After speaking with the laundress and the waiter, Frederick was already aware that, aside from the stock market's oddly sustained boom, virtually every aspect of society had begun to stagnate or even regress to some degree.
Having already learned about the conditions of the working class service staff, the next step was to investigate the situation of white-collar workers. Naturally, it was also worth taking a closer look at the market's reaction and the state of bank loans.
When Frederick mentioned that he was heading out, the cleaning lady quickly took their shoes away for polishing, and the waiter, using the driver ID and car service name Frederick had provided the day before, promptly arranged a ride. Everything was handled with impressive efficiency. Soon, the shoes were returned gleaming, and the car would arrive in fifteen minutes.
Wonderful!
Nile wasn't used to the bitterness of black coffee, so he added nearly half a cup of milk to make it palatable. Frederick went further, dropping in two sugar cubes. Sweets seemed to be everyone's common craving these days—how else could Coca-Cola become a nationwide, and later a global, sensation?
After a simple sandwich breakfast, the two saw that it was about time and followed the waiter outside. The elevator even had a dedicated attendant to operate it, professionally courteous with a sweet smile—worth noting with a backward glance.
Yesterday's driver was already waiting outside and cheerfully asked where Frederick would like to go. He also explained the pricing for charter services but said they could also charge by the day's mileage.
Frederick didn't care either way and instructed the driver to take them to the Pennsylvania National Bank—not for any urgent financial need, but to have a chat with the local loan manager and get a sense of the lending climate in Pittsburgh.
Objectively speaking, the total value of installment loans for consumer goods in the U.S. had exceeded $3.5 billion in recent years. The so-called economic boom was built on people's high expectations for future wages and a society-wide blind optimism. The mass production of cars, refrigerators, radios, and other industrial products relied heavily on consumer loans for sales.
Without the unrestricted expansion of credit, these goods wouldn't sell—at least not in such large quantities. Once banks realized they'd issued too many loans and started tightening credit, a chain reaction would follow, rapidly contracting the market.
Unsurprisingly, when Frederick and Nile entered the service hall of the Pennsylvania National Bank in Pittsburgh, the bank staff first noted that they had arrived by taxi. Then, after a glance at the gold-plated cufflinks on Frederick's French shirt and his plain silver tie clip, the staffer greeted them with a formulaic smile.
When Frederick explained that he was seeking a loan to expand his business, the staffer gave a barely perceptible sneer before leading them to an office.
After a short wait of about thirty seconds, a well-groomed manager in his thirties came out to greet them. His demeanor was much more natural, and he even ordered coffee to be brought in.
"Please have a seat!" he said, initiating the conversation.
In this era, loan approvals required extremely strict face-to-face assessments, and even small loans—meaning $100 to $200, the equivalent of a few months' wages for an industrial worker—were rare. Consider your own salary: would a modern bank easily offer you an unsecured loan equivalent to a few months' income? Probably not.
(Credit cards don't count…)
When Frederick said that his family wanted to expand their hotel business into the industrial cities of the Great Lakes region and needed funding, the manager showed a brief moment of contemplation. After all, the hotel industry did have a stable earning potential and was a solid investment at the time.
Throughout history and across the globe, most men have had natural biological needs. However, this line of business often involves navigating powerful social forces and the legal system. Without managing both, it's hard to profit.
In Brooke County, Frederick's father had influence among the local German-American community, wasn't afraid of a fight, and had good relations with the county administration. With connections on both sides of the law, their business ran smoothly. But whether they could break into the working-class neighborhoods of the Great Lakes cities remained uncertain.
"Perhaps Mr. Schäfer could provide some more detailed documentation?" The bank manager seemed mildly interested but not fully convinced.
"I have extensive experience in the business, a successful hotel, and can even offer it as collateral. Isn't that enough?" Frederick feigned a bit of naivety.
"In that case, Mr. Schäfer, do you currently hold any loans with the West Virginia National Bank?" the manager asked calmly.
"There's a small one, just a few thousand dollars," Frederick lied.
The hotel was thriving and didn't need any loans. In fact, they had enough capital to expand. But as mentioned earlier, starting a hotel wasn't just about money—you had to understand and manage both the legal and the underground networks. That's why their business had always remained in Brooke County.
"I'm sorry, but could you bring in the loan documentation so we can verify it with our branch?"
That was a clear signal: we're not giving you a loan, and we don't want you coming back either.
"What other documents do I need to prepare?" Frederick kept up the act.
"That will do for now. I wish you the best in our future cooperation," the manager said with a smile, standing up to shake Frederick's hand—a polite but unmistakable dismissal.
They didn't even get to drink the coffee...
Once outside, Frederick's charming façade instantly vanished. The innocent, cheerful young businessman was gone, replaced with a solemn expression as he and Nile got back into the car.
It was clear the bank hadn't asked about the hotel's performance, nor requested tax records or transaction history. Their decision hinged solely on whether any local bank was still willing to lend to Frederick's family.
The truth was evident: the bank's lending capital was drying up.
In the past, even white-collar workers earning $70 or $80 a month could easily borrow hundreds to buy a Ford car. Now, a well-run business was being turned away with vague excuses.
If this was how they treated a profitable hotel, what about those businesses already struggling with unsold inventory and cash flow issues?
They were surely in deep trouble.