Investigative reporting is something most newspapers pride themselves on. It has a long tradition, extending well beyond Watergate, dating back to the turn of the century, when the reporters who exposed the seamier side of things were called muckrakers.

Here at The Bond Buyer, we've been known to practice it, but only on rare occasions. There have been comparatively few times in the newspaper's 100-year history when it covered itself with journalistic glory of the investigative reporting variety. I blame the Travis case.

First, however, for some background. The newspaper, as I will be pleased to relate to any audience who cares to listen, when through three pretty distinct ages. The first was the founder's newspaper, filled with all sorts of rough and tumble stuff and packed with financial news.

Founder William F.G. Shanks, started the National Press Intelligence Co., a press clipping service, with $50,000 in 1885. He gradually found there was great demand for "investment news," which led to the founding of The Daily Bond Buyer in 1891.

In the words of a story on the paper published in 1897, "This is simply a daily digest of investment news, being chiefly devoted to early advance news of proposed issues of city, county, state, railway, and street railway bonds . . . Every special election to authorize issues of bonds is reported, the date on which it is to be held being first given, and the result of the vote next carefully noted. Every advertisement for sealed bids for such bonds is carefully summarized; and, when the bonds are sold, the name and address of the successful bidder is given, together with the amount of the bonds purchased, their rate of interest and term of years they are to run, and all particulars of interest to investors."

With a few alternations, this sums up The Bond Buyer of today, The Bond Buyer as it has always been.

Journalistic Heartbreak

Mr. Shanks died in Bermuda in 1905, and with him, with a few exceptions, including the aforementioned Travis case, went the first age of the newspaper. He was succeeded by his son William R. Shanks, who served until 1914, when the paper was taken over by William's son, Sanders Shanks, who ran it until 1949.

The Shanks family sold a controlling interest in the newspaper to C. Barron Otis in 1913. Mr. Otis bought American Banker in 1918, and it remained in the Otis family until its present owners, then called International Thomson, bought American Banker and The Bond Buyer in 1983.

The third age, the modern age, of the newspaper began in the 1960s, when it opened news bureaus, increased its number of reporters and editors, and otherwise assumed all the characteristics of a journalistic enterprise.

The founder's newspaper effectively ended publication in October 1921, foundering on the shore of what I can only conclude was journalistic heartbreak, brought on by, yes, the "Travis Inquiry."

As editor Sanders Shanks wrote in 1920, "Prior to June 1916, many rumors reached us via the New York financial district of the existence of a 'system' which monopolized the state's investment business to the exclusion of a majority of the legitimate bond houses and incidentally profited unduly on the large amounts of securities purchased annually by the state with tax monies appropriated to sinking funds for the protection of holders of state obligations."

In the Hunt

The Daily Bond Buyer, having gotten its "lead" in the classic journalisic way -- from sources -- proceeded to do some hard nuts-and-bolds work. For more than four years, The Bond Buyer, and another newspaper, the Brooklyn Daily Times, beat the drum in a fashion that would have heartened the founder, who had helped smash the Tweed Ring.

They eventually proved, with the support of public documents and the testimony of the principals, that the comptroller, one Eugene M. Travis, authorized purchases of bonds from only two dealers, with more than 80% going to independent operator Albert Judson, at routinely inflated prices that turned Mr. Judson a tidy profit of almost $825,141.65 -- in 1920s dollars.

In late 1920, Mr. Travis, his assistant James A. Wendall, and Mr. Judson were charged with grand larceny, but the indictment was dismissed in October 1921 by the state Supreme Court.

The court's decision stated in part, "Do these proofs constitute as matter of law such acts as would justify a jury in concluding that there was the essential intent to steal these moneys from the state, in which Travis, Wendell, and Judson acted as particeps criminis? It is my view they do not."

The court observed that neither Mr. Travis nor Mr. Wendell apparently received any money from the transactions. As for Mr. Judson, "He cannot be held for a larcenous taking because of securing a profit in excess of the market."

The newspaper professed its own bitter disappointment and noted, "If public officials, entrusted with the custody and management of millions of dollars of public funds raised by taxation and held in trust for the owners of the state's bonds, may conduct themselves as did Travis and Wendell with respect to the investment of some $40 million within a period of less than six years, we cannot help but view with the gravest apprehension the future security of the State Sinking Funds and the many large issues of state bonds which depend upon the standing of these funds for their prompt payment at maturity."

The newspaper continued, "To the lay mind, it would appear inconceivable that the court should ask for any more complete array of evidence indicative of criminal intent upon the part of the three defendants than the ample proof showing that time and again huge blocks of bonds were purchased at prices which the three defendants, by their own admission, must have known were substantially in excess of actual market values."

The episode marked the newspaper's last foray into investigative journalism for about 60 years. The Daily Bond Buyer became, with the exception of its statistics and coverage of the almost annual Treasury assaults on tax exemption, a rather undistinguished municipal bond man's "shopper."

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