GEORGE WESTINGHOUSE WAS in his shirtsleeves when Paul burst through the double doors of his private study. Paul felt a little bashful about his excitement, considering the previous day’s events. And yet an unrepentant axe murderer had been punished, and his death had exposed to the public the extent of Edison’s lies about alternating current. No one could now believe that alternating current was particularly lethal. The question was already being asked in the papers: Had Brown been simply mistaken? Or had he been lying? And if the latter, why?
Paul had not often been able to relay such good news to his client.
“Mr. Cravath?” Westinghouse checked his pocket watch.
“Sir, I telegrammed. The news from Buffalo—surely you’ve seen it?”
Proudly, Paul removed the day’s New York Times from his coat pocket. He slapped the paper down on Westinghouse’s desk.
The headline blared in forty-eight-point type across the top of the thin broadsheet: ELECTRICAL ATROCITY IN BUFFALO—IS EDISON TO BLAME?
“The papers are all looking into Edison,” said Paul. “They all are reporting that Brown was a fraud and someone had to have put him up to it.”
Westinghouse said nothing. He looked down at the newspaper, taking it into his hands and giving the headlines a long, hard stare.
“This is good,” said Westinghouse.
“Yes, this is good,” said Paul. This wasn’t quite the reaction he had hoped for. “Your current is too safe to be of any use in executions. They could barely kill a man with the stuff when they tried. Every newspaper in the country is reporting the story in the same terms: A/C is too safe. The scandal is no longer about the worrisome dangers of your current—it’s about your current’s worrisome safety.”
“We’ll sell more units.”
“We’ll sell a lot more units.” Paul was perplexed by his client’s muted response. Sales of A/C systems had been slowing of late. This was just the thing to reinvigorate buyers. This should have been a long-awaited moment of triumph. But Westinghouse looked as if the two men were at a wake.
“We’ll need to,” said Westinghouse as he set the paper down and sat back in his chair. “We’re bankrupt.” He said it so abruptly that Paul wasn’t quite sure what he meant.
“What?”
“Well, not quite yet. But soon. Very soon.”
“I don’t understand…” Sales had slowed, but they hadn’t slowed enough for that.
“Perhaps you’ve been reading the wrong papers,” suggested Westinghouse as he took a folded paper from under some letters on the other side of his desk. He placed the thin newspaper down on top of Paul’s New York Times. It was The Wall Street Journal.
WHEN LONDON TREMBLES…NEW YORK QUAKES. The subheading was less sensationalistic and more descriptive: “Rumors Spread Across Atlantic of Baring Bros. Collapse.” The second subhead then added helpfully: “Banking House Among World’s Oldest May Fall on Argentine Bond Loss—What Does This Mean for U.S.?”
“It is the damned Argentines,” said Westinghouse. “Everyone thought it was a solid bet at the time.”
Paul took The Journal from the desk and quickly scanned the left-hand column. From what he could gather, the reporting was nothing more than hearsay. Unidentified and unsourced rumors. Certain “suggestions” had “grown louder” in recent days. And these suggestions were that the Baring Brothers bank in London might soon crash. Since this was an institution that had withstood 120 years of financial turmoil, if Baring Brothers had a problem, it was likely not alone. “If the Bank of England itself were to be questioned,” the article said, “it could not carry a more severe shock.” There was more technical information about the nature of the Argentine deal—a South American recession, a bubble in Brazil, a ripple on one continent that would become a tidal wave when it reached another.
“How does this spell our bankruptcy?” asked Paul. “The Barings don’t own this company.”
“But how many of our creditors are now soon to be theirs?”
Paul began to understand the problem.
“Your creditors are going to demand repayment of their loans sooner than anticipated.”
“A lot sooner than anticipated,” replied Westinghouse as he gestured toward a letter on his desk. “That’s from A. J. Cassart. He would like his loans repaid by this coming Friday.”
“Christ…It’s Tuesday.”
“Did you read that in the paper too?”
“How much?”
“Hard to say. But this letter will not be the last of its kind that I receive this week. I have been going over our numbers….It’s no secret that we operate at a loss. Under normal circumstances, this is not a problem. Most growing businesses employ the same tactics.”
“How much debt are we in?”
“You, Mr. Cravath, are not in any debt at all. I am in debt for approximately three million dollars.”
“And what are the assets of the company?”
“All told? Approximately two and a half million.”
Paul began to pace the room, considering the problem. “So we’ll need to raise at least five hundred thousand in capital in order to convince your creditors not to seize the company.”
“I’m glad to see you’ve been practicing your mathematics.”
Paul stopped pacing by the ceiling-high bookshelves on the far side of the room. He turned to face Westinghouse.
“It’s not you who is in debt. It is your company. So that’s the first thing. It’s not on you alone.”
“You’re mistaken,” said Westinghouse.
“What are you talking about?”
“I’ve put up this house and everything in it as collateral. It might not be worth a full half a million, but it’s no tenement.”
Paul knew George Westinghouse had always taken the affairs of his company quite personally. It was named after him, and he treated the corporation as an extension of his own corpus. But it was one thing to do so emotionally; it was another to endanger the roof over his wife’s head.
Seeing the expression on Paul’s face, Westinghouse smiled with a stubborn na?veté.
“You think this is a grave mistake,” suggested Westinghouse.
“Sir, it’s your family,” said Paul.
“Am I in for one of your speeches? They’re quite good, kid, I’ll give you that. But if your aim is to convince me to simply let my company fall without placing every ounce of weight I have underneath it as support, well…not even you are that eloquent.”
Paul knew his argument would lose. The first thing he had learned about persuading others was how to determine when—and of what—they were capable of being persuaded. On that day, he knew Westinghouse would not be moved. And so he also knew that the only way to save his client was to stave off this bankruptcy himself.
You have to learn the rules of the game. And then you have to play better than anyone else.
—ALBERT EINSTEIN
OVER THE NEXT few weeks, Paul and Westinghouse took turns making penitent pilgrimages to the most moneyed of the New York moneymen. The stations of their cross were formed by Wall Street, Union Square, and Madison Square. Not a millionaire was spared their devotionals. Westinghouse forswore his company’s sins. The financial promiscuity would come to an end. The firm’s governance was pledged to frugality. In their pleas, the men asked for more than mere blessings. They asked for absolution.