business Orr Handicaps Savings Funds

Herald & Lantern 17 August '83

CAPE MAY POINT - John J Orr wrote to the Herald and Lantern in defense of money market mutual funds last March. He was reacting to an article on the new monty market deposit accounts lM-ing offered by financial institutions Although the mutuals were reeling from heavy withdrawals by investors anxious to take advantage of the new bank accounts — 1 which combined higher interest rates plus FDIC insurance - Orr predicted 'the rate difference would Ik 1 temporary Last'wcek. the Donoghue Money Fund Index reported that money market mutuals and money market deposit accounts were averaging the identical 8 44 percent. High school dropout Orr had been right In the meantime. Cape May County residents transferred milliops of dollars out of money market mutuals into local banks and savings and loans. Nationwide, deposits in mutuals have declined by about $67 billion, from Dec 1 $232 billion peak to last week s $165 billion .

ORR HAD STAYED with the mutuals. ’Tm not going to jump in and out of the pan," he said ‘Tm a little conservative. I like to keep one foot in. the water, one on ‘ land ■' Orr is a money market rhutual booster, saying thatTiftilike banks and savings arid loans, not one has ever '.'gone belly up " He thinks! they're safer then FDICVi nsured bank account^. “The money markets come under the strict supervision of the S.E.C.," he said. “Not a one was forced to merge Not a one ran to Congress for a bailout.'' ORR HAS 40 percent of his money invested in two Vanguard accounts. 20 percent with Delaware Cash Reserve and Delaware Trust Reserve, and the remainder with Government Investors Trust and 1st Varible. He also l(as a six-month Certificate of Deposit paying 9 percent interest and some money readily available in checking and passbook savings accounts. The total is private, but he says he is “not a wealthy

^man; I live frugally." Orr was "my own handicapper for the longest while.” Now he subscribes to Donoghue's Money Letter, published twice a month, and Money Fund Safety Ratings, published monthly. Two looseleaf notebooks with their reports represent the four years this has been a Hobby ORR WAS REARED in a financial atmosphere. His father, John J. Orr, had a grain and feed business and coal yard in Philadelphia, and was director of four or five bahks and president of four or five building and loans (the former issued first mortgages, the latter second mortgages). (He was also an independent Republican Philadelphia city councilman in the early 1900s.) Orr was born in Philadelphia, but taken to what was then the Columbia Hotel in Cape May a month later by a mother under doctor's orders to rest. He was the last of seven children, the other six all sisters. Only one is still alive. She is 89 and .lives in Philadelphia. Orr

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was to summer in the Cape May area thereafter. His mother died in 1912, his father remarried, and life at home became difficult. He quit.South Philadelphia High School in 1917 and ran away. He was 15. Combining “peach fuzz and a $1 driving license — I d been driving since I was 12. he talked his way into the U.S. Marines. “I had to lie a little," he said. "I told them you had to be 18 to have a driver’s license.” HE GOT TO Parris Island, S.C., before his father caught up with him and returned him to Philadelphia. Two months later, Orr was 16 and moved to Camden and a job as a shipfittcr with the New York Shipbuilding Co. He subsequently worked for William Cramp and Son Shipbuilding Co. in Philadelphia until it closed An 1927. (It would later (reopen and Orr would return to work with the U.S. Navy.) From 1935 to 1939, he worked for his developer brother-in-law, Richard J. Seltzer. Then, backed by two $500 loans from friends f he started his own business — John J. Orr Contractor-Builder. "A stubborn Scotsman," Orr "eked out a living" until 1939 when he went to the Philadelphia Navy Yard for the first of several times. In the spring of 1942, his application for a commission in the Navy was turned down because he was not a college graduate. He reapplied. took the exam, and scored 100 percent while finishing in one-third the time of most persons. SOMEHOW circumventing being a half-inch shorter than the 5-6 requirement. he was commissioned a Navy lieutenant on June 13, 1942. "I got a uniform and I didn't even know how to salute," he said. He came out of World

War II a lieutenant commander. Then he was assigned to UNRRA (the United Nation Reflief and Rehabilitation Administration) to assist China in rebuilding the junk fleet it destroyed during the war rather than let it fall into Japanese hands. "I am ashamed of that," he said. "That was the one time I failed. It was the most inept organization ever." Called back to active duty in 1948, he served through much of the Korean war and was at one time repair superintendent on Guam. He left the Navy at the end of 1953 with the rank of full commander, going to Pennypack Woods, a 1000-family development in northeast Philadelphia, as executive director. ORR RETIRED to the house he designed, actually in Lower Township by 600 feet, in 1963. Orr’s lack of a formal education never hurt him. He remembers Adm. Bryson Bruce, then head of Navy operations at Cramp’s, saying: "I don’t

care if you can read or write as long as you can do the job you’re assigned." But Orr did get his high school diploma — 30 years after it was due. South Philadelphia High awarded him a diploma in 1949 in recognition of his accomplishments. His wife, the former Elizabeth M. Murray of Philadelphia, died in November 1980. Married at the age of 21, they had been together just short of 58 years. Orr’s "finest daughter and son-in-law ever,’’ Elizabeth and Donald Strang, live in Zanesville, Ohio. He has two grandsons and became a greatgrandfather April 10. Seminar Set CAPE MAY — A seminar on insured trusts will be hosted by Janney Montgomery Scott Inc. 7:30 p.m. tomorrow at the Franklin Street Civic Center. The seminar is free. For reservations, call 398-2171.

Interest Hits Double Digits

By JOSEPH ZELNIK Interest rates on insured money market savings accounts broke the doubledigit mark in Cape May County last week as First Savings and Loan of Sea Isle City posted a 10.07 percent return. Key to the higher rates is the rising yields on shortterm U.S. Treasury securities. The 91-day Treasury Bill hit 9.57 percent last week, and First Savings pays T-bill plus .5 on its insured money market accounts. Two other Cape May County financial institutions also linked to the Tbill paid the county's next highest rates Sturdy Savings & Loan, which pays Tbill plus .25, paid 9.82 percent. Crest Savings & Loan, which matches the T-bill, paid 9.57. Ocean City's Home Savings & Loan paid the county's fourth highest rate, 9 percent, because it matches a "Federal Funds Rate," the fee banks charge each other for overnight reserve lending THE II OTHER financial institutions in the county set their rates according to competitive factors and they ranged from a low of 8 25 perdtnt at Citizens I Inited Ra«k to a high of 8.7

at Collective Federal Savings & Loan. Since interest rates have been rising in recent weeks, all but one of the institutions polled by the Herald and Lantern were paying higher rates than the last survey four weeks ago. Security Savings & Loan was paying 8.45 percent last week compared to 8.5 the week of July 12. The financial institutions can change the rates on insured money market savings accounts as often as they wish and pay whatever they like. Most change weekly and leave it up to their investors to call or stop in to find out the latest rates. THE INSURED money market savings accounts started last December and have since drained some $67 billion from the private, uninsured money market mutual funds. In addition to the money market accounts, which require a minimum $2,500 investment and permit a maximum of six transactions. three of them checks, there are so-called "Super Now'' accounts with unlimited checking, but they pay lower interest rates. Following list in

alphabetical order of the 15 financial institutions in the county gives last week’s insured money market account interest rate followed by the Super Now interest rate. Anchor Savings & Loan, 8.5, 7.5. Cape May County Savings & Loan, 8.6, 6.5. Citizens United Bank, 8.25,6.75. / Collective Federal Savings & Loan, 8.7, 8.25. Crest Savings & Loan, 9.57, 8.57. First Jersey National Bank, South, 8.6, 7.09. First National State Bank of South Jersey, 8.5, 7. First Savings & Loan, 10.07, 9.07. Guarantee Bank. 8.65, no Super Now but a computer will "sweep" checking accounts daily and put anything above a designated amount into the insured money market account. Heritage Bank, 8.5, 7.1. Marine National Bank. 8.47,. 7. Ocean City Home Savings & Loan, 9. 8.57. Security Savings & Loan. 8.45. 7.15. Sturdy Savings & Loan, 9.82, no Super Now. Union- Trust Co. of Wildwood, 8.5, 7.