Like everyone else, I used to have a friend at the Chase Manhattan Bank. My friend's name was Chauncey and he was like a brother to me.
When the recent Securities and Exchange Commission's report was published it turned out according to the SEC, that Chase Manhattan was selling New York City securities to its customers at the same time it was unloading the ones it had kept for its own portfolio.
I couldn't believe it so I called Chauncey. He wasn't there.
I called him again. After four calls he finally picked up the phone and said tersely. "I told you never to call me at the office."
"Where am I supposed to call you?" I wanted to know.
"What is it? I'm very busy."
"Chauncey, is that the way to talk to a friend?"
"We stopped that advertising campaign two years ago.
"That's what I'm calling about. Remember when you were my dearest friend four years back and you called me and said you could sell me some of the finest municipal securities money could buy?"
"I don't recall the conversation."
"Well, I do. You said that New York City was on a wave of new prosperity and anyone who bought its notes would never have to worry about his financial future again."
"I said that?"
"You certainly did. You also said, that because the demand was so great you were restricting sales of them to only your closest friends."
"I might have said it as a joke," Chauncey replied.
"You were dead serious, Chauncey. You didn't laugh once."
"All right, for argument's sake I might have said it. What do you want from me?"
"Well, I just read the SEC report on New York City and it claims that all the time Chase Manhattan was touting New York securities it was unloading its own notes because it knew the city was in a fiscal mess."
There was dead silence on the other end of the line.
"Chauncey, are you still there?"
"Yes, I'm here. I'm sure the SEC report is mistaken. We would never do that to our customers. We're one of the largest banks in the world."
"That's what I said when I bought $20,000 of the notes. I said if Chase Manhattan recommends them they must be good."
"They were good at the time I sold them to you," Chauncey said. "They just go bad, as time went by."
"But why was Chase Manhattan getting rid of its notes when it was pushing them on its friends?"
"We felt we owed it to our customers to let them buy them. When the demand was greater than the supply we had no choice but to sell the ones we were holding for our own investment. It wasn't easy. We loved New York City securities, and it broke our hearts every time we sold one."
"Then you didn't know the city was going broke?"
"That's the most insulting question I've ever heard. I'm glad David Rockefeller didn't take this call. You would have broken his heart. I thought we were friends."
"I did too until I read the SEC report. If I had a friend I wouldn't sell him securities that I knew were going down the drain."
"Well, if you feel that way about it," said Chauncey, "maybe we shouldn't be friends any more."
"I don't know why you're getting mad at me. I'm the one stuck with the securities."
"Friendship is based on trust," Chauncey told me. "You stick by a friend not only during the good times but the bad ones as well. This call has hurt me very much. I never thought you would stoop so low as to bring up something like this. I don't think we should see each other any more."
"I'm sorry, Chauncey. I didn't mean to get you angry."
"It's too late to apologize. You've ruined a beautiful relationship. If you're so petty as to let a lousy $20,000 investment in New York City securities stand between us, then we don't anything more to say to each other. And you can send back the toaster we gave you when you opened your account."