Not a Penny More, Not a Penny Less Read online

  He stood on Park Avenue, amused that the venue for his confrontation with Mrs. Rennick had been the Waldorf, the very hotel where John D. Rockefeller, the President of Standard Oil, had a suite. Henryk had arrived on foot and used the main entrance, while Mr. Rockefeller had earlier arrived by subway and taken his private lift to the Waldorf Towers. Although few New Yorkers were aware of it, Rockefeller had had his own private station built fifty feet below the Waldorf-Astoria to save him traveling the eight blocks to Grand Central Station, there being no stop between there and 125th Street. (The station remains to this day, but as no Rockefellers live at the Waldorf-Astoria, the train never stops there.) While Henryk had been discussing his $50,000 with Mrs. Rennick, Rockefeller had been considering an investment of $5,000,000 with Andrew W. Mellon, President Coolidge’s Secretary of the Treasury, fifty-seven floors above him.

  The next morning Henryk returned to work as usual. He knew he had only five days’ grace to sell the shares and clear his debt with the Morgan Bank and the stockbroker, as an account on the New York Stock Exchange runs for five business days or seven calendar days. On the last day of the account the shares were standing at $23¼. He sold at $231/8, and cleared his overdraft of $49,625 and, after expenses, realized a profit of $7,490 which he left deposited with the Morgan Bank.

  Over the next three years, Henryk stopped ringing Mr. Gronowich, and started dealing for himself, in small amounts to begin with, but growing larger as he gained in experience and confidence. Times were still good, and while he didn’t always make a profit, he had learned to master the occasional bear market as well as the more common bull. His system in the bear market was to sell short—not a practice considered to be entirely ethical in business. He soon mastered the art of selling shares he didn’t own in expectation of a subsequent fall in their price. His instinct for market trends refined as rapidly as did his taste for clothes, and the guile learned in the backstreets of the Lower East Side always stood him in good stead. Henryk soon discovered that the whole world was a jungle—sometimes the lions and tigers wore suits.

  When the stock market collapsed in 1929 Henryk had turned his $7,490 into $51,000 of liquid assets, having sold on every share he possessed the day after the Chairman of Halgarten & Co. jumped out of one of the Stock Exchange windows. Henryk had got the message. With his newly acquired income he had moved into a smart apartment in Brooklyn and started driving a rather ostentatious red Stutz. Henryk realized at an early age that he had come into the world with three main disadvantages—his name, background and impecunity. The money problem was solving itself, so he decided the time had come to expunge the other two. To that end, he had made an application to change his name by court order to Harvey David Metcalfe. When the application was granted, he ceased all further contact with his old friends from the Polish community, and in May 1930 he came of age with a new name and a new background.

  It was later that year at a football game that he first met Roger Sharpley and discovered that the rich have their problems too. Sharpley, a young man from Boston, had inherited his father’s company, which specialized in the import of whiskey and the export of furs. Educated at Choate and later in Dartmouth College, Sharpley had all the assurance and charm of the Boston set, so often envied by his fellow countrymen. He was tall and fair, looked as if he came from Viking stock, and with his air of the gifted amateur, found most things came easily to him—especially women. He was in every way a total contrast to Harvey. Although they were poles apart, the contrast acted like a magnet and attracted the one to the other.

  Roger’s only ambition in life was to become an officer in the Navy, but after graduating from Dartmouth he had had to return to the family business because of his father’s ill health. He had only been with the firm a few months when his father died. Roger would have liked to have sold Sharpley & Son to the first bidder, but his father had made a codicil to his will to the effect that if the firm were sold before Roger’s fortieth birthday (that being the last day one can enlist for the U.S. Navy), the money gained from the sale would be divided equally among his other relatives.

  Harvey gave Roger’s problem considerable thought, and after two lengthy sessions with a skillful New York lawyer, suggested a course of action to Roger: Harvey would purchase 49 percent of Sharpley & Son for $100,000 and the first $20,000 profit each year. At the age of forty, Roger could relinquish the remaining 51 percent for a further $100,000. The Board would consist of three voting members—Harvey, Roger and one nominated by Harvey, giving him overall control. As far as Harvey was concerned, Roger could join the Navy and need only attend the annual shareholders meeting.

  Roger could not believe his luck. He did not even consult anyone at Sharpley & Son, knowing only too well that they would try to talk him out of it. Harvey had counted on this and had assessed his quarry accurately. Roger gave the proposition only a few days’ consideration before allowing the legal papers to be drawn up in New York, far enough away from Boston to be sure the firm did not learn what was going on. Meanwhile, Harvey returned to the Morgan Bank, where he was now looked upon as a man with a future. Since banks deal in futures, the manager agreed to help him in his new enterprise with a loan of $50,000 to add to his own $50,000, enabling Harvey to acquire 49 percent of Sharpley & Son, and become its fifth President. The legal documents were signed in New York on October 28th, 1930.

  Roger left speedily for Newport, Rhode Island, to commence his Officers Training program in the U.S. Navy. Harvey left for Grand Central Station to catch the train for Boston. His days as a messenger boy on the New York Stock Exchange were over. He was twenty-one years of age and the President of his own company.

  What looked like disaster to most, Harvey could always turn into triumph. The American people were still suffering under Prohibition, and although Harvey could export furs, he could no longer import whiskey. This had been the main reason for the fall in the company profits over the past decade. But Harvey soon found that with a little bribery, involving the Mayor of Boston, the Chief of Police and the Customs officials on the Canadian border, plus a payment to the Mafia to ensure that his products reached the restaurants and speakeasies, somehow the whiskey imports went up rather than down. Sharpley & Son lost its more respectable and long-serving staff, and replaced them with animals better suited to Harvey Metcalfe’s particular jungle.

  From 1930 to 1933 Harvey went from strength to strength, but when Prohibition was finally lifted by President Roosevelt after overwhelming public demand, the excitement went with it. Harvey allowed the company to continue to deal in whiskey and furs while he branched out into new fields. In 1933 Sharpley & Son celebrated a hundred years in business. In three years Harvey had lost 97 years of goodwill and doubled the profits. It took him five years to reach his first million and only another four to double the sum again, which was when he decided the time had come for Harvey Metcalfe and Sharpley & Son to part company. In twelve years from 1930 to 1942, he had built up the profits from $30,000 to $910,000. He sold the company in January 1944 for $7,000,000, paying $100,000 to the widow of Captain Roger Sharpley of the U.S. Navy and keeping $6,900,000 for himself.

  Harvey celebrated his thirty-fifth birthday by buying at a cost of $4 million a small, ailing bank in Boston called the Lincoln Trust. At the time it boasted a profit of approximately $500,000 a year, a prestigious building in the center of Boston and an unblemished and somewhat boring reputation. Harvey intended to change both its reputation and its balance sheet. He enjoyed being the President of a bank—but it did nothing to improve his honesty. Every dubious deal in the Boston area seemed to emanate from the Lincoln Trust, and although Harvey increased the bank’s profits to $2 million per annum during the next five years, his personal reputation was never in credit.

  Harvey met Arlene Hunter in the winter of 1949. She was the only daughter of the President of the First City Bank of Boston. Until then Harvey had never taken any real interest in women. His driving force had always been making money, and al
though he considered the opposite sex a useful relaxation in his free time, on balance he found them an inconvenience. But having now reached what the glossy magazines referred to as middle age and having no heir to leave his fortune to, he calculated that it was time to find a wife who would present him with a son. As with everything else that he had wanted in his life, he considered the problem very carefully.

  Harvey had first run into Arlene when she was thirty-one: quite literally, when she had backed her car into his new Lincoln. She could not have been a greater contrast to the short, uneducated, overweight Pole. She was nearly six feet tall, slim and although not unattractive, she lacked confidence and was beginning to think that marriage had passed her by. Most of her school friends were already on their second divorces and felt rather sorry for her. Harvey’s extravagant ways came as a welcome change after her parents’ prudish discipline, which she often felt was to blame for her awkwardness with men of her own age. She had only had one affair—a disastrous failure, thanks to her total innocence—and until Harvey arrived, no one had seemed to be willing to give her a second chance. Arlene’s father did not approve of Harvey, and showed it, which only made him more attractive to her. Her father had not approved of any of the men she had associated with, but on this occasion he was right. Harvey on the other hand realized that to marry the First City Bank of Boston with the Lincoln Trust could only be of long-term benefit to him, and with that in mind he set out, as he always did, to conquer. Arlene didn’t put up much of a battle.

  Arlene and Harvey were married in 1951 at a wedding more memorable for those who were absent than those who attended. They settled into Harvey’s Lincoln home outside of Boston and very shortly afterward Arlene announced she was pregnant. She gave Harvey a daughter almost a year to the day after their marriage.

  They christened her Rosalie, and she became the center of Harvey’s attention; his only disappointment came when a prolapse closely followed by a hysterectomy prevented Arlene from bearing him any more children. He sent Rosalie to Bennetts, the most expensive girls’ school in Washington, and from there she was accepted at Vassar to major in English. This even pleased old man Hunter, who had grown to tolerate Harvey and adore his granddaughter. On gaining her degree, Rosalie continued her education at the Sorbonne, after a fierce disagreement with her father concerning the type of friends she was keeping, particularly the ones with long hair who didn’t want to go to Vietnam—not that Harvey had done much during the Second World War, except to cash in on every shortage. The final crunch came when Rosalie dared to suggest that morals were not to be decided only by length of hair or political views. Harvey missed her, but refused to admit the fact to Arlene.

  Harvey had three loves in his life: the first was still Rosalie, the second was his paintings, and the third his orchids. The first had started the moment his daughter was born. The second was a love that had developed over many years and had been kindled in the strangest way. A client of Sharpley & Son was about to go bankrupt while still owing a fairly large sum of money to the company. Harvey got wind of it and went around to confront him, but the rot had already set in and there was no longer any hope of securing cash. Determined not to leave empty-handed, Harvey took with him the man’s only tangible asset—a Renoir valued at $10,000.

  Harvey’s intention was to sell the picture quickly before it could be proved that he was a preferred creditor, but he became so entranced with the fine brushwork and the delicate pastel shades that his only desire was to own more. When he realized that pictures were not only a good investment, but that he actually liked them as well, his collection and his love grew hand in hand. By the early 1970s, Harvey had a Manet, two Monets, a Renoir, two Picassos, a Pissarro, a Utrillo, a Cézanne, as well as most of the recognized lesser names, and he had become quite a connoisseur of the Impressionist period. His one remaining desire was to possess a Van Gogh, and only recently he had failed to acquire L’Hôpital de St. Paul à St. Remy at the Sotheby-Parke Bernet Gallery in New York, when Dr. Armand Hammer of Occidental Petroleum had outbid him—$1,200,000 had been just a little too much for Harvey.

  Earlier, in 1966, he had failed to acquire Lot 49, Mademoiselle Ravoux, from Christie, Manson & Woods, the London art dealers; although the Rev. Theodore Pitcairn, representing the Lord’s New Church in Bryn Athyn, Pennsylvania, had pushed him over the top, he had only whetted his appetite further. The Lord giveth, and on that occasion the Lord had taken away. Although it was not fully appreciated in Boston, it was already recognized in the art world that Harvey had one of the finest Impressionist collections in the world, almost as widely admired as that of Walter Annenberg, President Nixon’s Ambassador to London who, like Harvey, had been one of the few people to build up a major collection since the Second World War.

  Harvey’s third love was his prize collection of orchids, and he had three times been a winner at the New England Spring Flower Show in Boston, twice beating old man Hunter into second place.

  Harvey now traveled to Europe once a year. He had established a successful stud in Kentucky and liked to see his horses run at Longchamp and Ascot. He also enjoyed watching Wimbledon, which he considered was still the greatest tennis tournament in the world. It amused him to do a little business in Europe at the same time, giving him the opportunity to make some more money for his Swiss bank account in Zürich. He did not need a Swiss account, but somehow he got a kick out of doing Uncle Sam.

  Although Harvey had mellowed over the years and cut down on his more dubious deals, he could never resist the chance to take a risk if he thought the reward was likely to be big enough. One such golden opportunity presented itself in 1964 when Her Majesty’s Government invited applications for exploration and production licenses in the North Sea. At that time neither the British Government nor the civil servants involved had any idea of the future significance of North Sea oil, or the role it would eventually play in British politics. If the Government had known that in 1978 the Arabs would be holding a pistol to the heads of the rest of the world, and the British House of Commons would have eleven Scottish Nationalist Members of Parliament, it would surely have reacted in a totally different way.

  On May 13th, 1964, the Secretary of State for Power laid before Parliament “Statutory Instrument—No. 708—Continental Shelf—Petroleum.” Harvey read this particular document with great interest, thinking that it might well be a means of making an exceptional killing. He was particularly fascinated by Paragraph 4 of the document, which read:

  Persons who are citizens of the United Kingdom and Colonies and are resident in the United Kingdom or who are bodies corporate incorporated in the United Kingdom may apply in accordance with these Regulations for:

  (a) a production license; or,

  (b) an exploration license.

  When he had studied the Regulations in their entirety, he had to sit back and think hard. Only a small amount of money was required to secure a production and exploration license. As Paragraph 6 went on to point out:

  (1) With every application for a production license there shall be paid a fee of two hundred pounds with an additional fee of five pounds for every block after the first ten in respect whereof that application is made.

  (2) With every application for an exploration license there shall be paid a fee of twenty pounds.

  Harvey couldn’t believe it. How easy it would be to use such a license to create the impression of a vast enterprise! For a few hundred dollars he could be alongside such names as Shell, B.P., Total, Gulf and Occidental.

  Harvey went over the Regulations again and again, hardly believing that the British Government could release such potential for so small an investment. Only the application form, an elaborate and exacting document, now stood in his way. Harvey was not a British subject, none of his companies was British and he realized he would have problems of presentation. He decided that his application must therefore be backed by a British bank and that he would set up a company whose directors would win the confidence of the B
ritish Government.

  With this in mind, early in 1964, he registered at Companies House in England a firm called Prospecta Oil, using Malcolm, Bottnick and Davis as his solicitors and Barclays Bank, who were already the Lincoln Trust’s representatives in Europe, as his bankers. Lord Hunnisett became Chairman of the company and several distinguished public figures joined the Board, including two ex-Members of Parliament who had lost their seats when the Labour Party won the 1964 Election. Prospecta Oil issued 2,000,000 10-pence shares at one pound, which were all taken up for Harvey by nominees. He also deposited $500,000 in the Lombard Street branch of Barclays Bank.

  Having thus created the front, Harvey then used Lord Hunnisett to apply for the license from the British Government. The new Labour Government elected in October 1964 was no more aware of the significance of North Sea oil than the earlier Conservative administration. The Government’s requirements for a license were a rent of £12,000 a year for the first six years, 12½ percent revenue tax, and a further Capital Gains tax on profits; but as Harvey’s plan was to reap profits for himself rather than the company that presented no problems.

  On May 22nd, 1965, the Minister of Power published in the London Gazette the name of Prospecta Oil among the fifty-two companies granted production licenses. On August 3rd, 1965, Statutory Instrument No. 1531 allocated the actual areas. Prospecta Oil’s was 51° 50′ 00″ N: 2° 30′ 20″ E, a site adjacent to one of B.P.’s holdings.

  Then Harvey sat back, waiting for one of the companies which had acquired North Sea sites to strike oil. It was a longish wait but Harvey was in no hurry, and not until June 1970 did B.P. make a big commercial strike in their Forties Field. B.P. had already spent over $1 billion in the North Sea and Harvey was determined to be one of the main beneficiaries. He was now on to another winner, and immediately set the second part of his plan in motion.