Exchange Politics

Each year on the second Monday in April the nominating committee of the New York Stock Exchange posts a hand-picked slate of officers and governors for the May elections. During the preceding month it holds three open meetings at which brokers suggest candidates, make stump speeches. In the end, however, the nominating committee from the depth of its own wisdom names whom it pleases. Throughout the 143 years since organized trading began under the old buttonwood tree on Wall Street, official nominations have been, almost without exception, tantamount to election.

By last week, however, it looked as if. for once, the annual Stock Exchange elections this year would provide plenty of hot politics, perhaps even a real contest. For the last five years the name of Richard Whitney has headed the official slate, and his nomination has never been seriously opposed. But Wall Street dopesters were convinced last week that the nominating committee will not name President Whitney for a sixth term. Its choice will apparently be Charles R. Gay, senior partner of Whitehouse & Co., oldest firm on the Exchange (founded 1828). And what had turned the Floor into a hustings was the prospect that President Whitney would break all precedent by running for re-election on an independent ticket.

Mr. Whitney had so far said nothing. But his friends last week were openly campaigning, and the odds were 3-to-1 in his favor, regardless of what the nominating committee might do. Pro-Whitney brokers passed out petition cards directed to the nominating committee and needing only a member's signature. "Tammany Tactics!" cried pro-Gay brokers. The plebeian New York Evening Journal even mailed out to all Stock Exchange members straw ballots which so alarmed the nominating committee that it dispatched a plea over the ticker requesting members to refrain from any & all unofficial voting. And from his chambers New York Supreme Court Justice Ferdinand Pecora issued a hasty denial that he sought to influence the coming election by an article on the stockmarket which he lately wrote for Collier's.

Candidate Gay's only move was to release a dignified statement, promising unqualified support to any member picked by the nominating committee. Probably without the slightest intention he thus put President Whitney in the position of being a "bolter." Tall, thickset, bespectacled Broker Gay has a background as different from Broker Whitney's as Manhattan is from Brooklyn, where Mr. Gay was born and still lives. ("Although," he says, "some people can't understand why.") Long before Mr. Whitney was ready for Groton, Mr. Gay was clerking in a drygoods house. Later he went into insurance, then coal, finally banking. He bought his seat on the Exchange in 1911. Today Mr. Whitney likes to ride to the Essex Fox Hounds in swank Far Hills, N. J. Mr. Gay prefers to dig in his garden.

Among a large group of brokers Mr. Whitney has inspired a fervent, devoted loyalty. They remember him as the man who led the Exchange through the worst years of the worst U. S. depression. Almost single-handed he directed the fight which resulted in the removal from the Stock Exchange Control Bill in Washington of most of its rawest and most of its unworkable provisions. And under him the Exchange got through its first year of Federal regulation without serious mishap. His friends believe the burly onetime Harvard oarsman made the best of a bad situation, that he has been unjustly criticized, that he deserves the vindication of another term as president.

The case against Mr. Whitney falls into two broad counts:

1) He has consistently bungled his job, notably in public relations. Many a broker feels that the Exchange could have headed off at least the most onerous forms of Federal supervision if, instead of stubbornly defending the status quo, its president had led a movement for voluntary reform.

2) No matter how often or how sincerely Mr. Whitney protests his desire to cooperate with Government regulations, his critics feel that the public will never be convinced that the field marshal of the spectacular fight against regulation has really had a change of heart. The quickest way, say they, to restore "public confidence" (i.e. public trading and more commissions) is to oust Mr. Whitney and his old-order administration.

And if two candidates choose to run next month, the real issue will not be their personal platforms but simply Mr. Whitney and the history of the past five years.

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