Financial History 134 (Summer 2020) | Page 39

Collection of the Museum of American Finance Portraits of William M. Kidder and Horace J. Morse in Kings View of the New York Stock Exchange. Christopher Bay, a scholar, mathematician and Norwegian immigrant, Charles Ulrick Bay was born in Rensselaer, NY. An industrialist, Bay founded the Bay Company, a surgical and medical supplies manufacturer, with his brother, Frederick. In 1933, while a partner at A.M. Kidder, he also founded the Bay Petroleum Company in 1935 and the American Export Air Lines in 1937. In 1938, he helped to organize A.M. Kidder’s takeover of Jenks, Gwynne & Co., a well-known stock, cotton and grain brokerage founded in 1913. In 1940, Bay became senior partner of A.M. Kidder & Co. In 1946, however, he became the ambassador to Norway under President Harry Truman and took a leave of absence from the firm until 1953. When Bay died in 1955, he owned about 71% of the firm’s stock. In 1956, his wife, Josephine Perfect Bay, assumed his position as the president and chairman of A.M. Kidder & Co., Inc. because the New York Stock Exchange rules required any stockholder who owned “more than 45% of a member company’s shares” to either sell or “take an active part in the firm.” Under Josephine Bay, A.M. Kidder & Co. had the distinction of being the only investment house in the top 207 firms of the syndicate of the Ford Motor Company initial public offering led by a woman. Born in Iowa in 1900, Josephine Holt Perfect Bay was raised in Brooklyn. The daughter of Otis Lincoln Perfect, a real estate broker, she was a 1916 graduate of the Brooklyn Heights Seminary and studied at Colorado College at Colorado Springs. She and Charles U. Bay married in 1942. In 1959, she remarried to Capton Michael Paul, a widower and a native of Ulanvdinsk, Outer Mongolia. Paul’s father, Michael A. Iogolevitch, had been the Surgeon General under Czar Nicholas. A trained violinist, Paul immigrated to the United States in 1917. In 1919, he opened a branch bank in Harbin, Manchuria for the National City Bank of New York after meeting Frank A. Vanderlip, the bank’s president. In 1922, he started his own firm dealing in precious stones and art. Eventually he settled in Texas, where he entered the oil business. He joined the NYSE in 1933. Josephine Bay Paul died in 1962. The following year, C. Michael Paul—then the president, chairman and chief stockholder of A.M. Kidder & Co., Inc.—decided to sell the firm to Reynolds & Co. and Francis I. duPont & Co. Paul said, “Since I have had no one to share the burden of running the firm as I had when Mrs. Paul was alive, I thought it best to hand it over to others. I want to have more free time for all my activities—the medical and educational philanthropies with which I’m connected and also my bowling and fishing.” According to Paul, Reynolds and duPont approached him about the sale, which was for cash. Paul said that he did not want to devote the time necessary to expand the business and maintain its quality, so he decided to sell. According to Vartanig G. Vartan, Reynolds & Co. and Francis I. duPont & Co. were part of a larger merger trend for which there were “two prime reasons” in the securities business: “the chief one being the drive for greater capital…. Brokerage firms need capital to carry customer margin accounts, to conduct their underwriting business, to pay for expanded research activities, and to aircondition their offices.” The second reason was “personal or estate acquisitions,” like C. Michael Paul’s personal circumstances. In the post-war period, A.M. Kidder & Co. had established its reputation for successfully selling mutual funds in Florida. In 1947, it bought 10 offices of another brokerage house in Florida. By 1961, it had 22 offices in Florida and realized “about 85% of its total mutual fund volume from the Sunshine State.” The New York Times reported, “Under terms of the acquisition agreement, Kidder’s assets [were] divided equally between Reynolds and duPont. Reynolds’ half [was] made up of 26 of Kidder’s offices, and duPont’s [was] the remaining 13.” The Florida offices were taken over by Reynolds & Co., which were not represented there and “said that it was interested in pursuing mutual fund sales in the Southern state.” With that sale, the name of A.M. Kidder & Co. was lost to history. Susie J. Pak is an Associate Professor in the Department of History at St. John’s University (New York). A graduate of Dartmouth College and Cornell University, she is the author of Gentlemen Bankers: The World of J.P. Morgan (Harvard University Press), a Trustee of the Business History Conference, co-chair of the Columbia University Economic History Seminar and a member of the editorial advisory board of the Business History Review. She is also a member of the Financial History editorial board. About Where Are They Now? The “Where Are They Now?” Series traces the origins and histories of 207 of the underwriters of the 1956 Ford Motor Company IPO. The research for this series has been generously funded by Charles Royce of The Royce Funds. The Museum’s “Where Are They Now?” blog can be found at: wherearetheynowblog.blogspot.com. www.MoAF.org | Summer 2020 | FINANCIAL HISTORY 37