Ferrant was enthusiastic. “Now we’ll see what shape the business is in. You can’t tell that just from the hull insurance, which is all I do for Grafalk.”
Five years of Grafalk history was a substantial amount of paper. We had workers’ compensation policies, which went on for about a hundred pages a year, showing classes of employees, states covered, Longshoremen’s Act exclusions, and premium audits. There was a business interruption policy for each year, cargo coverage, which was written on a per-shipment basis, and inland marine, to cover Grafalk’s liability for cargo once it was unloaded from his ships.
Ferrant sorted through the mass with an experienced eye. “You know, the cargo and the compensation are going to tell us the most. We’ll just see the value of the freight he’s carrying and how many people he’s employing to do it. You tot up those workers’ compensation policies—look at the final audited statements and that’ll tell you how many people he’s got sailing for him every year. I’ll go through these cargo policies.”
I sat down at a round wooden table and joined him in stacking the papers covering it down on the floor. “But I thought the whole shipping business was depressed. If he’s not carrying much, how will that tell us anything besides the fact that the industry’s depressed?”
“Good point, good point.” Ferrand placed a stack of workers’ compensation policies in front of me. “We have some industry statistics—the average load carriers are hauling as a percentage of their available tonnage, that sort of thing. We’ll just compare them. I’m afraid it’s a rough approximation. The other thing, though, is that we know about what it costs a day to own one of those old clunkers. Now if it’s not carrying cargo, there’s still overhead—it has to be docked someplace. Unless the ship is in mothballs—which also costs something per diem—you have to have a skeleton crew on board. You need to be able to turn the beast on in a hurry and get to the place where you have a cargo waiting. So we can make a good guess at his costs and then look at these cargoes, here, and see how much he’s earning.”
That seemed like a reasonable approach. I started on my part of the assignment, secretly entertained by Ferrant’s enthusiasm for the project. He didn’t have Hogarth’s personal feeling for the insured.
The first page of the 1977 policy explained that Grafalk Steamship was a closely held corporation, principal address at 132 North La Salle Street in Chicago. The summary of the coverage on the declarations page showed Grafalk with fifteen hundred employees in eight states. These included sailors, secretaries, stevedores, longshoremen, truck drivers, and general office workers. Directors and officers were excluded from coverage. The total premium for 1977 was four million eight hundred thousand dollars. I whistled to myself. A lot of money.
I flipped through the pages of state and class detail to the back where the audit of the premium was attached. This section was completed at the end of the year. It showed how many people had actually worked each day by class of job and how much premium Grafalk in fact owed Ajax for 1977. The reduction was substantial—down to three million dollars. Instead of three million hours of work, Grafalk’s employees had put in under two million for the year ending then.
I showed this result to Ferrant. He nodded and went back to the cargo policies. I finished the compensation ones, scribbling summary results on a sheet of paper. Ferrant handed me a stack of cargo policies. He was tabulating them by date, total value of contract, and vessel used. We’d compare them later to the tonnage figures of the individual ships.
Hogarth came in as we were finishing the masses of paper. I looked at my watch. It was almost six o’clock.
“Any luck?” Hogarth asked.
Ferrant pursed his lips, his long hair falling over his eyes again. “Well, we have to add up what we’ve got. Doesn’t look good, though. I say, Hogarth, be a sport and give us a hand—don’t look so sour. Think of this as an intellectual problem.”
Hogarth shook his head. “Count me out. I told Madeleine I’d be home on time for once tonight and I’m already late. I’m going to catch the six thirty-five.”
He left and Ferrant and I continued our work, tedious and uninspiring. In the end, though, it became clear that Grafalk had been using only forty of his sixty-three vessels for the last five years. In fact he’d sold three ships in the middle of 1979.
“He should have sold more,” Ferrant said gloomily.
“Maybe he tried and there wasn’t a market.”