stjorthotic Chapter 206 Lone Star Security Company
Chapter 206 Lone Star Security Company
Chapter 206 Lone Star Security Company
At 1:30 p.m., Larry and Dunbar returned to Goldman Sachs.
Although it was Sunday, the busy scene at Goldman Sachs seemed to never change, and they paid no attention to the two uninvited guests who had suddenly barged in.
Larry walked straight into the hallway where Henry Goldman's office was located.
Strangely enough, his office door was open, and the short, stout Samuel Sachs was whispering something to Henry Goldman at his desk.
Upon seeing Larry arrive, both men fell silent. Samuel Sachs quickly stood up, looked directly at Larry, and said politely,
"Welcome, Mr. Livingston. Goldman Sachs welcomes you."
Larry nodded his thanks, and then Samuel Sachs excused himself and left.
Henry Goldman looked at Larry, a smirk playing on his lips, and casually picked up a thick stack of documents from the table, holding them in his hands.
"Mr. Livingston, your proposal. Oh, as you just saw, my dear brother-in-law personally told me that for someone like you who trusts Goldman Sachs, we must follow the rules and only charge a 2% commission..."
Larry nodded, but before he could say anything more, Henry Goldman interrupted, saying...
"But sir, this plan is so well-designed that you can get things done with very little cost. So 2% really isn't much of a profit."
Larry smiled and pointed to the stack of proposals, saying, "Then consider it a stepping stone, Mr. Goldman. I'll be asking you for a lot of things in the future, and having a fixed fee structure would actually benefit our long-term cooperation."
Henry Goldman nodded and handed the stack of documents to Larry.
While Larry was browsing, Henry Goldman glanced at Larry's progress and explained in detail,
"My initial concern was that we could only import from Europe. Although we are all German immigrants, it wouldn't be too difficult for us to get some bullets from Germany. But since we have a legal importer in China, there's no need to go through all that trouble."
Larry nodded and continued flipping through the documents. The first one even thoughtfully listed the addresses of major gun and arms dealers at the time.
Henry Goldman continued, "The problem is another one: importers won't allow a complete stranger to take thousands of rounds of ammunition from them at once. That would immediately trigger an alarm. Even if it's a buyer they know well, if they order thousands of rounds at once, they'll be brushed off with the excuse that they don't have enough stock."
"Yes, what you're saying is possible!" Larry nodded, having already turned to the next page.
This is not text typed by a typewriter, but a sketch drawn as precisely as possible.
Henry Goldman glanced at the sketch in Larry's hand, propped himself up on one elbow, and pointed at the sketch with the other, saying,
"This is a location we carefully selected, situated on the northern border of Texas and Oklahoma, adjacent to Arkansas."
Then, he pointed to a spot circled in red at the junction of the three states and continued,
"The banks of the Red River are steep and covered in vast stretches of wasteland. As it is a disputed territory between the three states, the south bank of the Red River is a stretch of riverbanks, sandbars, and mudflats within Grayson. The legal jurisdiction over this area is extremely ambiguous. Texas Rangers, U.S. Marshals, Indian territory courts, and Arkansas officials may all claim jurisdiction, or they may all choose to recuse themselves."
Seeing Larry intently studying the map, Henry Goldman continued his explanation,
"What's interesting is that this place has specific addresses in three states, so theoretically, we can also establish a company in each of those three states and register it here."
Larry glanced at him, then turned to the next page of the document.
The paper has the headers of the three states listed, followed by several alternative company names.
Henry Goldman continued, "In River County, Arkansas, we will register a Red River Mining and Exploration Company. The core business of this company is exploration, which will allow us to legally purchase and hold the imported 'industrial supplies' and test rifles. It is geographically closest to the disputed area, facilitating logistics."
"In addition, the Central Territory Geological Services, based on the Oklahoma Territory Indian Reservation, had an equipment lease agreement with Red River Mining Company to conduct actual 'geological exploration' activities in the Tri-State Cape region, which involved live-fire testing. The Indian Territory was chosen for registration because company regulations there are the most lenient, with virtually no oversight."
"Third, Lone Star Security. This company is registered in Grayson County, Texas. Its main business is providing local security services, and it also handles commissions to drive away bison that harasses the railroads. The company will be employed by Central Territory Services, subcontracting tasks such as perimeter security. It is responsible for signing contracts with railroad companies for bison removal and with mining companies for exploration. It hires personnel, purchases equipment, and their payment is those metric brass precision fasteners..."
Larry frowned and looked at Henry Goldman, who smiled easily and said to Larry,
"We went through the process with lawyers from two different law firms, and police and officials in three states couldn't find any flaws in the authorization from this legitimate company. If any busybody officials or state troopers questioned us, we would produce the proper documents."
Any official would be overwhelmed by this pile of documents from three different jurisdictions. Pursuing this matter means dealing with the bureaucracies of two other states, which is both troublesome and prone to political intrigue; most people would choose to avoid trouble altogether.
Larry nodded, pondering the subtleties of the statement, then smiled and said...
"Excellent. The entire structure forms a perfect, legally sound business loop on paper. Each company has a legal scope of business in its place of registration, and their contractual relationships are protected by commercial law."
"Yes! The most crucial point is that the actual firearms testing takes place in a legally disputed area where 'no one can explicitly claim jurisdiction.' So the process is guaranteed to be flawless," Henry Goldman added.
Larry nodded and looked at the last page of the document, which contained a detailed configuration table and cost breakdown for Lone Star Security.
"What is this?" Larry asked, puzzled.
Henry Goldman stared intently at the paper, his tone becoming serious as he spoke.
"Yes, this is an option that I consider absolutely necessary. Believe me, Mr. Livingston, this is not about expanding the scope of the contract, but rather something you urgently need."
"I think the other two security companies are probably shells, but this one shouldn't be. Because there is indeed some danger there. You need a real security company with at least 30 people to help you with security and protection. Setting up such a company isn't easy, but if you're only maintaining it for a few months of gun testing, you can dissolve the company after the term expires."
Larry raised an eyebrow and flicked the paper with his fingernail, saying, "A private armed security company? Like the Pinkerton Detective Agency!"
Henry Goldman nodded and said, "Yes, these kinds of companies are not uncommon in Texas. Most of them rely heavily on government or large corporate contracts to survive. But I think you'd be better off building your own rather than hiring someone, because your firearms testing mission is too special. If you hire a similar company, you'll have to be wary of their betrayal, but if you build your own company, even a makeshift one, you'll be much safer as long as you keep things confidential."
Larry listened to Henry Goldman's account without speaking, but instead traced the various items such as "weapon configuration," "clothing and basic equipment," "transportation vehicles," and "personnel salaries" down to the final calculated amount.
The initial staffing and equipment purchase will cost approximately $8000 to $15000, and the first year's salaries and operations will also require $20000.
In other words, the operating capital for the first year will be approximately between $3 and $4.
Larry pondered for a moment, thinking that the cost of this security company already exceeded the investment in Browning Brothers Firearms Company. Wasn't this a case of buying the box and discarding the pearl?
In addition, Larry also suspected that the other party was deliberately increasing unnecessary expenses.
You must carefully consider what Goman says, because who knows which of his words might be a trap?
Larry turned to Henry Goldman and said thoughtfully, "Is it really necessary to set up this security company?"
Henry Goldman, with one hand on his left chest, said, "We consulted geological surveyors, lawyers, and relevant people in Texas, and they said it was absolutely necessary. Mr. Livingston, this is for your own good. To show my sincerity, the costs of setting up and maintaining the company later can be paid separately when you feel it's time to establish it; they are not included in the contract this time."
As he spoke, Henry Goldman flashed a slick smile and continued, "Of course, you can't skimp on the commission for creating this company..."
Larry thought for a moment, then said in a deep voice, "Alright, let's take it one step at a time. How much did it cost in total to set up and register these three companies, and to get the bullets from the arms importers?"
Henry Goldman's face hardened again as he helped Larry turn to the first page of the document, pointing to the numbers and saying,
"Ammunition isn't expensive, currently it's $40 to $50 per thousand rounds, so 2 rounds would be $1000; plus insurance of $800, inland transportation of $750, it would be around $2500 by the time it reaches Texas, and the registration and legal documents for the three companies would cost $1500. In addition, we also need to collect personnel fees for the purchase order, which is $600."
After saying that, Henry Goldman looked at Larry and concluded, "That's $4600 in total!"
Larry frowned and asked, "You mean you won't even get $100 for this job?"
Henry Goldman just said that he only takes a 2% fixed commission from Larry, but $100 is too little... Larry could hardly believe his ears.
Henry Goldman smiled slightly and continued,
"Our 2% commission reflects our commitment to working with you. But starting a business requires much more than just a legal entity. You need start-up capital, risk hedging, and, most importantly, to build reliable business credit. We've tailored a 'Partner Program' to ensure your new company's financial security for years to come—that's where our true value lies."
Larry's heart skipped a beat when he heard this, thinking to himself that this was the key point, the "Goldman Sachs moment" was coming!
"We recommend that your new Lone Star Security issue a long-term bond worth $10000 to $15000 with a maturity of 12 to 36 months for 'initial working capital, equipment purchase and market development'. In addition, our company will subscribe to the entire bond and underwrite it."
However, since your company has no credit history and your business is risky, we will charge you a relatively high annual interest rate, approximately 22%...
Larry interrupted him, "How can it be so high?"
Goldman shrugged and said, "You know what? Short-term lending rates are already at 14% now, which isn't considered high."
"Then continue..."
"Yes, for issuing this bond, we will charge you an underwriting fee of 3-5%, which is about $600. In addition, to ensure that you can repay on time and establish good credit, you should deposit 60% of your company's cash into our affiliated trust bank or have it managed directly by us. Of course, this will also incur a management fee of 1.5%."
Finally, we will still need to use your funds to ensure that your first year's interest is paid out; this is necessary. But you can use the remaining 40% of the funds…”
Larry almost cried when he heard the rest. "What 'seven in, thirteen out'? It's all garbage compared to Goldman Sachs' plan!"
Goldman Sachs lends you money at high interest rates, then "kindly holds 60% for you," and you end up with a 22% annual interest rate, plus various underwriting and management fees...
Larry quickly calculated that Goldman Sachs would earn $2000 from this process, including underwriting fees, management fees, and interest rate spreads on the issued bonds.
The other party's account still has 60% of the funds nominally their own, which can guarantee that at least the portion they underwrite is foolproof.
In name, Goldman Sachs provided you with $1.5 in long-term bonds, but in reality, you easily became their long-term slave.
Awesome, absolutely awesome!
But even so, Henry Goldman wasn't finished. He continued, "All of your company's future financing, mergers and acquisitions, and foreign exchange settlement services will be conducted through us..."
Larry nodded, thinking to himself, "This locks in all the high commissions I'll be making in the future..."
That's fucking rip-off!
Larry waved his hand, stopping Henry Goldman from continuing, and instead said to him seriously,
"Mr. Gao Man, you seem to have forgotten one thing. I am also a securities professional. Your process... may seem to have helped me register a company and raise capital, but in reality, I have to pay a much higher price than it appears..."
Goldman awkwardly stopped talking, looked at Larry, and after a moment said, "Mr. Livingston, we're all just trying to make a living on Wall Street. We need to find our own way to profit!"
Larry stared at him for a long time before smiling, taking out his checkbook, and then sitting down on his desk without any hesitation, picking up the pen from the brass pen holder.
Larry then said in a deep voice, "The plan is great, commendable. In addition to the $4600 cost, I'll give you a one-time fee of $1400—don't ask why I'm offering $1400, I fucking like to round it up. Are you in or not? If you are, I'll write you a check for $6000."
Henry Goldman gritted his teeth, but dared not look Larry in the eye, and then said, "Okay, okay... sir, I'll do it!"
Larry quickly filled out his check, blew on the ink to dry it, and gently handed it to the other person, saying in a low voice, "..."
"Mr. Goldman! Don't try any more tricks on me. What tricks do you have for that old spendthrift, Astor III? ... Please remember one thing: if you help me secure enough benefits, I won't be stingy with rewards and commissions; but if you ever try to use these tactics against me again, our cooperation will be over. Understand?"
Henry Goldman couldn't help but look at Larry, noticing the worldly wisdom that appeared on his seemingly young face, and a layer of frost on his face.
"Gulp," Goman unconsciously swallowed, silently avoiding Larry's gaze, and said dryly,
"I...I understand, Mr. Livingston."
.
As they walked out of the Goldman Sachs building, Larry led the way, followed by Mr. Dunbar.
The two turned a street corner, and Larry raised his hand to summon a horse-drawn carriage.
When the carriage reached them, Larry suddenly stopped. His gaze pierced through the carriage canopy, through the tall Romanesque eaves of Wall Street, and through the clouds in the sky, as he stared blankly at the empty space in the sky, lost in thought...
Dunbar frowned and asked, "Larry, what's wrong?"
Larry suddenly smiled, turned to him, and said, "Uncle Dunbar, guess what? I suddenly think that project Henry Goldman proposed, called Lone Star Security, is really a great idea!"
(End of this chapter)