Who Said Utilities Were the Best Investment? (Cont.)
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After showing the new certificate to my mother, I put it in our family safe deposit box at the bank, with the full expectation that this $50 investment would soon bring handsome returns. "That's the way to let money work for you," our friend at the bank advised me in a fatherly way.
This story has a sad ending which is soon to come.
After six months, this new share of "preferred" stock was worth $46; and after six more months it was worth only $35. When I suggested to an officer at Kentucky Utilities that perhaps I should sell it before its value dropped even more, I was told not to sell. Hold on to it, he said, it will come back up. And others I consulted agreed with that advice. So back into the bank box it went and stayed there for another year.
Late in the year 1927, I learned that my share of stock was worth only $17.50. But still I didn't sell because everyone I talked to about it said, "utilities are the best investment in the long run." The "long run," however, became more and more dismal. In 1928, I found out that the particular utilities facility in Alabama--the one I owned a piece of--was no longer in operation. Some said--but no one admitted it officially--it had been abandoned because of some wider regional development in the production of electrical power at and around Muscle Shoals, Ala.
Soon afterwards, I received from the Associated Gas and Electric Company a brief announcement saying its "venture in Alabama did not turn out very well," and that as a result my stock certificate #0-15352 was no longer marketable. I took that to mean it was worthless. So I was pleasantly surprised to read the last part of the announcement which said the company would redeem my certificate for $2.50, "in consideration for the awkward position that you and a few others of our stockholders are now in as a result of this unfortunate investment."
I was tempted to sell and collect the $2.50 but decided instead to keep it--just for spite: And, after more than half a century I still have it--a grim reminder of at least one time-tested proverb: "All is not gold that glitters."
Chester C. Travelstead
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