Vita Sua in a Bygone Mobile
Part 4 in a series: "The good doctor returns to the game." Previous installments: 1, 2 and 3.
Mobile Bay Times
Every brokerage office had its "sitters" and ours was no exception. In fact, there were far more "sitters" in those days in comparison to the business done than we were to see in later years.
In the fifties, far more people lived or worked closer to the center of town where the brokerage offices were located.
Most sitters, of course, were retired and spending the day at a brokerage
office was their way
Most did very little
business, but they
did give the office
an appearance of
being a busy place
for a visitor who
came in to inquire
And, occasionally, we'd get a real "live one," a man who would "trade off the tape" as the expression goes and who could really roll up the commissions for you. These people almost invariably came to grief as the commissions ultimately robbed them of their profits or enhanced their losses. I had a notable exception to this rule of whom I will speak later.
My business in these days was almost all with very small accounts. My mother directed a few to me, I stayed late at the office to catch any stray newcomers (since RK and XX were gone and PD in no shape to talk, I had a clear field), I added a few of my newspaper colleagues and several of my fellow officers at the National Guard Armory.
I was gradually building up a clientele. Not the kind you associate with the business. Probably 75 percent of my trades were "odd lots," less than 100 shares and a transaction of 200 or 300 shares was a real bonanza.
But these were the days when the stock exchange was proclaiming "Bring Wall Street to Main Street," and this was exactly my philosophy.
I was enthusiastic about my new occupation and began to invest a little on my own. My first purchase was ten shares of General Motors, bought May 8, 1952 at a price of 55 3/8.
I had invested my money in series "E" bonds and in savings and loan accounts which paid about 4 percent interest. A chance to buy GM at about 55 and receive $4 a year in dividends looked like a golden opportunity. It was. I still have the stock, since split 3-1 and now paying $3.40 and, even in these gloomy days of 1974, selling at about 35.
I probably would've plunged much deeper had not the old greybeards who "sat" with us each day kept proclaiming that another depression was on the way. They assured one and all that a depression always followed a war and that it was just a matter of time.
Actually, General Motors sold as low as 50 that year and one could have purchased it on 50 percent margin, paid interest charges on his 50 percent debit balance at the rate of 3 3/4 percent and realized a net yield of about 13 percent.
Not many were tempted, however. At least not in Mobile.
The year 1954 was one of big change at SRC. There was a shift in command in the Mobile office. Although PD and XX remained as co-managers, XX took over for PD as the de facto manager.
It came about after a visit from the New York partners, the messrs. M, M and M.
These visits came on average about every six months. They were occasions for very lavish suppers attended by PD, XX, RK and the partners. I wasn't invited.
Knowing PD, I suspect that he might have gotten very drunk at this particular supper and created a scene that resulted in his demotion.
Whatever the reason, he seemed content to keep his title but give up the responsibilities. And, while PD was a much fairer sort of person than XX, it was probably a wise move on the part of management. XX had more of a sense of direction and was willing to build for the future -- mostly, it can safely be said, his own.
PD still had not made the momentous decision of providing me with a desk. XX did so at once. And he expanded the staff, hiring BH in the summer of 1954.
However, he lost RK. His uncle detested XX much more than PD did, although, unlike PD, he did not show it. But when XX took over the ship, RK decided to leave.
A month or so after the change at the tiller, RK, whose sales talents were such that it was easy for him to find employment, left to join an over-the-counter firm, where he worked until his second and final retirement.
I was not much affected by this change, although whereas I could easily talk to PD, XX was a lot less approachable.
BH's addition to the staff meant a raise in salary for me. Since he insisted on a $300 per month wage, it was only proper that I should be elevated to the same scale.
I did not earn that year's salary, which, with a year-end bonus totaled $3,650, but I came within striking distance, had our payout been the 40 percent which it should have been. My production for the year was a three-fold increase over the preceding year. It represented a significant fraction of our office's business.
The next year, 1955, saw my production climb by almost 100 percent. My pay rose as well, based on a payout ratio of 37 percent, so for the first time I could say that I earned my keep for a year.
This was they year, too, that PD left us. I don't know just what brought on his demise which occurred while C and I were on a trip to Mexico in early September.
PD had an unfortunate habit of sometimes trading in people's accounts without their authorization and I think he may also have, from time to time, "guaranteed" accounts a profit. Of course, this is very much against the rules. I am far from certain that this was the case, but I suspect that it was and someone blew the whistle on him.
Although it was bad for PD, it was a break for the rest of us since his accounts were divvied up among XX, BH and I. I got by far the poorest end of it, but as it turned out, got one big break, although you may be sure XX didn't know he was giving me one.
Dr. DY was probably the biggest commodity trader in our town. He traded with PD. However, he had withdrawn from the market two or three years back and every indication was that he would not re-enter it.
He was a commanding sort of person, a native-born German who had been one of the community's outstanding physicians for a generation. He was an eye, ear, nose and throat specialist in the days when there weren't many specialists in a small town like Mobile. When I was a youngster and had to have my tonsils removed, mother had insisted on Dr. DY doing the job. At that time it wasn't the very simple operation it is these days. We couldn't have afforded Dr. DY's rates but this great gentleman always took his patients' financial ability into account and discounted his rates for the poorer ones. He did countless operations for no charge.
I'm sure that Dr. DY did not remember that I had been his patient.
Although Dr. DY possessed the ability to again become a top account, I'm sure XX did not take over the account because he thought it was unlikely that it would again become active and also because he could not have coped with Dr. DY's personality. They would have clashed very early and we would have lost Dr. DY.
It was to be some time before Dr. DY. was to re-enter the market, but when he did, he made me the top producer in the office for a year and, in fact, the top producer since the opening of the office.
At mid-year 1957, my production took a decided turn for the better.
As it happened, Dr. DY re-entered the market July 1, 1957. The first day he bought eight contracts of cottonseed oil, good for $132 in commissions. By the time the year was out he had accounted for a total of $3,821 and I wound up 1957 with a gross of $20,135, in a year that was a very bad one for the office, which realized a total gross of only $87,611.
It did me no good, however, to hoist my gross so much. I actually took a cut in pay, receiving only $5,000. I was short-changed some $3,000 or so. But this was they way XX operated. You may be sure he didn't go short.
When I look back now, I suppose that 1957 was my most fortunate year in the business. Along with Dr. DY's arrival, I signed up a new account who was to help me more than any I had ever had or was to have.
(Chapter V: "An Ugly Yankee comes my way ... and it's a lucky day.")