The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [23]
But within two weeks Howard and two partners, Carl Falk and George Sklenicka, filed the papers to start a stockbrokerage firm, Buffett, Sklenicka & Co.12 It was a maverick decision—to open a stockbroking business at a time when no one wanted to buy stocks.
Three weeks later, England went off the “gold standard.”*5 This meant that, to avoid bankruptcy, the country—which was deep in debt—would simply print more money to pay off its loans. This is a neat trick that only a government can pull off. It was as if the country with the most widely trusted and accepted currency of the age announced: “We are going to write bad checks, and you can take them or else.” The announcement instantly exploded trust in formerly gilt-edged institutions. All over the world, financial markets plunged.
The already sputtering United States economy coughed, then stalled, then plummeted into free fall. A rush of banks was sucked into its trailing vacuum and collapsed. In city after city, depositors fought their way to the teller’s window and were turned away.13 But in the middle of this maelstrom, Howard’s business was succeeding. His clients at first were mostly family friends. He sold them safe securities like utility stocks and municipal bonds. In the firm’s first month of operation, as financial panic spread around the world, he produced $400 of commissions and the firm was profitable.14 Through the ensuing months, even as people’s savings evaporated and faith in banks disappeared, Howard stuck to the same kind of conservative investments that had gotten him started, steadily adding customers and growing his business.15
The family’s fortunes had turned around. Then, shortly before Warren’s second birthday, twenty-month-old Charles Lindbergh Jr. was kidnapped and murdered in March 1932. The snatching of the “Lone Eagle’s” baby was “the biggest story since the Resurrection,” according to pundit H. L. Mencken. The country flew into a kidnapping paranoia in which parents conveyed their terror of abduction to their children, the Buffetts being no exception.16 Around then, Howard suffered some kind of attack serious enough for Leila to call an ambulance. The Mayo Clinic eventually diagnosed him with a heart condition.17 From that time on, he lived with restrictions: He wasn’t supposed to lift things, run, swim. Leila, whose life now revolved entirely around Howard, the Prince Charming who had rescued her from the miserable fate of running a Linotype press, must have been terrified at the thought of anything happening to him.
Warren was already a cautious child, who had kept his knees bent and stayed close to the ground when he learned to walk. Now, when his mother took him to her church circle meetings, he was content to sit placidly at her feet. She diverted him with an improvised toy—a toothbrush. Warren gazed quietly at the toothbrush for two hours at a stretch.18 What could he have been thinking as he stared at its columns and rows of bristles?
That November, with the country in crisis, Franklin Delano Roosevelt was elected President. Howard was certain this man of privilege who knew nothing of the common people would pollute the country’s currency and drive it to ruination.19 He stuck a big sack of sugar in the attic to prepare for the worst. By this time, Howard looked like a boyish Clark Kent in a business suit, nearsighted behind his wire-rimmed glasses, with receding dark hair, an earnest smile, and a genial manner. But he turned thunderous when it came to politics, reviewing the news of the day at top volume over dinner. Doris and Warren probably had no idea what Howard meant as he ranted about the horrors that would befall the country now that a Democrat