Acquiring Yongsan Yeonwa
After the model house opened, Ki-jo called Seong Dae-ik in to the Seoul office. The accounts had swollen past what the place could handle; he needed Dae-ik there.
And there was one more man who had found his way inside.
A fellow named Kim Ik-jae was working at the Seoul office. He was an assistant manager at Cheil Bank's Jongno branch, yet for days he had been coming in and laboring as if he were on the payroll—sweeping the floors, taking the telephones when the four department heads and Dae-ik were tied up, even cooking and washing the dishes in place of Dae-ik and Hansu. All of it was a campaign to land the 7th Division's construction payments, but Ki-jo found the effort so earnest he couldn't bring himself to throw the man out.
That morning, too, Kim Ik-jae arrived early, swept the front of the office, and flicked the night's dust from the desks with a feather duster. The department heads greeted him as if he belonged there.
"Hey, Ik-jae—you're early today."
"Ik-jae, that water in the kettle. Did you draw it this morning?"
"Ik-jae, are you a Cheil Bank man, or a Cheongsan Development man?"
At the last question Ik-jae broke into a wide grin.
"What's good for Cheongsan is good for Cheil Bank!"
Ki-jo liked the answer.
One day he called Ik-jae over.
"Mr. Kim, I'm sorry to say this to a man who's worked so hard, but I intend to deposit my dollars with whichever bank pays the higher interest."
Kim Ik-jae didn't so much as flinch.
"Of course you should, sir. Even so, I'll keep working for Cheongsan Development."
"You're a Cheil Bank man. How long do you mean to stay here doing odd jobs?"
In those days a banker was an elite among elites, a lord among lords. Businessmen who set foot in a bank had to watch the mood of the women at the teller windows; they bowed and scraped even to the female clerks, pressed gifts on them, and paid rush money just to get a document processed. That was the power a banker wielded, and Ki-jo found it remarkable that a man used to such treatment would stoop to menial work without a word of complaint.
"The branch manager told me not to come back to the bank until I'd secured Cheongsan's dollars."
"And if you can't place the deposit?"
"I might be fired. Then I figure you'll take me on, sir, so I'm minded to work all the harder."
"Ha."
Ki-jo rated the man's nerve and his persistence highly. But business was business. Liking Kim Ik-jae was no reason to park his dollars at Cheil Bank.
A few days after that conversation, Kim Ik-jae came up beside him.
"Sir—Yongsan Yeonwa. Wouldn't now be a good time to acquire it?"
Ki-jo had been turning the same question over himself: whether to wait for the auction price to sink further as the property kept failing to sell, or to buy it now. Taking Yongsan Yeonwa for a song was tempting, but buying it at this moment would send a far greater shock through the market. A newborn firm swallowing the fifth-largest company in Seoul would be a symbolic event—and it would hasten the collapse of the association besides.
"I've been thinking about a takeover myself."
The moment he answered, Ik-jae spoke as if he had been waiting for it.
"Then I'll help you—no, Cheil Bank will!"
"Yongsan Yeonwa is pledged as collateral to Chohung Bank. How exactly is Cheil Bank supposed to help?"
"Cheil Bank takes over Chohung's collateral. Then Cheil sells Yongsan Yeonwa to Cheongsan Development for less than the amount of the pledge."
"Wouldn't that leave Cheil Bank in the red?"
"I don't believe so."
With that, Kim Ik-jae opened that morning's Dong-A Ilbo to the front page.
It was a piece fretting over national security as talk of withdrawing the American troops in Korea gathered speed.
"With the rumors of a pullout spreading, the street rate on the dollar is climbing. Cheil Bank might take a loss on the Yongsan Yeonwa transaction, but if you'll deposit your dollars with us, we can make that loss back on the exchange."
A man who had lived this history once already, Ki-jo knew a bank could turn a profit by doing business that way. What astonished him was that a man of the 1950s had conceived a deal out of an idea like this.
"Even if Cheil Bank offers Cheongsan its highest rate, I believe both sides come out ahead. Once Cheongsan deposits dollars, the bank makes its money on the fat margins in dollar exchange."
Ki-jo remembered talking Lee Seong-sun around when he bought the land in Incheon. This was the exact reverse of that, and a smile rose in him before he knew it.
"Does that mean you'll agree?" Ik-jae asked, catching the smile.
"All right. In principle, I'm for the deal. By my own reckoning, both sides stand to gain. But can you persuade the bank president?"
"Just leave it to me. I'll talk the president around and see this through."
Kim Ik-jae's mind was sharp enough to covet. Ki-jo wanted to put him to work at Cheongsan on the spot, yet it seemed wiser to leave him where he was. A man destined to rise, sitting inside a bank, could be a far greater help later on.
Three days later, Ik-jae came back with a thick sheaf of transaction papers in his arms.
"Sir, Yongsan Yeonwa is yours now."
At his words the four department heads and Dae-ik came over to Ki-jo's desk, and the client presidents who had been idling in talk on the office sofa gathered around as well.
"You only need to stamp the documents. This is the historic moment Yongsan passes to Cheongsan."
The client presidents clapped and whooped.
"Well, I'll be—that bastard Han Man-yong is wiped out clean?"
"Serves him right! Run a filthy business and you go under!"
Han Man-yong and his father, Han Ki-soo, were nowhere in the room, but the air was that of a surrender being signed.
Ki-jo read the papers calmly. The price Cheil Bank had put before him was twenty-five percent of the collateral value—not even the worth of the land Yongsan Yeonwa stood on. When he had set his seal to every document, the Cheongsan staff, the client presidents, and Kim Ik-jae sent up a round of applause. The clapping broke over him, and still it didn't feel real. He thought he would have to go and see Yongsan Yeonwa himself before he could believe the place was his.
"Manager Jang, get the truck started. Let's go look at Yongsan Yeonwa with our own eyes."
"Sir, you'll want to take the bolt cutters. The front gate is locked with steel cable."
Ik-jae offered the advice, and on April 19, 1954, the staff of Cheongsan Development's Seoul office and the client presidents climbed into the truck bed and set off for Yongsan Yeonwa.
Just as Ik-jae had said, the front gate was bound shut with thick steel cable.
"President Lee, go on and cut it. This plant's yours now."
Not a ribbon to snip—a chain. A laugh rose in Ki-jo. He set the cutters to the cable and put his strength into them.
"Heave—!"
The cable parted. It dropped to the ground with a clank of iron, and the moment Ki-jo had severed it the four department heads flung the factory gate wide. Rusted iron shrieked open, and the broad works of Yongsan Yeonwa—once contending for first or second place in all of Seoul—lay bare before them.
"Whoa..."
Young Dae-ik let out a gasp.
Ki-jo led them in, boots striking the ground as he walked into Yongsan Yeonwa. It was like MacArthur coming ashore to retake the Philippines.
The first thing he inspected was the kiln. The war had left it half ruined, but putting it back in order would not be hard.
"Aigo. President Lee, you really hit the jackpot. The jackpot. I saw the contract earlier—you took the place for a song. Heh."
Whether the client president meant it as congratulations or as the groan of a man sick with envy, it was hard to say.
After looking the plant over, Jang Ma-ryang spoke.
"Brother, fix the works up and I reckon we can stamp a million and a half bricks out of here."
"That's how I see it." Ki-jo nodded.
"President Lee! You got a factory for practically nothing—you've got to stand us a round!"
"Do we get a drink off President Lee today?"
The client presidents were getting worked up.
"If not a day like today, when would I? Let's go!"
The men raised a cheer. Above their waving hands Ki-jo looked up at Yongsan Yeonwa's smokestack. It rose straight into a cloudless blue sky, and it seemed to be grinning wide at the arrival of its new master.
A few days after the takeover of Yongsan Yeonwa, the effect of swallowing a competitor began to show. The first signal flare was a telephone call to the office.
"Cheongsan Brick, Manager Kim speaking. Ah, yes. Where did you say? Yangju Yo-eop?"
Kim Seogwang listened, then covered the receiver and turned to Ki-jo.
"Sir, a place called Yangju Yo-eop wants to know if Cheongsan would handle consignment sales for them, the way we do for Yeongdeungpo Yeonwa."
"Yangju Yo-eop?"
That was the man who had told Ki-jo to attend the brick association's gathering.
So he's heard that Yongsan Yeonwa went to Cheongsan.
Ki-jo took the call himself.
"This is Lee Ki-jo."
"How do you do, President Lee? This is Jo Sang-hun of Yangju Yo-eop."
"You'd like to become one of Cheongsan's contract manufacturers?"
"Yes, sir. I'm sorry to inquire by telephone. I ought to have come in person, but I hadn't the face for it..."
"Come and talk it over. If the terms benefit us both, we'll sign on the spot."
"Thank you, sir. I'll be right there."
Within the hour Jo Sang-hun of Yangju Yo-eop came running to the Seoul office and signed a contract for consignment manufacture and sale. Ki-jo agreed to buy Yangju Yo-eop's bricks at production cost plus a slim margin, guaranteeing them something like a thousand hwan of profit on every ten thousand bricks. Once operating costs were stripped away there was little left over, but Jo Sang-hun—whose plant, built only that year, was on the verge of ruin because he could not sell a brick—seized the offer with both hands.
A few days after he left, inquiry calls hammered the office. The shack-yards teetering on bankruptcy seemed to have heard the news about Yangju Yo-eop. When the four department heads asked what they should do, Ki-jo said:
"Tell them we'll take every one of them."
At that, the department heads carried the word to the shack-yard presidents like gospel, and while they were at it they asked what brick stock the yards held and what they meant to produce from here on. Passed along to Dae-ik, those figures became a tally of how many bricks Cheongsan could sell in the short run and how many over the longer haul. When the telephones had rung themselves hot and the count was finished, Dae-ik reported.
"Through May, including the Yongsan Yeonwa we've acquired, I think we can sell two and a half million bricks in all."
In the original history, nationwide brick production in 1954 had been thirty million. This was nearly a tenth of that.
"Not bad..."
Ki-jo said it evenly. The shape of Seoul's brick market was now the four against the Cheongsan alliance, for every shack-yard that had belonged to the Gyeongin Construction Brick Association had broken away to become a contract manufacturer for Cheongsan. The majors were besieged on every side.
About time Lee Si-hyeong of Daehan Yeoeop started to thrash.
He was thinking it when a policeman came to the office.
"Good day. Lieutenant Gwak Jae-seong, Jongno Police Station."
He was the officer who had knocked at the door of the Cheongsan house the night of the dedication.
"Hello. What brings you?"
"I was hoping you might come with me somewhere. Would that be all right?"
The four department heads went tense. Police in the 1950s were not much trusted; the common view was that they were little more than thugs wearing the authority of the state. They were known, now and then, to take on a contract killing without a blink, so the fear was not unfounded.
Ma-ryang, doubting from the first whether the man was even a real policeman, rose from his seat.
"Name and unit. I'll check it with Jongno Police Station, so you can state your business here while you're at it."
The policeman didn't so much as start at the sight of Ma-ryang on his feet. Instead he asked, perfectly at his ease:
"Ah—Mr. Jang Ma-ryang, isn't it? Brother-in-law to President Lee Ki-jo."
The moment Ki-jo heard that, he knew Gwak Jae-seong was no ordinary policeman. The feel of an intelligence detective was strong, and instinct told him the man was tied to Lee Ki-poong.
"Manager Jang, what's there to worry about, stepping out with a policeman? Everyone get back to work. Don't fret."
Ki-jo judged that he was being taken to meet someone, and that someone was certainly Lee Ki-poong. He needed to see what kind of trouble the little ball Lee Si-hyeong had lofted was about to set rolling.
If you want the tiger, you go into the tiger's den.
Lee Ki-poong had never been a tiger to begin with, but Ki-jo set out with Lieutenant Gwak Jae-seong to catch him all the same.
As he had expected, Gwak led him toward the Liberal Party headquarters. Walking at his side, the lieutenant let out a short laugh.
"Your men's tailing leaves something to be desired."
Ki-jo whipped his head around, and the four department heads ducked out of sight at once.
"You can set your mind at ease. It was Mr. Mansong who told me to bring you."
Ki-jo raised his voice so the department heads could hear.
"All of you, watch the office! Don't any of you follow me!"
The men who had been hiding slunk back toward the office, looking sheepish. Watching the department heads who had tailed him out of nothing but worry, Ki-jo smiled.