Chapter 28: Department Expansion: Sales & Trading (August 1940)
The first dividend money from the Boeing investment arrived in July. It wasn't the total value of their shares, but it was a substantial amount of income—a large check proving that Continental Bank now owned a piece of a profitable company. The initial $\$5$ million from the trust was still locked away as the bank's main capital, but this new cash was pure profit.
Arthur told Elias to use this income to fund the next stage: the expansion of the Sales & Trading (S&T) Division.
"We are moving S&T," Arthur told Elias one hot morning in August. "We are moving them to Wall Street."
Elias raised an eyebrow. "Wall and Broad is expensive, Arthur. It will drain our operating cash quickly."
"It's a necessary expense," Arthur replied simply. "Our Research is brainpower, but S&T is the arm that acts. They need to be where the action is, where the prices are set, and where the rumors fly fastest. We are buying proximity."
Elias handled the details. They found a small but respectable office near the Financial District. The new office didn't need to look fancy—it just needed equipment. They spent nearly $\$5,000$ of the new Boeing income on a rent deposit and necessary upgrades. The biggest investment was for new, direct telephone lines to the brokerage houses. In 1940, these lines were the internet of finance, allowing for lightning-fast (for the time) trades.
Arthur spent the entire month of August working solely with the small S&T team. He didn't just tell them what to do; he taught them how to think.
"Most people on the street," Arthur explained to the two young traders, "think like simple gamblers. They buy low, they hope it goes up. We are not gamblers. We are hunters."
He taught them his secret methods, which were not secret in 2025, but were revolutionary in 1940.
Method One: The Quiet Buy.
Arthur had the S&T team start a small stock operation—buying and selling tiny amounts of stock in major companies like General Motors or U.S. Steel. This was practice.
"When you buy a large amount of stock," Arthur instructed, "you never place one huge order. That tells the market you are interested, and the seller will instantly raise the price. You must buy it bit by bit—a hundred shares here, two hundred there. You use different brokers. You spread the activity out over the whole day. You look small and boring."
Method Two: The Calculated Loss.
He also trained them to accept a calculated loss. If they bought a stock and it went down slightly, he didn't tell them to panic.
"Every great trade starts with a test," Arthur said. "You risk a small amount to learn the market's temperature. If you lose $\$200$ today, but you learn that the big buyer is sleeping, that $\$200$ was not a loss. It was the expense of buying crucial information."
Over the month, the small stock operation used about $\$10,000$ of the bank's operating cash for these practice trades. The team was fast, but they were still learning. They had a mix of small profits and small losses, evening out to a net income for August of only about $\$500$. Arthur didn't care about the number. He only cared that the team had learned how to move without being seen. The income earned was negligible, but the knowledge gained was immense.
By the end of August, the S&T team was a tight, well-oiled machine. They knew how to be invisible. They knew how to be patient.
The Research Division had given Arthur the target. The Capital Raising team was waiting to move. Now, the Sales & Trading Division was fully trained and armed with Arthur's future-methods. The financial machine was finally ready for the public market.