j ISSUE 56 SUMMER 1996 • m xrj 0M3£Mi BwPT/O'/V/V' / •;^jITm?/i , / / / / / ~ ^ j^*;^!***'* Pf/VV// / // {^1 jtv^nESS vvxy j[Wj|j ^ Tfa / ; ///// vAi , /jrAr/M/yy MUSEUM OFFERINGS The following items are offeredfor sale exclusively by The Museum ofAmerican Financial History. Allproceedsgo towardfurthering the Museums mission ofcollection preservation, and , documentation ofthe history of America’s capital markets. — '"A'Af./tr '•'frr/4t/AYJ S<‘i'ipo|>liily The Art of Finance By Keith Hollender. This hardcover book is the ANAERICA. MONEY, definitive text for collectors of financial docu- ments. For experienced collectors as well as beginners, the book has 120 illustrations, many in color. Published by the Museum ofAmerican Financial History. Subjects include railroad “barons,” gold rushes, early European trading ^ Hollender companies. $29.95 America, Money, ami War The Museum’s insightful teaching resource kit and exhibit catalogue on the financial aspect of the Civil War. The educator’s resource kit is a three-ring binder with subject overview/discus- sion plates, 20 color slides of notes, bills, and bonds, with asoft cover, 42-page illustrated cata- logue. Catalogue available separately. $49.95 (Catalogue only, $14.25) Tlic Rixhy Letter Notecards of Abraham Lincoln’s handwritten letter ofcondolence to a Massachusetts woman who lost all five ofher sons in Civil War battle. The message is clearly legible and shows .CapitalMaria** Lincoln’s anguish for both mother and nation. (-hnmkUnitthe»*W«0 Sumlii-r Shipped in a box ofeight cards, with envelopes. $13.00 (Price includes shipping and handling.) Friemls of Financial History Our quarterly magazine offers feature stories on great financial leaders, historic events, updates on Museum exhibits and activities, and aspecial section for collectors of financial memorabilia. $25.00 (For educators, $20.00) Please see order form on inside back cover Correspondent Dealer Services Execution Services Fully Disclosed Clearing Joe Oliva Mike Riordan Lance Dominick 855-5869 (312) THE CHICAGO CORPORATION 208 South LaSalle Street Chicago, Illinois 60604 I TheMidwestern Firm with National Reach MemberAllPrincipal Exchanges Summer 996 I Friends of Financial History Some of the any other start-ups” “little market on earth. on you’ll find In that time The Nasdaq we’ve watched many little Stock Market. start-up companies like Intel, Microsoft and MCI grow into Looking back today, it’s hard to imagine major corporations. that just over 17 years ago And although Apple Computer began as Nasdaq lists companies an idea in a garage in with market values Santa Clara Valley, larger than $20 billion and as small as Calitornia. $10 million, they all share one Or that a little company thing in common. A visionary thatoffered truckers abetter approach to doing business. And two-way radio system would challenge the a willingness to challenge the status quo. biggest company on earth and grow into the $12 billion telecom- munications power- house, MCI. Where will the MCIs, Microsofts and Intels Or that in 1970, a newcomputerized stock oftomorrow be found? The same place you’ll market would emerge and change the waystocks find the MCIs, Microsofts and Intels of today. have been traded for the last 200 years. W :::::::::: liWf 11::::: If" if Today, just 25 years later, Nasdaq is i If ! = trading stock in more companies than NASDAQ* ::::::::: The stock market for the next 100 years* Number 56 of Financial History fr.iends OF FINANCIAL HISTORY CONTENTS Published by the Museum of American Financial History 20 FRIENDS OF Two New Successes Was Trade Settlement FINANCIAL HISTORY for the Museum Always on T+3? Issue Number 56 • Summer 1996 FounderJohn Herzog reportson the annual A History ofClearance and (ISSN 0278-8861) benefit and the new internship program. Settlement Changes. Sarah Elizabeth Massey By Kenneth S. Levine Editor 7 Alan Barnett Art Director About the Museum EditorialAdvisoryBoard The Museum ofAmerican Financial History: Dan Cooper Hours, location, exhibits. THE COLLECTOR MaristCollege A FORUM FOR THE COLLECTOR OF DianaE. Herzog, 8 VINTAGE FINANCIAL MEMORABILIA. R.M. Smythe & Co., Inc. Museum People and News Douglas Parrillo, NationalAssociation ofSecuritiesDealers, Inc. Museum Interns, Antique Dictaphone 28 ArthurW. Samansky, Machines, Bowling Green Arts, HSBCAmericas, Inc. FriendsNews, and YoungVisitors. Relic of a Railroad Wreck BobShabazian, Travel down the road to bankruptcy American Stock Exchange on the Penn Central. IO Richard Sylla, By Sanford Mock HenryKaufman Professor Who’s Who at the Museum J. ofatnhdeMHairskteotrsy,oNfeFiwnaYnocriaklUInnisvteirtsuittiyons Spotlight onTrustee Edward 1. Altman. 32 By Kristen Mooney Jason Zweig, Shopping Guide Columnist, MoneyMagazine Museum Staff I I 33 DianeMoore, Executive Director One of Wall Street’s MegVentrudo, Collections Manager Prominent Leaders Recieves Books for Collectors Jim Festa, Public Information Officer the Museum’s Highest Honor Milazim Durakovic, Intern Bookseller Ray Boas reviews JoyceWallis, Intern The Museum honors Richard Grasso The WreckofthePenn Central. at its annual benefit. Copyright 1996 by the Museum of American Financial History, publisher, 26 Broadway, Room 35 200,NewYork,NY 10004-1763.Telephone:212- 13 908-4519, fax: 212-908-4601.All rights reserved. Fall I 996 Events Calendar Permission isgranted to reprintwith propercred- Educators’ Perspective itto FriendsofFinancialHistory. OfButtonwoodTrees and Beer: Four issue subscription $25 in U.S. and Canada. The Beginings ofExchanges Past and Present. $30 airmail Europe, U.K. Single copy $7.00. By Dr. Dan Cooper and Dr. Brian Grinder Collector’s Marketplace Paymentmustbemadeindollars,bycreditcard,or bankwireto RepublicNational Bank, FourWorld Deals for the savvycollector. Trade Center, Plaza Level, New York, NY 10048 14 Get ’em while they’re hot! ABA#026-004828,Account#456-022430 LetterstotheEditorarewelcome:pleasesendthem If You Have to Ask 40 to FriendsofFinancialHistoryatdieaboveaddress. How Much. . A look at the HerreshoffYacht Manufacturing From the Collection Coverphoto: HaroldS.Vanderbiltsailingthe Company, the top boat builders of Summer fun, familyvalues, Enterprise,aHcrreshoffyacht.Story, page 14. the turn ofthe century. and gambling on the boardwalk. PhotocourtesyofTheMariners'Museum, NewportNews, VA. By Stephen Goldsmith By MegVentrudo Summer 996 1 Friends of Financial History 3 STANDARD &POOR’S WORD THE STANDARD & POOR'S HAS BEEN THE AUTHORITY ON ON THE STREET FINANCIAL INFORMATION FOR MORE THAN 125 YEARS. WE'VE EARNED A PLACE IN FINANCIAL HISTORY. PhcMcGraw-HillCompanies 25 Broadway, New York, NY 10004 • 1-800-221-5277 Number 56 Fpifnos of Financial History FOUNDERS REPORT fi&i~ ~i&i= ~i Museum Fundraiser and Program Bring Great Success Internship By John E. Herzog T he joys of summer also bring us splendid private club on Pine Street, where 130th Anniversary of the founding of the good news aboutdevelopments at a warm fire greeted visitors. An Internet Pennsylvania Railroad, to the celebration the Museum. During the spring demonstration let visitors see the Museum of the Herreshoff Yacht Company, boat term, the Museum had its first full semester site on the World Wide Web, recently in builders for the great financiers of bygone collegeintern, and the projectwasquitesuc- the top 5% ofall Web sites! The guest of palmy days. And who was it who said “If cessful. For two days each week, Kristen honorwas RichardA. Grasso, Chairman of you have to askhow much, you can’t afford Mooney, a then senior from Marist College The New York Stock Exchange (see page it.”? Find the answer inside, and have a in Poughkeepsie, worked on a variety of 11). Inevitably, there were some words great short summer read. tasks for the Museum, and for a few other from your chairman, but the highlight of Otherwise, many interesting projects firms. The Museum had a great benefit and the eveningwere the remarks well prepared areworkingalong, including a new fall show Kristen learned about many different office by Dick Grasso, whose command of his in the form ofa major exhibit on railroads, activities. We are looking forward to the subject combined with a creative use ofthe with someseldom seen artifacts. Let us know next intern, who is also from Marist College Exchange’s records, make him an effective if you have something you feel should be and will be working with us this summer. and highly respected speaker. Attendance included, and remember, please, do not Our annual benefit was a great suc- was over one hundred, and many compli- throw any of your old stock market letters cess, and the first one to be held in the ments were received from our guests. and papersawaywithoutlettingus know.We financial district. In past years, we have Some fine stories await you inside, are always interested in adding to the migrated uptown for our events. The from a retrospective of“T + 3” and earlier Museum’scollection. Haveawonderfulsum- venue was The Down Town Association, a changes of the settlement process, to the mer, and best regards from all ofus here. iaa:i TRUSTEES Edward 1. Altman Stephen A. Cooper William M. Pinzler, Esq. Max L. Heine Professor President NewYork, NY ofFinance Nemco Brokerage, Inc. NYU Stern School ofBusiness NewYork, NY MortonJ. Wagner NewYork, NY Executive Vice President Smith Barney Inc. George Haley Garrison ThomasJ. Asher New York, NY President Regional Director, Executive Vice President The Robinson-Humphrev Co., Inc. Bond and Share Society John L. Watson III Atlanta, GA Williamsburg, VA President SecurityTraders Association Molly G. Bayley John E. Herzog New York, NY Principal Chairman Molly G. Bayley Consulting Herzog Heine Geduld, Inc. John Westergaard Washington, DC New York, NY Westergaard Publishing NewYork, NY William P. Behrens Chairman, CEO Thomas D. Levis Jason Zweig Ernst & Company Managing Director Columnist NewYork, NY Investors Company Money Magazine NewYork, NY New York, NY Randy Cepuch Vice President Communications Gordon S. Macklin Martin E. Zweig Fund Management Division Chairman Chairman and President Capital Research &£ Management White River Corporation The Zweig Funds Washington, DC Bethesda, MD NewYork, NY Summer 996 I Friends of Financial History 5 . ; ^s-yi;V.A..N.u >, ^ Inanhuirf. A«»_ .flnmttn,, ( - ^ &-XX&4 ixrri'rirr.exss X'(i>ipitnt' ‘ in -tMj’divs ot' A/AsAA /// /A/ //,//. yyyyy/yy/ yyyyy/y A///s////f//'. '//./yyy’r///fv.j /yy { yza////z/f/ A//SU/AA//ij“rw //AsrA , yyy/ vvyy //a/*/,//< /yyy/yy yyyv ,/yy/ 0/ //f//////<>/// f//Ar tr///r/f/////,/-7/' *S/;f////, yyy ///</////<< /ajJ/Ar/AA /v //^yyyyyyy/ A/ f/A/s/ ///f/V/Wy./,/z,Ai /z//fA</ //<//f////A/i'y.iy'f/’//</// fr//y////<///rr fityA'z:Mry//// AAt //,/- Ay/f~r/y///’///s/z<> . //!///.ifr'/!/// -v/// /////y.nwyy/V./tfr'/v/fV t*f//.vf////Zff/fr////// Z'/fttv /’//Z/f ?///'/><////' Arz// zzz/Ar; zz/a A#A,yA(-t’AA^/as/zAz/v/, z/yy./ A/yy' /A wy//*/’///. Proud Supporters of the Museum of American Financial History NEMCO BROKERAGE Stephen A. Cooper Life Insurance & Benefit Consulting Related Services 14 East 60th Street, Suite 1000 New York, NY 10022 (212)421-5700 rmfinds of Financial History Number 56 CHRONICLING THE HISTORY OF AMERICA’S FINANCIAL MARKETS The Museum ofAmerican Financial History is the newestpublic repository ofdocuments, stock and bond certificates, engravings, and other historically significant artifacts dedicated to the origins and history oftheAmerican capital markets. The Museum is located at 24 Broadway, NewYork City. Hours: 1 1:30am until 2:30pm, Monday through Friday. Admission is free. Special hours can be arranged for group tours. For further information call 212-908-4519. Coming this Fall! A Century of Railroads 1835-1935 ^WEALTFIofpennsvl\ 21181 4m A unique perspective on one-hundred years of railroad develop- opened and underwater tunnel service began between New York — ment in the United States as only the Museum ofAmerican City and New Jersey and New York City and Long Island. The — Financial History can bring will open this Fall in the NewYork station covered an area of 28 acres! The Pennsylvania Railroad City Gallery. Join the Museum staff in celebrating the trans- annual report of 1910 stated that the cost of the tunnels under portation technology that linked our vast country. the Hudson and East Rivers and the large station was The certihcate featured here is a Pennsylvania Railroad $112,965,415. As the railroad became the preferred vehicle of Company General Mortgage 4/ Gold Bond, Series D, $1,000, travel, the then-traditional ferries from Brooklyn andJersey City due April 1, 1981. were discontinued two months after the opening of the station. The vignette represents the original Penn Station of New To learn more about the once-great Pennsylvania Railroad, York City. On September 8, 1910, the building was officially please see p. 28, the Collector’s section. TheMuseum ofAmerican Financial Historyisa NewYorkStatechartered non-profiteducational andservicecorporation. Summer 996 I Friends of Financial History 7 » & ?i&;~ifcf•~ jfijp= 5 5= =«&: ri^Ol'Ml A\n MEWS University Students Learn Not-for-Profit Business with the Museum In the middle of a harsh, New York City “Every student fears that, at an internship, the only task we will winter, a 350 year old red oak tree trunk get involved in is filing and photo copying,” said Museum Intern was transported to BowlingGreen, theold- Kristen Mooney, “But at the Museum of American Financial est public park in America, right across the History, the opportunities for project-oriented work are abun- street from the Museum Gallery. Many dant.” A student ofBusiness Administration at Marist College in remarked on its large size and moss-cov- Poughkeepsie, New York with concentrations in Finance and ered exterior. What is this massive piece of Personnel, Kristen Mooney just completed a semester-long internship with the Museum. wood doing on Broadway? Kristen worked with the Museum staff, Chairman John Herzog, and Ernst & Company, Arturo DiModica, the artist made while experiencing “life on Wall Street”. famous for his bronze “Charging Bull” “What I like about the people at the Museum is that they asked me what I wanted to nearby, has agreed to create a masterpiece do, what would I feel comfortable with. Ofcourse, I did many small organizational pro- from the venerable tree trunk from jects in the archives, but I also learned about cataloguing the Museum pieces on comput- Riverdale, in the Bronx, that was felled by er and editing a magazine.” Kristen was asked to get involved in all the current projects ol disease. Scaffolding is going up as we go to the Museum. In February, she helped to plan the Museum’s annual benefit. In April, she press, and DiModicawill begin worksoon, worked on articles for this issue ofFriendsand much, much more. now that the winter is finally behind us. “Ofall my students, Kristen was one ofthe quickest studies. Kristen embraced informa- He expects to complete the project by tion technologyandwas always lookingforways to learn more about finance. Shewas a natur- Labor Day. He will work outside, for the al firstchoice to startour internship experiencewith the Museum,” said Professor Dan Cooper enjoyment of the Wall Street community. ofMarist. Dr. Cooper, aFriendscolumnistandeditorial board member, finds timebetween edi- tions to help select prospective interns from the Marist College finance department. Collections Manager Meg Ventrudo had praise for Kristen’s positive contribution. “Kristen was very helpful with the Bond Club ofNewYorkarchive inventory. Kristen came to us with a great attitude, and she was always enthusiastic about the Museum’s projects. We will miss her.” New Acquisition Reminds Us of Life Before Computers “Why is a ‘Shaver’ on display in the Museum gift shop?,” you may ask. Because the shaver is not the type of tool you find next to the sink, it is a machine used to remove dictation from “The project hopes to attract atten- a wax cylinder. Alexander Graham Bell, his cousin Chichester tion for the maintenance and care of New Bell, and Charles SumnerTainter invented the first dictaphone machine in 1881, and the York City’s millions oftrees,” according to Museum acquired an antique dictaphone, dictaphone listening device, and dictaphone a placard near the tree. The NewYork City shaver that were used at the Goodall Rubber Company ofNewJersey in the 1940s. Department of Parks and Recreation and When compared to the CD-ROM or even your pocket tape recorder, the three the Bowling Green Association are the machines seem quite large and, perhaps, medieval. Yet, at closer inspection, one finds that main contributors to the project. the recording apparatus is a simple, easy to understand version ofthe incredible technolo- Everyone seems to have an opinion gy ofthe 1990s. A steel stylus cut up and down grooves ofthe human voice into the wax on the sculptor’s odd choice ofmedium. I coating ofthe rotating drum. The cylinder was then transferred to the listening device for wonder ifthe treewas really dead. Ifit last- transcription. “Shavers” were then used to remove the dictation grooves ol the human voice ed 350 years, why was it brought here from the surface of the cylinder for reuse. One cylinder could be used up to 30 times. now?,” commented one maintenance The Dictaphone Corporation, the company that mass-produced the machines, has worker at 26 Broadway. The financial dis- received world recognition and has had profitable years since its beginnings (except 197I). trict eagerly awaits the start of DiModicas Dictaphone users include famous financier John D. Rockefeller. Like a paint palate to an latest project. Will the tree become a bear artist, the dictaphone was an-invaluable resource to the business peopleofthe 1920s and 30s. to accompany the Charging Bull? Number 56 of Financial History