Free Stone's Fall by Iain Pears Page B

third of the total. Armed with this, he called a meeting which voted that he should become chairman.
    And so it went on. Through careful experimentation, Ravenscliff discovered that really he needed no more than about 25 per cent of its shares in order to control an entire company. And why should the other shareholders object? The companies he ended up controlling performed well; they paid their dividends, the value of the shares constantly rose. And so Ravenscliff ’s power extended.
    “Well, that’s very fine. Everyone is happy, then,” I said. “Not much for me to go on there. And, although I can see you find all this fascinating, it is difficult to see how it is going to be made so for the reader of his biography. Is that all the report contains? I must say I find it all a little disappointing.”
    Franklin scowled. “Personally I find it remarkable. But, as you say, few are interested. Fortunately, there is a little more for you.
    “When he established the Gosport Torpedo Company in 1868, he had a great deal of difficulty persuading the Royal Navy to buy. Either it would not work, which made it useless, or it would work all too well, which meant that a small dinghy, in theory, could sink a battleship. Naturally this made the navy reluctant to support him. So he gave the machines to them.”
    “I thought the idea was to make a profit.”
    “It is. But Ravenscliff realised that an order from the Royal Navy was the best advertisement in the world. What it had, every other navy wanted. Before he had delivered a single machine, he had gone around the world, talking of the British Admiralty’s confidence in him. Naturally, everyone else determined to have them as well, even though the cost was formidable. Within five years, he had armed every enemy and potential enemy we had with the weaponry to sink our fleets.
    “What could he do? That was his argument. He claimed he had been more than happy to give the navy an exclusive right to purchase his machines, but they had refused. And, by the time the navies of the world realised that their ships needed more protection, Ravenscliff had taken control of Gleeson Steel, which made some of the best armour plating in the world, and the Beswick Shipyard, which could turn out brand-new warships. And so it went on. By 1902 every aspect of the production of ships and weapons was under Ravenscliff ’s control. His factories produced the engines, the ships, the guns, the shells. Earlier than most he saw the potential of steam turbines, so bought control of a company that explored for and extracted oil in Mesopotamia.”
    “That was very clever of him.”
    Franklin did not reply. “Do you know what a trust is?”
    I considered replying that whatever it was, in the world of finance it was likely to be a contradiction in terms. But I rested content with shaking my head instead.
    “These were invented by the Scots, some twenty years ago. It is a company, quoted on the Stock Exchange, except that it doesn’t do anything except own shares in other companies. Now what Ravenscliff did was put all his holdings—in Gleeson’s, Gosport, Beswick and so on, into the Rialto Investment Trust, and sold shares in it, keeping only a controlling stake. Do you understand the implications of that?”
    “No.”
    “I am truly glad that in your daily life you have no contact with money whatsoever,” he said vehemently. “You clearly have no instincts for it at all.”
    “I am quite prepared to admit it,” I said.
    “It is nothing to be proud of. Very well. Think of this. A quarter stake in the Trust means Ravenscliff controls it, correct?”
    “If you say so.”
    “I do. And the quarter stake the Trust holds in Beswick means it controls that. Correct?”
    I nodded.
    “So Ravenscliff controls Beswick with a quarter stake of a quarter stake. That is, six and one-quarter per cent. The same goes for another dozen or so companies which make up the main holdings of the Trust. To put it another