Investments in Sentiment

How One Man Has Responded to the Urgent Heart Appeal in Municipal Bonds

GEORGE S. CHAPPELL

ONE of my occasional offices is the investment of modest sums of money. This money, I hasten to add, is not my own. Also let me assure the horde of sleuthlike bond salesmen who, I know, will spring forward with a glad cry at this announcement, that I am inaccessible to even the most wily of them. I have my own method of selection and to all offers of exposition regarding the giltedged quality of this or that issue I am deaf and dumb. It has been necessary for me to hold myself thus incommunicado, sometimes turning down my most intimate friends, for I have found that if I established the precedent of seeing one of them, I should have to spend the rest of my life listening to their glowing recitals.

The money referred to comes to me from my Aunt Abigail and represents the sale, from time to time, of parcels of real estate. Aunt Abbic's holdings are part of a land grant dating from the pre-Rcvolutionary period. Lying near a small New England village the property has been gradually enveloped by city extensions.

Several motives are probably combined in my aunt's determination to sell. The first of these is the gradual rise in her taxes. Aunt Abbie has always cherished an opposition to paying taxes which would have made her a worthy member of the original Boston Tea Party. On one of my visits a few years ago I found her bristling with anger, holding the tax-bill in a trembling hand and making her decorous parlour ring with protest.

"It's an outrage!" she cried. "And it's all that Freddy Harris's doing! He's never gotten over Father's beating his father for Mayor."

AUNT Abbie has a personal way of looking at things. In vain I pointed out that Freddy Harris was only the collector, a sort of clerk in the municipal departments. She would have none of such academic discussion, preferring to widen the scope of her scorn to include, not only Freddy, but his entire family.

"Freddy Harris," she stormed, "and who is he I should like to know? Who are the Harrises? She was one of those Tobeys. Her father used to keep a fish market near the ferry slip. Common . . . ugh!"

I waited for Aunt Abbie to subside, enjoying her temper. Aunt Abbie is a fine hater. I have so little of that quality in my make-up that I like to feel that I share it, vicariously, in the person of one of my family.

"And why should I pay taxes at all?" she demanded. "What do I get for it? The Courier says they want to put up a great, uglv school in the neighborhood. That means a troop of dirty Italian children screaming like all possessed. I'll sell the land, that's what I'll do. I won't be bothered with it any longer. What is this I hear about these tax-exempt bonds?"

My aunt may be simple minded but she retains, also, the acuteness of a child.

"I know very little about such things," I admitted, "but I should be glad to look into the matter for you. I have some friends in Wall Street who. . ."

She interrupted me sharply.

"You keep away from those Wall Street men," she warned. "If I send you any money to invest, I want you to use your own judgment. You've lived in New York for fifteen years now; and if you haven't picked up some ideas of business, I miss my guess. Who else is there for me to turn to? The rest of the family have always stuck right here and can't see beyond the next lamp-post. Why, according to your own tell, you get more for writing one of those silly articles of yours than Father did for a month's work when he was your age."

I swallowed this reference to the quality of my literature as the necessary accompaniment of her clear confidence in my financial ability. This I knew to be an untried talent, but who knows? Mv Aunt was singularly clairvoyant at times. I might indeed turn out to be a financial genius.

Deep in the heart of each of us lies the desire to mingle in the big money game. In our dreams we see ourselves buying and selling the crisp certificates which, by their very movement, create something out of nothing. There is a touch of magic about it. The financial stream is the river Pactolus with its golden sands. The successful operator inherits the touch of Midas. And back of my sudden, wild dreaming stood the solid, comforting fact that I would be playing with someone else's money. I, too, am from New England.

I DEPARTED with the promise that I would look into the matter. I used those very words. "I will look into the matter," I said, "and report back." I liked the sound of that businesslike 'report back'. It sounded knowing. I was conscious of an important feeling about the chest. Business phrases crowded through my mind, 'checking up', 'listed securities', 'yield' and so on. I didn't know what they meant, but they sounded fine.

Upon my return to New York I heeded Aunt Abbie's warning and kept away from the professional broker. My one experience with Wall Street had been a solemn warning to me. Three years ago I played a hot tip. It was a motor stock. I had been given the tip by an actor who had overheard a conversation at the Lambs Club, a peculiarly appropriate place, as it later appeared. The market at that time was glutted ... I believe that is the disagreeable term . . . with motor stocks. Nevertheless I bought. My actor friend dismayed me somewhat bv telling me the next day that he had no confidence whatever in what he had heard; that he had not dared to invest himself; wouldn't think of it, etc. His recital to me had evidently been only a piece of acting. On top of this I read gloomy market reports which said, "Recent trading in motor stocks has been sluggish, indicating that buying power has reached its high level for the year and that a receding movement is to be expected. Wise traders who took advantage of the low levels of six months ago have been in a position to reap handsome profits, but it now appears that the point of absorption has been reached and the reaction is aoout to set in."

My feet suddenly grew exceedingly cold. And then the blooming stock began to rise, it rose and it rose. I sold out at a twelve point profit. I want to tell you, it was a warning to me. I never wanted to go near Wall Street again. I felt as if I had had a sort of solemn visitation, a visit from the Goddess Fortuna, herself. "It can never happen again, Boy." I kept saying to myself. "By all the laws of probability you ought to have lost your stocks, but you didn't. Now keep away from it." And I had done so up to the time when Aunt Abbie appointed me her fiscal agent.

Continued on page 84

Continued from page 62

I bought a copy of the Wall Street Journal and also scanned the financial pages of several of the daily papers. I could not help feeling important as I folded back my paper to the long columns of quotations. I imagined that my neighbour in the car was saying to himself, "I am sitting beside a big investor. I wonder who he is."

Though I read the subject matter before me with the closest attention, I cannot say that it meant much to me. It was all very well to know what the volume of sales had been and whether the stock ended the day with a plus or a minus sign back of it. I knew that the only kind of stocks to buy were the plus ones, ones that would keep on being plus and more plus for a long time. But the trouble was that when I had picked out a good, healthy, plus stock, I couldn't tell for the life of me what it was. I liked the looks of Advance Rumely, but what in the heck was it? Am Wat Kt pf had a cabalistic sound. A mere repetition of the formula, ending on that lovely sound, "pf", ought, it seemed to me, to open the doors of riches. But what did it all mean? What should I say when Aunt Abbie asked me what she was buying? I didn't know.

Industrials that I could understand were unappealing. A trenchant article stating that there were rare opportunities in the fertilizer field left me cold and I did not think that this type of investment would appeal to my aunt. American Ice seemed ephemeral. Coal and Woolens were disagreeable.

However I made a selected list to the best of my ability and mailed it to Aunt Abbie. "These stocks", I wrote, "have all shown handsome advances during the past year and the financial reports of the various companies show them to be in excellent condition." I realized dimly that the companies would naturally report themselves in excellent condition but that my actual knowledge of them w'as nil. Happily I was spared mental distress on this score by a prompt reply from my relative to the effect that I was, on no account, to buy a single share of stock. Her letter contained a check for five thousand dollars with which I reeled about the room for several minutes before I could concentrate upon the instructions. "I wish this money invested in bonds only. They must be tax exempt."

The old lady was perfectly explicitand clear. Also wise. I immediately began a study of the tax-exempt bond market. I found this class of securities, as we financiers say, to consist mainly of municipal bonds. What I was in no way prepared for, was the poignant heart appeal of many of the offerings. It came over me with a rush; and, as I held the printed page of my paper before me, it suddenly became dim, for my eyes had filled with tears. My heart was torn with conflicting emotions. So varied were the appeals and so touching that for a long time I could not decide how I could use my aunt's money to the best advantage, or which object was the most noble and deserving.

Of immediate local interest were the Town of Eastchester, N. Y. School Dist., 4 1/2%, bonds maturing in 1935. I know Eastchester well. I live quite near it and often motor through it as rapidly as possible. But even the most rapid transit can not hide its squalor and air of general wretchedness. It is a most slatternly and down-at-the-heel town. I realized at once that a school was undoubtedly a crying need there, w here they obviously need everything. It would be rather fine I thought to see the new school rising as I sped past, to wave to the little ones as they trudged toward the handsome brick edifice, and to be able to say, "Aunt Abbie and I helped."

But a little further down the list my eye was caught by another issue that, for the moment, seemed even more vital; namely, the Youngstown, Ohio, Grade Crossing Elimination, 5%. The very reading of this investment painted a composite picture of all the grade-crossing accidents I had ever read or heard of. The air seemed to be filled with flying Fords and dismembered citizens. Here was a magnificent task to be performed, the making of Youngstown, Ohio, safe for Motocracy. If I bought these bonds, I would be actually saving lives, as truly as if I dashed in front of a speeding train and pulled the terrified driver of the stalled car to a place of safety. I saw my citation in the records of the Carnegie Hero Fund and actually heard the words of the agent who approached me, medal in hand. As he pinned it on my swelling chest, he would say, in part, "For the share you had in averting a fatal accident at the grade crossing in Youngstown, w'hen a Mack truck containing tw'o hundred cases of Old Beeswax Scotch would have crossed in front of a Pennsylvania express, had there, at that time, been a grade-crossing, I give and bequeath to you this handsome medal."

But I was lured from these vain reflections by a nobler appeal, voiced by the Town of Yellowhead, Kankakee County, Ill., the reconstruction of whose roads, it appeared, would pay the trusting investor five per cent, on his money. The thought smote me that I had never known of the existence of the town of Yellowhead, charming though the name undoubtedly was. "Yellowhead, in Kankakee!" How pleasant it sounded. Yet I saw it, sunk in mire, inaccessible, lost through the ghastly condition of its roads. It w'as doubtless a scattered community in which neighbours were a mile apart. The haul to market was a five mile tug, hub-deep in mud. The radiator caps of lost Fords peeped here and there through the slime, mute testimonials of families which had started, years ago, for the movies and of whom no word had ever returned. Civilization was held in check by the difficulty of transportation and communication. How oalc, beside this need, appeared the vainglorious exploit of rescue from a grade crossing. I blushed to think that I had given the latter a serious thought and had almost taken pen in hand to address a letter beginning, "Yellowhead, I am here!" when my attention was attracted by a line at the sight of which tears literally spurted from my eyes. My feelings may have been slightly overwrought by the emotional strain of the other issues which I had considered. I only know that the moment I read the last caption I knew that my quest was ended. The words fairly burned on the printed page Miami, Fla., Sewer, 5%.

Continued on page 98

Continued from page 84

That was all, yet how much!

I am no sanitary engineer, but I could see, in all its horror, sewerless Miami. Gaunt citizens tottered in the streets, blue of face, sharp of bone, clattering, angular skeletons marked for death. From their pallid lips, as they stared hopelessly in each other's faces came the desolate message, "Yes, we have no sewers today!" No, not today, nor tomorrow. . . . How long, O Lord, how long!

With a dry, tearing sob that was more painful than an actual outburst I reached for my fountain pen to execute my order. My mind was made up. The die was cast.

A half hour later I had despatched a wire to Aunt Abbie: "Have put your money in Miami Sewer."

My rule since then has made me immune to the wiles of the bond salesman. I follow the dictates of my heart rather than my head and invest Aunt Abbie's funds in the bonds that make me cry the hardest.