The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [514]
24. Probably in fall 1923.
25. Howard was secretary of the Innocents (Daily Nebraskan, September 27, 1923). This group persisted for many more years, until, as Buffett puts it, “the day came when they couldn’t find thirteen who were innocent.”
26. Coffee with Congress.
27. Interview with Roberta Buffett Bialek.
28. At Harry A. Koch Co., whose motto was “Pays the Claim First.” He made $125 a month.
29. Receipt from Beebe & Runyan, December 21, 1926, annotated by Leila.
30. They were married December 26, 1925.
31. February 12, 1928.
32. Howard became a deacon in 1928 at the age of 25.
33. Address to the American Society of Newspaper Editors, Washington, D.C., January 25, 1925.
Chapter 6
1. Even so, only three in a hundred Americans owned stocks. Many had borrowed heavily to play the market, entranced by John J. Raskob’s article, “Everybody Ought to Be Rich” in the August 1929 Ladies’ Home Journal and Edgar Lawrence Smith’s proof that stocks outperform bonds (Common Stocks as Long-Term Investments. New York: The MacMillan Company, 1925).
2. “Stock Prices Slump $14,000,000,000 in Nation-Wide Stampede to Unload; Bankers to Support Market Today,” New York Times, October 29, 1929; David M. Kennedy, Freedom from Fear, The American People in Depression and War, 1929–1945. New York: Oxford University Press, 1999; John Brooks, Once in Golconda, A True Drama of Wall Street; 1920–1938. New York: Harper & Row, 1969. Roger Babson’s famous warning, “I repeat what I said at this time last year and the year before, that sooner or later a crash is coming,” was useless.
3. Kennedy, Freedom from Fear. Kennedy notes that interest payment on the national debt rose from $25 million annually in 1914 to $1 billion annually in the 1920s due to World War I, accounting for one-third of the federal budget. The actual budget in 1929 was $3.127 billion a year (Budget of the U.S. Government, Fiscal Year 1999—Historical Tables, Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits: 1789–2003. Washington, D.C.: Government Printing Office).
4. By the bottom tick on November 13, the market had lost $26 to $30 billion of its roughly $80 billion precrash value (Kennedy, op. cit., Brooks, op. cit.). World War I cost approximately $32 billion (Robert McElvaine, The Great Depression: America, 1929–1941. New York: Three Rivers Press, 1993; also Hugh Rockoff, It’s Over, Over There: The U.S. Economy in World War I, National Bureau of Economic Research Working Paper No. 10580).
5. Charlie Munger reported that all the Buffetts, including those employed elsewhere, worked at the store, in a letter to Katharine Graham dated November 13, 1974.
6. Coffee with Congress.
7. Roger Lowenstein, Buffett: The Making of an American Capitalist. New York: Doubleday, 1996.
8. Roger Lowenstein, in Buffett, cites Leila Buffett’s memoirs for this fact.
9. Ernest Buffett letter to Mr. and Mrs. Clarence Buffett and Marjorie Bailey, August 17, 1931.
10. “Union State Bank Closes Doors Today: Reports Assets in Good Condition; Reopening Planned,” Omaha World-Herald, August 15, 1931. Characteristically, the story understated the bank’s dire situation. It went into reorganization under regulatory supervision and filed for bankruptcy.
11. Howard had borrowed $9,000 to buy $10,000 of stock in the bank. The stock was now worthless. The house and mortgage were in Leila’s name. Standard Accident Insurance Company, Howard Homan Buffett application for fidelity bond.
12. “Buffett, Sklenicka and Falk Form New Firm,” Omaha Bee News, September 8, 1931. Statement of Buffett, Sklenicka & Co. for the month ending September 30, 1931.
13. The wave crested in December 1931 with the failure of the Bank of the United States, an official-sounding institution that had nothing to do with the government. The $286 million collapse broke a record, took down 400,000 depositors, and was understood by everyone—in one sense or another—as a failure of public trust (Kennedy, Freedom from Fear). It kicked the quivering