In 1922, tobacco farmers in Quincy, Fla., hauled in a bumper crop and at the urging of local banker Mark Monroe plowed their profits into shares of Coca-Cola Co.
"Coke had just come public and Daddy liked the taste," recalled Julia Woodward, Monroe's 80-year-old daughter. "Plus, he figured the stock would be good collateral because folks would always have a nickel to buy a bottle."
For the progeny of the farmers who heeded the banker and never sold, the payoff has been dazzling. Today, they own 7.5 million shares valued at $375 million. Adjusted for splits, the stock cost them 2 cents a share.
Largess from the town's 25 Coke millionaires trickles down to the 8,000 residents of Quincy, about 10 miles northwest of Tallahassee, Florida's capital. They worship at the renovated Methodist Church, watch plays in the restored Leaf Theater, read in the remodeled library and stroll through a downtown that's had millions lavished on it.
"This town has more to offer than other towns its size," said Chris Elred, manager of NRT Contract Manufacturing's 150-employee circuit-board plant, which recently relocated to the area from Illinois.
Most of Quincy's Coke trust fund crowd stuck with an old, if not very fashionable, investment philosophy: buy and hold.
"The Coke families largely have resisted the temptation to sell," said W.C. "Bud" Brancon, president of Quincy State Bank. "It always seemed so prudent to hang on."
At one time, the town's residents held two-thirds of all Coke shares outstanding, said Quincy historian Johnny Blitch. As a courtesy to Quincy's Coke investors, the Atlanta soft-drink company would dispatch a special envoy to town before the annual meeting to collect proxies.
The Coke stock made Quincy one of the wealthiest communities in the country. In fact, before World War II--and before some of the Coke holders left--Quincy was the richest town in America on a per-capita basis.
Even now, grand and historic mansions with freshly painted picket fences and manicured yards line quiet side streets, partially veiled by curtains of Spanish moss that hang from massive live oak trees.
This bastion of prosperity stands out in a section of Florida's Panhandle better known for pine flatlands and poverty. When nearby Carrabelle needed $1,000 to replace its faded high school football team uniforms, it staged a cow-dropping contest, raffling off 10-foot squares as residents bet on where a cow set loose on a football field would relieve itself.
In Quincy, a Rolodex and telephone do the trick.
When Blitch wanted to restore the Leaf Theater in downtown Quincy, he called up several Coke millionaires. Julia Woodward, Florence Brooks and Marcus and Betty Shelfer all chipped in. In a matter of days, Blitch raised $150,000, mostly in Coke stock.
Quincy fell on hard times in the late 1960s, as rising labor and production costs devastated the tobacco industry. Unemployment soared to 38%. Yet, the Coke millionaires came to the rescue, paying the tuition to send local students to college, for instance, and buying Christmas presents for the disadvantaged.
"There aren't records of how many widows and orphans the Coke stock helped out," Woodward said. "But that silly old investment made a huge difference."
Since going public, Coke stock has split 10 times. The owner of one share that cost $40 in 1919 now has 4,608 shares. At a recent price of 48, that's worth about $220,000. People who reinvested all their dividends would have 96,944 shares worth $4.7 million.
The annals of investing history are filled with other stories of investors who prospered by hanging on to Coke stock.
Atlanta's SunTrust Banks Inc. accepted $110,000 in Coke stock instead of cash as payment for taking the company public. Today, SunTrust's stake amounts to 48,266,496 shares, or 2% of Coke's stock. It's valued at more than $2.4 billion.
Billionaire investor Warren Buffett is sticking with Coke too. The Omaha, Neb., stock-picking guru heads Berkshire Hathaway Inc., Coke's largest holder, with 200 million shares, or 8%, a stake worth $10 billion. Buffett bought most of his Coke shares in the late 1980s for less than $8 each.
Buffett has said he'd never sell.
So does Woodward, the banker's daughter.
"Some people have sold shares to buy a car," she said. "But then a couple years later they realized they sold stock worth half a million dollars for a Cadillac."