Deadlock (33 page)

“The cargoes will still come out, but the smaller ships will have an advantage?” I persisted.

He smiled. “Just until they get the Poe Lock back under operation. Actually, there’s been a lot of disarray, both in the grain markets and among the Great Lakes shippers since the lock blew up. They’ll settle down in a few weeks when they realize that most traffic won’t be impaired.”

“Except for the carriers who’ve converted primarily to thousand-foot ships.”

“Yes, but there aren’t too many of those. Of course, grain concerns like Eudora are scrambling to get all their
cargoes onto the smaller fleets, even bypassing the 740-foot ships. Grafalk’s is picking up a number of orders. They aren’t jacking up their rates, though, the way some of their less scrupulous brethren are.”

“How profitable is Grafalk’s, in general?”

He looked at me in surprise. “They are the biggest carrier on the lakes.”

I smiled. “I know—I keep being told that. But do they make money? I understand that these smaller ships are unprofitable and they make up his whole fleet.”

Ferrant shrugged. “All we do is insure the hulls. I can’t tell you how much freight they’re carrying. Remember, though, profitability is relative. Grafalk may not make as much as a firm like American Marine, but that doesn’t mean they’re unprofitable.”

Hogarth had come in while we were talking. “Why do you want to know, Miss Warshawski?”

“It’s not just idle curiosity. You know, no one’s come forward claiming responsibility for the bombing—the PLO or the FALN or the Armenians. If it wasn’t a random act of terrorism, there had to be a reason for it. I’m trying to find out if that reason included switching cargo from the big freighters to small vessels like the ones in Grafalk’s fleet.”

Hogarth looked annoyed. “Not Grafalk, I assure you, Miss Warshawski. Niels Grafalk comes from a very old shipping family. He’s devoted to his fleet, to his business—and he’s a gentleman.”

“That’s a fine testimonial,” I said. “It does a lot of credit to your heart. But a fifty-million-dollar ship has been blown up, the North American shipping industry has been thrown into disarray, however temporary, and a lot of business interrupted. I don’t know how the courts interpret such a thing, but someone is gong to have to pay for that business interruption. Grafalk stands to gain a lot by
this accident. I want to know what shape his business is in. If it’s doing well, there’s less of a motive.”

Ferrant looked amused. “You certainly look for the less pleasant side of human nature … Jack, you have some idea of the state of the business, don’t you? Just look at your records, see how much cargo coverage he’s got and what his workers compensation insurance is like.”

Hogarth said mulishly that he had a meeting to get to and he thought it was a waste of time.

“Then I’ll do it,” Ferrant said. “You just show me where the files are, Jack, and I’ll have a look-through for Miss Warshawski here … No, really, I think she’s got a good point. We ought to follow up on it.”

Hogarth finally called his secretary on the intercom and asked her to bring him five years of Grafalk Steamship files. “Just don’t ever let the old boy know you did this. He’s very touchy where his family name is concerned.”

Hogarth left for his next meeting and Ferrant made some phone calls while I watched the boats out on Lake Michigan. Monroe Harbor was filling up rapidly with its summer fleet of sailboats. A lot of people were taking advantage of the beautiful weather; the near horizon was filled with white sails.

After some twenty minutes a middle-aged woman in a severely tailored suit came into the office pushing a large wire cart full of files. “These are the Grafalk Steamship files Mr. Hogarth asked for,” she said, leaving the cart in the middle of the room.

Ferrant was enthusiastic. “Now we’ll see what shape the business is in. You can’t tell that just from the hull insurance, which is all I do for Grafalk.”

Five years of Grafalk history was a substantial amount of paper. We had workers’ compensation policies, which went on for about a hundred pages a year, showing classes of employees, states covered, Longshoremen’s Act exclusions,
and premium audits. There was a business interruption policy for each year, cargo coverage, which was written on a per-shipment basis, and inland marine, to cover Grafalk’s liability for cargo once it was unloaded from his ships.

Ferrant sorted through the mass with an experienced eye. “You know, the cargo and the compensation are going to tell us the most. We’ll just see the value of the freight he’s carrying and how many people he’s employing to do it. You tot up those workers’ compensation policies—look at the final audited statements and that’ll tell you how many people he’s got sailing for him every year. I’ll go through these cargo policies.”

I sat down at a round wooden table and joined him in stacking the papers covering it down on the floor. “But I thought the whole shipping business was depressed. If he’s not carrying much, how will that tell us anything besides the fact that the industry’s depressed?”

“Good point, good point.” Ferrand placed a stack of workers’ compensation policies in front of me. “We have some industry statistics—the average load carriers are hauling as a percentage of their available tonnage, that sort of thing. We’ll just compare them. I’m afraid it’s a rough approximation. The other thing, though, is that we know about what it costs a day to own one of those old clunkers. Now if it’s not carrying cargo, there’s still overhead—it has to be docked someplace. Unless the ship is in mothballs—which also costs something per diem—you have to have a skeleton crew on board. You need to be able to turn the beast on in a hurry and get to the place where you have a cargo waiting. So we can make a good guess at his costs and then look at these cargoes, here, and see how much he’s earning.”

That seemed like a reasonable approach. I started on my part of the assignment, secretly entertained by Ferrant’s
enthusiasm for the project. He didn’t have Hogarth’s personal feeling for the insured.

The first page of the 1977 policy explained that Grafalk Steamship was a closely held corporation, principal address at 132 North La Salle Street in Chicago. The summary of the coverage on the declarations page showed Grafalk with fifteen hundred employees in eight states. These included sailors, secretaries, stevedores, longshoremen, truck drivers, and general office workers. Directors and officers were excluded from coverage. The total premium for 1977 was four million eight hundred thousand dollars. I whistled to myself. A lot of money.

I flipped through the pages of state and class detail to the back where the audit of the premium was attached. This section was completed at the end of the year. It showed how many people had actually worked each day by class of job and how much premium Grafalk in fact owed Ajax for 1977. The reduction was substantial—down to three million dollars. Instead of three million hours of work, Grafalk’s employees had put in under two million for the year ending then.

I showed this result to Ferrant. He nodded and went back to the cargo policies. I finished the compensation ones, scribbling summary results on a sheet of paper. Ferrant handed me a stack of cargo policies. He was tabulating them by date, total value of contract, and vessel used. We’d compare them later to the tonnage figures of the individual ships.

Hogarth came in as we were finishing the masses of paper. I looked at my watch. It was almost six o’clock.

“Any luck?” Hogarth asked.

Ferrant pursed his lips, his long hair falling over his eyes again. “Well, we have to add up what we’ve got. Doesn’t look good, though. I say, Hogarth, be a sport and give us a hand—don’t look so sour. Think of this as an intellectual problem.”

Hogarth shook his head. “Count me out. I told Madeleine
I’d be home on time for once tonight and I’m already late. I’m going to catch the six thirty-five.”

He left and Ferrant and I continued our work, tedious and uninspiring. In the end, though, it became clear that Grafalk had been using only forty of his sixty-three vessels for the last five years. In fact he’d sold three ships in the middle of 1979.

“He should have sold more,” Ferrant said gloomily.

“Maybe he tried and there wasn’t a market.”

By eight-thirty we’d completed a sketchy analysis of Grafalk’s finances. His ships cost about two thousand dollars a day to operate when they weren’t sailing, about ten thousand dollars a day when they were. So the total expense to Grafalk each season for running the steamship company was about a hundred twenty million dollars a year. And the total value of the cargoes he was carrying came out to only a hundred million in 1977. Things were a little bit better in ’78 and ’79 but hadn’t improved much the past two years.

“That answers your question all right,” Ferrant said. “The lad is definitely losing money.” He lined up his stacks of notes. “Odd how much cargo he’s been carrying for Eudora Grain the last five years. Almost twenty percent of his total volume.”

“Odd indeed,” I said. “Of course, Eudora’s a big concern … Where’s Grafalk been coming up with the money to cover these losses? They’re pretty staggering.”

“The steamship company isn’t the only thing he owns.” Ferrant was sweeping the policies back into their jackets. “There’s a profitable railway that connects the Port of Buffalo with Baltimore—he can unload there and ship by rail to oceangoing vessels in Baltimore. That does very well for him. His family owns a big block of stock in Hansen Electronic, the computer firm. You’d have to see if you could get his broker to tell you whether he’s been selling off the stock to pay for this. He’s into a number of
other things. I think his wife has some money, too. But the steamship company has always been his first love.”

We piled the policies back into the cart and left it in the hallway for someone to take care of in the morning. I yawned and stretched and offered to buy Ferrant a drink.

He walked with me to the Golden Glow on Jackson and Federal. It’s a place for serious drinkers—no quiche and celery sticks to entice imbibers of white wine on their way to the commuter trains. Sal, the magnificent black woman who owns the place, has a mahogany horseshoe-shaped bar, relic of an old Cyrus McCormick mansion, and seven tiny booths crammed into a space wedged out between a bank and an insurance company.

I hadn’t been in for several weeks and she came over to our booth herself for our order. I asked for my usual, a Johnnie Walker Black up, and Ferrant had a gin martini. I asked Sal for the use of a phone and she brought one over to the table for me.

My answering service told me Adrienne Gallagher, the woman I know at the Fort Dearborn Trust, had called. She’d left her home number and a message that I could call before ten.

A little girl answered the phone and called her mommy in a shrill voice.

“Hello, Vic. I got the information you wanted.”

“I hope they’re not trying to fire you or disbar you.”

She gave a little laugh. “No—but you owe me some
free detective work. Anyway, the condominium is owned by a Niels Grafalk—Vic? Are you there? Hello?”

“Thank, Adrienne,” I said mechanically. “Let me know when you need the detective work.”

I hung up and dialed the Windy City Balletworks to see if they were performing tonight. A recorded voice told me that performances were held Wednesday through Saturday at eight; Sundays at three. Today was Tuesday; Paige might be home.

Ferrant looked at me courteously. “Something wrong?”

I made a gesture of distaste. “Nothing I hadn’t suspected since this morning. But it’s upsetting anyway—Grafalk owns real estate along with everything else.”

“You know, Miss War—Do you have a first name? I just can’t keep my tongue around your last one—Vic, you’re being terribly mysterious. I take it you think Grafalk may be behind the damage to the Poe Lock, since we just spent most of the afternoon proving that he was losing money. Would you mind telling me what’s going on?”

“Some other time. There’s someone I need to talk to tonight. I’m sorry, I know it’s rude to run out on you like this, but I must see her.”

“Where are you going?” Ferrant asked.

“To the Gold Coast.”

He announced that he was coming with me. I shrugged and headed for the door. Ferrant tried putting some money on the table, but Sal gave it back to him. “Vic’ll pay me when she’s got the money,” she said.

I flagged a taxi on Dearborn. Ferrant got in beside me, again demanding to know what was going on.

“I’ll tell you later,” I said. “It’s too long a story to start during a short cab ride.”

We pulled up in front of a massive pale pink brick building with white concrete corners and white-enameled
shutters. It was dark now, but black wrought-iron street lamps illuminated the building’s facade.

Ferrant offered to accompany me inside, but I told him this was a job I had to handle alone. He watched me as I rang the bell, set in a lighted brass box outside the front door. A house phone was nestled inside the box for communicating with the inmates. When Paige’s voice came tinnily through the receiver, I pitched my voice high and told her it was Jeannine. She buzzed me in.