Chapter 19: The Rumor
The defeat in Seattle had been a quiet one. There had been no shouting, no slammed doors—just the calm, cold finality of a "no" from a corporate board. But the rumor that followed was loud. It was a noise designed to kill.
A few days after Elias and Arthur returned to New York, the whispers started.
It began on the trading floors. A broker would mention it to a nervous client. A low-level analyst would hear it from an old schoolmate working at a large bank. The message was simple and terrifying: National Metropolitan Bank was thinking about calling the Boeing loan.
To "call a loan" was the financial version of pressing the nuclear button.
When a company like Boeing takes out a large loan, the agreement usually lets the lender demand the full, immediate repayment of the principal under certain conditions—like a sudden drop in value or a major management change. In reality, banks almost never called these loans, because they risked forcing the client into bankruptcy, which meant the bank might lose all its money anyway. It was a threat used only to apply extreme pressure.
But the rumor spreading through Wall Street was that National Metropolitan was not just threatening—they were seriously considering it.
Arthur Vance was sitting in the Continental's research department, which was now a respectable room with four desks, even if only three were used. He wasn't talking to his single researcher, Mr. Harrison. He was simply watching the newswire machine.
The machine was noisy and messy, printing stock quotes, news headlines, and market gossip onto thin, yellow paper. Arthur read it like poetry. Most people saw a stream of random facts. Arthur saw the currents of fear and greed.
Harrison, a quiet man who lived on coffee, looked up at Arthur nervously. "Mr. Vance, I'm seeing some strange things. Boeing's stock isn't public, but the parts suppliers are. And the bond market... the debt they carry, even the small municipal bonds they issued—they're all dropping fast. It's like someone is selling everything attached to the company."
Arthur nodded slowly. "That's not the market deciding the stock is bad, Harrison. That's the market responding to an organized whisper campaign. Who benefits from a collapsed Boeing, Harrison?"
"Well, their main rival, Douglas Aircraft. Or maybe the other banks, if they could get their hands on those B-17 contracts…"
"Correct," Arthur said. "But look closer. Who started the whisper?"
Harrison pointed to a small, almost hidden line on the wire. "This article from The Financial Observer mentions that a 'source close to National Metropolitan Bank' expressed 'deep concern' over Boeing's ability to handle their wartime contract commitments."
"There it is," Arthur said, the calm returning to his face. He finally stood up. "The bankers who voted 'no' on our deal are now trying to save their own skin by destroying the patient."
Elias Thorne, who had been reviewing loan applications, came into the room looking gray.
"Arthur, this is bad," Elias whispered, pulling him into his office. "I just spoke to a friend on the Federal Reserve board. National Metropolitan is acting like they are preparing to declare the loan in default. They are building a case to seize collateral."
Elias walked to the window, his shoulders slumped. "This wasn't just a simple 'no,' Arthur. This was a trap. They convinced the board to deny our capital, then they leaked the rumor to create a crisis. They want Boeing to crash and burn so they can step in, wipe out the old shareholders, and take over the company for pennies on the dollar."
He turned back to Arthur, his eyes full of fear for their five million dollars. "If Boeing goes into receivership—if they go bankrupt—our investment in the landing gear company is worthless. It's a supplier to a dead client. We have sunk millions into a company that is about to become nothing."
Arthur did not panic. He walked over to the large map of the United States on Elias's wall. He pointed to Seattle, then to New York.
"They are smart, Elias," Arthur admitted. "They used our own methods against us. They created leverage by refusing capital, and now they are using the fear of the market to make Boeing completely helpless."
"So we failed?" Elias asked, a profound disappointment in his voice. "We spent three months, we created a bank, we bought a company, and we are beaten by a rumor?"
Arthur traced a line across the map with his finger. "No, Elias. They played the game with one hand. They threatened to destroy the company." He turned to Elias, his eyes clear and sharp. "We will play the game with two hands. We will not only save the company, but we will also destroy the weapon the rival bank is using."
Elias frowned. "How do you destroy a rumor? How do you stop a multi-million-dollar loan from being called? Only a new loan from a bigger bank can do that, and no one will touch them now!"
Arthur walked back to the research desk and picked up the note from The Financial Observer that Harrison had pointed out.
"You are right, Elias. We can't stop the rumor with a rumor. We can't stop a gun with a shield. We need a bigger gun."
He looked at the piece of paper in his hand. "The loan is the weapon. The loan itself. We need to take that weapon away."
Elias looked completely lost. "Arthur, that loan is owned by National Metropolitan Bank. A huge bank! You can't just walk in and ask for it. It's their greatest asset of leverage."
Arthur put the paper down. His face was cold, methodical, like a machine calculating the shortest route.
"It is only their greatest asset of leverage if they keep it, Elias. Right now, they see it as a troubled asset. They see it as risk. They see it as a time bomb that might hurt their balance sheet. They are trying to dump it before it explodes, using the threat of ruin to get a clean exit."
He walked back to Elias, his hands clasped behind his back.
"They do not see the loan as a valuable long-term asset. They see it as an immediate problem that needs to be solved. And we, Elias," Arthur said, his voice dropping to a decisive whisper, "we are about to become the solution to National Metropolitan's problem."
He straightened his back. Phase 3, the M&A Gambit, was over. It had failed to win the day, but it had revealed the enemy. It was time for Phase 4.
"It is time for the final pillar of Continental," Arthur declared. "The one I call the sword."