Reborn in America, I am a legendary short seller on Wall Street.

Chapter 219 The First Fund Management Company on Wall Street

On Saturday morning, just as dawn was breaking, Mr. Porter sent a young man to the Astor Hotel to inform Larry that he must be at 52 Wall Street by 10 a.m. that day.

Larry took the address that was delivered. It was a beautifully framed red cardstock sheet with a hand-drawn map and a line of printed text.

We believe in the power of progress!

Below the text was the company name written in large, cursive font: "Progress Partners Fund".

Larry raised an eyebrow, a smile spreading across his face. He thought to himself that the name was excellent, and the message was quite powerful. It was clear that Mr. Potter truly took this matter to heart, demonstrating his diligence and meticulousness by arranging everything perfectly, big or small.

Larry thanked the young man, then knocked on the door and told Dunbar to get ready to go down to Wall Street with him.

Dunbar was wiping his old pistol.

He was carrying a Colt Model 1860 pistol, which was very old; it was not only a single-action pistol but also a muzzle-loading percussion cap pistol. By today's standards, it was quite outdated.

Upon hearing Larry's instructions, Dunbar agreed, stood up, tucked the pistol into his concealed sling, and then slowly put on his coat.

Sure enough, Mr. Dunbar looked very handsome in front of the door, having put on new clothes and trimmed his hair and beard.

He exudes the dashing and heroic air of an old soldier from head to toe.

Larry exclaimed, "Uncle Dunbar, you'll be sure to elicit gasps from the ladies on Wall Street dressed like that."

Dunbar smiled and shook his head, casually asking, "Will Matthew be coming? He said he'd give me a pistol last time, I've been waiting for ages."

"Saying goodbye to your old buddy?" Larry pointed to his pistol.

Dunbar replied, "No, I just want to see what that futuristic pistol he's talking about looks like!"
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The two traveled by carriage to 52 Wall Street.

This is a typical old-fashioned, brown, three-story building common on Wall Street. Mr. Porter generously booked it all outright, and at this moment, all three floors belong to the fund company.

Larry, dressed in a sharp double-breasted suit, stood at the building entrance. Instead of rushing inside, he first surveyed the entire Wall Street from east to west.

One end of Wall Street is the East River, and the other end is the cemetery of Trinity Church.

Someone once summarized it in the past: the East River is water, which symbolizes money flowing like water; the cemetery of Trinity Church represents risk and conclusion. Therefore, Wall Street is constantly staging tragedies and comedies that combine risk and opportunity. People are used to seeing money come and go, just like the water of the East River.

"Larry! You've finally arrived!" Mr. Potter's voice drifted down from the second floor.

Larry looked up and saw Mr. Potter, also dressed impeccably and smiling, looking at him from the window. He then said...
"Wait there for me, I'll be right downstairs to meet you."

A moment later, Mr. Potter hurried downstairs and stood at the door to greet Larry.

Larry followed Mr. Potter into the small building, and after looking around, a smile appeared on his face.

“Mr. Potter, this place is quite nice. You have excellent taste.”

Mr. Potter smiled and stroked his curly mustache, saying, “It’s really nice, because the place itself is very nice. Do you see its tall dome? This place used to be a small chapel.”

Larry nodded, his eyes fixed on the office building converted from the small chapel, where the building's former form could still be vaguely seen.

The house may not be large, but its extremely high ceilings and huge arched windows allow sunlight to stream in, illuminating the polished, fresh wooden floors.

The air still faintly carried the mixed scents of turpentine, fresh paint, and leather. Larry saw it as the smell of new life and beginnings. The walls were also deliberately painted a trendy light olive green, rather than the somber dark brown of the old bank.

Larry was slightly bothered by the color of the walls, thinking to himself, "I finally managed to set up a fund, and they painted it green. That's not good."

But then he realized he'd forgotten that green was actually Americans' favorite color, because banknotes were green.

The first floor is half a reception room and half an open-plan office. The office is particularly spacious, with several young employees busily working inside.

The meeting room also has a fund-like feel, with a huge blackboard and a giant world map and a map of the US railroad network hanging next to it.

"Why don't I see the price quote machine?" Larry suddenly turned to ask Mr. Porter.

“No need! The company only needs to invest for the long term, not engage in short-term trading,” Mr. Porter replied with a smile.

Then, the two walked and talked until they reached the second floor.

There are three offices on the second floor. One of them belongs to Mr. Potter, and the other is empty except for a desk.

The desk is covered in brand-new, simple, and sturdy designs.

On the black desk sat a brass glass ink bottle, a fine fountain pen, and a stack of high-quality blank manuscript paper, everything neatly arranged, waiting to be filled with thoughts and wealth.

Mr. Potter gestured to Larry, pulled out a chair himself, and said, "Come, sit in your seat!"

"Me?" Larry chuckled, then sat down in the chair without any hesitation, experiencing the feeling of being in charge behind a desk.

“Mr. Porter, this place is really nice; I feel like I’m in control.” Larry looked up and smiled at Mr. Porter. Mr. Porter chuckled and then said, “I’ve heard some of your ideas about funds and long-term investing, and I’ve been quite inspired. In short, if the first round of funding is successful, we should invest in these mature emerging technologies first. But when the second fund is launched, we’ll try to enter the secondary market.”

Larry thought for a moment and said in a low voice, "It's fine if you really have this idea, but not now. I personally think there will be some better opportunities in the future."

Mr. Potter's eyes lit up, and he immediately asked, "What do you mean? Did you hear something?"

"It's not about what I heard, it's about what I felt. Haven't you noticed how high the interbank lending rates on Wall Street have been lately? It's as if there's a shortage of money everywhere."

Larry also visited National City Bank in New York yesterday and transferred $12 from there to his two company accounts.

When Larry tried to withdraw the money, the account manager was very unhappy and repeatedly tried to persuade him not to transfer so much money out at once.

Larry asked him why, and the account manager said that short-term lending rates had been rising further recently, and they were paying more attention to large transfers by their clients, especially fearing that their clients would be poached by other banks.

After Larry finished speaking, Mr. Porter raised his eyebrows and nodded, saying, "I've noticed that too. It seems that deflation has really occurred. I've heard a lot of rumors that Europeans are starting to gradually withdraw their investments from the United States."

Larry tapped the table and said, "In that case, we need to be careful. The Europeans withdrawing capital from America certainly won't pay with dollars; they'll only take gold."

“That makes sense. I’ve also heard recently that gold is starting to become scarce between banks. Previously, their interest rates were kept at a very low level, but now, if customers deposit gold coins, they are said to receive preferential interest rates.”

Mr. Potter paused for a moment, as if he were thinking about something.

Larry then asked, "Mr. Porter, can I turn the money in my account into gold?"

Mr. Potter nodded and said with a smile,
"You've come to the right person; others might not know the answer. Theoretically, the money in your account can be converted into gold, since the US dollar is theoretically tied to gold. But you still need to go to a bank or the Treasury's gold exchange office to do so. However, it's different if you hold gold certificates."

"Do you have a way to exchange them for gold vouchers?" Larry's face lit up with joy.

Gold certificates are paper certificates issued directly by the U.S. Treasury Department. Holders can redeem these certificates for gold coins or gold bars of equal value from the U.S. Treasury Department. To ensure the reliability of this commitment, Congress passed legislation requiring the Treasury Department to have a full reserve of gold worth $1 for every $1 of gold certificates issued.

Although the US dollar is legally backed by gold, it is not usually directly convertible into gold; its value is based on government or bank credit.

But gold certificates are different; they are still "cash within cash" and a direct manifestation of the gold standard.

Mr. Potter glanced at Larry, a sly smile spreading across his face. "Are you sure you want to do this? I can help you, but you have to finish the most important thing for today first."

"What is it?" Larry asked curiously.

“Let’s sign the documents to establish the fund company!” Mr. Porter said with a smile, tapping the table with his finger. “Come on, Larry, I’ve had the lawyers do the final confirmation. It should be ready now. Let’s sign the three-tiered agreement and officially establish the first fund company on Wall Street.”

Larry stood up from behind his desk and followed Mr. Potter to the third floor.

The third floor has two extremely spacious offices, but the ceiling is low, so they are furnished with small sofas and desks for people to rest.

At this point, there were already three lawyers present. When they saw Larry and Mr. Porter walk in, they all stood up and bowed to the two men.

Larry saw that several documents were already spread out on the table, and it looked like they had already been passed around among the lawyers.

A lawyer bent down, picked up the documents, and handed them to Mr. Potter, but Mr. Potter refused to take them and gestured for Larry to look at them himself.

Larry took a look and found that they were the Partnership Agreement, the Capital Subscription Agreement, the Shareholders Agreement, and the Management Agreement.

Larry now works for two companies and is quite familiar with these agreements, so he went straight to the last one, the "Entrusted Management Agreement," which clearly states that Mr. Porter is the trustee of the fund and details the manager's responsibilities, powers, management fees, and performance-based compensation.

The management fee was 2% annually, and the performance-based commission was 20%. Since no similar agreement existed at the time, this "management fee + performance-based compensation" model was very advanced. The agreement used the clearest language possible to avoid future ambiguity and emphasized the manager's fiduciary duty.

Larry looked up at Mr. Potter and understood what he meant.

Mr. Porter smiled and looked out the window. “Larry, after much thought, I think you should become the major shareholder of this fund company… After all, this company needs a lot of money for follow-on investments, and I don’t have that much money.”

Larry waved his hand and said, "No, sir. You can invest less, and I will make sure that the investment will not exceed yours. I still want you to be the major shareholder."

Mr. Porter glanced at Larry, waved his hand, and said with a smile, "I sensed your sincerity before, but it doesn't matter. Besides being a shareholder, I'm also a manager, and I get performance-based compensation. This is more interesting to me than a simple shareholder structure. No problem, sign it."

Larry looked at the capital subscription agreement, which only showed Mr. Porter's investment of $10, but not his share, nor Larry's investment or share.

“Since you insist on making me the major shareholder, fine, Mr. Porter, I’ll contribute $20. That should be enough for the initial fund to make further investments.”

Larry knew that Mr. Porter's decision was well thought out, and that he had also reserved room for profit in his role as manager, so he stopped being coy and signed his name on several contracts.

Mr. Potter nodded, took the pen Larry had just used, and signed his name as well.

After signing his last name, Mr. Potter stretched his wrist, put down the pen, and said with a smile, "Larry, my name is here. My future and fortune are in your hands now."

Larry's eyes were full of confidence, and a slight smile appeared on his face, but he still spoke solemnly.
“Mr. Porter, your trust is my greatest responsibility. Our names are signed together on this paper today, and tomorrow they will be etched together in the history of Wall Street.”

In the presence of three lawyers, the two men clasped hands tightly.

(End of this chapter)