Chapter 27: Department Expansion: Research
It was late July 1940. The large check from Boeing—the bank's first major dividend payment—had been deposited. It was no longer just an exciting piece of paper; it was a huge amount of working capital in the bank's accounts.
The very first place Arthur Vance decided to spend this new income was on the small, dusty corner of the office that housed the Research Division.
Elias Thorne was a good lawyer, and he was good at hiring talent. He understood that Arthur needed more than just one smart person like Martha Klein. For the plan to buy into the top fifty companies on the stock exchange, they needed a small, dedicated army.
Elias placed a notice with a few trusted contacts at Columbia University and a few other places. He wasn't looking for someone who looked important or talked loud. He was looking for someone who was quiet, loved numbers, and understood how to dig.
Peter Grant
Elias found his man in the second week of July. His name was Peter Grant.
Peter was a quiet man in his late twenties, maybe ten years older than Arthur. He had been working for a small, struggling financial magazine, writing dry articles about the bond market that nobody ever read. Peter had an incredible memory for numbers and a way of seeing patterns in stock prices that others missed. He didn't care about making a big fuss; he just cared about the data.
When Elias first interviewed him, he was direct.
"Mr. Grant, our bank is very new," Elias said. "But we have just successfully completed a major, highly profitable deal that has given us the capital to expand. We are looking to immediately invest that capital in a highly complex stock operation on Wall Street."
Peter was silent for a moment. "A complex stock operation, sir? Meaning a quiet campaign to buy shares in secret?"
Elias was surprised. "Exactly. And we need to know the truth behind every company we target. Not the newspaper story, but the true value that is hidden from the public."
Peter's eyes lit up, not with greed, but with the excitement of a puzzle. "I enjoy finding patterns, Mr. Thorne. Most investors look at the last week's price. I look at the last ten years of a company's taxes and contracts."
The deal was quickly made. Peter Grant was hired as the second analyst in the Research Division.
Funding the Machine
The hiring of Peter and the modest expansion of Martha's area of the office were the first major expenses the Continental Bank paid with the Boeing dividend.
Arthur made it clear to Elias: "We do not use this cash to buy fancy carpets or mahogany desks. We use this profit to buy talent and information. They are the only assets that grow faster than money."
The Research Division suddenly looked more serious. Elias spent part of the income on two new, heavy wooden desks, a proper metal filing cabinet for security, and, most importantly, a subscription to a private telegraph service that gave them faster, more detailed financial news than the regular papers. This service cost a significant amount of money—a direct spending of the bank's newfound income—but Arthur saw it as essential. He called it "buying time."
They moved the division into a slightly larger room at the back of the office. Now, Martha and Peter sat across from each other, working under the glow of two new desk lamps.
Martha, with her sharp, legal mind for contracts and public documents, and Peter, with his genius for tracking the movement of money and seeing mathematical trends. They were the perfect team.
The New Mission: The Top 50
Arthur brought in a simple list. It was a list of the top fifty public companies by market value on the New York Stock Exchange.
"Gentlemen, Miss Klein," Arthur began, his voice calm and methodical. "The Boeing deal was Phase One. It gave us our income and proved our method. Now, Phase Two begins: the conquest of the public market."
He pointed to the list. "Your job is to build a full, completely honest report on every single company on this list. Start from number one and go down. For each company, I need to know three things."
Arthur held up one finger. "One: What does the market think the company is worth? This is the public number."
He held up a second finger. "Two: What is the secret, unavoidable contract or deal that guarantees its future success, regardless of the war? This is the hidden truth."
He held up a third finger. "Three: Which major bank or powerful family controls the company's debt and keeps its price low? This is the enemy."
Martha was already pulling out a fresh legal pad. Peter was tracing the numbers on the list with his pencil. It was a huge, almost impossible task, but it was the kind of work they were built for.
Arthur tapped the first name on the list: The Coca-Cola Company.
The Deep Dive on Coke
"Coca-Cola is the immediate priority," Arthur stated. "The market believes a rumor that the government will soon institute sugar rationing. If that happens, every investor thinks Coke's business will be ruined, and the stock price will drop like a stone."
Arthur leaned on Peter's desk. "Peter, your first job is to track the stock price and the trading volume over the next three months. I want to know who is selling, and more importantly, who is buying quietly. See if the panic has already started to set in."
He then turned to Martha. "Martha, your job is to use every contact you have to find out the absolute truth about the sugar supply. The official documents will say nothing. You need to use our network to find the unofficial, guaranteed deal that exists between Coca-Cola's leadership and the military's supply command in Washington."
"You are looking for a guaranteed contract that overrides any public rationing rule," Arthur told them. "If that contract exists, the sugar rumor is a complete lie, and the stock price is about to become a huge opportunity for the bank's stock operation."
The team understood the gravity of the task. They were not just checking numbers; they were hunting secrets that would make or break the next great investment for Continental. Every dollar of the Boeing income spent on them had to be worth five times that amount in intelligence. This intelligence would lead to future investment gains that would dwarf the Boeing dividend.
Arthur left the room, leaving the two analysts to their work. He knew the expansion was a perfect move. With Elias handling the legal and outward-facing duties, and Martha and Peter digging up the truth, the core of the machine was now fully engaged. The bank was getting ready to spend its hard-earned money and fight the war on the floor of the stock exchange.
The next piece of the machine that needed to be ready was the sword itself: Sales & Trading.