"Not in the underwriting," replied the younger man. "I'm not going to suggest increasing our lines or opening up any more than we have. But I don't think it would hurt us if we opened up a little financially."
"How so? In what way?"
"Well, our investments are in high-class securities, but they're not liquid enough. We've always bought with the intention of holding what we buy forever. Now, we've got an exceptionally good finance committee; Mr. Griswold in particular is regarded as one of the strongest and shrewdest men in Wall Street."
"Yes; I know he is," Mr. Wintermuth conceded.
"And there's really no good reason why we shouldn't benefit by his judgment. Now, you know as well as any one that the money to be made out of underwriting, pure and simple, is comparatively little. You know that in the long run, even with the most ably managed companies, expenses and losses together just about eat up all the premiums received—that less than a dozen first-class companies doing a national business have an underwriting balance on the right side for the last ten-year period."
"I admit that unfortunately such is the case."
"Therefore the only chance a company has to make money is from the use of money—from the use of its premiums between the time they are received and the time they are paid out in losses. And as this is really our only chance, we ought to take every advantage—and make as much of an investment profit as we possibly can."
"I trust you do not mean to suggest that we use the Guardian's assets for purposes of speculation," Mr. Wintermuth remarked.
"Certainly not—unless it is speculating to take advantage of what foresight and knowledge of conditions our finance committee possesses. I do not suggest buying on margin or selling what we haven't got. But I do suggest that we carry more liquid assets and a bigger cash balance than we have ever done, so as to be able to take advantage of opportunities that may present themselves. Now, take our Ninth National Bank stock, for instance. The Duane Trust Company crowd are trying to buy the control, and the stock's higher than it's ever been. In my opinion the block we hold is worth more to the Duane people than it is to us; I'd let them have it."
"Why, we've had that stock for twenty years!" the President said.