Kane and Abel/Sons of Fortune Read online

  In 1915 a craze for collecting matchbox labels hit Sayre Academy. William observed this frenzy for a week with great interest but did not join in. Within a few days, common labels were changing hands at a dime, while rarities commanded as much as fifty cents. William considered the situation and decided to become not a collector but a dealer.

  On the following Saturday he went to Leavitt and Peirce, one of the largest tobacconists in Boston, and spent the afternoon taking down the names and addresses of major match box manufacturers throughout the world, making a special note of those nations that were not at war. He invested five dollars in notepaper, envelopes and stamps and wrote to the chairman or president of every company he had listed. His letter was simple despite having been rewritten seven times.

  Dear Mr. Chairman:

  I am a dedicated collector of matchbox labels, but I cannot afford to buy all the matches. My pocket money is only one dollar a week, but I enclose a three-cent stamp for postage to prove that I am serious about my hobby. I am sorry to bother you personally, but yours was the only name I could find to write to.

  Your friend,

  William Kane (aged 9)

  P.S. Yours are one of my favorites.

  Within two weeks, William had a 55 percent reply, which yielded 78 different labels. Nearly all his correspondents also returned the three-cent stamp, as William had anticipated they would.

  During the next seven days, William set up a market in labels within the school, always checking what he could sell even before he had made a purchase. He noticed that some boys showed no interest in the rarity of the matchbox label, only in its looks, and with them he made quick exchanges to obtain rare trophies for the more discerning collectors. After a further two weeks of buying and selling he sensed that the market was reaching its zenith and that if he was not careful, with the holidays fast approaching, interest might begin to die off. With much trumpeted advance publicity in the form of a printed handout, which cost him a half-cent a sheet, placed on every boy’s desk, William announced that he would be holding an auction of all his matchbox labels, all 211 of them. The auction took place in the school washroom during the lunch hour and was better attended than most school hockey games.

  The result was that William grossed $57.32, a net profit of $51.32 on his original investment. William put $25.00 on deposit with the bank at 2.5 percent, bought himself a camera for $10, gave $5 to the Young Men’s Christian Association, which had broadened its activities to helping the new flood of immigrants, bought his mother some flowers and put the remaining few dollars into his pocket. The market in matchbox labels collapsed even before the school term ended. It was to be the first of many such occasions on which William got out at the top of the market. The grandmothers were proud of him when they were informed of the details; it was not unlike the way their husbands had made their fortunes in the panic of 1873.

  When the holidays came, William could not resist finding out if it was possible to obtain a better return on his invested capital than the 2.5 percent yielded by his savings account. For the next three months he invested—again through Grandmother Kane—in stocks highly recommended by The Wall Street Journal. During the next term at school he lost more than half the money he had made on the matchbox labels. It was the only time in his life that he relied solely on the expertise of The Wall Street Journal, or on any information available on any street corner.

  Angry with his loss of more than $20, William decided that it must be recouped during the Easter holidays. He worked out which parties and other functions his mother would expect him to attend and found he was left with only fourteen free days, just enough time for his new venture. He sold all his remaining Wall Street Journal shares, which netted him only $12. With this money he bought himself a flat piece of wood, two sets of wheels, axles and a piece of rope, at a cost, after some bargaining, of $5. He then put on a flat cloth cap and an old suit he had outgrown and went off to the local railroad station. He stood outside the exit, looking hungry and tired, informing selected travelers that the main hotels in Boston were near the railroad station, so that there was no need to take a taxi or the occasional surviving hansom carriage as he, William, could carry their luggage on his moving board for 20 percent of what the taxis charged; he added that the walk would also do them good. Working six hours a day, he found he could make roughly $4.

  Five days before the new school term was due to start, he had made back all his original losses and chalked up a further $10 profit. He then hit a problem. The taxi drivers were starting to get annoyed with him. William assured them that he would retire, aged nine, if each one of them would give him 50 cents to cover the cost of his homemade dolly; they agreed and he made another $8.50. On the way home to Beacon Hill, William sold his dolly for $2 to a school friend two years his senior, promising he would not return to his beat. The friend was soon to discover that the taxi drivers were waiting for him; moreover, it rained the rest of the week.

  On the day he returned to school, William put his money back on deposit in the bank, at 2.5 percent. During the following year this decision caused him no anxiety as he watched his savings rise steadily. The sinking of the Lusitania in May of 1915 and Wilson’s declaration of war against Germany in April of 1917 didn’t concern William. Nothing and no one could ever beat America, he assured his mother. William even invested $10 in Liberty Bonds to back his judgment.

  By William’s eleventh birthday the credit column of his ledger showed a profit of $412. He had given his mother a fountain pen and his two grandmothers brooches from a local jewelry shop. The fountain pen was a Parker and the jewelry arrived at his grandmothers’ homes in Shreve, Crump and Low boxes, which he had found after much searching in the trash cans behind the famous store. To do the boy justice, he had not wanted to cheat his grandmothers, but he had already learned from his matchbox-label experience that good packaging sells products. The grandmothers, who noted the lack of the Shreve, Crump and Low hallmark, still wore their brooches with considerable pride.

  They continued to follow William’s every move and had decided that he would proceed as planned to the first form at St. Paul’s, in Concord, New Hampshire, the following September. For good measure the boy rewarded them with the top mathematics scholarship, unnecessarily saving the family some $300 a year. William accepted the scholarship and the grandmothers returned the money for, as they expressed it, “a less fortunate child.” Anne hated the thought that William was leaving her to go away to boarding school, but the grandmothers insisted, and more important, she knew it was what Richard had wanted. She sewed on William’s name tapes, marked his boots, checked his clothes and finally packed his trunk, refusing any help from the servants. When the time came for William to go, his mother asked him how much pocket money he would like for the term ahead of him.

  “None,” he replied without further comment.

  William kissed his mother on the cheek; he had no idea how much she was going to miss him. He marched off down the path in his first pair of long pants, his hair cut very short, carrying a small suitcase, toward Roberts, the chauffeur. He climbed into the back of the Rolls-Royce and it drove him away. He didn’t look back. His mother waved and waved and later cried. William wanted to cry, too, but he knew his father would not have approved.

  The first thing that struck William Kane as strange about his new prep school was that the other boys did not care who he was. The looks of admiration, the silent acknowledgment of his presence, were no longer there. One older boy actually asked his name, and what was worse, when told, was not manifestly impressed. Some even called him Bill, which he soon corrected with the explanation that no one had ever referred to his father as Dick.

  William’s new domain was a small room with wooden bookshelves, two tables, two chairs, two beds and a comfortably shabby leather settee. The other chair, table and bed were occupied by a boy from New York named Matthew Lester, whose father was chairman of Lester and Company of New York, another old family bank.
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  William soon became used to the school routine. Up at seven-thirty, wash, breakfast in the main dining room with the whole school—220 boys munching their way through eggs, bacon and porridge. After breakfast, chapel, three 50-minute classes before lunch and two after it, followed by a music lesson, which William detested because he could not sing a note in tune and he had even less desire to learn to play any musical instrument. Football in the fall, hockey and squash in the winter, and rowing and tennis in the spring left him with very little free time. As a mathematics scholar, William had special tutorials in the subject three times a week from his housemaster, G. Raglan, Esq., known to the boys as Grumpy.

  During his first year, William proved to be well worthy of his scholarship, always among the top few boys in almost every subject and in a class of his own in mathematics. Only his new friend, Matthew Lester, was any real competition for him, and that was almost certainly because they shared the same room. While establishing himself academically, William also acquired a reputation as a financier. Although his first investment in the market had proved disastrous, he did not abandon his belief that to make a significant amount of money, sizable capital gains on the stock market were essential. He kept a wary eye on The Wall Street Journal, company reports and, while still aged twelve, started to experiment with a ghost portfolio of investments. He recorded every one of his ghost purchases and sales, the good and the not-so-good, in a newly acquired, different-colored ledger and compared his performance at the end of each month against the rest of the market. He did not bother with any of the leading stocks listed, concentrating instead on the more obscure companies, some of which traded only over the counter, so that it was impossible to buy more than a few shares in them at any one time. William expected four things from his investments: a low multiple of earnings, a high growth rate, strong asset backing and a favorable trading outlook. He found few shares that fulfilled all these rigorous criteria, but when he did, they almost invariably showed him a profit.

  The moment he could prove that he was regularly beating the Dow Jones Index with his ghost investment program, William knew he was ready to invest his own money once again. He started with $100 and never stopped refining his method. He would always follow profits and cut losses. Once a stock had doubled, he would sell half his holding but keep the remaining half intact, trading the stock he still held as a bonus. Some of his early finds, such as Eastman Kodak and I.B.M., went on to become national leaders. He also backed Sears, a large mail-order company, convinced it was a trend that would catch on more and more.

  By the end of his first year he was advising half the school staff and some of the parents. William Kane was happy at school.

  Anne Kane had been unhappy and lonely at home with William away at St. Paul’s and with a family circle consisting only of herself and the two grandmothers, now approaching old age. She was miserably conscious that she was past thirty and that her smooth and youthful prettiness had disappeared without leaving much in its place. She started picking up the threads, severed by Richard’s death, with some of her old friends. John and Milly Preston, William’s godmother, whom she had known all her life, began inviting her to dinners and the theater, always including an extra man, trying to make a match for Anne. The Prestons’ choices were almost always atrocious, and Anne used to laugh privately at their attempts at matchmaking until one day in January 1919, just after William had returned to school for the winter term, Anne was invited to yet another dinner for four. Milly confessed she had never met her other guest, Henry Osborne, but that they thought he had been at Harvard at the same time as John.

  “Actually,” confessed Milly over the phone, “John doesn’t know much about him, darling, except that he is rather good-looking.”

  On that score, John’s opinion was verified by Anne and Milly. Henry Osborne was warming himself by the fire when Anne arrived and he rose immediately to allow Milly to introduce them. A shade over six feet, with dark eyes, almost black, and straight black hair, he was slim and athletic-looking. Anne felt a quick flash of pleasure that she was paired for the evening with this energetic and youthful man, while Milly had to content herself with a husband who was fading into middle age by comparison with his dashing college contemporary. Henry Osborne’s arm was in a sling, almost completely covering his Harvard tie.

  “A war wound?” Anne asked sympathetically.

  “No, I fell down the stairs the week after I got back from the western front,” he said, laughing.

  It was one of those dinners, lately so rare for Anne, at which the time at the table slipped by happily and unaccountably. Henry Osborne answered all Anne’s inquisitive questions. After leaving Harvard, he had worked for a real estate management firm in Chicago, his hometown, but when the war came he couldn’t resist having a go at the Germans. He had a fund of splendid stories about Europe and the life he had led there as a young lieutenant preserving the honor of America on the Marne. Milly and John had not seen Anne laugh so much since Richard’s death and smiled at each other knowingly when Henry asked if he might drive her home.

  “What are you going to do now that you’ve come back to a land fit for heroes?” asked Anne as Henry Osborne eased his Stutz out onto Charles Street.

  “Haven’t really decided,” he replied. “Luckily, I have a little money of my own, so I don’t have to rush into anything. Might even start my own real estate firm right here in Boston. I’ve always felt at home in the city since my days at Harvard.”

  “You won’t be returning to Chicago, then?”

  “No, there’s nothing to take me back. My parents are both dead and I was an only child, so I can start fresh anywhere I choose. Where do I turn?”

  “Oh, first on the right,” said Anne.

  “You live on Beacon Hill?”

  “Yes. About a hundred and fifty yards on the right-hand side up Chestnut and it’s the red house on the corner of Louisburg Square.”

  Henry Osborne parked the car and accompanied Anne to the front door of her home. After saying good night, he was gone almost before she had time to thank him. She watched his car glide slowly back down Beacon Hill, knowing that she wanted to see him again. She was delighted, though not entirely surprised, when he telephoned her the following morning.

  “Boston Symphony Orchestra, Mozart and that flamboyant new hero, Mahler, next Monday—can I persuade you?”

  Anne was a little taken aback by the extent to which she looked forward to Monday. It seemed so long since a man whom she found attractive had pursued her. Henry Osborne arrived punctually for the outing, they shook hands rather awkwardly, and he accepted a Scotch highball.

  “It must be pleasant to live on Louisburg Square. You’re a lucky girl.”

  “Yes, I suppose so—I’ve never really given it much thought. I was born and raised on Commonwealth Avenue. If anything, I find this slightly cramped.”

  “I think I might buy a house on the Hill myself if I do decide to settle in Boston.”

  “They don’t come on the market all that often,” said Anne, “but you may be lucky. Hadn’t we better be going? I hate being late for a concert and having to tread on other people’s toes to reach my seat.”

  Henry glanced at his watch. “Yes, I agree—wouldn’t do to miss the conductor’s entrance. But you don’t have to worry about anyone’s feet except mine. We’re on the aisle.”

  The cascades of sumptuous music made it natural for Henry to take Anne’s arm as they walked to the Ritz. The only other person who had done that since Richard’s death had been William, and only after considerable persuasion, because he considered it sissy. Once again the hours slipped by for Anne: was it the excellent food or was it Henry’s company? This time he made her laugh with his stories of Harvard and cry with recollections of the war. Although she was well aware that he looked younger than herself, he had done so much with his life that she always felt deliciously youthful and inexperienced in his company. She told him about her husband’s death and cried a little
more. He took her hand and she spoke of her son with glowing pride and affection. He said he had always wanted a son. Henry scarcely mentioned Chicago or his own home life, but Anne felt sure that he must miss his family. When he took her home that night, he stayed for a quick drink and kissed her gently on the cheek as he left. Anne went back over the evening minute by minute before she fell asleep.

  They went to the theater on Tuesday, visited Anne’s summer mansion on the North Shore on Wednesday, drove deep into the snow-covered Massachusetts countryside on Thursday, shopped for antiques on Friday and made love on Saturday. After Sunday, they were rarely apart. Milly and John Preston were “absolutely delighted” that their matchmaking had at last proved so successful. Milly went around Boston telling everyone that she had been responsible for putting the two of them together.

  The announcement during that summer of the engagement came as no surprise to anyone except William. He had disliked Henry intensely from the day that Anne, with a well-founded sense of misgiving, introduced them to each other. Their first conversation took the form of long questions from Henry, trying to prove he wanted to be a friend, and monosyllabic answers from William, showing that he didn’t. And he never changed his mind. Anne ascribed her son’s resentment to an understandable feeling of jealousy; William had been the center of her life since Richard’s death. Moreover, it was perfectly proper that, in William’s estimation, no one could possibly take the place of his own father. Anne convinced Henry that, given time, William would get over his sense of outrage.