Richard Whitney (financier)
Richard Whitney ( born August 1, 1888 in Boston, Massachusetts, † December 5, 1974 in Far Hills, New Jersey) was an American banker, investment advisers, broker and early 1930s, president of the New York Stock Exchange.
Early years and career
Whitney was born as the son of the banker George Whitney on August 1, 1888 in Boston. His ancestors had been immigrants who had reached around 1630 the then colony. After studying in Groton and Harvard, he moved in 1910 to New York. He founded the brokerage firm Richard Whitney & Co. and two years later became a member of the New York Stock Exchange. Soon he was prime broker for the firm JP Morgan & Co., whose vice president, his brother George was later. During World War II he headed almost honorary ( symbolic for the payment of one dollar per year), the Food Administration, the Chairman of the later U.S. President Herbert Hoover was. In 1916 he married the young widow Gertrude Sheldon Sands; from this marriage were born three children. Whitney took over her father's investment business, Cummings and Mark Forest, and changed its name in Richard Whitney & Co. Three years later he was elected to the Board of Directors of the New York Stock Exchange.
Stock market crisis of 1929
Meanwhile, Vice President of the New York Stock Exchange, Whitney tried at the height of the panic on October 24, 1929 to stop the sell- through support purchases by he ordered a number of securities well above its market price; his appearance on the trading floor and his order of tens of thousands shares of U.S. Steel for 40 points above the market price made Whitney a hero of the Exchange. Its total expenditures were an estimated $ 20 million in a single afternoon, the largest transaction in history. It was especially the top papers, the course should be stabilized. As from across the country received sales messages, the success was limited and could not prevent the next world economic crisis.
The following years
In the crisis year 1930 Whitney was president of the New York Stock Exchange and held this office for five years. During this time he was speaker of the so-called Old Guard, a loose association of wealthy individuals who fell in the subsequent period, especially from 1933 through the "New Deal" under the presidency of Franklin D. Roosevelt, under the shelling reformist forces. So it was that he had several times to testify before a committee of inquiry set up by the Congress in the period 1932-1935.
As the forces of reform were stronger, Whitney decided in 1935 not to re- run for president of the Stock Exchange.
Whitney's sudden downfall and his life thereafter
At the same time he engaged in speculative activities, for which he borrowed large sums of money to friends and acquaintances, where he served his connections with JP Morgan & Co. about his brother as a kind of security. He is said to have borrowed to maintain his company around $ 30 million for friends, family and from the money held by his own company. He also became embroiled increasingly deeper into illegal practices.
Finally, his books were reviewed, and in March 1938, broke his empire together. By examining the full extent of his mismanagement came to light. When he was declared bankrupt, he had about $ 6.5 million debt.
Then accused of misuse of foreign funds, he pleaded guilty and was sentenced to five to ten years' imprisonment, of which he served in Sing Sing for three years and four months. After his release, he retired from the public back on a family estate in Barnstable / Massachusetts. Throughout the difficult time his wife stood by him and sold almost all of the assets of the couple. His debt is said to have taken over his brother. Whitney died on December 5, 1974 in Short Hills, New Jersey.
The impact of Whitney's action
The practices Richard Whitney shocked the business world, and as President Roosevelt learned of the embezzlement, he was said to be near collapse. However, it gave impetus for fundamental reform of the financial markets.
Media
The director August Everding turned in 1966 under the title The Black Friday, a documentary play about Whitney with Curd Jürgens in the lead role. The role of the speaker took Horst Tappert.