orgy of extravagance and high prices, I advise you frankly to wait
awhile before taking on any securities. You cannot afford to absorb
the inevitable shrinkage in the values of all commodities when the
show-down comes. However, there is a new issue of South Coast Power
Company first mortgage bonds that can be bought now to yield eight per
cent. and I should be very much inclined to take a chance on them,
Farrel. The debentures of the power corporations in this state are
about the best I know of."

"I think you are quite right, sir," Farrel agreed. "Eventually the
South Coast Company is bound to divide with the Pacific Company control
of the power business of the state. I dare say that in the fullness of
time the South Coast people will arrange a merger with the Central
California Power Company."

"Perhaps. The Central California Company is under-financed and not
particularly well managed, Farrel. I think it is, potentially, an
excellent property, but its bonds have been rather depressed for a long
time."

Farrel nodded his understanding. "Thank you for your advice, sir.
When I am ready will your bank be good enough to arrange the purchase
of the South Coast bonds for me?"

"Certainly. Happy to oblige you, Farrel. But do not be in too great a
hurry. You may lose more in the shrinkages of values if you buy now
than you would make in interest."

"I shall be guided by your advice, sir. You are very kind."