|
Vernon Sharp Trust
"Today we closed out the financial career of Vernon Sharp:
In 1939 Clayton Welch, principal of West Virginia Training School, approached our forbear about acquiring his 1932 Auburn Speedster. Instead of cash, he proposed trading 15 acres of raw Florida land valued (by Welch) at $30 per acre. Dad thought a man's word was his bond so a trade was made. Don't know if any cash changed hands, but $450 was generally understood to be the value of the trade. Taxes were less than fifty cents per year.
Florida had seen a real estate boom in the twenties financed by a roaring stock market. The country was prosperous due to a good economy fueled by automobiles and the radio. The mobility that the car induced and the warm climate of Florida brought in speculators by the thousands. Swamps were being drained and sand was being piled. Some 25,000 realtors serviced the exchange of land that mostly involved "binders" and a minor amount of cash.
In 1926 the market peaked just before a hurricane struck, leaving over 400 dead and 50,000 homeless. The boom ended, "binders" failed and real estate reverted back to original owners encumbered by inflated assessments and taxes In the aftermath Welch bought his 15 acres of wilderness (turkeys, a bear and a panther have been reported there in recent years). Dad never set foot on the land!
In the 68 years since the exchange there was very little interest in the inaccessible wet land acreage in the middle of some 6000 acres belonging to one owner. The original sale honored an existing contract to log the acreage until January of 1940 and aerial shots today imply Cypress groves. There were some unattractive speculative bids, but it wasn't until rezoning hearings were held last year that we decided to seek some professional help. This is where Amanda Hancock came in - suggesting that it be listed at $85,000. I never thought it would sell at that price! (But then, what do I know?)
So now I have to revise my opinion of Dad's investment skill. The Auburn in pristine condition would be worth some $200,000 today, but as Patty says, a Vernon Sharp car did not stay in pristine condition!
So here's a problem for Austin (and any one else that wants to participate): Ignoring frictional costs (taxes and sale expenses) and assuming that the $450 could have been placed in an investment that added compound interest once a year, what was the annual rate of return in a selling price of $85,000? Given an inflation rate (depreciation of money) of 5 percent average for the 68 years what is the net gain in real dollars? The answers are not in the back of the book but are in my head!
Regards to all,
P.S. In the middle of the last century one of a half dozen small parcels within the greater Orin Brown property was owned by a Vernon Sharp of the state of Ohio!
"
back to top
|
