The Scam of the Scam (Revised)
"That's absurd!"
The first person to roar at my proposal of ten million dollars was the Vice President, Francis DuPont.
"Even considering the military supply contract and the monopoly on the North American market, ten million dollars is an impossible figure. At that price, it would exceed the profits we at DuPont would earn from your company's license. Furthermore, considering it's a lump-sum payment, there are significant cost issues."
Ten million dollars.
It was an astronomical sum, equivalent to a bit over 250 billion won in Korean currency about a hundred years later. It was certainly a difficult amount for a major corporation like DuPont, the number one chemical company in the United States, to pay for a mere license, let alone a patent.
"Under the same conditions, 3 million dollars and a 6% royalty. Anything more than that is impossible."
Of course, DuPont's counter-proposal was still an enormous amount for a licensing fee.
It was proof that they, too, were well aware of the immense value of the patent I had filed.
"Hmm... I think there's been a misunderstanding. It's not cash that I want. I won't be taking any royalties, either."
That was why I wanted something other than money.
"We believe in the value of this new material, PMMA, and in the capabilities of a company like DuPont. Therefore... we want to take a long-term view of this deal and maintain a continuous partnership with your company."
"Then, what exactly do you want?"
"I want your company's common stock, equivalent to the value of ten million dollars."
Paying in cash versus paying in stock carries a vastly different level of risk.
For one, since no immediate cash leaves the company, it isn't recorded as an expense, and therefore, it has little impact on cash flow.
That was the reason I demanded stock instead of cash.
Naturally, if I had demanded ten million dollars in cash, they would have rejected it out of hand, thinking I was insane.
"Hmm, stock, you say......."
"Instead, I don't want it now. I want to receive it based on the stock price three years from today... that is, July 31, 1932."
"You want to receive it three years from now?"
I nodded at the perplexed Mr. DuPont and continued.
"As I mentioned earlier, we want to remain in a cooperative relationship with a major corporation like yours for a long time to come. The reason I delayed the payment for three years is... well, it's like a guarantee that we will work hard to fulfill the contract during that time. After all, once the licensing agreement is signed, we, too, must devote ourselves to technology transfer for the sake of your company's development."
"Hmm... it is an unprecedented form of contract. Let me think about it for a moment."
Perhaps because my proposal was unexpected, Mr. DuPont began to calculate something, scribbling numbers on a notepad.
About five minutes passed.
"Hmm, if it's this much, I don't think there will be any major problems. If we don't have to pay royalties, the total amount we have to pay decreases, so the board is likely to consider it positively."
"Is that so?"
"However, our company's stock price is currently maintaining a continuous upward trend. If this technology is commercialized, the stock price will rise even further. In that case, wouldn't it be a loss for your company to receive the stock three years later, as the number of shares you receive will decrease?"
"That's a good thing in its own right, as it means the dividends we receive will increase. Just because the number of shares decreases doesn't mean the ten million dollar value goes anywhere, does it?"
In fact, that was exactly what I was aiming for.
Up until now, the U.S. stock market, including DuPont, had been maintaining a continuous rise, to the point where the word "overheated" was being used.
Isn't it common knowledge that stocks always go up, except for the ones I buy?
But if I receive the stock three years later, it means I get fewer shares than I could get now—which meant it was a benefit to DuPont, increasing the probability that they would accept the proposal.
"In that case, let's add a clause prohibiting the sale of the stock for three years after it is issued. It would be problematic if it affected the stock price. And, since a single closing price is too risky for both of us, I think it would be better to use the average closing price of the last week of July. We should also add a clause that allows us to purchase up to 3% of your stock during the same period."
This was only natural, as they would need to defend their management rights.
"And... since it seems like your company is taking on too much risk, let's pay an additional 1 million dollars as an advance payment immediately. If these are the conditions, I will consider it."
This might look like a kind gesture, but in reality, it's a form of 'bait'.
Or should I call it a consolation prize?
Just in case they change their minds and reject this scam-level contract, I was putting extra money in their mouths to ensure that wouldn't happen.
"You'll give us an additional advance payment?"
"It would be problematic if your company were to go bankrupt before the contract is fulfilled, wouldn't it? It's a minimal safety device."
"Thank you for your consideration."
However, I feigned ignorance and expressed my gratitude.
"Then, I'll end the discussion here for now. I will show your company a draft of the specific contract within a week. After that, we can discuss further. Well, the main conditions won't change much."
"Let's do that."
With those words, I shook hands with Mr. DuPont.
The general counsel standing next to Mr. DuPont looked at me as if I were a pitiful victim of a rigged gambling game, but they wouldn't know.
It wasn't me who was being scammed; it was them.
"It was an honor to meet you today."
"I, too, was glad to have such a good conversation."
By the way... how much will the stock price have fallen in three years?
It'll probably be down to about a tenth of its value, right?
After talking with the DuPont negotiation team, I headed to the top floor of the Lexington Hotel.
In any case, since he is the biggest investor in our SCC, shouldn't I report such matters promptly?
"Lee, you decided to receive stock instead of money? And, three years from now?"
"Yes, Boss."
But the answer that returned was not from my father-in-law.
"Are you telling me that you just handed over the organization's assets without even taking the money?"
The number two of our organization seems very angry.
Does he think I'm surpassing him these days?
"I will receive it, three years from now."
"And you won't be able to sell it for three years, either. Do you even know what you've done? Boss, this is tantamount to betrayal of the organization."
Perhaps thinking this was the perfect opportunity to deal with me, Nitti, having finished his words, twitched his hand as if he were about to draw his gun right then and there.
Soon, my father-in-law's mouth opened.
"Lee, explain."
"I told you the reason last time, Boss."
"Yes, you said you would bring back a source of income to replace the organization's business."
"What I received as a transaction condition is more important than money."
I continued speaking to my father-in-law, who was still looking at me with a face full of suspicion.
"DuPont is one of the largest corporations in the United States, and its annual revenue is at least several hundred million dollars. Of course, the net profit is less than that, but it's not a small amount either."
"So?"
"In three years, you will be able to exert influence on one of the top companies in the United States. Legally, of course."
Although my father-in-law is better at counting bullets than money, he is a man who possesses a desire to be seen as a successful businessman on the surface.
"Legally, you say."
"Now, what protects the organization should be the law and money, not guns. The times are changing that way."
And the DuPont stock I will receive in three years is enough to serve as that shield.
Of course, based on the current stock price, it would be at most around 1% of the total equity, so it wouldn't exert that much influence, but it will be different in three years.
"You will never regret this."
"...Hmm."
As I answered with conviction, my father-in-law exhaled a long plume of cigar smoke.
"Boss, you shouldn't pay attention to the lies of a traitor. That guy has already......."
"Nitti."
Soon, my father-in-law cut off Nitti's words and glared at him.
"Lee hasn't betrayed us. It's just that the results aren't known yet."
"Boss......!"
Ignoring Nitti, who was clenching his fists, my father-in-law's gaze turned to me.
"Lee."
"Yes, Boss."
"Can you take responsibility for those words?"
"Of course."
"I'll see you in three years."
"I will make sure you never regret it, Boss."
Well, there won't be anything to regret, anyway.
Nitti might regret it, though.
It was around mid-August when I headed to Washington D.C. with Mr. Ahern, my lawyer.
Mr. Ahern and his legal team nearly lost their eyesight reviewing the hundreds of pages of the contract, but other than that, the licensing agreement with DuPont proceeded smoothly.
Although the cash in hand was only 1 million dollars, I wasn't particularly disappointed because I could make up for the rest of the money by signing contracts with companies outside of North America.
More importantly, the contract I had to sign with the federal government was more critical.
"With this, the contract process is complete."
"I look forward to working with you."
"I, too, look forward to our future cooperation."
After signing the contract for the last time, I shook hands with Lieutenant Colonel Elkins from the Ordnance Department.
Although the delivery volume itself was small because it was a trial contract, the important thing was that I had broken through the contract barrier once.
Once they got a taste of acrylic, they wouldn't be able to stop, so it was clear that continuous transactions would take place, even if it wasn't a huge amount of money right away.
That was enough to fulfill the contract with DuPont.
"Mr. Lee, you're heading back to Chicago now, aren't you?"
"Not immediately. There are a few people I need to meet in D.C."
To be precise, there was only one person, though.
"Congratulations, Mr. Lee. You had some good news today."
Huh? How does this person know that?
Meyer Lansky.
I blinked at the words of one of the brains of the New York Mafia, whom I had spoken with in Atlantic City last time.
"Thank you. You're well-informed, aren't you?"
"Well, since D.C. is close to New York, our information tends to be a bit faster."
Hmm, I guess there's a reason for the saying that one should go to Seoul. Unlike Chicago, which takes over 10 hours to travel to and from, it would certainly be easier to access from New York, where you can reach out and touch things.
"That's impressive. I hope you'll visit me often, too. Since I'm doing business, I find I need all sorts of information and connections."
"Connections... they are always important. Though it's more important who you are connected to than how many you have. If you need any, I'll connect you."
As expected, it's great that I don't have to beat around the bush when someone is smart.
"In that case, I would like to ask for your help."
At his straightforward answer, I continued with a satisfied expression.
"I would like to meet the Governor of New York. Would it be possible to connect me?"
FDR.
It was time to meet the future President who would end the Great Depression and lead the second great war to victory.