Chapter 213: Capital Operations Conclude, Waco Aerobatic Airplane, Aerial Navigation
The Hudson Shipping Company acquisition case resulted in the major shareholder changing to Taishan Casino Company.
It thereby became an absolute holding company.
The absolute controlling shareholder holding 67% equity can decide all matters within the company and also has absolute voting rights at the shareholder meeting.
Therefore, no one would be able to stop everything Fang Wen planned to do next.
The first thing he did after taking over Hudson was to comprehensively restructure the company.
Apart from the shipping department, all other departments were dismantled, and the originally few employees were reduced to only over 40 people.
Among these remaining employees, the main ones were the operational members of the two cargo ships: captain, first mate, second mate, third mate, boatswain and sailors, chief engineer, chief greaser, second greaser, third greaser, engine mechanics, and the cook on the ship.
Fang Wen did not trust these people; he needed to replace them with a reliable batch.
Lin Shuiwang, who was originally in charge of affairs at various transfer airports on the Asia-Europe route, took a ship to the United States.
North of New York Manhattan, a three-story building, the new office location of Hudson Shipping Company.
In the general manager’s office of the shipping company, Fang Wen talked with Lin Shuiwang.
“San Shui, you said before that you wanted to become a captain, right?”
“Yeah.” Lin Shuiwang rubbed his palms, excited and expectant.
“Now you can be a captain, but I have an even bigger idea. I’m handing all of Hudson Shipping’s business to you to manage. Can you do it?”
Fang Wen’s words stunned Lin Shuiwang.
“General Manager, in my whole life, apart from my vocal talent, I’m only decent at navigation. Shipping business involves a lot to manage; I’m afraid I can’t handle it.”
“You’re underestimating yourself. Weren’t all the transfer airports on the Asia-Europe route operated and managed by you?” Fang Wen laughed.
“Those places already had a solid foundation. I just talked and communicated with people, solved problems if there were any, or moved to the next if not. It’s very simple.” Lin Shuiwang replied.
“But you understand shipping business better than I do. I believe you can do well. San Shui, the company needs you, and you like shipping too. People should always aim higher. Captain isn’t the peak of your career. Give it a try.” Fang Wen encouraged.
Lin Shuiwang hesitated, smoked a cigarette, and then made his decision: “Alright then, General Manager. I’ll take it on first. If I can’t do it well, can you let me go be a captain?”
“Sure. Now let’s talk business.” Fang Wen’s smile disappeared, his face serious.
This isn’t business yet! Lin Shuiwang quickly sat up straight.
When he heard Fang Wen finish talking about the silver smuggling, he was extremely surprised.
“General Manager, you’re incredibly bold. You dare to do something like this. No need to say more, I support you.”
“Your support alone isn’t enough. I’m planning to replace all the crew members. Do you have reliable people?”
“Of course.” Lin Shuiwang replied without hesitation.
His confidence came from his hometown Min Nan.
Since the Ming and Qing dynasties, there have been many people in Min Nan making a living at sea. At that time, there were no professional sailor training schools; everyone learned through family and friends, and it continued into the Republic of China.
They were all relatives and friends, so they naturally worked unitedly. Plus, silver smuggling wouldn’t lack their profit sharing, so this matter was settled.
Lin Shuiwang became the manager of Hudson Shipping’s business. The sailors on the two cargo ships were all replaced with Min Nan sailors, of course half of them held American IDs, and the owners were also an American company, so they remained American-registered cargo ships.
After the reorganization of these two cargo ships, they were preparing to go to Europe.
A great piece of news appeared in the United States: Roosevelt abolished the《 Smoot-Hawley Act》 and signed the Reciprocal Tariff Act.
The tariff trade war thereby ended. The restored international trade saved America’s shipping industry, but unfortunately Hudson Shipping Company’s former major shareholder couldn’t wait for this moment.
Taking advantage of this policy welfare, Hudson Shipping received orders to ship cargo to Europe, perfect timing.
The two cargo ships heading to Europe this time officially carried two ships of rubber products there, and brought back various European specialty products, as well as watches, instruments, and equipment.
Privately, they would bring back a large amount of silver from Europe.
While the cargo ships headed to Europe, Fang Wen continued his plans in the United States.
Restructuring, debt.
These two things could actually be done together.
In mid-July, Hudson Shipping consecutively issued several announcements.
《Announcement on Hudson Shipping’s name change to Taishan International》
This announcement formally changed Hudson Shipping to Taishan International.
The subsequent announcements were: 《Taishan International Resolution: Board resolution to acquire Taishan Casino Company through stock issuance》, 《Taishan International Board Resolution: Borrow 2 million US dollars from Taishan Casino Company to repay short-term debt》, 《Taishan International Board Resolution: Plan to resolve debt problems through stock issuance》.
The stock issuance to acquire assets and convert bonds to equity among the three board resolutions opened a new capital play on the New York Stock Exchange.
The New York Stock Exchange and the Securities and Exchange Commission had no experience in this area, nor did securities regulations prohibit such financial behavior.
For this, the Securities and Exchange Commission held a series of discussion meetings.
The specific meeting contents were unknown to the outside world, but everyone analyzed that this capital operation would likely be approved.
Because it could give the capital market stronger refinancing capabilities and also solve problems for some companies in operational difficulty.
More crucially, this method was a playstyle favored by Wall Street; in the future, they could use similar cases to conduct analogous operations.
For this reason, after several meetings, the Securities and Exchange Commission surprisingly amended the 1934 Securities Exchange Act, allowing directed share issuance as a permissible operation.
Obtaining the Securities and Exchange Commission’s approval so smoothly surprised Fang Wen; the funds and connections he prepared for this went unused.
Since it was approved and a capital operation method that all of Wall Street was watching, Fang Wen immediately executed it.
First was the valuation.
Taishan Casino Company’s valuation was 10 million US dollars, including considerations of existing assets, future prospects, and more.
Plus Taishan International’s 2 million in debt-to-equity conversion.
Taishan International’s current stock price was 1 US dollar. To issue stocks to purchase assets and convert debt to stock, it needed to issue 12 million shares.
The original Taishan International shares were 100,000, suddenly increasing by 12 million shares, like a small rabbit turning into an elephant.
Taishan International’s major shareholder’s shareholding after the directed issuance would exceed 99%, no longer qualifying for listing.
This trouble was soon resolved by Wall Street people.
They proposed an issuance guarantee system, where during directed additional issuance, several Wall Street investment banks would invest, allowing them to obtain a total of 3 million directed issuance shares at 1 US dollar each.
This solved the problem of equity being too concentrated and losing listing qualifications.
In essence, these investment banks wanted a piece of the pie.
Fang Wen generously agreed to this.
He knew very well that to make money on Wall Street, he had to play by their rules.
His purpose from beginning to end was to shear wool from the United States, turning it into a means to deal with the Japanese. Because of this, he never became overly greedy.
The directed additional issuance plan, with the intervention of Wall Street investment banks, changed from issuing 12 million shares to 15 million shares.
And, according to the rules set, the shares invested by these investment banks as part of the guarantee plan had only a 3-month lock-up period, after which they could enter the market for trading.
For the investment banks, this became an operable capital activity.
The subsequent matters didn’t require Fang Wen’s involvement; Wall Street investment banks handled them.
Only 17% of Taishan International shares on the market were snapped up by investors of unknown identities.
As purchasable stocks became scarce, the stock price rose from 1 dollar to 5 dollars.
Late July 1934.
Taishan International’s 15 million directed additional stocks were issued.
With no traders, the stock price stayed at 5 dollars.
This was preparation for cashing out the 3 million investment bank shares 3 months later; the investment banks thought selling at 5 dollars was a good choice.
But Fang Wen didn’t think so. He spent so much effort to list Taishan Casino, not for such short-sightedness.
His goal had always been a stock price of 100 dollars.
A stock price of 100 dollars, 15 million shares, that is a market cap of 1.5 billion.
Fang Wen could obtain 1 billion, or even more.
1 billion US dollars during the War of Resistance was enough to do many things.
But that needed time to brew. No matter how magical the capital market, it couldn’t achieve 100-fold or thousand-fold growth in a year.
With the directed issuance completed, Fang Wen’s attention turned to the two cargo ships.
The two cargo ships were waiting to unload at Marseille Port via the Mediterranean Sea.
Subsequently, trucks flying the Swiss flag entered the port and unloaded truckloads of watches.
These wooden boxes contained not only watches, but also silver.
Relations with local contacts had to be smoothed before customs inspection.
After Lin Shuiwang visited the local customs person in charge with 500,000 francs, the matter was tacitly approved.
At night, all the sailors mobilized, loading box after box of cargo onto the ship. This loading took 2 nights to complete.
After loading, the two cargo ships set sail toward the United States.
Along the way, via the telegraph device, Fang Wen accurately tracked the positions of the two ships. When the cargo ships entered US territorial waters, Fang Wen took action.
He called Indiana.
“You can start.”
Indiana silently hung up the phone, hesitated for a moment, but still sent a message to customs.
According to his message, customs patrol ships were redirected to another direction, attempting to intercept another smuggling ship.
This created a gap in the smuggling defense line on the US East Coast.
Even so, without future precise measurement equipment, the ships still couldn’t accurately pass through this gap.
Next, Fang Wen needed to personally command.
He went to a farm in the New York suburbs and boarded the specially prepared Waco（Waco） stunt plane.
Don’t underestimate its small size; this guy participated in the cross-American continent air race and completed the entire course.
Fang Wen got on the plane, activated mechanical perception, and gained a more comprehensive understanding of this specially ordered aircraft.
Its fuselage had been modified; the wing brackets were changed to metal for greater endurance.
The engine wasn’t original either; Fang Wen even judged the original engine was likely a 200-horsepower old-style aviation engine.
But the modified plane had excellent performance, piquing Fang Wen’s curiosity, which was why he chose this aircraft.
He started the plane, took off, and skillfully piloted this small airplane into the air.
It felt like flying the Potez 25 fighter reconnaissance aircraft back then, but compared to the Potez 25, this one was more agile.
At the same time, Fang Wen noticed the plane’s tail fin was unusual—a rare trapezoidal tail fin among biplanes.
The trapezoidal tail fin, or vertical tail fin, in the monoplane piston aircraft era, gave monoplanes higher stability.
Even on some multi-engine propeller planes, to improve vertical tail efficiency, twin or multiple vertical tails were used.
Its main role was to use the vertical tail to stabilize the high-speed airflow impact behind the propeller.
But in biplanes, the trapezoidal fin served the same purpose.
Fang Wen couldn’t help but sigh: No wonder the Waco stunt plane remained popular after so many years of development. They focused on one thing; even a biplane could achieve excellent performance improvements.
With this sentiment, Fang Wen controlled the plane to climb, actually reaching over 4,000 meters altitude.
He felt the fuselage trembling under pressure; he couldn’t go higher and descended a few hundred meters.
The plane flew out of New York City, patrolling toward the US East Coast sea area.
Under mechanical perception, Fang Wen saw the scene below: the original customs patrol ships had indeed been redirected to the northern area, where a cargo ship was fleeing, pursued closely by patrol ships.
It had to be fast, or once the patrol ships completed the arrest and returned, there would be no chance.
Fang Wen flew from the gap toward deeper waters, while sending a telegram.
【Report nautical chart coordinates.】
After a short while, the telegram returned information.
They were all latitude and longitude coordinates from the nautical chart.
Fang Wen took out the sextant for positioning. After marking, he confirmed his position and the cargo ships’.
The gap between them was 150 kilometers. He adjusted course and flew toward the target.
Half an hour later, two cargo ships appeared ahead. Fang Wen telegraphed again to confirm, then instructed the cargo ships to proceed in the direction he indicated.
In this way, he led navigation from the air, with the two cargo ships following closely.
Before the customs patrol ships returned, they passed through that gap.
They then docked at a remote private port in New York State.
New York State also had private ports, secret channels used during Prohibition for smuggling high-proof alcohol.
The Mafia and other gangs made a fortune through these private ports in those years, but after Prohibition was repealed, they fell into disuse.
That day, it bustled again.
Two 5,000-ton cargo ships arrived.
Because the water wasn’t deep enough, the cargo ships couldn’t dock. After Al Capone and his men at the port talked, they organized two small ships to transfer cargo at sea.
Box after box of silver was placed in nets; crew members used pulleys to lower them slowly, then gang members on the boats below moved them aboard.
In this back-and-forth manner, a large amount of silver was transported ashore, then loaded onto trucks and sent to warehouses in New York City.
This batch of silver, when the silver price reached nearly 1 US dollar per ounce, was entirely bought by several Mafia big families at 80% of the price.
Next, it was up to them how to operate it; Fang Wen no longer needed to worry about it.
He prepared to return to Asia, but the millions of US dollars from this silver transaction needed to be spent well.
What to spend it on?
Fang Wen thought of his seaplane. Since his ability was in this area, better not to invest randomly but go all the way down this path.
Therefore, he decided to purchase a batch of aircraft manufacturing equipment before leaving the United States, and select suppliers for engines, propellers, aluminum alloy, and hydraulic devices.
