“They tell me in the trust company that if I leave the money there without touching it I’ll make $79 a month.”
“Let me see; yes; that is about what you may expect.”
“Well, Mr. Colwell, I can’t live on that. Willie’s school costs me $50, and then there’s Edith’s clothes,” she went on, with an air which implied that as for herself she wouldn’t care at all. “You see, he was so indulgent, and they are used to so much. Of course, it’s a blessing we have the house; but taxes take up so much; and—isn’t there some way of investing the money so it could bring more?”
“I might buy some bonds for you. But for your principal to be absolutely safe at all times, you will have to invest in very high-grade securities, which will return to you about 3½ per cent. That would mean, let’s see, $110 a month.”
“And Harry spent $10,000 a year,” she murmured, complainingly.
“Harry was always—er—rather extravagant.”
“Well, I’m glad he enjoyed himself while he lived,” she said, quickly. Then, after a pause: “And, Mr. Colwell, if I should get tired of the bonds, could I always get my money back?”
“You could always find a ready market for them. You might sell them for a little more or for a little less than you paid.”
“I shouldn’t like to sell them,” she said, with a business air, “for less than I paid. What would be the sense?”
“You are right, Mrs. Hunt,” he said, encouragingly. “It wouldn’t be very profitable, would it?”
“Ticky-ticky-ticky-ticky-ticky-ticky-tick!” said the ticker. It was whirring away at a furious rate. Its story is always interesting when it is busy. And Colwell had not looked at the tape in fully five minutes!
“Couldn’t you buy something for me, Mr. Colwell, that when I came to sell it I could get more than it cost me?”
“No man can guarantee that, Mrs. Hunt.”
“I shouldn’t like to lose the little I have,” she said, hastily.
“Oh, there is no danger of that. If you will give me a check for $35,000, leaving $3,000 with the trust company for emergencies, I shall buy some bonds which I feel reasonably certain will advance in price within a few months.”
“Ticky-ticky-ticky-tick,” interrupted the ticker. In some inexplicable way it seemed to him that the brassy sound had an ominous ring, so he added: “But you will have to let me know promptly, Mrs. Hunt. The stock market, you see, is not a polite institution. It waits for none, not even for your sex.”
“Gracious me, must I take the money out of the bank to-day and bring it to you?”
“A check will do.” He began to drum on the desk nervously with his fingers, but ceased abruptly as he became aware of it.
“Very well, I’ll send it to you to-day. I know you’re very busy, so I won’t keep you any longer. And you’ll buy good, cheap bonds for me?”
“Yes, Mrs. Hunt.”
“There’s no danger of losing, is there, Mr. Colwell?”
“None whatever. I have bought some for Mrs. Colwell, and I would not run the slightest risk. You need have no fear about them.”
“It’s exceedingly kind of you, Mr. Colwell. I am more grateful than I can say. I—I——”
“The way to please me is not to mention it, Mrs. Hunt. I am going to try to make some money for you, so that you can at least double the income from the trust company.”
“Thanks, ever so much. Of course, I know you are thoroughly familiar with such things. But I’ve heard so much about the money everybody loses in Wall Street that I was half afraid.”
“Not when you buy good bonds, Mrs. Hunt.”
“Good morning, Mr. Colwell.”
“Good morning, Mrs. Hunt. Remember, whenever I may be of service you are to let me know immediately.”
“Oh, thank you, so much, Mr. Colwell. Good morning.”
“Good morning, Mrs. Hunt.”
Mrs. Hunt sent him a check for $35,000, and Colwell bought 100 five-per cent gold bonds of the Manhattan Electric Light, Heat & Power Company, paying 96 for them.
“These bonds,” he wrote to her, “will surely advance in price, and when they touch a good figure I shall sell a part, and keep the balance for you as an investment. The operation is partly speculative, but I assure you the money is safe. You will have an opportunity to increase your original capital and your entire funds will then be invested in these same bonds—Manhattan Electric 5s—as many as the money will buy. I hope within six months to secure for you an income of twice as much as you have been receiving from the trust company.”
The next morning she called at his office.
“Good morning, Mrs. Hunt. I trust you are well.”
“Good morning, Mr. Colwell. I know I am an awful bother to you, but——”
“You are greatly mistaken, Mrs. Hunt.”
“You are very kind. You see, I don’t exactly understand about those bonds. I thought you could tell me. I’m so stupid,” archly.
“I won’t have you prevaricate about yourself, Mrs. Hunt. Now, you gave me $35,000, didn’t you?”
“Yes.” Her tone indicated that she granted that much and nothing more.
“Well, I opened an account for you with our firm. You were credited with the amount. I then gave an order to buy one hundred bonds of $1,000 each. We paid 96 for them.”
“I don’t follow you quite, Mr. Colwell. I told you”—another arch smile—“I was so stupid!”
“It means that for each $1,000–bond $960 was paid. It brought the total up to $96,000.”
“But I only had $35,000 to begin with. You don’t mean I’ve made that much, do you?”
“Not yet, Mrs. Hunt. You put in $35,000; that was your margin, you know; and we put in the other $61,000 and kept the bonds as security. We owe you $35,000, and you owe us $61,000, and——”
“But—I know you’ll laugh at me, Mr. Colwell—but I really can’t help thinking it’s something like the poor people you read about, who mortgage their houses, and they go on, and the first thing you know some real-estate agent owns the house and you have nothing. I have a friend, Mrs. Stilwell, who lost hers that way,” she finished, corroboratively.
“This is not a similar case, exactly. The reason why you use a margin is that you can do much more with the money that way than if you bought outright. It protects your broker against a depreciation in the security purchased, which is all he wants. In this case you theoretically owe us $61,000, but the bonds are in your name, and they are worth $96,000, so that if you want to pay us back, all you have to do is to order us to sell the bonds, return the money we have advanced, and keep the balance of your margin; that is, of your original sum.”
“I don’t understand why I should owe the firm. I shouldn’t mind so much owing you, because I know you’d never take advantage of my ignorance of business matters. But I’ve never met Mr. Wilson nor Mr. Graves. I don’t even know how they look.”
“But you know me,” said Mr. Colwell, with patient courtesy.
“Oh, it isn’t that I’m afraid of being cheated, Mr. Colwell,” she said hastily and reassuringly; “but I don’t wish to be under obligations to any one, particularly utter strangers; though, of course, if you say it is all right, I am satisfied.”
“My dear Mrs. Hunt, don’t worry