Great Expectations

John Barrymore, Wallace Beery, and many another in the film colony who had deposits in Los Angeles' Guaranty Building and Loan Association in 1930, find it difficult to forget the name of the Guaranty's former secretary and general manager, one Gilbert H. Beesemyer. Seven years ago, they and 24,000 other Guaranty depositors discovered that he had stolen eight million dollars from the company (TIME, Jan. 5, 1931). Embezzler Beesemyer went to San Quentin Prison for 44 years. Since then no less than 2,500 Guaranty depositors have gone to the poorhouse or the insane asylum, some 30 have committed suicide. With the help of Depression, Guaranty's original assets of $20,000,000 had shrunk to $5,000,000 (mostly in land) by 1932, enabling the liquidating company to buy off some creditors for 5.9-c- on the dollar, issue stock with a par value of 25-c- on the dollar to others.

After three more years of operating at a loss, in January 1935 the board of directors of the liquidating company looked up into the angry faces of a mob of stockholders who bellowed their disapproval, forced the quaking directors to accept a onetime pressagent named Harold Eugene Murphy as a board member.

Murphy and a minority backing promptly showed their mettle by operating at a profit of $2,000 during the next six months. Murphy presently became president, directed the company so successfully that by October 1937 Guaranty had paid two preferred dividends of 15-c- and 10-c- a share, aggregating approximately $750,000. More than 3,000 letters testified to the gratitude of stockholders. One woman had her roof fixed with the $2.50 she received, took her dishpan back to the kitchen at last. One oldster of 94 years found 80-c- reason enough to thank God and Murphy.

To such people, confident in Right, the discovery of oil last spring near Guaranty's El Segundo holdings was no surprise. Talk of a dollar-for-dollar payment to shareholders grew loud as President Murphy leased the property in exchange for a 16% royalty on any oil produced, last week reached a mighty crescendo: the Guaranty's first well produced 2,500 barrels of oil on its first day.

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