Page 53 of The Moneychangers

At the trial, so great had been his shame, he could not bear to look Juanita's way.

Now, six months later, Miles's concern about the bank was less. He had wronged FMA but in prison would have paid his debt in full. By God, he had paid!

But not even Drummonburg in all its awfulness made up for what he owed Juanita. Nothing ever would. It was why he must seek her out and beg forgiveness. Thus, since he needed life to do it, he endured.


"This is First Mercantile American Bank," the FMA money trader snapped crisply into the telephone; he had it cradled expertly between his shoulder and left ear so his hands were free. "I want six million dollars overnight. What's your rate?"

From the California West Coast the voice of a money trader in the giant Bank of America drawled, "Thirteen and five eighths." 'that's high," the FMA man said. 'Tough titty."

The FMA trader hesitated, trying to outguess the other, wondering which way the rate would go. From habit he filtered out the persistent drone of voices around him in First Mercantile American's Money Trading Center a sensitive, security-guarded nerve core in FMA Headquarters Tower, which few of the bank's customers knew about and only a privileged handful ever saw. But it was in centers like this that much of a big bank's profit was made or could be lost.

Reserve requirements made necessary for a bank to hold specific amounts of cash against possible demand, but no bank wanted too much idle money or too little. Bank money traders kept amounts in balance.

"Hold, please," the FMA trader said to San Francisco. He pressed a "hold" button on his phone console, then another button near it.

A new voice announced, "Manufacturers Hanover Trust, New York." "I need six million overnight. What's your rate?" "Thirteen and three quarters." On the East Coast the rate was rising.

"Thanks, no thanks." The FMA trader broke the connection with New York and released the "hold" button where San Francisco was waiting. He said, 'I guess I’l1 take it."

"Six million sold to you at thirteen and five eighths," Bank of America said. "Right."

The trade had taken twenty seconds. It was one of thousands daily between rival banks in a contest of nerve and wits, with stakes in seven figures. Bank money traders were invariably young men in their thirties bright and ambition, quick-minded, unflustered under pressure. Yet, since a record of success in trading could advance a young man's career and mistakes blight it, tension was constant so that three years on a money-trading desk was considered a maximum. After that, the strain began to show.

At this moment, in San Francisco and at First Mercantile American Bank the latest transaction was being recorded, fed to a computer, then transmitted to the Federal Reserve System. At the "Fed," for the next twenty-four hours, reserves of Bank of America would be debited by six million dollars, the reserves of FMA credited with the same amount. FMA would pay Bank of America for the use of its money for that time.

All over the country similar transactions between other banks were taking place. It was a Wednesday, in mid-April.

Alex Vandervoort, visiting the Money Trading Center, a part of his domain within the bank, nodded a greeting to the trader who was seated on an elevated platform surrounded by assistants, the latter funneling information and completing paper work. The young man, already immersed in another trade, returned the greeting with a wave and cheerful smile.

Elsewhere in the room the size of an auditorium and with similarities to the control center of a busy airport were other traders in securities and bonds, flanked by aides, accountants, secretaries. All were engaged in deploying the bank's money lending, borrowing, investing, selling, reinvesting.

Beyond the traders, a half-dozen financial supervisors worked at larger, plusher desks.

Traders and supervisors alike faced a huge board, running the trading center's length and giving quotations, interest rates and other information. The remote-controlled figures on the board changed constantly.

A bond trader at a desk not far from where Alex was standing rose to his feet and announced loudly, "Ford and United Auto Workers just announced a two-year contract." Several other traders reached for telephones. Important industrial and political news, because of its instant effect on securities prices, was always shared this way by the first in the room to hear of it.

Seconds later, a green light above the information board winked off and was replaced by flashing amber. It was a signal to traders not to commit themselves because new quotations, presumably resulting from the auto industry settlement, were coming in. A flashing red light, used rarely, was a warning of more cataclysmic change.

Yet the money-trading desk, whose operation Alex had been watching, remained a pivot point.

Federal regulations required banks to have seventeen and a half percent of their demand deposits available in liquid cash. Penalties for non-compliance were severe. Yet it was equally poor banking to leave large sums uninvested, even for a day.

Therefore banks maintained a continual tally of all money moving in and out. A central cashier's department kept a finger on the flow like a physician on a pulse. If deposits within a banking system such as First Mercantile American's were heavier than anticipated, the bank through its money trader promptly loaned surplus funds to other banks who might be short of their reserve requirements. Conversely, if customer withdrawals were unusually heavy, FMA would borrow.

A bank's position changed from hour to hour, so that a bank which was a lender in the morning could be a borrower at midday and a lender again before the close of business. This way, a large bank might trade better than a billion dollars in a day.

Two other things could be said and often were about the system. First, banks were usually faster in pursuing earnings for themselves than for their clients. Second, banks did far, far better in the way of profit for themselves than they achieved for outsiders who entrusted money to them.

Alex Vandervoort's presence in the Money Trading Center had been partly to keep in touch with money flow, which he often did, partly to discuss bank developments in recent weeks which had distressed him.

He was with Tom Straughan, a senior vice-president and fellow member of FMA's money policy committee. Straughan's office was immediately outside. He had walked into the Money Trading Center with Alex. It was young Straughan who, back in January, had opposed a cutback of Forum East funds but now welcomed the proposed loan to Supranational Corporation. They were discussing Supranational now.

"You're worrying too much, Alex," Tom Straughan insisted. "Besides being a nil-risk situation, SuNatCo will be good for us. I'm convinced of it."

Alex said impatiently, "There's no such thing as nil-risk. Even so, I'm less concerned about Supranational than I am about the taps we'll have to turn off elsewhere."

Both men knew which taps, within First Mercantile American, Alex was referring to. A memorandum of proposals, drafted by Roscoe Heyward and approved by the bank's president, Jerome Patterton, had been circulated to members of the money policy committee a few days earlier. To make possible the fifty million dollar Supranational line of credit, it was proposed to cut back drastically on small loans, home mortgages and municipal bond financing.

"If the loan goes through and we make those cutbacks," Tom Straughan argued, "they'll be only temporary. In three months, maybe less, our funding can revert to what it was before." "You may believe that, Tom. I don't."

Alex was dispirited before he came here. His converser lion with young Straughan now depressed him further.

The Heyward-Patterton proposals ran counter, not only to Alex's beliefs, but also his financial instincts. It was wrong, he believed, to channel the bank's funds so substantially into one industrial loan at the expense of public service, even though the industrial financing would be far more profitable. But even from a solely business viewpoint, the extent of the bank's commitment to Supranational through SuNatCo subsidiaries made him uneasy.

On the last point, he realized, he was a minority of one. Everyone else in the bank's top management was delighted with the new Supranational connection and Roscoe Heyward had been congratulated effusively for achieving it. Yet Alex's uneasiness persisted, though he was unable to say why. Certainly Supranational seemed to be sound financially; its balance sheets showed the giant conglomerate radiating fiscal health. And in prestige, SuNatCo rated alongside companies like General Motors, IBM, Exxon, Du Pont, and U. S. Steel.