Republic of China: Ace Pilot

Chapter 211, Section 210: Heading to the United States, Future Thinking: Acquisition, Restructuring, and Speculation
A high-powered telegraph antenna in Yangon emitted radio waves that crossed the Pacific Ocean and reached the United States.

These telegrams were sent to different regional telegraph offices.

The recipients of the telegrams reacted in different ways.

Taishan Casino Company, Las Vegas.

Taishan Casino Company, which had been operating for a year, was at its peak.

Fang Wen laid a solid foundation, and this legitimate gambling company, which united the interests of gangsters, Las Vegas locals, state legislators, judges, and many other parties, has always been successful. Everyone is making money and maintaining the business together.

Zhao Jiu had a very leisurely life. His main job was to take care of the overall situation, ease internal conflicts, and act as a peacemaker when disputes of interest or other conflicts arose.

In this way, he was respected by various interest groups within the Taishan Casino Company.

But Zhao Jiu knew in his heart that this was an unstable company, and the only chance to make it take off smoothly was to go public.

Zhao Jiu had been preparing for this, but unfortunately, he was still a little short.

On that day, he received a registered telegram.

After reading it, he immediately stood up and rushed out of the office.

He found Al Capone, someone in the company with whom he had close ties.

Zhao Jiu made no secret about Al Capone.

"The general manager bet on a surge in silver prices. While silver prices did rise in the US, a 50% income tax was levied on silver transactions. Now, unless the Treasury buys up silver, trading it on the market will result in losses."

Al Capone has been living a comfortable life for over a year, and the weight he lost in prison has come back.

He took it very seriously when he heard it was Fang Wen.

"We've also discussed the silver issue. We have a way to have the Treasury buy up the silver; after all, we have leverage over the years that we can use against those people. The problem is that we can't smuggle large amounts of foreign silver into the United States through customs patrols."

"So, as long as the silver is smuggled over, you can solve the rest of the problems?" Zhao Jiu asked with delight.

“That’s right, 8% of the Treasury’s purchase price. If that price is acceptable, they’ll be willing.” Al Capone stated the Mafia’s asking price, which was neither too high nor too low. A 2% profit margin without taking any risks was worthwhile.

Zhao Jiu immediately sent this information back via telegram.

Meanwhile, in New York, a radio wave was also transmitted to Yangon.

The radio waves traveled back and forth, constantly communicating.

Through contact with people across the ocean, Fang Wen gradually made a decision: indeed, Americans understood the US government better, and their approach was more suitable.

He already had a plan in mind, knowing that in this silver turmoil, he needed to both utilize the rules and cleverly circumvent the restrictions in order to maximize his own interests.

He immediately summoned the team members: Manager Liu, Fang Shouxin, and Sun Debiao.

"The Americans have taken precautions regarding silver. They control the inflow of foreign silver through high income taxes, and it can only be purchased by the U.S. Treasury. We need to find another way to sell silver to the Americans," Fang Wen said with a determined look. "Since direct sales are blocked, we will open up a hidden channel to bypass customs and transport the silver to the U.S. mainland."

"How do we do it?" Sun Debiao asked.

“I need an American fleet to avoid customs patrols,” Fang Wen replied.

"Where can we find such a fleet to cooperate with us?" Manager Liu shook his head.

"At first, I also thought it was impossible, but then I contacted people in the United States. Do you remember that I had two investment brokers in the US?"

Manager Liu, Fang Shouxin, and Sun Debiao all nodded in agreement; they were all aware of the matter.

Fang Wen continued, “I telegraphed them to inquire if they had any American shipping fleets operating in the Far East or Europe. They said yes, but this company misjudged the situation, holding a large amount of US dollars. After the dollar depreciated, it was unable to repay its debts and had entered bankruptcy liquidation. It was listed on the New York Stock Exchange, and its stock price had fallen to 1 cent. Acquiring all the shares would only cost $1000, but even then, no one dared to take it. If we take over this company, we will have a means to transport silver.”

Manager Liu, Fang Shouxin, and Sun Debiao did not speak in response; they were absorbing and digesting what Fang Wen said.

After a while, Manager Liu asked, "How much debt does this company have?"

Fang Wen took out a piece of paper and handed it to Manager Liu: "This is the company's situation; they have $500 million in debt."

Manager Liu manages all the accounts of Taishan Airlines. He has also kept up with the times and learned Western finance. He is no stranger to the data that Fang Wen writes down on paper.

He observed and calculated simultaneously, and finally drew his own conclusion.

“General Manager, this company owes more than $500 million in debt. They also have outstanding payments for some of the cargo on their ships, plus freight penalties. The actual debt should be $700 million, while the company’s only assets are those two 5000-ton cargo ships, which are worth only $140 million. If you buy this company, you will lose $560 million.”

Did they lose $560 million?

Fang Wen did not back down, but asked, "Then calculate how much profit you can make if you ship silver from the Swiss treasury to the United States and sell it at 8% of the market price."

Manager Liu took out his abacus, quickly turned the dial, and after a while, calculated the result.

"The current price of silver in the United States is $0.6 per ounce. When we hoarded silver, it was $0.40 per ounce, so we made a 50% profit. After deducting the 20% selling price, the actual profit was $5 million."

"The U.S. government's tender offer price ceiling is $1.2929 per ounce. Assuming silver rises to $1 per ounce, how much can we earn?" Fang Wen asked.

“If it rises to $1 per ounce, we can earn more than 1900 million,” Manager Liu replied.

Based on this calculation, it seems like the business is viable.

But Fang Wen didn't finish speaking.

"Taishan Casino's application to list on the NYSE has been repeatedly rejected, even though all the requirements have been met. They still refuse on the grounds that a gaming company is not in the public interest. But they can't stop a listed company from acquiring Taishan Casino."

Fang Wen revealed the future world's capital operation methods.

Manager Liu, Fang Shouxin, and Sun Debiao did not understand.

Sun Debiao was completely baffled: "General Manager, going public requires paying those stock exchanges. You have to spend money to buy a bankrupt company, and you also have to spend money to use it to acquire Taishan Casino Company. Is it worth it?"

“It’s worth it.” Fang Wen smiled. Nothing is more worthwhile than buying shares for 1 cent and then selling them for $100.

However, it's impossible for one person to buy all the shares; otherwise, it wouldn't be a joint-stock company.

He had to establish many shell companies that were not under his own name but were actually under his control, to jointly purchase all the shares.

In this way, the game of capital can continue.

But it's not enough for me to understand it myself; I have to explain this future vision to my subordinates so that they can cooperate with me to complete the entire plan.

Fang Wen continued to explain.

“We need to look beyond the immediate losses and profits; we need to consider the long-term strategy and future returns. While Taishan Casino Company is not yet listed, its value extends far beyond that. By acquiring a bankrupt company, we can indirectly allow Taishan Casino to bypass the direct restrictions of the stock exchange and achieve a backdoor listing.” “As for the cost,” Fang Wen continued, “although the initial investment seems substantial, we need to calculate the overall return. First, by acquiring the bankrupt company at a low price, we are essentially acquiring a valuable shell company at an extremely low cost. Second, by using this shell company to acquire Taishan Casino, we can legalize our casino business and bring it to the capital market. With only one gaming company listed on the NYSE, investors will have no choice but to buy our company's stock, which will also boost the overall valuation.”

“Furthermore,” Fang Wen’s eyes gleamed with shrewdness, “when the price of silver rises as expected, our stockpiled silver will become a huge source of profit. This profit will not only cover the costs incurred during the acquisition process, but also bring considerable cash flow to the company, supporting our expansion in other areas.”

"As for the establishment of offshore companies," Fang Wen looked at Manager Liu, "I need to establish a series of complex equity structures to ensure that these offshore companies can operate independently while also being controlled by us. In this way, during the acquisition process, we can diversify our shareholdings to avoid attracting the attention of regulatory agencies, while also maximizing our profits through capital operations at the appropriate time."

Upon hearing this, Manager Liu nodded, indicating his understanding and willingness to undertake this important task. He knew that such capital operations required not only precise calculations and judgments, but also a high degree of confidentiality and flexible operation.

Although Fang Shouxin and Sun Debiao were still confused about the specific details of the capital operation, they had full confidence in Fang Wen's decision-making ability. They believed that as long as they followed Fang Wen, they would definitely be able to find an extraordinary path to success.

Therefore, Fang Wen began to arrange the follow-up plans. He first instructed Manager Liu to complete the establishment of the offshore company and the construction of its equity structure as soon as possible; at the same time, he also began to contact the management of Taishan Casino Company to lay the groundwork for future acquisitions.

End of March 1934.

Manager Liu, who travels back and forth by plane, brought back good news.

He mainly traveled within the Commonwealth, registering independent companies with different businesses in different regions of the Commonwealth.

Because these companies belong to the same system, they became verifiable legitimate companies after a two-week update of information from the Commonwealth Business Organization.

In reality, these companies are just shell companies; funds are transferred in when needed and transferred out when not needed.

This is also the best model for overseas companies, as the NYSE can obtain accurate information by sending a telegram to London.

With these companies in hand, Fang Wen could finally take action.

This time he did not fly a plane, but traveled by ship, because that would leave entry and exit records proving that he came to the United States alone without any collaborators.

After sailing at sea for two weeks, the passenger ship arrived in New York Harbor.

Fang Wen disembarked with the other passengers.

They had to go through immigration, and everyone held their documents in their hands.

Fang Wen, too, held a passport issued by the Republic of China government.

His passport was covered with stamps and signatures, representing the countries he had visited.

The staff member took the passport, opened it, stared blankly at the densely packed stamps inside, and couldn't help but ask, "Have you been to all these countries?"

"Yes, I am a pilot."

Fang Wen's explanation cleared up the staff's doubts. These days, there are two types of people who would have this kind of passport: seamen and pilots.

After receiving his passport, Fang Wen carried his suitcase out of the inspection room. The first thing he did was make a phone call.

At a public phone booth, take out a coin and dial a number.

After a short wait, a woman's voice could be heard, along with the joyful shouts of children playing.

"Is this Mary? I can't go to church today, my child is sick."

“I am not Mary. Please tell your husband that an Eastern friend has arrived. If he has time,” Fang Wen paused, looking at the hotel sign in the distance, “tell him to come to the Crown Hotel to find me.”

"Okay, I'll tell him when he gets back." The woman hung up the phone.

Fang Wen also hung up the phone, left the phone booth, and headed straight for the Crown Hotel.

Fang Wen booked a single room and didn't go anywhere else; he just waited in the room.

At five o'clock in the afternoon, there was a knock on the door.

When Fang Wen got up and opened the door, he was suddenly in Indiana.

The two smiled at each other and gave each other an American-style hug.

Patting the other person on the shoulder, Fang Wen said, "You know, every time I contact you, it's definitely because I need something."

“Yes, but I benefit from it every time,” Indiana replied with a smile.

The two entered the room and sat down on the only two chairs in the single room.

“This is a big deal. You can choose to join or not,” Fang Wen asked with a smile. This way of asking questions was a test of Indiana's feelings and also a test of the relationship between the two.

Indiana rubbed his hands together and looked up at Fang Wen.

He was hallucinating.

A whisper came from the left ear: "Don't join him. He's a demon. Can't you see? Only a demon can be so mysterious and powerful."

A whisper echoed in my right ear: "Join him, everything you have is thanks to him. Without him, you're still in Tehran. He is your angel."

As the hallucinations subsided, Indiana made a decision.

"I'm in. Now you can say that, right?"

Fang Wen smiled and said, "Have you heard of the Silver Purchase Act?"

Indiana nodded: "I've heard of it."

“I happen to have a large amount of silver. But the Silver Purchase Act is very unfriendly to foreigners like us. I need to use some means to realize my plan.”

Here it comes, here it comes, the angels' and demons' plan has begun.

Indiana had witnessed Fang Wen's plans several times, and each time he was amazed by them; this time was no exception.

With great excitement, Indiana remained silent and continued listening.

Seeing that Indiana remained silent, Fang Wen continued, "I plan to acquire a publicly traded company that is about to go bankrupt, and then use that company's ships to smuggle silver."

“Right now, all silver in the United States can only be traded with the Treasury Department. If you bring it over, do you have a way to make it legal and then sell it to the Treasury Department?” Indiana asked.

“I can’t do anything about it, but the Mafia can. I’ve heard that in the past, the Mafia did a lot of things for the members of Congress. Now, these Mafia members have unexpectedly bought a lot of silver at 80% of the original price. They want the members of Congress to repay them for what they did in the past. Having the Treasury buy this batch of silver would be the best way to repay them.”

Upon hearing Fang Wen's explanation, Indiana exclaimed in amazement, "You've succeeded again! This will definitely work!"

“I haven’t finished speaking yet,” Fang Wen replied.

(End of this chapter)