By Roger W. Eddy
Back in the day, there was a small subgenre of books where people reminisced about their childhood, replete with humorous stories. Cheaper by the Dozen is probably the best known and there were others that were often seen as fodder for what would now be called YA books. I read several, but the one that sticks in my mind was Roger W. Eddy’s The Worldly Adventures of a Teenage Tycoon.
The book was abridged from a longer work, The Bulls and the Bees. Evidently, the adult version had some passages about how Roger learned about sex from the animals in the farm where he lived. This was obviously unsuited for teens in the 1950s, but the rest made some good reading.
It was filled with anecdotes. Roger’s father was a stockbroker in the 1920s in addition to living on the farm. The one that sticks in my mind was the one that gave the book its name.
Roger developed a liking for stocks. Not as investments, but for the stock certificates themselves.*
And, indeed, there is much to like. Certificates were intricately engraved, much like currency, and featured elaborate artwork representing Progress and the company’s mission. Roger would pore over them, admiring the mottos and art. So he began buying them.
He had $1 a month to spend, so would pick out stocks that fit in that budget for his father to buy.** Over the years, he had papered his bedroom with them.
Then came the stock market crash. Roger describes the scene that night as his father came into his room and started ripping his beautiful certificates off the walls and into shreds, bemoaning the fact that they were worthless. Roger knew better than to stop him, but couldn’t understand what was going on. Didn’t they look as good as they ever did?***
The book was a nice, ironic look at growing up in the 1920s, that doesn’t sentimentalize the era.
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*Today the hobby is called scripophily.
**Probably commission free.
***As an aside, if you find an old stock certificate, don’t throw it out. It may be worth something to collectors. And it may actually still be worth cash: the company may have been swallowed up in a merger (or several) and it descendant company could still be around. The certificates don’t expire, so long as any portion of the original company exists, you can cash it it. When I worked at a brokerage, we had one person whose job it was to track these down and figure out what they were worth. It gets complex to calculate the value with all the various splits and mergers over the years.
5 comments:
Bought this book at our Elementary Shools Book Fair about 1960 or 61, loved it !
I read the expurgated version in grade school. As an adult I realized something, Eddy almost certainly didn't go broke. No buying on margin. He held his own certificates. Not all companies went out of business. And if you held on through the worst market collapse in history, three and a half years later the DJI recovered. A bunch of penny stocks went out of business, but I bet he had a nice little nest egg.
He was only buying penny stocks. He only bought stock that sold for less than $1. Most of those would have been wiped out. He might have had a few that managed to survive, but nothing of great value.
Well, sure. But,
In 1929 we were still on the gold standard. A dollar was 1/20 a troy ounce of gold. Say $75.
Friday I bought General Mills at $74. Today Kellogg is $69. Also, Roger Eddy was buying for beauty. I don't think companies with finely engraved certificates tended to be the fly by night places. Gilt-edged had that name for a reason.
Three of the beleaguered penny stocks of 1929 were Cessna, Beach[ later Beachcraft] And Stearman Aircraft which became part of Boeing. I was looking into that just last night.
Best,
David
Of course they had finely engraved stock certificates. It made them look legitimate. The first rule of even a fraudulent stock offering was to make up impressive certificates to inspire confidence.
Second, gold tells you nothing. A dollar in 1929 was worth the equivalent of $17.84 today. Further, he wouldn't have any gold. He would have spent all of his gold certificates (assuming he was using paper money, not coins) in order to buy the stock.
Third, you got your math wrong. An ounce of gold was worth $20.63 in 1939. A Troy ounce of gold would be worth just over $1.70. But you would not have gotten a full ounce in exchange; you would have gotten the weight in gold that was worth $1. No one would give you $1.70 in exchange for $1.
Fourth, yes, some penny stocks managed to survive the Depression and thrive, but that was highly unusual, not only for the era, but for penny stocks in general (there's a reason why brokers today are required by the SEC to discourage their purchase). Most of his stocks were worthless.
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