The three years that followed the acquisition of Thorne Motors and the formation of the Hemsworth Conglomerate were a blur of calculated aggression and relentless expansion. Damon, now sixteen, had fully shed the facade of a merely "precocious" child; he was now recognized within the highest circles of Wall Street as the terrifyingly brilliant mind guiding the venerable House of Hemsworth. Arthur, his father, had become his executive shield, executing Damon's precise, often counter-intuitive, instructions with a newfound, fierce conviction.
The focus during 1904 to 1906 was the deep and complex integration of the three new pillars—Oil (Apex Fuels), Automobile (Thorne Motors), and Retail (Hemsworth Mercantile)—all funded and protected by the core Banking arm.
At Thorne Motors in Detroit, Damon dictated a complete overhaul of the factory floor, funding William Thorne's most radical plans for the moving assembly line. The constant supply of high-grade steel and chemicals, sourced through newly acquired or invested-in subsidiaries of the Hemsworth Conglomerate, gave Thorne an insurmountable cost advantage. While competitors like Ransom E. Olds and the early Fords struggled with fluctuating material costs and supply bottlenecks, Thorne Motors was a self-feeding machine. By 1906, they were producing their Model A chassis at a price point nearly 30% lower than the market average, positioned perfectly for the emerging middle class.
At Apex Fuels, Damon demanded not just higher efficiency in gasoline production, but an immediate expansion into petrochemicals. He knew that the true long-term value of oil lay not just in fuel, but in the byproducts that would eventually create plastics, synthetic rubber, and fertilizers. Dr. Elias, the chief chemist, was given unlimited funding to establish dedicated chemical processing plants alongside the refineries. Apex began generating revenue streams from selling heavy lubricating oils and bitumen for road paving—the very roads that Thorne cars would soon travel.
The most challenging task was Hemsworth Mercantile. Damon oversaw the transformation of the failing general stores into what he termed "Volume Depots." These were large, unadorned warehouses built on cheap land, focusing on high turnover and standardized inventory. He forced the adoption of the first rudimentary centralized inventory system, using telegraphs and complex ledgers to track stock across all locations. Thorne Motors' early trucks were pressed into service, creating a private delivery network that bypassed the inefficiency of third-party rail freight. The profits were small per item, but the volume was immense, and the control over the entire supply chain was absolute.
Damon's success had not gone unnoticed. He had earned the cautious respect of his peers, but also the deep, simmering hostility of his father's rivals. The Morgan-Rockefeller axis saw the upstart Hemsworth Conglomerate as a disruptive force, undermining the established rules of the trusts. Arthur received numerous "invitations" to meetings where the established titans of finance suggested, politely but firmly, that the Hemsworths should divest from their industrial interests and return to the polite, low-risk business of traditional banking. Damon merely used these meetings to gauge their complacency and identify their most vulnerable points.
He knew his window of quiet expansion was closing. His foreknowledge was his only advantage, and that knowledge pointed toward the autumn of 1907.
The Panic of 1907, or the "Knickerbocker Crisis," would be a severe financial crash caused by reckless speculation in copper and a loss of confidence in the banking system, leading to a massive withdrawal of funds. Damon had been preparing for it for five years.
His strategy was brutal, complex, and surgical:
Liquidity: The Hemsworth Bank (the core) had aggressively liquidated all non-essential and speculative assets over the previous two years, stockpiling cash and gold reserves far exceeding the required ratio. This ensured the bank's survival.
Targeting: Damon had identified several over-leveraged trusts and banks whose failure would trigger the cascade. Specifically, he focused on the Knickerbocker Trust Company, known for its risky involvement in the United Copper Company pool.
Positioning: Damon instructed the Conglomerate to quietly assume the debt of several key industrial firms that relied on the vulnerable banks for short-term commercial paper. This positioned Hemsworth as the lender of last resort for critical, healthy businesses when the panic hit.
In September 1907, Damon, now tall and commanding in his bespoke suit, sat across from his father in the Wall Street office. The atmosphere was taut. The stock market was showing tremors, and the whispers of a copper speculation disaster were growing louder.
"The time is now, Father," Damon stated, his voice devoid of emotion. "The pool will collapse next month. The Knickerbocker Trust is fatally exposed. Once the public realizes they cannot get their deposits, the run will begin, and it will spread to every institution that doesn't hold enough cash."
"Morgan will step in," Arthur insisted, though his face was pale. "He always does. He will gather the funds and stop the crisis."
"Morgan will step in, yes, but only after sufficient blood has been spilled to consolidate his own power," Damon countered. "And we will step in before him, and we will do it with surgical precision."
Damon placed a hand-drawn map on the desk, illustrating the flow of capital. It was complex, showing dozens of interrelated firms. "The New York Central Railroad uses the Knickerbocker Trust for its commercial paper. If the Trust fails, the railroad cannot pay its suppliers. We need that railroad, Father. Not to own, but to ensure its stability. We move our capital in two phases."
Phase One: The Pressure.
Damon's plan required an initial, shocking show of force. The Hemsworth Bank began discreetly calling in short-term loans from several of the weaker banks tied to the copper speculation. Then, Damon made a provocative, public move that sent shivers through the financial district: he authorized the Hemsworth Bank to publicly withdraw a substantial, calculated portion of its correspondent bank deposits from the Knickerbocker Trust Company.
The withdrawal was not catastrophic, but it was highly visible and deeply suspicious. The message was clear: Hemsworth has lost faith.
The very next day, the rumors became fact. The copper pool collapsed. The price of United Copper Company stock plummeted. The public panic, already triggered by Hemsworth's suspicious withdrawal, metastasized into a full-blown run on the Knickerbocker Trust.
Phase Two: The Consolidation.
As the run began, the financial landscape descended into chaos. J.P. Morgan, the seventy-year-old titan, began his heroic effort to assemble a consortium of banks to inject liquidity. But Damon had moved faster.
While Morgan was busy saving the institutions that served his own interests, Damon targeted the strategically vital industrial assets that were now facing immediate bankruptcy because their short-term credit had vanished:
Shipping & Logistics: A major inter-coastal shipping line that the Hemsworth Conglomerate needed to link the East Coast Mercantile Depots with new West Coast expansion plans. The line's primary bank had just failed. Damon stepped in, covering all outstanding debts and acquiring a controlling interest for pennies on the dollar. Hemsworth Global Logistics was born.
Raw Materials: A series of struggling, but technologically advanced, coal and iron ore mines in Pennsylvania. Their failure would affect the entire supply chain. Damon acquired them, instantly securing the supply of materials for Thorne Motors and future expansion. Gold—the capital realized from the Alaskan sales—had just purchased the literal earth needed for the next phase of the industrial machine.
Semiconductor Foundation: This was the quietest, most important maneuver. A small, underfunded laboratory run by a brilliant electrical engineer in New Jersey, whose current work focused on advanced vacuum tube technology and radio transmission. The engineer was bankrupted by the failure of his small, local bank. Damon, through a shell company, acquired the laboratory, the patents, and the engineer for a paltry sum. This was the silent, crucial birth of the Semiconductor pillar.
In the heart of the crisis, Arthur Hemsworth found himself in an extraordinary position. His bank was solvent, his industrial assets were secure, and while everyone else was losing money, the Hemsworth Conglomerate was acquiring its core, final assets at fire-sale prices.
When J.P. Morgan finally settled the crisis by forcing the remaining bankers into line, he called Arthur Hemsworth to his library. The room was thick with smoke and the palpable force of Morgan's authority.
"Arthur," Morgan stated, his voice a gravelly rumble. "You have played a dangerous game. Your actions in pulling your deposits from Knickerbocker accelerated the panic."
Arthur, emboldened by the stability of his own position, stood his ground. "With respect, Mr. Morgan, my bank's responsibility is to its depositors, not to the unsound lending practices of its peers. My son foresaw the vulnerability. We acted on sound financial principle."
Morgan studied Arthur intently. "Your son. I hear he is the actual mind now. A child who has proven more effective than half the men in this room. You have acquired some interesting assets in the chaos, Arthur. Very low-risk assets, considering the price you paid."
"We believe in the future of American industry, Mr. Morgan," Arthur said, echoing Damon's philosophy. "We simply acquired the necessary infrastructure to ensure that future."
Morgan merely grunted. He knew a successful financial attack when he saw one. He couldn't destroy Hemsworth; the bank was too liquid, and its industrial interests were now too vital to the nation's supply chain. He could only respect the ruthless foresight.
The immediate aftermath of the panic defined the future of the Hemsworth Conglomerate. The Banking arm was now viewed as the most stable financial institution in New York, instantly elevating Arthur and Damon into a league of their own. The Oil, Automobile, and Retail pillars, now secured with cheap, vertically integrated logistics and raw material supply, exploded in growth over the next five years.
But the real victory lay in the quiet acquisitions that laid the groundwork for the two remaining pillars: Airlines and Semiconductors.
The New Jersey lab, dubbed Hemsworth Labs, began its dedicated, long-term research into electronics. Damon knew that the path from vacuum tubes to transistors and then to silicon chips would take decades, but by controlling the early foundational patents, he ensured the Conglomerate would dominate the information age.
Meanwhile, Vance Air Transport, the paper company, finally had its first, albeit slow, growth. Damon purchased surplus military aircraft that had been grounded, and using his new shipping logistics arm, started the nation's first reliable, private air cargo service—flying high-value, low-weight goods (like important bank documents and pharmaceuticals) between the East Coast and the growing Midwest. This wasn't glamorous passenger travel, but it was profitable, provided crucial operational experience, and established the vital air corridors necessary to win future government Air Mail contracts.
In January 1908, Damon sat once more in his father's study, reviewing the annual report. The 1907 Panic, a catastrophe for the nation, was the single most profitable year in the history of the House of Hemsworth.
"We did it, Father," Damon said quietly. "We survived the fire and emerged with the steel."
Arthur looked at his son, his expression a complex mix of pride and fear. "The cost, Damon. The cost of knowing. You used the desperation of thousands to enrich yourself. Is this the nature of the empire we are building?"
Damon shrugged, a cold indifference in his eyes that no sixteen-year-old should possess. "Empire is built on the predictable failure of others, Father. We did not cause the panic; we merely refused to join the foolish. We are building a machine that will employ millions, create technologies that will change the world, and provide stability when the system inevitably fails again. A thousand ships will sink so that one great fleet may sail. We are the great fleet."
He tapped the organization chart, now complete with all seven pillars: Banking, Oil, Gold, Retail, Automobile, Logistics/Airlines, and Semiconductors (Hemsworth Labs).
"The foundation is secure. Now, for the long game," Damon concluded. "We expand the Retail empire nationwide, preparing for the inevitable national highway system. We push Thorne Motors into true mass production. And we wait. The next great challenge will not be a financial panic, but a global conflict. And we must be prepared to finance the winning side of World War I."