Stone's Fall

The file of Seyd's triggered an almighty outburst of this peculiar form of madness; in many cases, Franklin explained, it hinted but did not elaborate. It asserted but provided no evidence. It sketched out, but gave no background detail.

'It is incomplete, I know,' I said, sorry that I had introduced the poor man to such a source of annoyance, but feeling at the same time that if his bloodhound-like desire to hunt down the detail could be properly harnessed it might prove highly useful. 'Could you tell me what it's all about?'

I will not set it down word for word. That would be intolerable, and do little except highlight how little, even with his expert tutelage, I really understood at that stage. Ravenscliff, he said was a new breed. Not an industrialist, not a banker, but a capitalist of the most modern sort . . .

Here he had lost me. He began again. In the last few decades companies have sold themselves on the Stock Exchange. People buy shares in them; if a company is successful, its profits increase, more people want the shares, so the price rises.

Easy. I nodded.

In the day-to-day, he went on, settling into his stride now, the managers of a company – let us say a steel factory – run the business. There is also a board of directors which keeps an eye on the managers on behalf of the shareholders. As they own the business, the shareholders can tell the management what to do, if enough of them agree. Often there are so many shareholders and they are so scattered they can never agree on anything. And this is where Ravenscliff saw his opportunity.

Back in the 1870s he realised that you do not have to own a company to control it. So, in 1878, he sold his torpedo company to Beswick, but, rather than being paid in cash, Beswick gave him shares instead. In fact, he ended up with nearly a 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.