The Hatfields & the McCoys

In the normally polite business of investment banking, two firms have long been known as the Hatfields and the McCoys. One is Chicago's Halsey, Stuart & Co., which staunchly fights for competitive bidding for security issues; the other is Manhattan's Morgan Stanley & Co., which just as staunchly believes that the best way to float securities is to negotiate a price with the issuer.

Halsey, Stuart's President Harold Stuart has seldom missed a chance to take a potshot at Morgan Stanley; in fact, he was an important Government witness in the antitrust case* against 17 investment bankers (TIME, March 31). With his help, the U.S. hoped to prove that Morgan Stanley and its Wall Street colleagues long monopolized the securities business by the negotiated-bid methods which Stuart objected to. But Stuart was of little help, and Morgan Stanley steadfastly denies such charges. It points out that it has invited Stuart to join in several of its negotiated deals, only to be turned down cold.

Last week, for the first time, the two companies joined hands to underwrite a securities issue. Halsey, Stuart & Co. agreed to join a group of more than 200 underwriters, headed by Morgan Stanley, to sell $200 million of Allied Chemical & Dye Corp. bonds next month. It is the biggest public underwriting of industrial corporate securities in history--and, true to Morgan Stanley tradition, is a negotiated deal. Even so, Halsey, Stuart insisted that no compromise of principle was involved. Said Advertising Manager Carl A. Anderson: "We still believe certain things and they believe other things. [But] we certainly don't let other feelings interfere with our interest in participating in a job of this dimension."

*Last week, after 5,000,000 words of testimony, the Government rested its case. The defense now gets its innings.

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