THE other day I was seized in the plenitude of my powers and dragged to lunch by a banker. He talked. I listened. Then I talked and he listened, and I saw by the color rising to his pallid cheeks that he was astonished and shocked. Yet what I told him was merely the everyday philosophy of a gambler.
Let me hasten to explain that I am not a wicked gambler in this land of righteousness. Nor am I a wanton gambler of life. I am a mere enjoyer, content to take life as it comes and striving not to fetter the lives that directly succeed me.
The relation of this simple fact irritated the banker beyond all pretense to politeness. When I indicated what provision I have made for my children after my death he told me that I was no business man. That was, coming from him, a term of horrified contempt. But I was flattered, and thanked him for the compliment.
Your business man, capitulating to the propaganda of other money-grubbers, has learned to believe that his cash, be it personally accumulated capital or life-insurance funds, must be left in trust to his descendants. The almost universal adherence to this quaint custom has been fostered, I maintain, by the overpowering advertising of those companies who profit by having money left in trust with them. For how, by any process of original thinking, can a man wish to deny his offspring the full and untrammeled use of the money he leaves them?
It was right here in the exposition of my gambling philosophy that I brought the flush of horror to the banker’s cheeks. I asked him, tit for tat, what provision he was making for his children, and he told me that he had arranged a trust of which they were to get the income until they were twenty-five, then half the principal, and the remainder of the principal at thirty-five.
‘You mean,’ I asked, ‘that your dead hand will reach out of the grave and grasp the money you can no longer spend? Do you really want your children to hate you as a post-mortem skinflint?’
This was, I admit, a brutal way of expressing what he imagined to be a benevolent course of conduct. He rallied to his own defense, quoting statistics to show that the average child to whom money is left outright at the age of twenty-one squanders it within seven years, claiming that not even his children would know the value of money when they were twenty-one.
I gave his statistics and his claim the attention they merit — which is nil. I offered it as my opinion that at maturity a boy should receive outright whatever his father is able to leave him, so long as the sum is written in less than six figures. Perhaps if I were able to think higher than five figures I should not have made even this exception.
Consider the cramping effects of a frozen inheritance of, say, $20,000 on various types of youth. The income is 5 per cent (less the trustee’s fees), or a bit less than a thousand a year. My first type is lazy. He finds that with an easy job at a small salary he can eke out his trust income and live comfortably. He dawdles along, never exerting himself, except to spend without imagination the capital that comes to him at twenty-five. B is tremendously ambitious, knowing the value of money, and finding an immediate use for capital. Prevented by law from laying hands on his own money, he goes to a shark who tenders a loan against his inheritance at a modest charge of 50 per cent. Such a boy has reason to curse a father who leaves half to him and half to the loan shark. C has in him the makings of an artist and would like to devote the formative years of his life to study under the best teachers. This being impossible on an income of a thousand a year, he turns to illustrating, postponing, if not completely ruining, his artistic career.
It may well be argued that these three types, chosen at random, are better off than youths whose fathers leave them nothing and who start from scratch. But that is beside the point. The ambitious boy and the talented boy will be better served by giving them their inheritance outright, and the lazy youth and all others who do not know what is termed the proper value of money will at least enjoy themselves while it lasts and get down to cases sooner.
The proponents of the trust fund contend that no person devising property to minors knows what they will be like on reaching maturity. A father supposes that his son will be a chip of the old block, but Old Man Statistics proves that he will be a seven-year profligate. Nevertheless, say I, let him have his capital when he reaches man’s estate. What man who has amassed a fortune will admit himself to have been incapable of handling a lump sum at twenty-one? Then what outrageous egotism to maintain that his son is less capable of handling it! What a complete negation of his own principles to believe that a group of impersonals whose guiding policy is conscientious apathy will better administer an estate than the descendant to whom it belongs!
There are egotists who leave their money in trust in order to keep intact the monument personally erected to their business sagacity. They would so leave it in perpetuity if a law (in my state, at least) did not restrict the bestowal of trust funds to ‘two lives in being.’ The effect of this bequest is that the son, about whom the parent knows something, is denied full use of the inheritance, while the grandson, about whom the grandparent may well know nothing, gets the whole ‘wad.’ What the law grants to the third generation a wise parent should voluntarily accord the second generation.
But I have none of the crusader’s spirit, and shall make no further efforts toward unfettering the second generation. In fact, I only desire to show that a man who is ‘no business man’ may have valid reasons for letting his own life terminate when he dies so that his successors may have fullest freedom to work out their lives. If they work hard and make more money than they start with, perhaps they will be happier that way. If they lose all and have nothing, there will be plenty to tell them that those who have least are happiest. In any event I shall have given them the loose rein which is desired of all youth, and the admonition to be as happy as I am.