Myeongdong Baek Grandma
The person who made Dan Sa-cheon start was a short, middle-aged woman. Her name was Baek Hee-yeop.
Like him, she was a displaced northerner, a native of Pyongyang. Through the war she had made her money in Busan trading penicillin and mycin, then carried that stake to Daegu and built a real fortune dealing in military uniforms. The trade meant taking army clothing that had come in as wartime aid, dyeing it black or gray, and selling it to ordinary people. In those years when cloth was scarce, tough military fabric, dyed and turned into civilian clothes, sold as if it had grown wings, and with the money earned that way she had only lately settled in Myeongdong.
Her chief business now was buying up National Foundation Bonds, which had fallen to next to nothing. She also did a little private lending and a little currency exchange on the side. The scale of it was nothing beside Dan Sa-cheon's, but she was one of the few who could run an independent trade on their own capital.
There was one other independent operator beyond Dan Sa-cheon's reach. His name was Go Seong-il, and he too was a refugee from the North, a man who had made a killing on the dyes used to recolor military uniforms. Bring the dye in from abroad and a twentyfold profit was possible, and Go Seong-il, a trader by origin, had locked up that dye and supplied it across the country.
The Myeongdong private-loan market was as good as the main stage of the so-called thirty-eight fortune-hunters, who had struck it rich during the war. Like Jews who, having lost their country, turned to usury in Europe, the displaced northerners who had lost their hometowns held the South's private-money trade in a tight grip.
At any rate, the moment Baek Hee-yeop—someone outside his influence—met Lee Ki-jo, Dan Sa-cheon was thrown off balance.
How on earth did those two get connected…?
Ki-jo possessed a vast sum of dollars whose source no one could trace, and seeing him sit down with Baek Hee-yeop only sharpened Dan Sa-cheon's curiosity. He strained to catch the talk passing between them.
This time it was Baek Hee-yeop who recognized Ki-jo first. She came up to the table where he and Seong Dae-ik were sitting, her face bright with a smile, and asked,
"Hello. You must be President Lee Ki-jo?"
"Ah—how do you do? You would be President Baek Hee-yeop."
"Yes, I'm Baek Hee-yeop. A pleasure to meet you."
They shook hands and sat. Baek Hee-yeop glanced at Seong Dae-ik in the seat beside Ki-jo, then asked,
"And who is the gentleman beside you?"
"Manager Seong Dae-ik, head of accounting at Cheongsan Development."
Seong Dae-ik rose again and bowed.
"How do you do, ma'am. I'm Seong Dae-ik, accounting manager."
"Glad to meet you, Manager Seong. Does Cheongsan Development hire nothing but young, good-looking men? It isn't only the president—you're a handsome fellow yourself. Ho ho ho!"
When Baek Hee-yeop laughed so freely, Seong Dae-ik flushed.
"I heard a rumor that President Lee was looking for dollars, so I tried the office. And here you are in Myeongdong, as it happens."
"Yes. I stepped out for a little business in the district."
"They say the day you travel turns out to be market day—this worked out nicely. You're still after dollars, aren't you?"
"I am."
"I'd already been thinking I ought to repay you, after you saved my younger cousin's life…"
At those words Ki-jo started.
"I saved your cousin's life…?"
"Paik Sun-yup, the one who was Army Chief of Staff. Sun-yup is my younger cousin."
"Is that so? I had no idea."
"We don't look a thing alike, do we? Sun-yup told me himself. He said that if you'd spoken even a few words when he was sent to trial, his head would have come off. He says he survived thanks to you, President Lee. I'm grateful."
"I only followed the facts."
"I thought you'd say that. It's written right across your face: I am an honest man. Ho ho."
Praised in that big voice by the formidable Baek Hee-yeop, Ki-jo grew a little shy himself.
"If you're offering to help me because of what happened back then, you really needn't."
"What are you saying? You saved one of my own house. The kin who made it south ahead of the communists amount to a handful. I have to repay you."
"You could take a loss on my account. Are you sure that's all right? What will you do if the dollar rises later?"
"It's fine. I was going to sell every dollar I was holding anyway and buy National Foundation Bonds."
"National Foundation Bonds?"
Baek Hee-yeop glanced around once, then lowered her voice.
"I'm telling you this specially, President Lee. Right now those bonds are trading at less than twenty percent of face value. Buy them, bury them, and you can make five times your money or better."
"Is that so?"
"If you have the room, you ought to pick some up yourself. Other people curse them as trash bonds, but they will turn into gilt-edged paper. I'm certain of it."
"If I have room later, I'll think it over."
"You have room even now, don't you? From what I hear, you dredge mud out of the Han, bake it into bricks, and sell them, and you put up houses out of sand. There isn't another Bongi Kim Seon-dal—the old trickster who sold the river itself. Ho ho."
"Ha ha. It isn't quite on that level, President Baek."
"I also heard you donate a great many bricks for building schools. Anyway, I can feel you're different from the money-drunk crowd in Myeongdong, President Lee."
Finished with her praise, Baek Hee-yeop asked the size of the exchange he needed. When Ki-jo told her, she thought a moment, then spoke.
"That's more than the dollars I have on hand. Chairman Dan could change the whole sum at once, but he isn't the only one in Myeongdong. There's another big player, a man named Go Seong-il. I'll ask him as well and make up the amount for you."
"There's no need to overextend yourself on my account."
"Not at all. He's a gentleman I've known well since the war. I was the one buying dye from him to run the uniform trade. We're close."
"If that's how it is, then I'll ask it of you."
"Good. Then let me set the terms."
Baek Hee-yeop agreed to sell at five percent under Myeongdong's posted rate. That was her repayment to Ki-jo for saving her cousin. Five percent sounded modest, but the principal was so large that her loss on the deal would not be small.
"Is there anything else I can help you with?"
"Nothing. Thank you."
"Don't thank me. And listen—I'm close with Sister Seong-ryong. We're both from Pyongyang. So from now on, don't give the partnership chances only to her. Get along with me, too."
"Ha ha. I will."
When the dealing was finished, Baek Hee-yeop studied Seong Dae-ik, who had been listening quietly at Ki-jo's side. Her look done, she spoke to him.
"I don't know young men all that well yet, but if President Lee brings you to a meeting like this, it means he trusts you. You know that yourself, don't you?"
"Yes…"
Dae-ik said it with his head lowered.
"Don't lose that trust. Guard it well. With people, the first thing is trust, and the second thing is trust. Especially in hard times like these, trust is the greatest asset there is. And you must do even better by the person who believes in you."
"I'll take it to heart."
Hee-yeop looked at Dae-ik with the pleased smile of someone regarding a dear younger sibling, then held out her card to Ki-jo.
"President Lee. I'll have the dollars ready, so send Manager Seong to me in a week."
"I will."
With that the deal was closed, and Ki-jo left the tearoom with Dae-ik. It had been a clean transaction, without a wasted word.
On the way back, Dae-ik asked,
"President, when the deal with Chairman Dan fell through, I didn't know what we were going to do. Did you know there was another big hand in Myeongdong?"
"In a general way, yes."
Ki-jo knew the trio of northern lenders who ruled Myeongdong's private money: Dan Sa-cheon, the Cash King; Myeongdong Baek Grandma; and the Gwanghwamun Bear. The two he had met today were the Cash King and Myeongdong Baek Grandma, and the dye merchant Go Seong-il, whom Baek Hee-yeop had mentioned, was the Gwanghwamun Bear. He had also known that Baek Grandma was Paik Sun-yup's older cousin, and when things soured with Dan Sa-cheon he had meant to seek her out, or the Gwanghwamun Bear, and ask them to handle the exchange. He had especially counted on Myeongdong Baek Grandma, Paik Sun-yup's cousin, not to turn him away.
"But President—those National Foundation Bonds President Baek mentioned. Shall we buy some with the company's profits?"
"Don't buy them with company money. Buying a little with your own wages, though—that I'd recommend. If you want to buy a great deal even if it means an advance on salary, I'll advance it."
"Ah—no, President. An advance? I couldn't…"
"It's all right. For you, I could advance a whole year's pay. Invest alongside President Baek. And whenever you stop by her office, learn whatever you can from her."
"I won't take an advance. I'll buy only what my wages will cover, and gather them that way."
"Suit yourself."
Ki-jo knew what was coming. Baek Hee-yeop would succeed in the National Foundation Bonds and take an enormous profit in 1957. The bonds were paper the Syngman Rhee government had issued to excess during the war, when tax revenue ran short, and a public that did not trust the government had turned its back on them. Baek Hee-yeop, having bought them up, would sell before the bond panic of early 1958—once speculative demand had fastened on the paper—at more than five times her cost, and take her place as one of Myeongdong's big hands.
She was little known, but she was one of the greatest orthodox investors Korea ever produced. She bought undervalued stocks and bonds, let them sit, and when the market priced them too high she threw them off without a moment's clinging. It was Myeongdong Baek Grandma who raised Park Hyeon-ju, the chairman of Mirae Asset. In his second year of university he went to Baek Hee-yeop seeking instruction, and he would later say that she taught him how to look at a company and a philosophy of investing, and so became his teacher.
Ki-jo understood that what Chairman Park would one day say was true. He could feel it: she had taken the measure of the diligent, clever Dae-ik at a single glance and wanted to teach him something. Just as she liked a stock or a bond that still had room to rise, Baek Hee-yeop seemed to like a person who looked as if he might. If Dae-ik met her often and followed her into the National Foundation Bonds, he would make money and also get a feel for how the capital markets moved. Bringing him to Myeongdong had been worth it.
Walking beside him, Dae-ik asked,
"President, you'll go so far as to advance me wages and tell me to invest in the bonds, and yet you won't invest the company's money. I'd like to know why."
Ki-jo smiled as he answered.
"Just because."
"What? Just because?"
Ki-jo only went on smiling as he walked with the startled Dae-ik.
He remembered the affair bound up with the National Foundation Bonds. In January 1958 the country would reel from a bond panic. Rumors would run that paper trading at a fifth of face value or less might fall still further under government policy, or else soar, and a warped trade would set in. In the end a tremendous wash of speculative money would pour into the National Foundation Bonds, and thirty-four securities houses that had invested beyond their means would face bankruptcy. The government would then put in public money to steady the capital market. Fully four hundred million hwan would go to stopping a chain of brokerage failures—money that might have been spent on the nation and its people. That precious sum would be used to clean up a brawl the speculators had started.
People repeated the same kind of mistake. Every time a bubble of that sort burst, the country poured tax money into the hole, and ordinary citizens who had nothing to do with it shared the pain. It happened even in the desperately poor Korea of the 1950s.
Ki-jo hated that.
If he had been blinded by money, he could have made an astronomical sum in bond futures. He remembered how the price of the National Foundation Bonds would run; he could buy before they rose and sell before they fell, and toy with the market. But futures were a structure in which, if one side made a hundred, someone else lost a hundred. The brokerage that took the other side of his trades would be unable to settle and would stagger, and the debt that house incurred would land, intact, on a poor public.
Because he had no wish to lay out so tangled an explanation, he had answered just because, and Dae-ik could not hide his confusion. Ki-jo smiled and set the answer right.
"Dae-ik. Think it through once, as accounting manager. Say we make bricks and build houses and earn twenty million hwan in a year. Then we put money into National Foundation Bonds and clear a hundred million hwan at a stroke. Would you still have any appetite for the business?"
"Well, of course… I think I'd give more of my attention to the investment that returns five times the money."
"That's what I don't want. Dae-ik, finance can make a great sum all at once, but it doesn't share the fruit with many people. The private lenders in Myeongdong are exactly that sort. Playing with money is different, at the root, from manufacturing or from transport."
"You're right, President."
"I want to make jobs for people, pay higher wages with the money earned that way, hire still more, and divide the wealth."
Dae-ik nodded. Ki-jo judged he had taught the still-young Dae-ik enough for one day. Tell him too much and it would only weigh on him, so he turned the talk.
"Dae-ik, you've never had milmyeon, have you?"
"Milmyeon? I've heard of it. Is it different from ordinary noodles?"
"When I was in Busan I was very fond of milmyeon. Milmyeon, you see…"
All the way to the office, Ki-jo talked of nothing but milmyeon, the cold wheat-flour noodles of the south. Dae-ik shot back that he had never tasted the southern dish, but it still couldn't beat the cold noodles of the North. Ki-jo enjoyed talking with him. It was a good thing to grow a young man and let him dream large, but he also hoped that young man would grow into someone who thought of the people around him.
In this last life, Ki-jo wanted to raise many good people—more than he wanted to make money.