"
"Do go on, Uncle Seth. I'm tremendously interested," averred Shirley.
"Shortly after I launched the Laguna Grande Lumber Company--in which,
as your guardian and executor of your father's estate, I deemed it
wise to invest part of your inheritance--I found myself forced to
seek further for sound investments for your surplus funds. Now, good
timber, bought cheap, inevitably will be sold dear. At least, such
has been my observation during a quarter of a century--and old John
Cardigan had some twenty thousand acres of the finest redwood timber
in the State--timber which had cost him an average price of less than
fifty cents per thousand.
"Well, in this instance the old man had overreached himself, and
finding it necessary to increase his working capital, he incorporated
his holdings into the Cardigan Redwood Lumber Company and floated a
bond-issue of a million dollars. They were twenty-year six per cent.
certificates; the security was ample, and I invested for you three
hundred thousand dollars in Cardigan bonds. I bought them at eighty,
and they were worth two hundred; at least, they would have been worth
two hundred under my management--"
"How did you manage to buy them so cheap?" she interrupted.
"Old Cardigan had had a long run of bad luck--due to bad management
and bad judgment, my dear--and when a corporation is bonded, the
bondholders have access to its financial statements.
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