298-299

*Chapter 298: The First Shot is Fired*

Currently, the world's seven largest oil companies, ranked from largest to smallest, are: ExxonMobil, Royal Dutch Shell, Mobil Oil, Texaco, British Petroleum (BP), Chevron, and Gulf Oil.

ExxonMobil is dominated by the Rockefeller family, and Royal Dutch Shell and Mobil Oil also have their largest shares controlled by the same family.

This leaves Texaco, BP, Chevron, and Gulf Oil as the four companies not yet infiltrated by the Rockefellers.

Texaco is backed by the Texas financial group, while BP remains under British control.

Gulf Oil is under the Mellon family’s control, and Chevron, formerly known as Standard Oil of California, naturally became the property of the California financial group.

David Rockefeller has long set his sights on Texaco, Gulf Oil, and Chevron.

The fall of Old Wilson represents an unprecedented opportunity for him.

Lawrence Rockefeller, exhaling a ring of smoke, said nonchalantly:

“Standard Oil of California must return to its rightful owner. However, simply aiming to reclaim Chevron seems like a waste of such a rare opportunity.”

“When Schneider was in power, not only did he resist our infiltration, but he also managed to fend off the Morgans. Despite being weaker than us, he kept the California financial group independent and even competed fiercely with us across multiple industries.”

Financial groups are monopolistic conglomerates formed by the fusion of massive banks and corporations, controlled by a select few financial oligarchs.

Not every wealthy individual belongs to a financial group, but a financial group never lacks wealth—the extent depends on its size.

The leaders of financial groups hold immense societal power because they control vast social resources.

The more resources a financial group controls, the higher the societal status of its leaders.

Thus, the goal of every financial group is to dominate more resources, not merely to earn more money.

Money is akin to golden eggs—finite once used. But if transformed into a "golden goose," it produces endless wealth, creating a positive cycle.

In modern capitalist society, social resources are primarily embodied in corporations, with political resources serving as auxiliaries to capital.

This system drives every financial group to seize control of more corporations, thereby enhancing its societal influence and standing.

The aim is not necessarily to wholly own a company but to achieve control. There’s a fundamental difference between ownership and operational control.

The operator or controller can exploit other shareholders. Unless these shareholders unite to resist or take over, they remain powerless.

This convenience allows the ultimate controller to leverage the company for greater gains.

The more aggressive approach involves deliberate mismanagement to buy shares cheaply or injecting capital to dilute others’ holdings, inflating one’s equity value indirectly.

More subtly, the company’s resources can be exploited for personal gain.

For instance, the Rockefeller family doesn’t need to fully acquire Chevron.

Controlling its board and shareholders’ meetings suffices to secure operational authority.

With thousands of employees, Chevron’s collective insurance purchases could easily favor Rockefeller-owned insurers over those of the California financial group.

If each employee’s insurance costs $1,000, then for thousands, it totals billions in premiums—renewed annually for decades, generating over $10 billion.

This is the synergistic effect of resource integration, where the ultimate controller reaps the most benefits, not the shareholders.

Financial groups worldwide, including Boston’s, follow this model.

Milo stands out as an exception—his rise was astonishingly rapid.

Compared to other financial groups, he is still in a startup phase in terms of time.

Many of his companies’ equities are highly concentrated in his hands.

His industrial portfolio is incomplete and not yet a financial group in the strictest sense.

At best, he’s a member of the Boston financial group, but his independence is exceptionally strong.

Now, Milo’s core foundation is beginning to take shape:

- *Dominating Yahoo*, ensuring control over the future internet landscape.

- *Controlling media*, securing influence over public discourse in an increasingly internet-driven world.

- *Leading electronics technology*, having just formed an alliance with Samsung, Microsoft, Apple, and others. However, it will take time—at least until the mobile internet emerges—for Milo to dominate consumer electronics.

Beyond these, Milo has dabbled in energy, retail, and banking, but only just started to establish a foothold.

In traditional industries, established financial groups hold immense sway, making progress extraordinarily difficult.

Take the oil industry: Milo merged Phillips Petroleum and Conoco to form ConocoPhillips ahead of time.

Yet, in the global energy market, ConocoPhillips remains a minor player.

Expansion? Easier said than done.

Even the Rockefellers, with over 80 years of groundwork, haven’t fully revived Standard Oil.

Milo, a newcomer, faces an even steeper uphill battle.

In retail, Milo aims to innovate, blending future Amazon-like e-commerce with Walmart’s online-to-offline model.

The potential rewards are high, but so are the challenges.

Finally, banking and finance represent the core of major financial groups.

The Morgans maintain a stranglehold here, forcing even the Rockefellers into alliances.

Breaking through requires extraordinary circumstances:

- A catastrophic event wiping out America’s financial elite.

- The premature emergence of S3, wreaking havoc across half of the United States, resetting the game.

Otherwise, even a financial crisis offers little opportunity.

Often, financial crises are deliberately orchestrated by financial groups to eliminate weaker competitors, as seen in the subprime mortgage crisis a decade later.

The United States has indeed seen the collapse of many businesses, and some financial conglomerates have suffered severe blows.

But what about those that were well-prepared, or the most powerful conglomerates?

JPMorgan Chase directly absorbed the best parts of Lehman Brothers without taking on its debts.

Citigroup acquired Bank of America under similar conditions, avoiding any liability for its debts.

General Electric bought up those airline companies, while Boeing took over engine companies...

For most people, for the average citizen, this was undoubtedly a crisis.

But for the financial conglomerates and corporate giants, it was nothing more than a carefully orchestrated celebration, with even the U.S. government cooperating in their actions.

Unless... unless the Great Depression of the 1920s were to happen again.

Compared to that historic Great Depression, all subsequent economic crises have been minor.

Even the subprime mortgage crisis of 2008 pales in comparison to the Great Depression.

Franklin D. Roosevelt’s rise to power was due in part to his standing among America’s elite families.

The other part was that, by the time of the Great Depression, the United States was on the brink of collapse.

Capitalists were ready to flee, and global conflict was looming.

Roosevelt stepped up to the challenge, implementing various measures to address the depression, making the U.S. the country that suffered the least damage and rebounded the fastest.

This established the foundation for America’s status as the world's leading industrial power.

In simple terms, the Great Depression shook America’s very foundations.

Roosevelt’s reforms had popular support, and capitalists had no choice but to cooperate, unwilling to face bankruptcy or public backlash.

In the initial stages, despite their dissatisfaction, they had to hold their noses and support Roosevelt’s reforms.

Even then, it took two Roosevelts working in succession to truly make America “great again.”

Otherwise, it would have been far too difficult.

Even if Milo were a time traveler blessed with divine foresight, he could only have gone with the flow, becoming part of the system and climbing step by step.

This was because he was born into that privileged class.

Otherwise, no matter how much he wanted to rise, there would have been no path available.

Without the right background and without a massive upheaval like World War III or a civil war,

Americans born into the lower classes would need two to three generations of effort, with each generation producing exceptional individuals, to have even a chance of rising.

“...Let’s do it this way then.”

After detailed discussions, David Rockefeller and Lawrence Rockefeller, the two brothers, finalized their target and devised their plan.

These two old foxes knew that someone would make a move.

They also knew that the Wilson family and the California financial consortium had not yet suffered significant losses, so they decided to let the more impatient groups act as the vanguard.

Once those groups had worn themselves out, the Rockefellers planned to seize their opportunity.

Meanwhile, as the Rockefellers and other conglomerates schemed against the California financial consortium in secret,

Milo remained in San Francisco.

News of Schneider’s illness and coma was no longer limited to a select few but had spread throughout the American political and business spheres, even reaching influential families and financial groups abroad.

For a time, undercurrents surged, and an unusual atmosphere began to permeate American commerce.

While many speculated about which financial group would be the first to test the California consortium,

It turned out to be an infamous financial raider who fired the first shot.

Jim Chanos, founder of Knicks United Fund, one of Wall Street’s largest short-selling firms, was notorious for using short-selling as a means of extorting and sabotaging listed companies, wreaking havoc in the financial markets.

He secured funding from Chicago’s City Bank and acquired a 10.2% stake in California’s Litton Industries. He then publicly demanded a seat on the company’s board.

Litton Industries, though not well-known, was one of the California consortium’s primary arms manufacturers.

Their cruise missiles were among the best in the world.

The U.S. military sourced 30% of its cruise missiles and rocket engines from this company.

It was a key member of the California consortium.

As everyone knew, Chicago City Bank was not part of the California consortium; instead, it was a competitor of Wilson Financial and Wells Fargo.

This bank was one of the core institutions of the Chicago consortium.

In other words, many believed the Chicago consortium had made the first move.

After the news broke, attention shifted en masse to this battleground.

Jim Chanos, understanding the importance of swift and decisive action, struck while Litton Industries’ management was still in emergency meetings.

That afternoon, Knicks United Fund Company unveiled a highly tempting proposal for the shareholders.

If Knicks United Fund Company were to take over Litton Industries, it planned to split the company.

Half of Litton Industries' subsidiaries would be reorganized into a separate entity called "Litton Industrial Trust." Shareholders would receive equivalent securities from this trust.

The key point is that "Litton Industrial Trust" would be a trust company rather than a munitions company.

The revenue generated annually by these assets would be decoupled from the rest of Litton Industries' operations.

The "Litton Industrial Trust" would directly and fully distribute the profits to its shareholders without passing through Litton Industries.

For Litton Industries' shareholders, this meant that owning securities in "Litton Industrial Trust" allowed them to enjoy the entirety of the profits generated by those assets.

In comparison, previously, the shareholders only received a portion of the profits left after Litton Industries deducted funds for reinvestment and expansion. The difference here was enormous.

Additionally, the profits from "Litton Industrial Trust" would no longer be included in Litton Industries’ total income for corporate taxation.

Instead, the profits would go directly to shareholders, who would handle their personal income tax obligations.

With this arrangement, the shareholders could earn several times the dividends they had previously received!

However, this came at the expense of Litton Industries' long-term interests and future growth prospects.

For shareholders without management or operational control, they were more than willing to prioritize short-term gains.

After all, the future is uncertain, but money in hand is a sure thing.

Even if Litton Industries’ stock price were to fall in the future, the earnings from "Litton Industrial Trust" could offset those losses—potentially even surpass them.

For shareholders, this plan, which involved lower risk and significantly higher returns, was irresistibly appealing.

They believed Litton Industries should support Knicks United Fund Company joining the board to make wise decisions!

Soon, the proposal sparked widespread discussion within Litton Industries. Many mid-level employees who held shares voiced their opinions, expressing their stance to the upper management.

However, the upper management, equipped with operational control, was not so short-sighted. They understood the malicious intentions of Knicks United Fund Company and Jim Chanos, and naturally rejected the proposal outright.

Litton Industries quickly found itself in turmoil, with tensions arising between the upper management and the mid- to lower-level employees.

Meanwhile, Jim Chanos didn’t relent and continued leveraging media influence, ensuring extensive newspaper coverage of the proposal.

The news spread rapidly, with growing support from investors. Litton Industries’ management team became increasingly alarmed.

The shareholders were on the brink of rebellion!

Unable to contain the unrest, several board members reached out to the Wilson family for assistance...

(End of Chapter)  

*Chapter 299: The Dilemma of the King of California*

Sometimes, life works in the most peculiar ways.

The departure or arrival of one individual can have immeasurable consequences on a myriad of matters.

As long as Schneider was alive—even if he had mostly lost his ability to work—his mere presence kept the Wilson family's overt influence intact.

The titles "Lion of California" and "King of California" were earned through his illustrious past.

But once the news of Schneider’s hospitalization and coma was confirmed, everything changed.

Unless he wakes up immediately, even a full recovery in the future won't restore things to their current state.

Once someone fires the first shot, others are bound to follow.

In San Francisco, atop Nob Hill, within the ancestral home of the Wilson family, a storm brews.

The presence of executives from Lyton Industries and members of the Lyton family only adds to the tension—not visually but emotionally.

In the Wilson family’s living room, several members of the clan are gathered:

Paul Wilson, the three brothers Edward, Leonard, and Timothy, along with James Wilson and other relatives.

James Wilson, Paul Wilson’s biological son and Edward’s uncle, is now the chairman of Lyton Industries.

He married into the Lyton family, which is part of the California Consortium, a close ally of the Wilsons.

The Lyton family operates much like Brian’s family, Milo’s uncle-in-law. Most core families within a consortium have two or three such allied families for support.

Around these families are at least seven or eight additional peripheral members.

These clusters of core and allied families form larger consortiums.

While this is true for most, Morgan and Rockefeller operate differently.

Their consortiums have a single core family—themselves—which spares them the internal strife and conflicts of interest that plague others.

Over a century, this distinction allowed them to overshadow consortiums in Boston, Chicago, and Cleveland, which consist of multiple core families.

James Wilson’s marriage to a Lyton family member cemented an alliance between the Wilsons and Lytons, with both managing Lyton Industries—a post-World War II industrial venture.

However, James owns less than 1% of its shares, a common scenario for Wilson family members.

Most of their holdings are managed through family charitable or management trusts, where the rights are collectively shared, but the family head retains ultimate authority.

This unique structure is exclusive to the California Consortium, known for being more loosely organized than others.

Without the Wilson family—without Schneider and his father’s Unified Alliance—the California Consortium might never have existed.

This lack of cohesion explains why the relatively weaker Texas Consortium wields greater influence in Washington, while the economically powerful California Consortium, with its hubs in Los Angeles and San Francisco, remains politically muted.

In the past, Schneider barely held the consortium together.

Since the millennium, neither Schneider nor anyone else has emerged to fill that void, leaving the consortium without a voice.

“James, what is the current situation with Lyton Industries?”

“Has it truly reached such a critical state in such a short time?”

A family member asked James Wilson, whose grave expression underscored the severity of the situation.

James nodded solemnly and addressed the group:

“The situation is dire. The announcement by Nyx Joint Fund Company has been highly inflammatory.”

“Lyton Industries is a Wilson-Lyton enterprise. Normally, other shareholders align with us because it’s profitable to do so.”

“But the company’s performance has been deteriorating for years, leaving shareholders disappointed. Dissatisfaction has been brewing for a long time.”

“In 1990, our revenue reached $6.483 billion, with a net profit of $915 million—a 13.23% profit margin.”

“Last year, revenue rose to $9.537 billion, but net profit fell to $528 million, leaving us with only a 4.35% profit margin.”

“While we cleared many bad assets, much of the recovered funds went toward stock buybacks to stabilize share prices. Initially, this worked, but with international stability and competition from other arms manufacturers, our stock prices dropped again. From the beginning of the year until now, our market value has shrunk by over $1 billion.”

“As much as I hate to admit it, I’ve made a series of strategic missteps, leading shareholders to feel their interests are severely compromised. Dividends have been shrinking year after year, and share values continue to decline.”

“So, shareholders have lost confidence in us. They no longer believe in long-term gains and instead trust the Nyx Joint Fund Company.”

“I’m willing to resign to take responsibility, but neither the Wilsons nor the Lytons can afford to lose Lyton Industries.”

The room fell into heavy silence.

Leonard Wilson broke the tension by asking:

“James, with the combined Wilson and Lyton shares, we control 38.6%. That leaves us 11.41% short of a majority. Do you think there are enough voting rights among other shareholders to side with us?”

Typically, owning over 33.4% of a company’s shares is sufficient to control its direction, barring hostile takeovers or aggressive competitors.

Anything more is often considered unnecessary, with excess funds better spent controlling additional enterprises.

The issue at hand is that Litton Industries is facing a hostile takeover.

Ironically, the other shareholders are not siding with Wilson and Litton at this time.

This puts them in an awkward position.

The 33.4% shareholding line has a prerequisite: at least another 16.6% of shareholders must support you as the largest shareholder.

Otherwise, it remains unstable.

Currently, this is exactly the situation for Litton Industries.

"The Nicks Union Fund publicly declared that they own 10.2% of the shares, but no one knows how much they secretly control."

"Right now, we can still block them from entering the board of directors. But if they demand an emergency shareholders' meeting and win over a majority of shareholders, they could feasibly achieve their goals according to the company bylaws."

"This is a recent development, so we must decide quickly on our course of action. Delaying will only increase uncertainties."

As soon as he finished speaking, everyone exchanged glances before one family member finally spoke up:

"The best solution is to increase our shareholding. If we can secure control of the board and the shareholders' meeting, the Nicks Union Fund will have no choice but to back down. No one else will be able to intervene either."

"However, under the current circumstances, increasing our stake will undoubtedly drive up the stock price. Conservatively, we would need $12–15 billion in capital."

"While this amount is significant but manageable, my concern is whether unforeseen issues requiring substantial funds will arise later."

"After all, there are companies just as important—if not more important—than Litton Industries."

The room fell silent again. James Wilson shrugged and leaned back on the sofa.

He returned to the family for this very reason.

As chairman of Litton Industries, James naturally wanted stability.

Ideally, the company would remain under his leadership.

Even if he were forced to resign, he would need to ensure the company's survival.

Losing control of the company would significantly diminish his standing within both the Wilson and Litton families.

But James didn't have the funds and could only rely on the family's decision.

With the patriarch, Schneider King Wilson, still in a coma, no one could single-handedly call the shots. Decisions were made collectively by various branches of the family and Litton representatives.

The majority's stance would represent the family's position, absolving James of responsibility regardless of the outcome.

"Let’s all think it over tonight. Tomorrow morning, we’ll reconvene with everyone present and make a final decision."

Seeing no immediate response, Paul Wilson, the eldest and most influential person in the room, took charge.

He added a word of caution:

"Due to Schneider's illness, the family is on high alert. I suspect the attack on Litton Industries is not an isolated case—more malicious incidents are likely on the horizon."

"Everyone has a responsibility to mobilize funds. A strong cash flow is our ammunition for both defense and counterattack."

"Stay vigilant and closely monitor your respective companies. Report any anomalies immediately to avoid being caught off guard."

"James, you'll need to work through the night contacting shareholders and assessing their stance to stabilize them for now."

James nodded. "Understood, Dad."

Paul then turned to Edward. "Come, Edward, let’s talk in the study."

Leaving the other Wilson and Litton family members and Litton Industries executives behind, Paul Wilson and Edward, Milo's eldest cousin, entered Schneider's old study.

The polished wooden floors were softened by an intricate Persian rug, exuding warmth and elegance.

Walnut bookshelves lined the walls, filled with leather-bound volumes, while classical oil paintings adorned the walls.

A brass chandelier cast a soft glow on the ornate desk and high-backed leather chair.

Although the corner fireplace was unlit—it was rarely needed in San Francisco or Los Angeles—it was a traditional European architectural feature. In America, wealthier families often added fireplaces, even for decorative purposes.

"I’ll support you as the new family head," Paul declared as soon as they sat down, "but only if we can maintain control. Otherwise, my support won’t matter."

"Thank you," Edward replied quietly. Unlike before, he seemed more composed and reserved.

Adversity had forced Edward to mature. Schneider’s incapacitation left him no choice but to grow.

"But we both know the current troublemakers are just pawns," Paul continued.

"Until recently, I’d never even heard of Jim Chanos! This young man is backed by people from Chicago, and behind them is Morgan!"

"The real threat will ultimately come from other giants."

"Edward, do you have a plan?"

Jim Chanos, originally from Milwaukee, came from a modest background—his father owned a dry-cleaning chain, and his mother was an office manager at a steel plant.

Milwaukee and steel, combined with his long history in Chicago, pointed unmistakably to a connection with the Morgan family.

In the U.S., Rockefeller represented oil and energy, and Morgan, besides finance, symbolized steel, railroads, and shipbuilding.

Edward paused before answering softly, "Dear Paul, have you considered that we might not be able to fend off everyone?"

Paul sighed heavily, his voice filled with concern. "Of course I have. Even if Schneider were to recover immediately, it might already be too late. We're too fragmented."

"That’s why I’m considering bringing in outside help."

"Milo Blackburn?"

"It seems you’ve figured it out."

“This is an easy conclusion to reach.”

Paul Wilson shook his head. “It has to be someone connected to us, with sufficient cash flow, who won’t be intimidated by the threats of Morgan or Rockefeller. At the same time, it needs to be someone you can reach. Other than Milo Blackburn, who else is there?”

“But you need to think it through, Edward. Compared to Morgan or Rockefeller, Blackburn isn’t necessarily a good person.”

“When that time comes, Wilson might no longer be the king of California.”

In the study, Edward leaned back in a walnut armchair, staring up at the amber-colored chandelier above him.

“I understand everything you’ve said. But besides Milo, who else can we turn to? The Dresk family? They’d probably love to see us humiliated. Or the Kreibergs? They can barely keep themselves afloat!”

“So who else is left? Who has the strength and the vision? Who?”

“On that list, is there anyone better suited to helping the Wilsons than Blackburn?”

“At the very least, Milo has a quarter of Wilson blood running through his veins.”

“If for no other reason, I think the most suitable white knight for the Wilsons is him.”

Paul Wilson, unable to argue further, closed his eyes and leaned back in his armchair, mirroring Edward.

“Enough said. When the time truly comes, bring him in.”

“You have my support.”

(End of Chapter)