"'Oh well,' said I,
delighted at this confidence, I think I can afford to
risk what you are
willing to risk for your mother, Mrs. Beverly. Where is
Petunia, did you say?'"
"He pulled down a
roller map on the wall as you draw down a window-blind,
and again I listened to statements that churned in my brain. Petunia was
a new
resort on the sea coast of New Hampshire. One railway
system did
already connect it with both Portsmouth and Portland, but it was not a
very direct
connection at present. Yet in spite of this, the population
had increased 23 and seven-tenths per cent in five years, and now an
electric railway was in
construction that would double the population in
the next five years. This was less than what had happened to other
neighbouring
resorts under
identical conditions; yet with things as they
now were, the company was earning two per cent on its stock, which was
being put into improvements. The stock was selling at 30, and if a
dividend was paid next year, it would go to par. But Mr. Beverly did not
counsel buying the stock. 'I did not let mother have any,' he said,
'though I took some myself. But the bonds are different. You're getting
the last that will be sold at par. In three days they will be placed
before the public at 102 1/2 and interest.'"
"I was well pleased when I left Mr. Beverly's office. In a few days I was
still more pleased to learn that I could sell my Petunia sixes for 104 if
so wished. But I did not wish it; and Mr. Beverly told me that he should
not sell his mother's unless they went to 110. 'In that case,' said he,
'it might be worth while to capitalise her
premium.'"
"I liked the idea of capitalising one's
premium. If you had fifty bonds
that cost you par, and sold them at 110, you would then buy at par
fifty-five bonds of some other rising kind, and go on doing this until--I
named no limit for this process; but my
delighted mind saw visions of
eighty and a hundred thousand a year--comfort at least, if not affluence
in New York--and I explained to Ethel what the
phrase capitalising one's
premium meant. I showed her the Petunias, too, and we read what it said
on the coupons aloud together. Ethel was at first not quite satisfied
with the
arrangement of the coupons. 'Thirty dollars on January first,
and thirty on July first,' she said. That seems a long while to wait for
those payments, Richard. And there are only two in every year, though you
pay them a thousand dollars all at once. It does not seem very
prompt on
their part.' I told her that this was the rule. 'But,' she urged, 'don't
you think that a man like Mr. Beverly might be able to get them to make
an
exception if he explained the circumstances? Other people may be
satisfied with
waiting for little crumbs in this way, but why should we?'
I soon made her understand how it was, however, and I explained many
other facts about investments and the stock market to her, as I learned
them. It was a great pleasure to do this. We came to talk about finance
even more than we talked of my writings; for during that Spring I
invested a good deal more rapidly than I wrote. The Petunias had taken
only one-twentieth of a million dollars; and though Mr. Beverly warned me
to rush
hastily into nothing, and
pointed out the good sense of
distributing my eggs in a number of baskets, still we both agreed that the
sooner all my money was bringing me five or six per cent, the better."
"I have come to think that it might be well were women taught the
elements of investing as they are now taught French and Music. I would
not have the French and Music dropped, but I would add the other. It
might be more of a
protection to women than being able to read a French
novel, and perhaps some day we shall have it so. But of course it had
been left
totally out of Ethel's education; and at first she merely
received my
instruction and took my opinions. It was not long, however,
before she began to
entertain some of her own, obliging me not
infrequently to reason with her. I very well remember the first occasion
that this happened."
"We had been as usual talking about stocks, as we walked on the Riverside
Drive on a Sunday afternoon in May. Ethel had been for some moments
silent. 'Richard,' she finally began, 'if I had had the naming of these
things, I should never have called them securities. Insecurities comes a
great deal nearer what they are. What right has a thing that says on its
face it is worth a thousand dollars to go bobbing up and down in the way
most of them do? I think that securities is almost sarcastic. And have
you noticed the price of those Petunias?'"
"I had, of course, noticed it; but I had not mentioned it to Ethel. 'I
read the papers now,' she explained, 'morning and evening. Of course the
market is off a little on
account of the bank statement. But that is not
enough to
account for the Petunias.'"
"'Ethel, you are nervous,' I said. 'And it is the papers which make you
so. The Petunias are a first lien on the whole property, of which the
assessed valuation--'"
"'What is the good,' she interrupted, 'of a first lien on something which
depends on
politics for its
existence, if the politicians change their
minds? Did you not see that bill they're thinking of passing?' I was
startled by what Ethel told me, for the article in the paper had escaped
my notice. But Mr. Beverly explained it to me in a couple of minutes.
'Ha!' he jovially exclaimed, on my entering his office on Monday morning;
'you want to know about Petunias. They opened at 85 I see.' He then ran
the tape from the ticker through his clean strong hands. 'Here they are
again. Five thousand sold at 83. Now, if they go to 70, I'll very likely
take ten thousand more for mother. It's all Frank Smith's bluff, you
know. He wants a jag of the water-works stock, more than they say they
agreed he should have. So he's shaking this bill over them, which would
allow the city to build its own water-plant, and of course run the
present company out of business. Not a thing in it! All bluff. He'll get
the stock, I suppose. What's that?' he broke off to a clerk who came with
a message. 'Wants 500 preferred does he? Buyer 30? Very well, he can't
have it. Say so from me. Now,' he resumed to me, 'take a cigar by the
way. And don't buy any more Petunias until I tell you the right moment.
Do you see where your Amalgamated Electric has gone to?'"
"I had seen this. It had scored a 20-point rise since my purchase of it;
and I felt very sorry that I had not taken Mr. Beverly's advice and
bought a thousand shares. It had been on a day when I had felt
un
accountably
cautious, and I had taken only two hundred and fifty shares
of Amalgamated Electric. There are days when one is
cautious and days
when one is venturesome; and they seem to have nothing to do with
results."
"'They're going to increase the
dividend,' said Mr. Beverly, as I smoked
his excellent cigar. 'It's good for twenty points higher by the end of
the week. I had just got mother a few more shares.'"
"I left Mr. Beverly's office the possessor of two thousand shares of
Amalgamated Electric, and also entirely re
assured about my Petunias. He
always made me feel happy."
"His keen laughing brown eyes, and crisp well-brushed hair, and big
somewhat English way of chaffing (he had gone to Oxford, where he had
rowed on a
winning crew) carried a sense of
buoyantprosperity that went
with his wiry figure and good smart London clothes. His face was almost
as tawny as an Indian's with the outdoor life that he took care to lead.
I was always flattered when he could spare any time to clap me on the
shoulder and crack a joke."
"Amalgamated Electric had risen five more points before the board closed
that afternoon. This was the first news that I told Ethel."
"'Richard,' said she, 'I wish you would sell that stock to-morrow.'"
"But this I saw no reason for; and on Tuesday it had gained seven points
further. Ethel still more
strongly urged me to sell it. I must freely
admit that." And the narrator paused reflectively.
"Thank you, Richard," said Ethel from the sofa. "And I admit that I could
give you no reason for my request, except that it all seemed so sudden.
And--yes--there was one other thing. But that was even more silly."
"I believe I know what you mean," replied Richard, "and I shall come to
it
presently. If any one was silly, it was not you."
"I did not sell Amalgamated Electric on Wednesday, and on Thursday a
doubt about the increased
dividend began to be circulated. The stock,
nevertheless, after a
forenoon of
weakness, rallied. Moreover a check for
my first
dividend came from the Pollyopolis Heat, Light, Power, Paving,
Pressing, and Packing Company."
"'What a number of things it does!' exclaimed Ethel, when I showed her
the company's check."
"'Yes,' I replied, and quoted Browning to her: ''Twenty-nine Distinct
damnations. One sure if the other fails.' Beverly's mother has a lot of
it.'"
"But Ethel did not smile. 'Richard,' she said, 'I do wish you had more
investments with ordinary simple names, like New York and New Haven, or
Chicago and Northwestern.' And when I told her that I thought this was
really
unreasonable, she was firm. 'Yes,' she replied, 'I don't like the
names--not most of them, at least. Dutchess and Columbia Traction sounds
pretty well; and besides that, of course one knows how successful these
electric railways are. But take the Standard Egg Trust, and the Patent
Pasteurised Infant Rubber Feeder Company.'"
"'Why, Ethel!' I exclaimed, 'those are both based upon great inventions,
Mr. Beverly--'"
"But she interrupted me
earnestly 'I know about those inventions,
Richard, for I have procured the prospectuses. And I wish that I could
have told you my own feeling about them before you bought any of the
stock.'"
"'I do not think you can fully have taken it in, Ethel.'"
"'I trust that it may not have fully taken you in,' she replied. 'Have
you noticed what those stocks are selling for at present?'"
"Of course I had noticed this. I had paid 63 for Standard Egg, and it was
now 48, while 11 was the price of Patent Pasteurized Feeder, for which I
had paid 20. But this, Mr. Beverly
assured me, was a
normal and even
healthy course for a new stock. 'Had they gone up too soon and too high,'
he explained, 'I should have suspected some
crooked manipulation and
advised selling at once. But this indicates a
healthy absorption
preliminary to a natural rise. I should not dream of letting mother part
with hers.'"
"The basis of Standard Egg was not only a
monopoly of all the hens in the
United States, but a machine called a Separator, for telling the age and
state of an egg by means of immersion in water. Perfectly good eggs sank
fast and passed out through one distributor; fairly nice eggs did not
reach the bottom, and were drawn off through another sluice, and so on.
This saved the wages of the egg twirlers, whose method of candling eggs,
as it was called, was far less rapid than the Separator. And when I
learned that one house in St. Louis alone twirled 50,000 eggs in a day,
the possible profits of the Egg Trust became clear to me. But they were
not so clear to Ethel. She said that you could not monopolise hens. That
they would always be laying eggs and putting it in the power of
competitors to hatch them by incubators. Nor did she have confidence in
the Pasteurised Feeder. 'Even if you get the parents to adopt it,' she
said, 'you cannot get the children. If they do not like the taste of the
milk as it comes out of the bottle through the Feeder, they will simply
not take it.'"
"'Well,' I answered, 'old Mrs. Beverly is
holding on to hers.'"
"When I said this, Ethel sat with her mouth tight. Then she opened it and
said: 'I hate that woman.'"
"'Hate her? Why, you have never so much as laid eyes on her.'"
"'That is not at all necessary. I consider it indecent for a grey haired
woman with grandchildren to be speculating in the stock market every week
like a regular bull or bear.'"
"Every point in this
outburst of Ethel's seemed to me so unwarrantable
that I was quite dazed. I sat looking at her, and her eyes filled with
tears. 'Oh Richard!' she exclaimed, 'she will ruin you, and I hate her!'"
"'My dear Ethel,' I replied, 'she will not. And only see how you are
making it all up out of your head. You have never seen her, but you speak
of her as a grey-haired grandmother.'"
"'She must be, Richard. You have told me that Mr. Beverly is a married
man and about forty-five. No doubt he has older sisters and brothers. But
if he has not, his mother can hardly be less than sixty-five, and he has
probably been married for several years. He might easily have a daughter
coming out, next winter, and a son at Harvard or Yale; and if their
grandmother's hair is not grey, that is quite as
unnatural as her
speculating in monopolised eggs in this way at her age. She must be a
very unladylike person.'"
"Ethel, I saw, was excited. Therefore I made no more point of her
theories
concerning the appearance and family
circle of old Mrs. Beverly.
But in justice to myself I felt obliged to
remind her, first, that I was
investing, not speculating, and second, that it was Mr. Beverly's advice
I was following, and not that of his mother. 'Had he not
spoken of her,'