“Dix francs, monsieur,” said the old lady to Henry.
Henry fumbled in his pocket, only to discover he had spent all his money. He looked despairingly at the old lady, who raised her hands, smiled at him and said:
“Don’t worry, Henry, have them on me. For old times’ sake.”
A MATTER OF PRINCIPLE
Sir Hamish Graham had many of the qualities and most of the failings that result from being born to a middle-class Scottish family. He was well educated, hard-working and honest, while at the same time being narrow-minded, uncompromising and proud. Never on any occasion had he allowed hard liquor to pass his lips, and he mistrusted all men who had not been born north of Hadrian’s Wall, and many of those who had.
After spending his formative years at Fettes School, to which he had won a minor scholarship, and at Edinburgh University, where he obtained a second-class honors degree in engineering, he was chosen from a field of twelve to be a trainee with the international construction company TarMac (named after its founder, J. L. McAdam, who discovered that tar when mixed with stones was the best constituent for making roads). The new trainee, through diligent work and uncompromising tactics, became the firm’s youngest and most disliked project manager. By the age of thirty Graham had been appointed deputy managing director of TarMac and was already beginning to realize that he could not hope to progress much farther while he was in someone else’s employ. He therefore began to think of forming his own company. When two years later the chairman of TarMac, Sir Alfred Hickman, offered Graham the opportunity to replace the retiring managing director, he resigned immediately. After all, if Sir Alfred felt he had the ability to run TarMac he must also be competent enough to start his own company.
The next day, young Hamish Graham made an appointment to see the local manager of the Bank of Scotland who was responsible for the TarMac account, and with whom he had dealt for the past ten years. Graham explained to the manager his plans for the future, submitting a full written proposal, and requesting that his overdraft facility be extended from fifty pounds to ten thousand. Three weeks later Graham learned that his application had been viewed favorably. He remained in his lodgings in Edinburgh, while renting an office in the north of the city (or, to be more accurate, a room at ten shillings a week). He purchased a typewriter, hired a secretary and ordered some unembossed headed letter-paper. After a further month of diligent interviewing, he employed two engineers, both graduates of Aberdeen University, and five out-of-work laborers from Glasgow.
During those first few weeks on his own Graham tendered for several small road contracts in the central lowlands of Scotland, the first seven of which he failed to secure. Preparing a tender is always time-consuming and often expensive, so by the end of his first six months in business Graham was beginning to wonder if his sudden departure from TarMac had not been foolhardy. For the first time in his life he experienced self-doubt, but that was soon removed by the Ayrshire County Council, who accepted his tender to construct a minor road which was to join a projected school with the main highway. The road was only five hundred yards in length, but the assignment took Graham’s little team seven months to complete and when all the bills had been paid and all expenses taken into account Graham Construction made a net loss of £143.10s.6d.
Still, in the profit column was a small reputation which had been invisibly earned, and caused the Ayrshire Council to invite him to build the school at the end of their new road. This contract made Graham Construction a profit of £420 and added still further to
his reputation. From that moment Graham Construction went from strength to strength, and as early as his third year in business he was able to declare a small pre-tax profit, and this grew steadily over the next five years. When Graham Construction was floated on the London Stock Exchange the demand for the shares was oversubscribed ten times and the newly quoted company was soon considered a blue-chip institution, a considerable achievement for Graham to have pulled off in his own lifetime. But then the City likes men who grow slowly and can be relied on not to involve themselves in unnecessary risks.
In the sixties Graham Construction built motorways, hospitals, factories and even a power station, but the achievement the chairman took most pride in was Edinburgh’s newly completed art gallery, which was the only contract that showed a deficit in the annual general report. The invisible earnings column, however, recorded the award of knight bachelor for the chairman.
Sir Hamish decided that the time had come for Graham Construction to expand into new fields, and looked, as generations of Scots had before him, toward the natural market of the British Empire. He built in Australia and Canada with his own finances, and in India and Africa with a subsidy from the British government. In 1963 he was named “Businessman of the Year” by The Times and three years later “Chairman of the Year” by The Economist. Sir Hamish never once altered his methods to keep pace with the changing times, and if anything grew more stubborn in the belief that his ideas of doing business were correct whatever anyone else thought; and he had a long credit column to prove he was right.
In the early seventies, when the slump hit the construction business, Graham Construction suffered the same cut in budgets and lost contracts as any of its major competitors. Sir Hamish reacted in a predictable way, by tightening his belt and paring his estimates while at the same time refusing one jot to compromise his business principles. The company therefore grew leaner and many of his more enterprising young executives left Graham Construction for firms which still believed in taking on the occasional risky contract.
Only when the slope of the profits graph started taking on the look of a downhill slalom did Sir Hamish become worried. One night, while brooding over the company’s profit-and-loss account for the previous three years, and realizing that he was losing contracts even in his native Scotland, Sir Hamish reluctantly came to the conclusion that he must tender for less established work, and perhaps even consider the odd gamble.
His brightest young executive, David Heath, a stocky, middle-aged bachelor, whom he did not entirely trust—after all, the man had been educated south of the border and worse, at some extraordinary place in the United States called the Wharton Business School—wanted Sir Hamish to put a toe into Mexican waters. Mexico, as Heath was not slow to point out, had discovered vast reserves of oil off its eastern coast and had overnight become rich with American dollars. The construction business in Mexico was suddenly proving most lucrative and contracts were coming up for tender with figures as high as thirty to forty million dollars attached to them. Heath urged Sir Hamish to go after one such contract that had recently been announced in a full-page advertisement in The Economist. The Mexican government was issuing tender documents for a proposed ring road around its capital, Mexico City. In an article in the business section of The Observer, detailed arguments were put forward as to why established British companies should try to fulfill the ring road tender. Heath had offered shrewd advice on overseas contracts in the past that Sir Hamish had subsequently let slip through his fingers.
The next morning, Sir Hamish sat at his desk listening attentively to David Heath, who felt that because Graham Construction had already built the Glasgow and Edinburgh ring roads any application they made to the Mexican government had to be taken seriously. To Heath’s surprise, Sir Hamish agreed with his project manager and allowed a team of six men to travel to Mexico to obtain the tender documents and research the project.
The research team was led by David Heath, and consisted of three other engineers, a geologist and an accountant. When the team arrived in Mexico they obtained the tender documents from the Minister of Works and settled down to study them minutely. Having pinpointed the major problems, they walked around Mexico City with their ears open and their mouths shut and made a list of the problems they were clearly going to encounter: the impossibility of unloading anything at Vera Cruz and then transporting the cargo to Mexico City without half of the original assignment being stolen, the lack of communications between ministries, and worst of all the attitude of the Mexicans to the dictionary definition of work. But David Heath’s most positive contribution to the list was to discover that each minister had his own outside man, and that man had better be well disposed to Graham Construction if the firm were to be even considered for the short list. Heath immediately sought out the Minister of Works man, one Victor Perez, and took him to an extravagant lunch at the Fonda el Refugio, where both of them nearly ended up drunk, although Heath remained sober enough to agree on all of the necessary terms, conditional upon Sir Hamish’s approval. Having taken every possible precaution, Heath agreed with Perez on a tender figure which was to include the minister’s percentage. Once he had completed the report for his chairman, he flew back to England with his team.
On the evening of David Heath’s return, Sir Hamish retired to bed early to study his project manager’s conclusions. He read the report through the night as others might read a spy story, and was left in no doubt that this was the opportunity he had been looking for to overcome the temporary setbacks Graham Construction was now suffering. Although Sir Hamish would be up against Costains, Sunleys and John Brown, as well as many international companies, he still felt confident that any application he made must have a “fair chance.” On arrival at his office the next morning Sir Hamish sent for David Heath, who was delighted by the chairman’s initial response to his report.
Sir Hamish started speaking as soon as his burly project manager entered the room, not even inviting him to take a seat.
“You must contact our Embassy in Mexico City immediately and inform them of our intentions,” pronounced Sir Hamish. “I may speak to the Ambassador myself,” he said, intending that to be the concluding remark of the interview.
“Useless,” said David Heath.
“I beg your pardon?”
“I don’t wish to appear rude, sir, but it doesn’t work like that any more. Britain is no longer a great power dispensing largesse to all far-flung and grateful recipients.”
“More’s the pity,” said Sir Hamish.
The project manager continued as though he had not heard his chairman.
“The Mexicans now have vast wealth of their own and the United States, Japan, France and Germany keep massive embassies in Mexico City with highly professional trade delegations trying to influence every ministry.”
“But surely history counts for something,” said Sir Hamish. “Wouldn’t they rather deal with an established British company than some upstarts from—?”
“Perhaps, sir, but in the end all that really matters is which minister is in charge of what contract and who is his outside representative.”
Sir Hamish looked puzzled. “Your meaning is obscure to me, Mr. Heath.”
“Allow me to explain, sir. Under the present system in Mexico, each ministry has an allocation of money to spend on projects agreed to by the government. Every Secretary of State is acutely aware that his tenure of office may be very short, so he picks out a major contract for himself from the many available. It’s the one way to ensure a pension for life if the government is changed overnight or the minister simply loses his job.”