For much of the last century, East Main Street’s financial district was known as the Wall Street of the South. Today, while many of the iron fronts and office towers that once housed banks and brokerage firms have been re-purposed, the canyonlike thoroughfare still exudes a sense of stability like none other in town.
In his recently-published book, “Richmond’s Main Street: Stories from the Wall Street of the South,” John B. Keefe Sr., a veteran of Richmond’s financial community, captures the memories and lingering spirit of the place through interviews with people whose careers and lives are deeply entwined with the district. A native of Milford, Connecticut, the Washington and Lee University graduate worked on and around Main Street for 34 years as a stockbroker, equity analyst, investment banker and head of mergers and acquisitions for a public company.
The following, edited excerpts from this oral history reveal that while, yes, for saints and scoundrels alike, it was about the money. But it was also a world where deeply professional and personal relationships were forged. And while the 185-page “Richmond’s Main Street,” published last year by Dementi Books, captures an era of conducting business that may seem archaic, it wasn’t that long ago. — Edwin Slipek
One of the largest stockbrokers in the world traces its origins to Richmond. Said who? Someone who should know: Donald Regan, former chairman of Merrill Lynch and later Secretary of the Treasury and chief of staff to President Ronald Reagan.
The lineage started with cotton trader Gwathmey & Co., which began in Richmond in 1820. In 1926 Gwathmey merged with E.A. Pierce, the nation’s largest broker at the time, which a decade later merged with Merrill Lynch.
Merrill was proud enough of its Richmond genesis that for years the sign outside of its former building in Washington, D.C., proclaimed: “BUSINESS ORIGINALLY ESTABLISHED IN RICHMOND, VA. 1820.”
The Gwathmey & Co. cotton trading operation may have vanished with time, and other cities may claim to be the birthplace of Merrill Lynch, but who’s going to argue with the chairman of the board? — John B. Keefe Sr.
The Trader
Branch, Cabell was one of the last of the old-line family firms.
The managing partner when I started was Mason New. He had bought controlling interest in the firm from the Cabell family in the 1950s. He was in his seventies and smoked like a chimney. He sat there and he traded off the tape, but used to call down for quotes if he missed a stock on the tape.
And guess who he would call? Me. He’d want a quote on something, even though he’d sit there with a quote machine right in front of him, which he used primarily as an ashtray.
One day when I was busy with something, I got frustrated with Mr. New and told him to punch the quote up on the Bunker Ramo right in front of him. “I don’t know how to work this damn thing, boy.” I told him that I’d come over and show him, but I wasn’t very polite.
I showed him how it worked. That was the beginning of a friendship that was very important to me. I can’t begin to tell you what a genius this guy was, and the wealth of knowledge and experience in that man’s head. I had enormous respect for him.
He told me that I had to remember that I was dealing with people’s money, and that’s second only to their family in terms of their importance. And for some people, it’s actually number one. So I had to treat that responsibility with respect. That’s what I was taught, but I think that’s changed a bit. The primary focus was the client, and if you took care of the client, they would take care of you. That was it. Plain and simple, nothing fancy. —Willie Walters, former head trader at Branch, Cabell, now runs Walters and Company with his wife. It is a real estate investment, property management, brokerage and investment firm in Denver.
Management
In 1961, when I started in the investment business in Richmond, the Main Street area was a very exciting place to work. The corners of Ninth Street and Main Street were known as the financial crossroads of Virginia. There were national banks on each corner, and these offices were their Virginia headquarters. The banks were surrounded by brokerage firms and law firms. At that time, there were seven New York Stock Exchange member firms domiciled in Richmond, with their main offices on Main Street.
I started my career at J.C. Wheat & Company, which was located at Tenth and Main in the American Bank Building. It was said to be one of the last buildings on Main Street before the Great Depression … The Ross Building was built in 1965, which J. C. Wheat moved into in 1966. One indication of the closeness of the Main Street investment community, or my restlessness, was that during my fifty-year career on Main Street I was employed with J.C. Wheat, Branch, Cabell, Bank of Virginia, and Scott & Stringfellow (for thirty-five years). All of these firms were on the same block of Main Street. —William P. Schubmehl, who served as president of Scott & Stringfellow from 1992 to 1996, continued as a stockbroker at the firm until 2005.
Just as Richmond counted itself a regional center for much of the twentieth century, home to leading mercantile operations, it was a major financial center, home to important banks and investment firms. In the 1970s, Richmond headquartered more New York Stock Exchange (NYSE) member firms—Abbott, Proctor & Paine; Anderson & Strudwick; Branch & Company; Branch Cabell; Davenport; Scott & Stringfellow; and Wheat—than any city in the nation outside of New York City. Ultimately, waves of services merger and acquisition activity, heavy regulatory burdens, and increasing technology requirements convinced all but Davenport to yield to larger, out-of-state partners.
That Richmond’s biggest local firms were NYSE members was a point of pride. But they, and a few smaller firms, also belonged to the old Richmond Stock Exchange, one of twenty-four stock markets registered with the Securities and Exchange Commission in the 1930s. Members met at noon daily in the First & Merchants Bank Building on Ninth and Main Streets. The Exchange’s purpose was to disseminate quotes and facilitate trading in local stocks, recalls the wonderful Bernice Lipson Katz, the RSE’s secretary-treasurer and its only woman member in the 1960s.
No one accused the Exchange of an overly heavy regulatory touch. Missing a meeting would cost you $0.50. Late to a securities auction? Fork over $0.25. Indecorous conduct carried the biggest fine of all: $1.00.
In the early 1970s, one of the members announced that his firm wasn’t going to continue to pay dues and support the exchange financially, so that was the end of the exchange. If he hadn’t withdrawn support, I’ve been told, Richmond might have held on to claim one of the last of the nation’s independent stock exchanges. — John B. Keefe III
The President of the Big Board
With initial public offerings, some official or star would buy the first one hundred shares. We’d start with a hundred-share print for that buyer, a marvelous piece of investor relations for a company. You’ll have IPOs today open on millions of shares, with the price based on supply and demand. Even then, they’ll start with a hundred-share print. When Best Products [a former Richmond-based, catalog showroom retailer] went public [in 1976], Jack DeJarnette, a trader at Wheat who attended Washington and Lee, and I bought the first hundred shares and gifted it to W&L. We did so Sydney Lewis, the head of Best Products [and W&L alumnus], and Jack and I could say that Washington and Lee was the recipient of the first hundred shares of Best Products stock. — William R. Johnson, a graduate of Washington and Lee University was president of the New York Stock Exchange from 1996-2001.
The Stockbroker
Stuart Seaton was the finest and most outstanding person I’ve ever known, always playing fair and by the book, and doing what was in the best interest of his clients. He was an airborne officer in the U.S. Army and retired as a full colonel. He came to Anderson & Strudwick after a twenty-one-year career in the army, the last two years as the senior artillery instructor at West Point. He was in the investment business for thirty-eight years, at Anderson & Strudwick and Dean Witter, and I worked with him for all those years. You couldn’t ask for a better person to work with.
There’s a good story about Stuart’s fiftieth birthday. To celebrate in style, I managed to borrow a wheelbarrow from the construction people working on what is now the SunTrust building next door. I put an army blanket in it, wheeled it up to his desk, and told him to get in because we were going to the Bull & Bear Club for a few drinks. He wouldn’t get in at first, but we talked him into it. We went down to the street, crossed Ninth Street, went to the service entrance at the Fidelity Building, and rode the elevator up to the club and bar. We encountered a few bumps along the way, but didn’t want him to walk! — Louis Bowman Jr. is a retired institutional salesman, most recently with Morgan Stanley
The Client
My father passed away in ’76, and he left us three boys a farm. We sold it and ended up getting seventeen thousand dollars each. I was living in Richmond working as a safety engineer for an insurance company at the time, and I didn’t know what to do about the money.
One day I had to survey a business in downtown Richmond, and I saw a stockbroker office, Dean Witter. I thought I’ll just go in here and get some advice on what to do with this money. The receptionist at the front of the office recommended that I talk with a Clyde Pitchford. He opened an account for me and suggested a couple of stocks. I said, well, I’m trusting you. Let’s see what happens.
Time went on, and I would call him or sometimes drop by the brokerage house. I considered him a friend. He would take me to see some horses he owned. He was also thinking about opening up a restaurant in the Fan, called Humphrey’s. I wanted to invest in it, but he kind of guided me away from that.
For our honeymoon, Clyde mailed me a key to a house he owned at Wintergreen and let my wife and I stay there for a week. I always wondered, why would he be so nice to me?
I called to speak with Clyde in 1986, at E.F. Hutton, his new employer, and was told that he didn’t work there anymore, that they had a problem. I asked, a problem about what? I was told customer money was missing from some of Clyde’s accounts, including mine. I wrote a letter insisting that they return my twenty-two thousand dollars, which the account was worth at the time, or I was going to take legal action. They didn’t respond to that, and I wasn’t happy. I felt I was being ignored.
By this time I had moved back to South Carolina. I was extremely worried about my money and didn’t like the way things were being handled. I flew to Richmond, walked into E.F. Hutton, sat down in the branch manager’s office, and got them to cut me a certified check for twenty-two thousand dollars. I wasn’t going to walk out without it. It’s really a shame, what happened to Clyde.
Sam E. Smith Jr., lives in north Myrtle Beach, South Carolina. He was a client of Clyde Pitchford … whose lavish lifestyle—a chauffeur-driven Rolls Royce, fox hunts, bespoke suits—was funded with clients’ money, including Sam’s. A riveting three-month search, with the FBI assisting, in 1986 led to Clyde’s surrender in New York, and national attention from People magazine, the Wall Street Journal and the Washington Post.
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The Analyst
In 1990, Ed Morrissett wanted to retire. Bill Coogan from Goldman Sachs was hired to head the corporate finance department. He cussed like a sailor, often in front of women. He was absolutely ruthless. He came to my office and said he didn’t know me and I didn’t know him, but I made money. He told me the problem with the firm was too much overhead. There was Jim Wheat and his cronies upstairs. The guys he went to college with. …
He said we’re going to throw them out. We’re going to have a coup, and we’re going to throw them out. He was going to make the company lean, and the people that really generated the commissions and really made the money would be the ones left. We’d run it, and we’d make a lot of money.
That struck me as wrong. First of all, this guy hadn’t been around long enough to earn his stripes. Second, I told him I was uncomfortable even talking about this. We were in Jim Wheat’s building. I worked for Jim Wheat. I wasn’t going to talk about this. I wasn’t going to have anything to do with it. He told me I was the first person to turn him down. I replied that he should just count me out. If he fired them all, he could fire me too. … He said no, I’d be okay because I’m a producer. I wasn’t overhead like research. I was a producer.
The more I thought about it, the more upset I got. …
On April 1, 1991 … I sent out sixty-some notes out to Wheat friends and two formal letters, resigning.
Wallace W. “Jerry” Epperson is managing director of furniture research at Mann, Armistead & Epperson, Ltd., the firm he co-founded soon after leaving Wheat.
The Stockbroker
There was a gentleman by the name of Dr. James Martin, a British citizen. He was doing some computer work for IBM in the United States. It was kind of secret stuff. I found out about him from a stockbroker friend of mine. Dr. Martin had been buying my stocks for many years, all the way back to 1977, ’78, through my friend.
I started managing his money years later, and he gave me five million dollars to manage. My job was to buy interest-sensitive securities, because I was supposedly an expert in them, due to success with Freddie Mac and Financial Corporation and others.
I turned his five million dollars into three million dollars. I was summoned to Bermuda to see him. He looked at the numbers and said: “Charlie, do you need more money to work with?” I had just lost him two million dollars. Now, he had gone to Oxford on a full scholarship. His father was a factory worker and wouldn’t support him at Oxford. But Dr. Martin was so grateful to Oxford for the assistance that he decided to pay them back. That’s why he wanted to make money.
His commitment gave me the courage to take the necessary risk. The account went from three million dollars to over one hundred million dollars in 18 months.
You really had to focus on his goal to make a big impact on Oxford. The money was not important to him unless it could fund the school. In fact, Dr. Martin ultimately became the largest donor to Oxford in its 900-year history. He ended up founding the James Martin School in Oxford and the James Martin Center for Nonproliferation Studies. He achieved all his goals.
Charles A. “Charlie” Mills III is the chairman of Mills Value Advisors, Inc.
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Management
What’s changed most about the financial business?
The biggest change is technology! The Internet has changed our world in the last 25 years. I went to a meeting at the New York Stock Exchange 25 or 30 years ago, and they announced they were planning for 100 million-share days. My thought was, you have to be kidding.
There are seven or eight different locations where you can trade today and a billion shares, two three billion shares a day is nothing. Commissions are virtually nothing now. That’s a big change. Brokers and banks have merged and are competing vigorously in all types of financial services, including the money management business. Another change for the positive is the compensation system. Brokers as well as bankers are compensated based on assets under management, not just transactions.
Ninth and Main is not the financial crossroads of Virginia any longer, and if there is one, I am not sure where it is. The bank buildings are apartments, the private dining clubs are closed, and fast food and curbside lunch stands have taken their place.—William P. Schubmehl
