Establishing a Medical Foundation: Page 2

When I was a boy my parents were not poor, nor were they rich. Once, my father, who sold candy wholesale, was out of a job and down to his last two weeks of spending money for the family. But that was his low point, and I wasn't even aware of it at the time.

When I was ten years old, I learned what money was for. The laws of Montgomery, Alabama, permitted me to go to the movies by myself at that age. My parents would give me a dime on Saturday mornings, and the Strand Theater was assured of an early customer. I would see the Pathé News, the "To Be Continued Next Saturday" serial, and a movie-sometimes twice.

When I was sixteen, my father had enough money to send me to college, Lehigh University. I studied the minimum and got a C average-my only A was in Music Appreciation, and my only distinction was that I was captain of the golf team. At college my brain didn't come to grips with the problem of how I would earn a living; it didn't occur to me to study something practical. It's just as well. Lehigh is a fine engineering school; if I'd fooled with that, I would have flunked out.

When I got out of college I didn't know what I wanted to do. Well really, I guess I did, but I didn't discuss it with my father. What I wanted to do was to not work. Sometimes I had this nice fantasy. I thought if I had the courage (I wasn't even close) I'd ask John D. Rockefeller for $1 million. My reason was that he was too old to thoroughly enjoy his money, and I wasn't too old to thoroughly enjoy his money. I could play golf, travel, and be happy in every way, and he could enjoy this-secondhand.

If the reader has gotten the impression that I lacked enthusiasm for work he is on the right track. However, I had to get a job. I tried selling insurance and couldn't stand it. Everybody I said hello to was a prospect. I worked on my first potential customer for two months and must have played golf with him a dozen times (he couldn't hit the ball out of his own shadow) and finally got up enough courage to try to sell him an annuity. He turned me down. I went out to the street and cried-and retired from the insurance business. Money earned in insurance: zero.

My next effort was in the candy business. My father thought that maybe I could help him in sales. By then we had moved to New York. He was concentrating on selling candy to just a few large customers, the chain stores-Woolworth's. Kress, McCrory, and others. To help me learn the business, he got me a job in a candy factory, Edgar P. Lewis, of Malden, Massachusetts. I liked making candy, and for six months worked on the marmalade slab, making imitation orange slices, and barely lifting 100-pound bags of sugar into a boiling cauldron. In the late afternoon I'd go back to my boarding house and take a nap before dinner. Those were solid naps. When I woke up I didn't know where I was or what I was.

My salary at Edgar P. Lewis was $15 a week-and I lived on it. No hardship, but not luxurious either. Room and board was $10.50 (lunch excluded). Both breakfast and dinner had the advantage of baked beans. I had one luxury (a necessity in getting to work), an old Buick my father had given me. Garage used up a buck a week. That didn't leave much out of the $15. When I was on double dates with Matt Suvalsky, an old college friend, Matt was encouraged to split the gas with me. A happy period in my life.

After six months my father felt that I had eaten enough candy and I was ready for sales training with him. My specific chores were to drive the car and carry the samples; and I would listen while my father talked to the candy buyers.

Well, we struggled along for a few months, but you know how it is with father and son, they don't always work well together. Besides, I guess selling wasn't my racket. My father had always impressed on me how important the other man's time was, and I think he overdid it. So I retired from the candy business and still needed a job.

We hear about those people who, while still playing with their rattles, know exactly what they want to do in life. Well, I was twenty-two and I'd never had any idea what I wanted to do. Naturally I got in the doldrums. My parents were patient and didn't push me. I lay around the apartment on West 88th Street, played bridge in the afternoon and evening, and fell asleep around 3 A.M. listening to Clyde McCoy playing Sugar Blues. My father thought I should see a psychiatrist. And I did, twice a week.

During this period an uncle got me a job with an industrial designer. Salary, $18 a week. The designer insisted I wear a hat, a Homburg no less; this purchase ate up my excess profits. I accompanied my employer to different stores he represented, with the thought that sooner or later I would catch on to the business. But I wasn't a quick learner. However, before I could get fired the designer offered to raise my salary from $18 a week to $50 a week, if I stopped seeing the psychiatrist, and he proposed we take a trip to Florida together. I was just bright enough to sense an ulterior motive, and resigned.

Insurance, candy, and industrial design-three strikes. Back to bridge, Clyde McCoy, and the psychiatrist. My parents were discouraged but they weren't surprised. My father always expected I'd have trouble making a living. I had no discernible useful aptitude, and my father had a suspicion that I was lazy (which suspicion he didn't keep from me).

Anyway, lazy or not, I didn't have a job. One night at the bridge club one of the players, who knew I was indigent, said I might like the brokerage business. Wall Street was the last place I'd have thought of trying, and with reluctance kept an appointment he made. My father went with me to the garment district branch of Cohen, Simondson & Co., members of the New York Stock Exchange. I was interviewed by a customer's broker who needed an assistant to answer his phones and keep his charts. I got the job, $25 a week. Years later I learned that my father had paid the customer's broker twenty weeks' salary in advance.

This time I took an interest in a job. The fluctuating prices and the gamble of the stock market struck one of my aptitudes. And it wasn't hard looking at the pretty models in the garment district. In a week I felt so much better that I tendered my resignation to the psychiatrist. Six months later I passed a stock exchange test, and became a junior customer's broker.

Although I liked the stock market, I was no threat to make a fortune; part of the job was approaching people for business and I didn't like that, it was selling again. After several years with Cohen, Simondson, I applied for a job as a full customer's broker at Bache & Co., and got turned down. Then E. A. Pierce & Co., later Merrill Lynch, Pierce, Fenner & Bean, took a chance and gave me a job at $75 a week-which I didn't quite earn.

I wasn't what you'd call a hard worker. There was usually an hour for lunch at Wilfred's across the street, and when the market closed at three o'clock I was on my way to my real enjoyment, bridge at the Cavendish Club. At my peak I was no more than a mediocre customer's broker. In market judgment I was probably above average-my charts were a big help here-but in commissions for the firm I was a dud. My career high was a salary of $1,000 a month.

Making a thousand a month must have unsettled my brain because, although classified 4-F, I volunteered for the Coast Guard. At Sheepshead Bay I worked my way steadily up through the ranks, to Seaman 2nd Class. The Coast Guard sifted through my talents, and put me in a high position on top of a garbage wagon where I was third in charge. But enough of my wartime exploits.

From the Coast Guard I returned to Merrill Lynch and my job as a customer"s broker. One afternoon, after playing gin at the City Athletic Club, Chester Gaines, a specialist on the floor of the New York Stock Exchange, said that judging by the way I played gin I'd do well trading on the floor, and should buy a seat. It was a good idea but the funds I had were a little short of the purchase price-about 97 percent short.

In those days I used to play golf with a friend, Jerry Ohrbach, at Metropolis Country Club (let me brag and say I won the club championship seven years in a row). One day, when we were in the same foursome, I got a seven on the first hole, an easy par-five. I was steaming, and asked Jerry what odds he would give against my getting a thirty-three on that nine. Par was thirty-five, so that meant I would have to be four under for the next eight holes. Jerry said 1,000-to-1. I said I'll take a hundred dollars worth of that if you like, and he said okay. He could afford the hundred thousand and I could afford the hundred dollars. Jerry had the best of the odds and I had a shot at a fortune. I made him sweat to the last hole. I needed a birdie there for the thirty-three, but didn't come close.

When Chester Gaines suggested the stock exchange seat, I spoke to Jerry about it. He told me that the golf bet had scared him so much he would like to be partners with me. By borrowing from my father, one of my uncles, my wife, and adding my own few dollars, I got up 25 percent of the necessary capital. Jerry and his father, Nathan, put up the rest and became limited partners in the small firm, Dreyfus & Co., members of the New York Stock Exchange. And we lived happily ever after. Well, not quite.

Our back-office work was done by Bache & Co., the firm that had turned me down as a customer's broker. A friend of mine, John Behrens, handled my accounts in the office, and I went to the floor of the Exchange where I did two-dollar brokerage and traded for the firm's account. I liked the floor. It was a lot of walking-with a little thinking thrown in-and the hours of ten to three fitted well with my lazy bones.

In the first year, 1946, with capital of $100,000, we made $14,000 trading. Not as bad as you'd think-1946 was a bear market. A floor joke describes it, "The market was so bad that not even the liars made money." I don't think Nathan Ohrbach realized how well we did not to have lost our shirts. Nathan,,who had the misfortune to walk into a brokerage office for the first time in 1929, had the indestructible opinion that you couldn't beat the market and was restless for Dreyfus & Co. to become a commission firm.

One day Jerry introduced me to one of the partners of the firm of Lewisohn & Sons. The capital partners wanted to retire, and Jerry and Nathan thought we should take over this old firm, stop clearing through Bache, and do our own back-office work. I mildly resisted-it didn't took like that good a deal, and besides it sounded like work. But I was told that three of the Lewisohn partners would remain and run the business, and I could stay on the floor. So I agreed.

Well, we bought this turkey, with trimmings. The Ohrbachs and I got the trimmings.

Without going into the reasons, it wasn't long before I had to leave the floor, where I was reasonably competent, and take on managing a brokerage firm, where I wasn't competent at all. Nathan Ohrbach soon found there were more ways of losing money on Wall Street than trading in the market. Our capital went down rapidly-mine vanished. We couldn't even go out of business easily, and decided to try to stick it out. The Ohrbachs were good about it and drew no interest on their money. I cut my salary to zero, and we struggled along.

After a while business got so good we broke even. The Ohrbachs and I thought we should advertise, and we set aside $20,000 of hard (unearned) money for the purpose. In those days one agency handled all the Wall Street advertising, and it was dreary. I thought we should try another agency.

At that time the firm of Doyle, Dane, and Bernbach was in Swaddling clothes. The partners were friends of the Ohrbachs and agreed to handle our account. But for our budget they couldn't afford to write the copy. So I had to. To my great surprise I loved it; it was an aptitude that had been hidden from me. Our account executive, Freddie Dossenbach, and I used to have lunch at a corner table next to a window at Schwartzs on Broad Street. Inspired by Swiss cheese and liverwurst, with iced tea, I'd write copy to fit Freddie's cartoons. The ads were so different from what was being done on Wall Street that we got a lot of attention for the money being spent. Business got better and the firm started to grow. Soon we had enough partners to always have a quorum for an argument.

One day the Dreyfus Fund walked through the front door and we didn't know it. A fine gentleman, John Nesbett, applied for a position. John was the sole proprietor of a $500,000 mutual fund, the Nesbett Fund. He had struggled with it for several years, but with a management fee of $2,500 a year it had become impractical for him to continue. When John joined Dreyfus & Co. the name of his fund was changed to the Dreyfus Fund, and we took over the struggle. In the next five years Dreyfus & Co. lost about a million and a half dollars of its earnings on the Fund. During that period I got looks from some of my partners that at best could be called askance. But one day the Fund started to break even. From then on it became a winner.

I made money in the stock market, a great deal of it in Polaroid stock. Did I carefully screen the list to select this stock? No. I wouldn't even have known there was such a company if I hadn't had a brother-in-law who worked there. I bought the stock initially for the wrong reason-Polaroid's 3-D glasses-and made money because of the camera.

It would appear I had some luck. The Ohrbachs pushed me into the commission business, the Dreyfus Fund walked into the office, and I bought the right stock for the wrong reason. As I said earlier I was an implausible person to have made a lot of money.

In the late 1960s I retired from my businesses. Since then I have worked full time with the Dreyfus Medical Foundation.