Walter looked confused. "Boeing? But... they are not important. They lost the big bomber contract to Douglas. They are... they are almost bankrupt."
"You are repeating the 'market opinion,' Walter," Arthur said softly. "I do not want the opinion. I want the facts. I want to know everything. How much money do they have in the bank, right now? How much do they owe? Who do they owe it to? What are their factories tooled for? What patents do they hold? I want to know the name of their chief engineer, and I want to know if he is a genius or a drunk."
"This is not a public company, Mr. Vance," Walter said, his mind already working. "This... this will be difficult. It will require... digging."
"Then get a shovel," Arthur said. "Find out everything about Boeing. I want the full report on Mr. Thorne's desk. You have two weeks."
Walter Hayes stood up. He was a different man from the one who had walked in. He was no longer a failed accountant. He was the Head of Research.
"Yes, sir," Walter said. "Two weeks."
He turned and left the office.
Elias Thorne looked at Arthur. He was pale.
"My God, Arthur," Elias whispered. "The way you talked... 'I want to know if he is a genius or a drunk.' What kind of bank are we building here?"
Arthur stood and walked back to the window. He looked down at the busy street.
"The war in Europe is getting worse, Elias," Arthur said. "The news from Germany is bad. The world is going to change."
"What does that have to do with Boeing?"
"Everything," Arthur said. "That 'failing' company has a new design. A revolutionary design. A four-engine bomber they call the 'B-17.' It's the most advanced plane in the world. And as you said... they are almost bankrupt."
Elias finally saw the picture. "They are desperate."
"They are," Arthur said. "And desperate men are willing to make deals. Now... we wait for Walter to bring us the facts. The machine, Elias... we just turned it on."