How the War Is Paid For

1916

"It is only true in a limited sense," observes one English financial critic, "that a nation can pay for war out of its accumulated wealth, and its ability to do so does not alter the fact that the war is actually paid for, by somebody, as it proceeds. In so far as we pay for the war by borrowing in America, we hire Americans to pay for it now and promise to repay them some day, so handing the debt on to the future. American investors who buy our bonds pay American producers of munitions for the goods they sell us now, and we shall be taxed after the war to pay the investors when the bonds mature and to pay their interest in the meantime.

"In so far as we pay for the war by selling securities back to America, we pay for it out of accumulated wealth. American investors who buy back Pennsylvania bonds from us pay the munition makers. Both these processes we are employing. The extent to which we are making use of the latter is known only by the authorities, but we may fairly hope that it is not greater than the extent of our loans to our allies and Dominions. If so, our capital resources are not being diminished."

Man Made $100,000 on 44-Cent Start

1920

Now Charged With Theft of $500

Arrest Reveals Career of Poor Texas Youth Who Made Fortune in New York

NEW YORK, N. Y., March 25. — Abraham White, known variously as the "Speculator King," the "Postage Stamp Bidder," the "Wireless Chief" and the "Texas Grocer," was held in $1,000 bail by Magistrate Charles N. Haris in the Yorkville court on a charge of grand larceny.

While acting as a plain "financier" at his offices, White is charged with accepting $500 from Julius Reibert, a builder, of Hartford, Conn., last Oct. 15, for investment in stock of the Freezproof Corporation.

Reibert, in his complaint against White, who fifteen years ago made a fortune on a "shoestring" in Wall street, says the stock was to have been delivered to him on Dec. 1. Neither was the stock delivered up to the time of White's arrest in the Hotel Pennsylvania, nor the $500 returned to Reibert, after repeated demands, it was stated.

Made $100,000 From 44 Cents

White started life in Corsicana, Texas, under the name of Abraham Schwartz, fifty-five years ago, the son of the owner of a chain of small grocery stores thruout the Lone Star State. In 1896 the future bond wizard went to St. Louis and changed his name to White.

Later in the year White came to New York and conceived the idea of making $100,000 by investing 44 cents in stamps, plus native shrewdness. At that time President Cleveland and Congress authorized a Government bond issue, and the Secretary of the Treasury forgot to ask for checks to cover the amounts of the bid. White saw his chance. He sent in bids aggregating $1,500,000, at a cost of 44 cents in stamps. He told the late Russell Sage what a smart thing he had pulled off, and the financier was so pleased that he advanced the large sum necessary to tide White over. The former Texas grocer cleaned up $100,000 and that started him on a meteoric career.

Formed Securities Company

While president of a wireless company, White formed the Greater New York Securities Company, a bank located in his office. In September, 1907, he outbid J. P. Morgan & Co. and a syndicate for $18,000,000 worth of city bonds and deposited with his bid a certified check for $800,000. Comptroller Metz tried to collect on the check, but as there were no funds, White's bid was thrown out.

Later, in the name of a Massachusetts corporation, White got $4,000,000 of another issue of city bonds and made $500,000 on the transaction.

While at the height of his career, White bought Shadow Lawn, the palatial residence of the late John A. McCall, at Long Branch, against the bidding of several millionaires. After occupying the house for the summer of 1906, and entertaining lavishly, White disappeared for a few months, leaving a trail of unpaid bills.

—The Saturday Blade, Chicago, March 27, 1950, p. 5.

Cleaning Cistern Finds $50,000 Bonds

1908

Vineland, N. J., May 22 — All Newfield was excited when it was learned that A. S. Kandle had found $50,000 worth of bonds at the bottom of an old cistern he was cleaning. Kandle is the village barber, and soon his shop was besieged by anxious neighbors and friends, whose congratulations were most hearty. The bonds were issued by the West Jersey railroad forty-two years ago to John Kandle, father of the barber. The elder Kandle died about fifteen years ago, and old neighbors recall to mind his oft-repeated assertion that he had wealth but could not use it. The reason is now found to be that somehow the bonds got into the cistern, where they have lain for over forty years. Kandle immediately took his find to a lawyer friend in Camden, and as the lawyer advised silence until he could make an investigation, Kandle refuses full details.