The Oligarchs — Part II

Kangze Huang
Aug 6, 2018 · 11 min read
“Banff Springs Hotel” by David Daase

Continued from Part I

“How much longer are they going to keep us waiting?” said Jacob, growing impatient.

Almost a month ago, they had received that life changing letter from Count Barson, the lumber baron of North Carolina. Now they were sitting in a mountain estate, on leather seats sipping champagne while they waited. The great hall was the epitome of luxury, and Jacob felt somewhat uncomfortable in the room.

“A lot of power is consolidated in this place,” said Uncle Joshua. “This is where important decisions are made, by important men.”

Jacob shuffled nervously in his seat. “I’m sure those decisions affected many people without them realizing. And now here we are.”

“That’s right boy, now we’re here. One day we will have a castle like this, of our own.”

Suddenly the large oaken doors of the Great Hall opened. A squabble of well dressed tall men entered the echoing chambers, commanding the entire atmosphere.

“You must be Mr. Malliar!” boomed the lead gentleman. “A pleasure to meet you, my name is Count Barson.”

Count Barson, the lumber baron of North Carolina, was fat but tall. White haired flowed from his beard and balding head, hidden underneath a top hat that made him seem that much taller. The other gentlemen introduced themselves, shaking hands vigorously with both the Malliar founders.

After exchanging initial pleasantries that Jacob could not keep up with, the meat of the meeting begun.

“Toast” by Bennett, Frank Moss (1874)

“We’ve heard of your technology Mr Malliar, and quite frankly its well done.” said Count Barson. “But frankly, it’s nothing special.”

The smile from Uncle Joshua’s face disappeared.

“It’s special enough that we’ve secured financing for the next 5 telegram lines.” he replied.

The lumber baron laughed heartily.

“That’s great, but we’ve got plans to install 50 in the next few months.” he said. “You’re not the only ones working on this technology. In fact, we’ve been funding our engineers for the past 5 years, and I don’t think your product is any better than ours.”

Silence took over the room. The long pause turned into anxiety, and Uncle Joshua was the first to break the silence.

“Then why did you call us here?” he asked.

“Well Mr Malliar,” said the Baron. “We both have the technology, but that does not mean we need to compete. In fact, we could easily crush your fledgling enterprise, but that’s not how we like to operate.”

Uncle Joshua held his composure, refusing to show fear. “What are you saying?” he said firmly.

The Baron looked to his left and then to right, with his team nodding back.

“We would like to work out an agreement,” he said. “On the sharing of technology and distribution resources. You see, our specialty is making things happen, and we can make things happen faster than anyone else. If 50 sounds like a lot of telegram lines, then you must not have imagined 5000. That is the level of scale we are operating on.”

Joshua did not respond. In the awkward silence, Jacob looked on with concern. He was confused on where the conversation was going and their place in it.

“We are happy to share a portion of the profits, say 10%” said the Baron. “If you are willing to work together with our engineering team to improve the technology. Think about how long it would take for you to reach even 50 lines, and ask yourself, do I want to have 500 in half the time? …we can make that happen.”

Joshua frowned in disapproval.

“Give you the secrets of our company in exchange for minor dividends? How do I know you won’t be incurring all sorts of expenses and reduce profits to zero? I am not a fool to give up control of my own fate.” he rebutted.

The barons frowned back in response.

“It’s a very generous offer, but if you do not want to take it, that is ok with us too.”

Another silence muffed the room, but this time Uncle Joshua did not budge.

Jacob was getting nervous. He had no experience in these types of negotiations, and it was all flying over his head. It didn’t seem like things were going well for their company, and he was wondering why Uncle Joshua did not just take the Baron’s offer. It seemed generous enough.

Finally Count Barson broke the silence.

“Alright my friend. I see that you and I are quite alike, and would rather die than give up control of our own destinies. Let me tell you what it is I want.”

Uncle Joshua hid his smile, relieved that his silence did not backfire.

“There is nothing worse than wasted opportunity,” said the Baron. “And one of the worse ways to throw away profits is to compete. We both work hard and should deserve the rewards of our labours, do you agree?”

Uncle Joshua nodded in agreeance.

“You can have your own territory,” said the Baron. “But let us agree on a price for our telegram services. None of us should set our prices lower than 2 cents a message, how does that sound?”

Jacob was the first to weigh in.

“Why 2 cents?” he asked. “That’s too expensive for most people!”

The Baron laughed loud and hearty.

“Good to hear you finally speak up my boy! Let me enlighten you. It’s called supply and demand. Right now there is a limited amount of telegram lines in the world, and this commands a higher price. Two cents is the number our analysts concluded would maximize revenues, according to the incomes of our potential customers.”

Checking to see if Jacob was following along, the Baron continued.

“These high margins would allow us to fund the development of more telegram lines, and eventually the price will drop down… but for now, the poor will have to wait.”

The Baron’s answer took Jacob by surprise. It made logical sense, but somehow it just felt unfair. But before he could weigh in again, Uncle Joshua spoke up.

“I admire your integrity to work together,” said Joshua. “And I think that is a fair fixed price, as that would allow us both to prosper. How then would you like to divide the territory?”

The Baron’s face bloomed into a bristly friendly smile, his white mustache hiding any signs of crookedness.

“I’m quite tired of the mountains and trees, my friend. It is time that I come into the cities. But, I see you are quite fond of your township.” He paused for effect. “How about then, you can take the railroad towns while I claim the cities? Minus my own mountain villas of course.”

Uncle Joshua did not like that the most profitable areas were being claimed by the Baron and bravely negotiated back.

“I don’t think that is too fair,” said Joshua. “The cities are where all the profits are, and besides, aren’t you heavily invested in the rails that deliver your timber to factories? Why give us this territory?”

The Baron could not hide his admiration. He was quite impressed by Joshua’s business acumen, and conceded some truth.

“Well, the railroad builders and I do not have the best relationship.” He said. “Sir Gregory Jurgens controls most of the rails, and we often clash on delivery prices. He would take my entrance into his territory as a threat, and as you know, we Oligarchs do not like to compete.”

Joshua smiled at this new information. Sensing an opportunity to play two titans against each other, he passionately debated with the Baron over certain concessions that would secure his loyalty to the Barson Family. After many hours of intense debate, all the gentlemen in the room shoke hands, and the Malliars left with a concrete contract of cooperation, plus a $10,000 loan — enough to build 100 telegram lines in their agreed upon rail-town territory.

“Luncheon of the Boating Party” by Pierre-Auguste Renoir (1881)

Back in their hometown, Joshua and Jacob celebrated their successful negotiation. Amelia glanced nervously at Uncle Joshua and the two young girls by his side. She held onto Jacob’s arm tighter and watched as he drank his champagne.

“A glorious day for a glorious company!” Joshua cheered. “I already see the next 1000 lines in the next 100 towns!”

The party raged on for hours. By the end of the night, the Mayor was so piss drunk that he was passed out on Joshua Malliar’s ottoman, a half empty glass of wine barely held in his hand. In their own chambers, Jacob and Amelia had their own private party in a lover’s embrace.

“In the Moonlight” by “cliford417” (DeviantArt)

Cracking open a window, Amelia smiled as she saw Jacob’s sweaty face.

“My sweet, I am so proud of you.” she said.

Jacob smiled back, pushing back a lock of her French hair behind her ear.

“Thank you my love,” he said. His eyebrows curled down into a forlorn frown, remembering the carriage ride back from the Baron’s mountain estate.

“What’s the matter Jacob?” asked Amelia, concerned by his change of expression.

“It was this dream I had on the road back.” Replied Jacob. “I dreamt of you as a baby, held in your mother’s arms and running away in fear… In France.”

Amelia smiled. “You had revolutionary dreams, my love?”

“I guess so,” said Jacob. He paused for a moment, then asked her.

“Why did Europe descend into war, even after the successful French revolution?”

Amelia fell silent and stared outside the window at the moon floating in the American sky.

“Because,” she replied. “Monarchies may fight each other over debated land, but all share the same fears. When the Prussians and English saw the powerful French monarchy fall to the people, they feared their own empires imploding.”

A candle of understanding lit in Jacob’s mind.

“I see,” he said. “the only thing worse than threats from other monarchs are threats from within.”

“Yes, the upper class, they are all the same. Only concerned for their own wealth while oppressing the people.” said Amelia. “And that’s why Napoleon was our hero. He liberated Europe from the oppression of self-proclaimed kings.”

“But didn’t he eventually proclaim himself Emperor of Europe?” asked Jacob. “Isn’t that the same thing?”

“He fought hard for liberty,” she replied. “But I guess when you’re worked so hard for so long, you begin to feel entitled to rule… But the people loved him.”

“The people still struggled, didn’t they?” Jacob pointed out.

“They did” said Amelia. “France was in a total war economy. That’s why my father decided that it was time to leave.,, I was just a baby at the time, but I remember the grey industrial skies and the smell of Sulphur. And gunpowder… even though I don’t remember my homeland, the smell of gunpowder reminds me of France.”

Jacob drew her closer into his arms and smelled her soft perfumed hair.

“This reminds me of France,” he said. “I am not Napoleon, but one day we will liberate the masses.”

Amelia snorted in laughter. “Americans need no liberation, they are already free.” she said, and kissed him.

“You just focus on bringing the Telegram to the people, my sweet.”

“Industrialization” by Jonas Lie

The next 5 years were explosive, to say the least. All of America was going through change. From the steamboats of Vanderbilt’s growing empire, to the fledgling railroads being proposed across the continent, it was a good time to be in business.

Telegrams were popping up all over America, and although competition was abundant in the communications industry, the majority of players agreed on fixed prices so that they would all enjoy the profits of their investments. Two cents per message became a continental norm, and every year the Telegram giants would meet in New York to discuss their plans for the next expansion of lines.

Not all markets enjoyed such collusion between Oligarchs, but those that did made their founders very rich. Millionaires were made in steel, oil, shipping and cotton. Every industry had it’s own Oligarchs, and they were all getting rich.

“Pyramid of Capitalist System” by Nedeljkovich, Brashich, & Kuharich (1911)
“Wedding” by Agnes Russo

In 1837, Amelia and Jacob got married. The wedding ceremony was a splendour of luxury, hosted in Count Barson’s mountain-side estate. The dining halls were adorned with the most expensive metal of the time, Aluminum. It was a new wonder material that Jacob was fascinated by, but extremely hard to manufacture. Abundant in the earth’s crust and extremely lightweight, it had captured his imagination for the past few months, and on this special day, he wanted his guests to try it out. The only thing more precious was his beautiful bride, Amelia Malliar.

“Congratulations my boy,” said Count Barson, smiling. “I have been blessed to see you come so far.”

“Thank you Count Barson,” replied Jacob. “I just wish Uncle Joshua could be here.”

Count Baron frowned.

“Joshua has been distant lately,” he said. “I do not know his motives, but he has not returned any of my letters nor accepted any invitations to sport. He disrespects me.”

Jacob shuffled uncomfortably in his seat — the same seat he sat in 5 years ago during that first meeting with Count Barson. He could not speak for Uncle Joshua, for he had been distant with Jacob as well.

In a short amount of time, Joshua had grown Malliar Telegram into a grand conglomerate. No one could deny he was a brilliant businessman, but some of his recent dealings were questionable.

“Did you know he threatened me recently?” whispered Count Barson.

Shocked, Jacob asked. “He did? Why would he do that?”

“He said I gave him a bad deal, and that he was no fool. He even attempted to build some telegram lines in the cities… a violation of our agreement.”

Jacob became increasingly worried. No one could get through to Joshua, and no one knew what meetings he was having behind the backs of shareholders. Count Barson was a good friend to those who were on his good side, but Jacob knew what Oligarchs did to their enemies. For the most part, he preferred to stay out of “big business”.

“Railroad Tracks” by Janet Ternoff

Meanwhile, in a town far away, Uncle Joshua was doing “big business”. Malliar Telegram had not grown so large without other Oligarchs taking notice, and they wanted a piece of the pie.

“So do we have a deal?” asked Sir Gregory Jurgens, the great Railway Tycoon.

To be continued in Part III

Kangze Huang

Written by

Finance, Code and Entrepreneurship. Founder of RentHero AI

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