Accessibility Navigation:

Interview with Julius W. Abernethy

Interviewee: 
Abernethy, Julius Whitener
Interviewer: 
Blythe, LeGette
Date of Interview: 
1969-08-18
Identifier: 
OHAB0001
Subjects: 
Stocks; Bonds; TextileS; Philanthropy; Newton, NC; Tax
Abstract: 
Julius Abernethy was one of the most wealthy North Carolinians at the time of this interview, yet he was one of the least known and unassuming. At the time of this interview his estimated worth was between 20 and 30 million dollars. Abernethy quit school around the 6th or 7th grade and began his career trading pocket knives, guns, and horses. His office is a modest four-room frame dwelling in Newton, North Carolina with a sign that reads, "Open. Come on In. Julius W. Abernethy." Mr. Abernethy has given generously to individuals, colleges, institutions, hospitals, orphanages and homes for elderly. He believes that you should give while still alive so you can see the benefits of your gift being used and enjoyed.
Interview Setting: 
The interview took place in Mr. Abernethy's office in Newton, NC.
Collection: 
Piedmont Stories
Interview Audio: 
Transcript:
LB (LeGette Blythe): Julius Whitener Abernethy of Newton is one of the North Carolina's wealthiest men. His fortune is variously estimated at figures above thirty million dollars. He pays in state and federal income taxes about a million dollars a year. He is best known as a trader, particularly in stocks and bonds, especially textile stocks, but he is appreciated likewise as a philanthropist who has given generously and widely to countless individuals and institutions, mainly colleges, churches, hospitals, orphanages, and homes for elderly persons. He himself professes not to possess any figures on the extent of his benefactions, though he estimates them between eight and ten million dollars. Many other millions have accrued to individuals and institutions through growth in the value of stocks given by him or bought because of his counseling. Yet, of the state's immensely wealthy citizens, Julius Abernethy is one the least known and surely he is one of the most unassuming. He doesn't boast that he quit school in his native Hickory in the sixth or seventh grade, nor does he herald his ability to analyze a corporation's financial statement while he's lighting one of his ever-present Hav-a-Tampas. And surely his office gives no indication of the extent of the business transacted in it. To enter the office, one steps two paces from the sidewalk, opens a door on which a small sign proclaims, "Open. Come on In. Julius W. Abernethy." And steps directly into what years ago was the small living room of a one-story four-room frame dwelling that housed the Newton telephone central office switchboard. In front of a desk piled a foot high with letters, newspapers, packages, cigar boxes, and empty pasteboard cartons, he'll likely see Julius Abernethy seated sideways to the desk because it's solid on that side and he can't get his knees under it. At a desk nearby, in the wide doorway that opened into the dining room his nephew Claude Abernethy, Jr. will probably be punching keys on a machine spelling out instantly Wall Street stock quotations. Near the younger Abernethy will be an assistant, a man. This is the staff of this securities office that handles immense volume of stock trading. But these three will not be the population of this most unique citadel of high finance. For the entering visitor at almost any hour of the business day is likely to see a widely varying assortment of visitors who have preceded him. On a well-worn sofa set against the front wall and in nondescript chairs facing the two desks may be the president of one the southeast's greatest banks, the chairman of the board of some huge textile corporation, a preacher friend come in to say hello or perhaps ask a little help for some ailing sister in his flock, or maybe Startown community farmer who has just fetched some extra special home-made link sausage or a gallon of sorghum molasses. Often in the group, he'd see a college president or a director of endowment, and maybe seated beside him on a sofa some fellow trying to get home whose car has broken down and figures may Mr. Julius will fix him up with a new tire or have his brakes re-aligned. Amazingly, here in this room, in this strange commingling, this singular study in democracy, the business is transacted. And big business, too, business in many, many millions. It was in some such situation as this then, that Mr. Abernethy was interviewed on Monday afternoon, August 18, 1969. For the interview, he did retreat into his adjacent tiny private office that actually is little more private than the living room outer one. And he left the door open. "It's pretty hot in here," he explained. But he wanted to be able to hear one of the men yelling to him to answer his telephone or to be available to any visitor dropping by, including his younger daughter and her daughter recently arrived from their home in Honolulu, and to catch any word about a rising or falling stock. So the interview was informal, as it was meant to be. For Julius Abernethy is no standardized businessman or textilist or churchman or philanthropist. And the sounds recorded on the tape along with the conversation are the routine sounds of the distinctly un-routine office of a singular Carolinian. No editing of the tape has been done. The researcher, the friend, the children the grandchildren great grandchildren wishing years hence to have a look and a listen will be seeing and hearing Julius W. Abernethy exactly as he was and as he talked that afternoon, an afternoon as he casually mentions during which one block of stocks held by him and his three children advanced sufficiently to give them a profit of a hundred and fifty thousand. But even then, it was but an ordinary day in the life of this extraordinary Catawba County industrialist and philanthropist. This recording begins in the midst of Mr. Abernethy's discussion of his views concerning buying and selling. He is saying that no trade, in his opinion, is a good trade unless it is good for both the buyer and the seller; that each participant must feel that he has gained by making the trade. RECORDING INTERUPTED. RECORDING RESUMED. [long pause]
JA (Julius Abernethy): believe that was a good sale if you don't feel like it's buy, so I'll give you that for yours.
LB: That was a, that was a end to any argument as to value--.
JA: ( ), I made a lot of deals that way.
LB: I know you told me, you know, at lunch we were talking about--, you said no, no trade is a good trade unless both sides are satisfied?
JA: Right. That's right, it's got to be, and like Mr. Caldwell told you, I could always go back and trade with a man again. Just one time, it's like if you had a store, you sell to a customer once and didn't come back again, you'd go broke.
LB: I know.
JA: It's that repeat business. (In other words), all the time, it keeps you in business.
LB: And you don't get that unless you're a customer who has confidence in you.
JA: Right. Right.
LB: Integrity.
JA: Exactly right.
LB: Well that's, that's your, really your secret in these textile
JA: Yes.
LB: deals as well as your general stock trading hasn't it?
JA: Yes.
LB: I know we were talking about this.
JA: Well, a lot of times, like several brokers called me last week and wondered what I thought would be a fair price based on the money market today, and I would tell them. I'd say," Well, that ( ) 19 and 20, but fourteen dollars now. It only pays eighty cents. I've sold better stocks worth better. Sell for fifteen or fifteen and a half paying a dollar." They said that would be about right. Said there was some estate had a big block of it and wanted to sell it. I said, "Well, give fourteen to fifteen dollars for it and we get a fair price. So they thanked me very much for it. He called me back the next day and said he had a thousand shared so I bought him, fourteen dollars. Some estate had 15,000 shares. They didn't want to sell it all, but they owed the government a lot of tax. I sold most of the stock to them way back. Sold it to them. You see I didn't have over 6000. He bought it way back, then it was split.
LB: I guess you have sold a lot of stock and bought it and sold it again, and bought it again. The same stocks haven't you?
JA: Oh yes. Two or three times before it's over, a lot of it. Four times some of it. But conditions change. Money changes in value during the meantime, just like it is changing now.
LB: (What was the actually know--,) As Robert Caldwell was saying, the dollar is never the same value any one minute after the next really, is it?
JA: No.
LB: It's just what you get for it.
JA: There are a lot of people I know, just like you, who have some money saved up and they worked hard for it. But they haven't got it in building loans. I know one woman who got twenty thousand dollars when her husband died fifteen or twenty years ago. I helped him make some money, done some work for him, so she went to see a group of lawyers and they had her put in it building loans. I told her, I said, "Listen, I know I can triple your money for you with certain stock you could have bought then for six dollars." And, I said she could buy three thousand shares ( ). It's still sixteen. It's been as high as twenty or twenty-one. If she had put it in this stock and the company has got no mortgage against it, she would be getting eighteen hundred dollars a year instead of nine hundred. She would be getting more than that. If she got six thousand shares and had a couple of thousand left over, she'd be getting six thousand. [pause] Lets see, three. No, three thousand instead of nine hundred dollars. So she has a hard time making it now with her social security because everything has gone up in the last fifteen years. But the stock holder, "I'm going to leave that money in the bank" is getting about the same thing off of it
LB: Yes.
JA: (of their) loan. So a lot of times I think the stockholder is getting cheated.
LB: Well, the thing about it, Mr. Julius, you take if this woman had twenty thousand dollars and say put it in stocks, wouldn't she have to know how to handle stocks? In other words, how could she administer that thing? Isn't that the problem?
JA: She would have to trust somebody, and who are you going to trust?
LB: It's it, isn't it?
JA: Certainly is.
LB: Say if I had twenty thousand dollars on savings, what would be my procedure, knowing nothing in the world about stocks or handling stocks or how to buy 'em or sell 'em. How could I do that? Just put it in the hands of some broker?
JA: Get ya' some, get your son to recommend somebody, a brokerage, since he is with the bank. You've got to trust somebody. And, I tell people to put it in three or four different kinds of stocks.
LB: But you see, you are a genius at finance. Where the average person wouldn't know, in comparison with you, would know nothing, you might say. How could they do better than putting it in the bank or building loan?
JA: Well, the building loan is, they haven't got any capital. It's your capital and my capital. They are just the agent, that's all. They borrow from you at four or four and a half and loan at six, seven, or eight ( ) now a year. So the government just guarantees the principal, no interest. ( ) and take it over and liquidate it if something happened to one of them. But they don't guarantee you any interest.
LB: I know.
JA: That's like Bob told you this morning, there is no real security. You've got to have it yourself. What you do or something--.
LB: What I'm trying to get at, how could a person. Now you can take a dollar and trade and you have all your life from the time you were a boy, but you are in a thousand or a million. How can the average person do that?
JA: I do that. I've seen my stuff go up and down a lot of times. A million dollars a week. I've got one stock in here that is worth a dollar fifty this morning. I've got forty thousand shares of it. ( ) .
LB: That would be how much?
JA: A hundred and fifty thousand dollars.
LB: Today?
JA: Today.
LB: That it went up.
JA: Yes. Of course, I'm not going to sell it. It has been double what it is now, back six months ago.
LB: In other words, you and your family made on that transaction, you would have made if you had sold, but you actually made it if it holds, A hundred and fifty thousand dollars today.
JA: Yeah.
LB: This the eighth--, what is this? The 18th of August, 1969. Well that would be more than a lot of people would make in a lifetime.
JA: Oh, yeah.
LB: And yet, but what I'm getting at. I still don't see how the average person that knows nothing about stocks can deal in them. I wouldn't know a bit more than a rabbit, for instance, how to handle it if I had a little free money to deal in stocks. Except as you suggested, just give it over to a broker that ya' had confidence in. Isn't that the only way?
JA: Maybe the broker won't take it. I've had people offer a hundred thousand dollars to me just take it, and I wouldn't take a dime. I would say that I would help them buy something and you can pay the broker, but I don't want anything out of it. But ever now and then some fellow will come in and say, "I've got twenty-five thousand dollars. Take it and buy me something with it." I would say, "No." I don't have anybody's money except my own.
LB: Well but how, now how could this widow you were talking about make money unless she ran into somebody like you that would just do it for here?
JA: She couldn't do it. In other words, she's, I have a notion she is having a pretty hard time getting along with the income. In other words, everything has gone up
LB: Yes.
JA: and living expenses are three times what they were fifteen years ago.
LB: I know.
JA: I was talking to a lady today up at Blowing Rock the other day and she had three little tomatoes. She said, "Ain't that awful. I just paid fifty cents for these tomatoes at the store." I can buy them around here for five cents a pound, but she probably paid twenty-five or thirty cents a pound.
LB: I know. Thirty-five I bet. But y'all, you just have a daily knowledge of the stocks, hours knowledge, you might say. Where the average person knows nothing about them. That's, I guess that's why some few people make the money and others don't.
JA: I know the value of them pretty well. Things I've been in twenty or twenty-five years. I build them up going to the record and I analyze the statements and have other people to advise me. Then it just depends on the (management) a whole lot. And some of it's good and some not so good.
LB: I heard your little granddaughter down at Mooresville the other day at, Ms. Rayder's daughters. Your daughter was laughing about it and said when her children would come up here to your office, just little bitty youngsters, could barely read, that you would hand them a stock market report or some financial report to read just to entertain themselves. She was laughing about that. And one of your granddaughters said the, the same thing. And said you would give them some financial statement to read instead of a cartoon book or something. You are really, you might say, just born into the stock and to trading at any rate. Where the average person, of course, wouldn't know the first thing about it. That's really what makes a person win in trading is the fact that there are so few in it that really know about it. Isn't that one of the--?
JA: Right.
LB: How many people in North Carolina would be as familiar with stocks as you, say? Wouldn't be many would it?
JA: Well, say ten or fifteen, twenty people ( ) probably aren't all. They read all the time; they keep posted.
LB: Yes. But not--.
JA: Way back there, I remember when there weren't three or four people. Even the bankers or people who ( ) . They won't tell you what to do because they are afraid if they'd loose money you'd hold it against them.
LB: Oh I know.
JA: A lot of people won't do that. I always figured you ( ) anyway anything you do.
LB: Have you ever had any really big loss in a business deal?
JA: I've had some, but everybody has some losses in their business sometimes. Conditions change.
U1 (Unknown Speaker): Do you have that (polar) on the Statesville property.
JA: On the what?
U1: Statesville property. Abernethy Mills.
JA: I believe we have, yeah. [long pause] I always bought anything I bought it and I always kept it until I wanted to sell it, until there was a good market. But I've had many losses, but I never would take them, I always kept it.
LB: So you actually didn't lose it. You just lost in on the books? ( ).
JA: It's just like if you had money in the bank. In building loan or something, on a certificate. A lot of people never would touch it. They just leave it and put more in, more in. I always did it with stocks or real estate. Tried to do it in the same way. I would keep it until I found a good buyer when there was a real market for it. Sometimes there is not a market for anything. I mean there is nobody that wants to buy it. You have to find the right party. So, there is no way you can figure out for that you are a hundred percent right. In other words, something will come up maybe in other parts of the world that will affect that industry.
LB: Like wars.
JA: Yes, wars and certain kinds of textiles they get over in these foreign countries. Well, they've got to change it around, put it in something that is profitable. Those people's goods are not as good as ours. They make them cheaper, and they are not as good. Still, the average person doesn't know it until they try them out. In other words, they've got cheap labor over there and they don't use as good as a cotton probably as we do. They just but what they can get and they don't now as much about manufacturing. It's a long story. You can't remember things that happened to you over the period of years.
LB: But ( ) Mr. Abernethy, you were talking about when you stock would go down and you don't' sell it. That's the difference in having a lot of money. You can cover that.
JA: And I buy more and average it out.
LB: But a fellow that doesn't have much money he would be out, he'd off, wiped out.
JA: He ( ) all away by a hundred shares instead of a thousand.
LB: A lot of them, if the things goes down sharply, he is out of commission isn't he?
JA: Not necessarily. He's still got it. He's ( )
LB: Otherwise.
JA: Yes, I don't care. I never cared about salaries.
LB: In fact, you never did draw any salaries in these?
JA: Hardly ever, no. I get director's fees. I've got quite a few of them. I've cut them out because I would rather have the dividends.
LB: I notice you had this certificate of appreciation from the American and Efird.
JA: Yeah, yeah.
LB: How long were director? Well you still are?
JA: No, I resigned (that's what that was about) .
LB: Is that in effect now?
JA: Yes. In other words, I was the largest stockholder in it. I've been in the stock for fifty or sixty years. Traded in it and the old former companies that merged together, and now it is a ( ) corporation. I was on too many boards and I couldn't go to the meetings.
LB: How many have you been on at the most, you might say?
JA: thirty-five or more boards of directors ( ). I've been president vice president of probably twenty or twenty-five of them. Chairman of the Board or Finance Committee. My doctors told me to get off at least half of them.
LB: You've been actually been director on more than that at one time, haven't you, up to fifty or sixty?
JA: I expect so, yes. I never kept up with it. I've been on a lot of big ones as well as small ones. [clears throat]
LB: You've had sometimes several meeting a day with directors haven't you?
JA: Oh, yes. A lot of times, three or four a day. There would be one at ten o'clock, another at two o'clock, and one at three o'clock.
LB: And sometimes in different cities.
JA: Yes, right.
LB: Well, your trading and all has really been your form of--. You, you don't have any hobbies like a lot of people. And that's really been your hobby hasn't it, making money?
JA: Right, yes. Making it and I like to give it away.
LB: That's what I was wanting you to talk a little about. Your, now you are known all over everywhere as one of North Carolina's greatest philanthropists and probably have given more money than a great number of North Carolinians. In fact, there are very few that have given as much as you. You might say, if you leave the Duke, and of course that's a great foundation, but as an individual, there have been very few people that have given more. Isn't that right?
JA: I guess that's right. I don't believe in these foundations because they build up and get too powerful. I think they ought to be forced to give away their income very year. Because the government is getting cheated out of a lot of money, income, you know. And not piling it up. Then they control too much. They get too big and I think they ought to be done away with. I think they will.
LB: In other words, they would have to give away every year.
JA: If they had income of a million dollars.
LB: Have to give away that year.
JA: Ought to give it away to charity. They are supposed to be a tax free and that is the purpose of it. They ought not be allowed to keep getting bigger and bigger. Up to a few years ago, they could buy their own stock in it and build them up. That a way they control it, the company.
LB: It became really a company didn't it?
JA: Yes. So I think that ought to be done away with. Or force them to give away all their income every year. You see a lot of the gifts to these tax-free foundations are stock in the companies as the build up to save tax on inheritance tax and what not. With charitable foundations. But a lot of companies have abused it. They have let it keep building up and buying more and more stock and getting bigger, but they don't give it out. They give token amounts. But no sizable amounts. So I think they are figuring on doing something about it now, a new tax bill coming up.
LB: That would cut down the power of these foundations at any rate. If they had to give it away every year.
JA: Right. In other words, there is plenty of money to carry on business and to go around if it is properly handled, but now if it gets channeled up like in a few big foundations, it don't circulate. And the little fellow has to go along and make it up. But it was taken out of circulation to a certain degree. Like these oil people, why should they get big tax refunds back and pay no taxes to drill more oil? It's kind of like this farm bill. I think it's all wrong because the government ought not to have to pay people to not grow.
LB: That seems to be a backward sort of thing, to pay somebody not to grow cotton for instance, or tobacco.
JA: Right, right.
LB: I don't understand the economics of it, but it seems illogical at most. You were talking the other day about your idea of, of philanthropy. You said, as I recall it, that on a lot of occasions when you had, after you had given a particularly large gift to some school for instance, like Catawba College, you would turn right around and make that money back pretty soon or a big part of it. And looked like it was just providential almost.
JA: Yes, it has happened all times.
LB: As I understand, you have sort of a feeling or belief that maybe you are spared to make money and allowed to make money like you have just because of the fact that you do get great joy in giving it away. That's really the only way you can keep it anyway isn't it? Isn't that what you told me?
JA: Yes, for sure the only thing you know you've got is what you give away. You've got it while you're living.
LB: What is your little jingle motto about the giver?
JA: While you're living, then you know where it's going. You can see the good it does.
LB: Give it while you're living, then you'll know,
JA: Where it's going.
LB: where it's going. Well a lot of wealthy people I expect do deprive themselves of a lot of fun by not giving it when they are able to enjoy.
JA: A lot of people die with a lot of money, and they've never given anything away but in very small amounts. But it is something you have to learn to do, is how to give. And you've got to learn how to receive.
LB: It's just as hard to learn how to give it probably as it is to make it, isn't it?
JA: Right.
LB: In fact, it's harder for some people.
JA: That's exactly right.
LB: I imagine you have people after you every day for money.
JA: Oh yes. Three or four a day come in here. People you've never heard of.
LB: And it's hard to--
JA: And there are a lot of these cranks that come in. I've had several write me who didn't have any money and wanted me to give it to him and put him in business. There is something wrong with them in the story. They read in the paper where I'd done this, that or the other.
LB: Every time, I imagine every time some college or hospital or something announces that you have given them a big gift you get a flood of letters, don't you?
JA: Oh, yes.
LB: I know since we've been working on this biography business a lot of, a number of people have asked me, you know, sort of how they could get on the good side of you. I told them that I was certainly not going to make any effort in anybody's behalf because when somebody is giving a thing it is their own affair. You have, you are bound to have a lot of people that take you for a sucker, and I guess you have been a sucker in a lot of cases, haven't you?
JA: Oh, yes. [long pause]
LB: You must get a deluge of letters after some--.
JA: Yes. [phones ringing in background] [long pause] ( ). I don't know whether I showed you this or not. This happened this year.
LB: No sir, I don't think so.
JA: I'll get a lot of letters like this.
LB: Who was this from? Some individual?
JA: It's from ( ). I give 'em two hundred thousand to build (twenty-three or four million dollar buildings). Baptist Hospital. So I gave them that this year.
LB: This was just this past February.
JA: Yes, this year.
LB: "The Chairman of the Board of the Trustees of North Carolina Baptist Hospital will sign this Friday a contract for the hospital addition which your recent generous contribution of more than two hundred thousand dollars has partially made possible. We are grateful to you for this support and hope that the building once completed will merit the trust you have placed in us." Well that's just one of a number that you get in, isn't it? For instance, if that were published in the paper you would get a flood of calls wouldn't you?
JA: Yes. Oh yeah.
LB: Not only from cranks but from other
JA: I requested that the gift not be put in the paper.
LB: I know.
JA: It's ( ) because ( ) people get the wrong impression.
LB: Well, the fact that you are doing it some would probably think you were doing it to get a lot of praise for it publicly and on the other hand there would be a lot of suckers that would use it or try to.
JA: A lot of times, instead of giving money away, I'll give 'em some good stocks.
LB: Which is better, isn't it?
JA: Yes, because they get the income off of it. I give a lot stocks away like Carolina Mills ( ) but ( ). And some of them sold it when they wanted to build new buildings and stuff. and a lot of times they get two or three times what you paid for them maybe ten years ago.
LB: So actually you were giving them a current value which later was, in other words if they had put that money in the bank it wouldn't have been anything like the amount for which they sold it.
JA: Well they had ( ) until they used it. [phone rings in background] In other words you can't tell people exactly how you made your money because it comes out of the air a lot of times. I mean you (when you sell).
LB: I know. I remember you were telling me that when you went on the Board at Catawba College that some of them didn't like the idea of buying stocks and all. They wanted to put it in bonds or rather they. Bonds or something like that.
JA: I told them "Listen, I couldn't give you a penny if I had to give you because I didn't make money out of government bonds. I made it out of stocks." Old man, Carr was on the board and said, "Well, what would you put in it?" I said, "I know a dozen things." ( ) was one of the most prominent lawyers over there and Russell Whitener was a good lawyer here and on the Board. ( ) I'll guarantee you double your income. We'll sell a couple hundred thousand dollars of these bonds and I'll put it in a good mill stock." "Oh." They said." I wouldn't have that." How did you make your money, Mr. Carr?" He made it out of mills. That stock is not selling at anything like its value, about half its value, Dan River Mills, and it just merged with ( ) Alabama. I had a lot of that, so I said I'll guarantee you double. So I put a hundred and eighty some thousand, sold the bonds and they just broke even on them. They were two and a quarter percent bonds and they paid par for them.
LB: That was government bonds?
JA: Yes, ten or fifteen year bonds. In four and a half years, I sold the stock and they over-doubled their money. And they got sixty-eight thousand in dividends off of the investment whereas the bonds would only have paid them eighteen thousand.
LB: That was fifty thousand.
JA: And then the difference in the bonds went down then to eighty. If they had kept the bonds for four and a half years, they would have lost another forty thousand. See, they built a library there, and library, they had the library bought. So I guaranteed them no loss and double their income. Well, they got more than double. They got an average over six percent of their money in dividends.
LB: Plus double the value of it.
JA: In other words, they couldn't have built a library. That extra two hundred and fifty thousand dollars ( ) investment. I let them draw a contract and after four and a half years I bought it back, me and my family and me ourselves, and it went on up after that a lot.
LB: You bought that stock back?
JA: Yes, and gave them more than double. I took it up with the Board. They couldn't have built the library they built if it hadn't been for that one deal. The cost kept going up, up, up, so when they started to raise this money we could have built a library five years before that, but when they finally built it, it cost over a half million. It kept going up, up, up. That's just one of a lot of cases.
LB: Now, you've done that in lot of other institutions haven't you?
JA: Oh, yes. I've helped a lot of churches that way ( ) two or three churches. I give them, stocks and the stock doubles and the dividends come in instead of giving them cash. There are four or five around here I've paid for half of them, but it didn't cost me maybe over a third of that to give them two hundred and fifty thousand dollars. It didn't take well over fifty or sixty thousand of the money I put in these stocks to pay it because they ( ).
LB: So that was deal that was good another one of those deals that was good for both of you wasn't it?
JA: Oh yes.
LB: You hadn't paid as much for the stock
JA: No.
LB: as the value would have been right at the moment and then on top of that they got the profit of the stock increasing. Now that's--, you've done that with other school haven't you.
JA: Yes.
LB: How about the contribution to Davidson. Did you give them stock or?
JA: A lot of times I give money and stock. I've given them quite a bit of money in the last fifteen years or twenty years.
LB: You've given them six hundred thousand or more haven't you?
JA: More than that yes. I never kept a count of it. In the last few year, three or four years ( ) there. I gave them on the Ford Foundation a half million dollars, they had to match a certain amount. And I gave them fifty thousand on the library.
LB: Have you any idea Mr. Abernethy, within any reasonable number of thousands of dollars, how much you have given away in actual money, not counting the increase of value of the stock, but say the value of the stock at the time?
JA: Well, that's the way you would have to give it the market value. You couldn't take it off your taxes if you didn't.
LB: That would run into millions and millions. What ten?
JA: Oh yes. I expect eight or ten million dollars in the last twenty or twenty five years.
LB: And then actually though the value has been far more than that hasn't it?
JA: Well some of it went up and doubled after I gave it to them just like at Catawba College.
LB: So actually you could say that you've given.
JA: Well, not unless you paid out that much taxes too. I've paid out a lot of taxes. I was at several parties here for me ( ) and ( ) a little tax on me ( ) and I gave my kids ( ) Mill in Statesville. It made a lot of money so they taxed it to me and I paid it three different times. I finally ( ) every year. I made a lot of money trading. I doubled it and then tripled it and.
LB: That was the time you said they taxed you because they said your brains had made the money.
JA: Had money the money.
LB: That is the Internal Revenue.
JA: And my attorney said that was the first time he ever heard of that.
LB: Now how were you telling me that finally ended up to your advantage didn't you say?
JA: Yes, if I would have died. In other words, they got more by not taxing me inheritance tax. It so happened I didn't die. I've outlived most all my enemies.
LB: Didn't you say that the government agency that made you pay this said that they--, how was that?
JA: Told me later they had made a mistake by doing that.
LB: That you had really outfoxed them on it. RECORDING INTERUPTED. RECORDING RESUMED
JA: Yes.
LB: Are you were to pay, let's see you figured in giving--.
JA: I kept ten percent of it. The big mistake I made I should have given it all to them because I was still a partner don't you see. I gave them thirty percent each and made a partnership then I incorporated later.
LB: Well how did--, why shouldn't they have charged them on the basis of thirty percent a piece and you ten percent?
JA: No, I borrowed the money back from them. They got a big refund back. They got ninety percent back and made them you might say pretty wealthy, each one of them. They got over a million dollars of that back. I made a million and a half way back and I invested it that was fifteen or twenty years ago. Of course, that doubled and tripled and I have one girl up here and she didn't know anything of what she had. I was trying to explain it to her now. But my health hasn't been too good. I wanted to turn it over to her but she doesn't know nothing about it like the average person and she never had to worry about anything. She's got one daughter getting married but she's not over eighteen and a half. I said, "Well, ( ) same thing don't do a thing with it until she is twenty-one." My wife has been looking after it for her and I have. So it's hard to tell people what to do, to give them advice.
LB: That would be the difficulty. I would think with some person that had a little savings and wanted to go and to make more money than five percent. He wouldn't know how to would he?
JA: A lot of them wouldn't.
LB: He would probably turn around and lose that.
JA: Well, not necessarily. If you buy a good company, well managed.
LB: But how would he know?
JA: What about local companies that you know people are interested in. Some of them can't buy stock in the companies and some of them you can. They pay pretty good. But you can always find out something. I never have any trouble finding what to put money in.
LB: How do you say come down here day by day. Do you have any routine at all from one day to the next like a person would have say working in a bank?
JA: No, but people come in to see me. I had a fellow come in from Concord this morning while you were here. He brought me some good link sausage he made over there. He's got some stocks in several mills over there, China Grove and--. Hey.
U2 (Mr. Abernethy's Daughter): I don't want to interrupt but I wanted to tell you that (May Falma) (paid for this) and the reason she couldn't find them is because he had packed them in with some other papers and she just looked at the envelope and--.
LB: That's all right. Go ahead.
U2: And so I found my, I found papers and thank you for the sausage and lunch and I'll see you later.
JA: OK. Well did you find what you wanted, did (she have the copies for you)?
U2: Yeah, I'll talk to you later about there's a little error in there.
JA: What is that?
U2: I don't know. I may need to investigate it.
JA: Why?
U2: They took the money my daughter made when she took that part time job at the pineapple and put it--, you see Francis, her name's Francis Catherine
JA: Yeah.
U2: and they had Francis (Kaig) and so they put it under Francis A. Hewitt, see. And they didn't notice that. Well if it ever comes to light then you'll know what happened. I told the children making a little bit of money's a dangerous thing but I wanted them to have that chance to make it. Part-time jobs.
JA: Well (I want them to make a lot of money). ( ).
U2: [laughter]
JA: ( ) how many shares you got of it?
U2: Yeah, I got all of that so I'm going to study it and I'll let you know about it.
JA: ( ), he had it on the books.
U2: Well she didn't give me that whole list but I, I got all my reports and I can go over it.
JA: ( ).
U2: OK.
JA: ( ).
U2: OK, we'll see you. Bye bye.
JA: OK. Bye bye.
LB: I wanna see ya' down in Vespa. Look Catherine.
U2: OK. [laughter]
LB: Keep up the courage.
JA: ( ).
LB: You're not thinking about backing out are you?
U2: No, I guess not. We kept waiting. I don't believe their going to back out.
JA: I don't believe they will.
U2: What daddy?
JA: ( ).
U2: Yeah, I'm going to get it.
JA: Well go get it.
U2: Yeah, don't worry. ( ).
JA: ( ).
U2: OK, I--.
JA: That's the way you were raised.
U2: I know it! OK, daddy. I love you. Bye bye.
JA: Bye. Her husband's a surgeon in Hawaii. She went over--.
LB: She's your youngest child.
JA: Yeah.
LB: Yeah, she's the one that's getting married, ( ) week.
JA: Yeah.
LB: Well talking about, I believe we were talking about the difficulty of a person, you know, that is not versed in stocks and all that making--.
JA: Well, they have to trust somebody. I've had people call me from Florida, Washington, that I traded with fifteen or twenty years ago and some of them come here to see me. One of them came by here a couple of weeks ago since I've seen you, and said, "I've got a million dollars to invest. I sold some land and got a big price for it and I want you to tell me what to put it in. I'd like to get about ten percent." Well, I told him four or five things. He wanted me to handle it for him and I said, " No I wouldn't do it. You will have to make up your own mind because I ( ) out of it." Another friend came by who had some land in Florida he sold that and then he had a big farm in Mississippi, a cotton farm, and he sold that. He had over half a million dollars. He said, "I'd like to invest part of this." He said he didn't know anything about it. I had sold him a little stock a few years ago. He said he would like me to help him with it. I said I would help him. So I got sick and went to the hospital for about a week, and he hasn't been back since. But people like that come to me all the time. Some of them are sincere.
LB: Do they ever come back and say, "That tip you gave me panned out or on the other hand I lost on it?
JA: Yes. No, mostly all made money, ninety percent of them. They thank me for it. They are very grateful. I sold a lot of them bonds way back then they were cheap, and they kept them and got paid off par for them.
LB: Like municipal?
JA: Yes.
LB: You made a lot money right at the beginning of your trading really wasn't it on these defaulted municipal and county bonds?
JA: Yes, county and state. I bought some state bonds.
LB: Since they've put in the local government commission in Raleigh that's just about cut down on.
JA: ( ) . There's only one or two in the ( ) I know of.
LB: Just virtually none now.
JA: Yes. Max Gardner put that in way back there.
LB: Yes, I remember.
JA: Then the insurance companies formed another municipal council to check the local government. They work hand and hand together because they had most of these bonds then.
LB: So actually a county can't sell the bonds now up to.
JA: They used to issue twenty or thirty year bonds. Now they won't do that anymore. It's so much a year they pay off. They used to put it in the bank. It was a racket for the big banks because they had that sinking fund money in the banks to buy bonds in but they could buy them in at a discount if they went below par. There were some instances where they ( ) so they could buy them in cheap. There have been instances of that kind.
LB: But under this new setup there is very little chance of a town defaulting isn't it?
JA: Right.
LB: Unless it has some terrible natural disaster or something.
JA: Right.
LB: I know, I believe you can't issue but a certain percentage of your valuation per year, I believe. You've got to keep it under a certain percentage.
JA: Right. They like to have it down to four, five, or eight percent.
LB: Yeah.
JA: It sometimes gets higher.
LB: I believe eight, eight was--, when I was an observer I believe eight percent was the maximum I believe. Well that's how you really got into--, where you star--, you got into that from.
JA: And I collected those back coupons no taxes, tax free. I collected a lot of them. I would go around a couple of times a year the whole western part of the state. I had at one time four or five million dollars worth of those bonds maybe more than that.
LB: Now the coupon was the
JA: Tax free interest.
LB: and it was actually interest payment wasn't it.
JA: Yeah, and they were tax free ( ) then. [telephone rings]
LB: How did you do it? Do you turn in the coupon and get the money?
JA: Yes, see the banks would sell them off when they could, but these just kept stacking up. They weren't paying them. They were in default so people wouldn't ( ) them that owned them until they got them. But I would go sell them for half price. I bought the bonds for maybe twenty or thirty cents on the dollar. They were six percent bonds. When they had six or seven years interest they ( ) in twenty-eight, twenty-nine, thirty.
LB: But the interest was good.
JA: Twenty-six or seven. Yeah. But I talked to them and get the money half price. I collected as much as fifty or sixty thousand a year from counties and towns because I could take the money there and buy other bonds. Don't you see, and it was tax free. In other words, that interest was tax free. I didn't have to pay income tax on it. I collected enough from that to pay my income tax way back there in twenty-five or thirty years ago in the 30s, tax-free. I don't say it boasting but I knew more about municipal bonds and ( ) than anybody in the state back in the 30s.
LB: I guess you did.
JA: I have more of them.
LB: You were telling me earlier that you would go around to a county for instance that was in default and instead of looking on the book valuation of property that you would go around and look at the smoke stack, count the smoke stacks and see if the mills were running.
JA: Yes, and the look of the land.
LB: And whether the land--
JA: I had a fair value of what land was worth and what it was on the tax books for.
LB: And whether it was producing.
JA: A lot of them cut their valuation way down during the Depression. When they borrowed the money in '25, '24, the 20s, the land was valued up high, then when they devalued it they cut down about half, some of it two thirds. Of course, it made the statement look haywire, an indebtedness drop of eight percent to may thirty-five, forty percent and then--
LB: Well actually there hadn't been any change in the real value.
JA: No. But when things turned around and got back up then they revalued again and sold new bonds and took up these bonds. That's what happened.
LB: But you judged the, you told me you judged the economy of the community by looking at the people and whether they were working or whether the mills were running or whatever industry enterprises were there.
JA: That's right.
LB: You had bonds from half of the counties I guess? Not half, probably a number of them.
JA: Quite a few of them. And I had friends too who would buy them with me. Buy them by a big block. I bought as high as over a half million dollars at one time of the same bonds.
LB: That would be you and a group?
JA: Four or five people I dealt with. Sometimes just my cost because they always knew where there were some more that I could buy maybe just as good or a little cheaper. They didn't want to buy more of them. They all made money out of them. The young fellow sitting out there when you came and made several hundred thousand dollars. He inherited about thirty thousand dollars. I had him put it in those bonds. He started out the same way. He borrowed. Now he is worth a million and a half dollars.
LB: He inherited how much?
JA: About thirty thousand.
LB: Has he made any other--?
JA: He went into mill stocks too and so forth.
LB: I mean he's made it all on stocks?
JA: Stocks and bonds, yes.
LB: Not a, not a job?
JA: No, he never earned a salary. He did work at a job with Burlington Mills until he got ( ). I reckon he hasn't worked in thirty or forty years. He quit trading. I'm going to see if I can get him back here. [pause]
LB: You started this, actually as you were saying a few minutes ago, you don't even remember, you can't even remember when you started trading, do you? Swapping pocket knives and--
JA: Oh yes. I started trading when I was in the first or second grade of school. Seven, eight years old.
LB: How old were you when you were trading cows and horses for those guns?
JA: I was ten or twelve years old, fourteen. I traded pretty freely most anything.
LB: You had made which seems to me phenomenal, by the time you were eighteen years old--
JA: I was worth a hundred thousand dollars or a couple hundred thousand.
LB: From a little boy with nothing and you said you finished about, you figure, about the seventh grade, didn't you?
JA: I've forgotten.
LB: Anyway, it was down in the grades and by the time you were eighteen a couple hundred thousand dollars just trading.
JA: Yes.
LB: That would be how much now?
JA: Oh, a couple of million dollars.
LB: Several million, wouldn't it?
JA: Yes.
LB: Well, it would be ten times as much or more.
JA: Well (put trading), I put stuff in other people's names, traded real estate. I put my father's name.
LB: Before you were old enough legally?
JA: Before I was twenty-one. I had several lot sales and made money out of them. I would buy some land pretty close to town, cut roads through there, which people are still making money out of today. [pause]
LB: We've got just a few minutes on that, we can just run the tape out if you don't mind. This is as I say, this is just--
JA: Well, you've met a lot of my friends and they can tell you as much about me as I can tell myself. The people I've dealt with.
LB: Well that's the, anybody that is willing to be recorded by what their friends say, that's a pretty good sign. Because a lot of people would rather take the evaluation of what you would tell them than what your friends would tell them about you.
JA: I know I was doing, I don't know whether I told you this before, I had a mill in Statesville I bought from Charlie Cannon. And during the war, that excess profit tax. Business got good all at once and I had a big profit. ( ) . I doubled it after I bought it back, got my kids into it, then tripled it, the profits. But I would have an extra good month and be showing about thirty-thousand dollars a month profit. I doubled it and went to sixty, before taxes, so I would say, "Well, give them an extra check this week." I gave them seven that year.
LB: You mean the employees?
JA: All the employees. The foremen and assistants, all of them.
LB: Just an extra check, the same size check.
JA: Yes. They had government controls on what you would give that year. Instead of paying excess profit, I could it right off, I would give them four to seven checks a year extra. There you had seven and I froze on it. These other mills couldn't give it away because the government took it for excess profit tax and I made them all.
LB: But since you had been doing it you could keep on.
JA: Yes, I could keep on.
Groups: