The Good Competitor

A shy, dignified Chicago bachelor, Harold Leonard Stuart, 63, head of Halsey, Stuart & Co., last week walked off with $100,000,000 worth of bond business. Banker Stuart had won another round in his eleven-year-old war with Wall Street.

The big, erect, white-haired Chicagoan has long campaigned for open competitive bidding for securities in the railroad and utility fields, in place of the traditional, privately negotiated deals. Last week the syndicate headed by Halsey, Stuart plunked down the winning bid for the largest issue of railroad securities ever offered by competitive bidding--Great Northern Railway's $100,000,000 in refunding bonds (TIME, Sept. 4).

The Halsey, Stuart bid topped by some $1,400,000 the competing bid submitted by Great Northern's customary bankers--Morgan, Stanley & Co.

Since the Stuart bids were substantially above the Morgan bids on two of the three maturities in the offering, many Wall Streeters were quick to say that Stuart had paid too high a price. But Banker Stuart and the winning syndicate were satisfied.

Free for All. After many bruising tries, Stuart learned that he could not upset the established relationships between blue-chip companies and their regular bankers just by personal solicitation. The individualistic Stuart, determined to make LaSalle Street the equal of Wall Street, then began his clamor for competitive bidding--he wanted the securities business from which he was excluded thrown open to all comers. After eight years of Stuart drumfire, in 1941 the SEC decreed competitive bidding for utility holding company securities; and last May the ICC ordered competitive bidding for railroad bonds.

Stuart was ready. Although always formal in his dealings with his employes (he "misters" even his oldest associates), Stuart had built an organization notable for its retailing strength throughout the U.S.

This distributing power enables Halsey, Stuart to bid confidently at prices too high for others. In the Great Northern deal no other houses are associated with Halsey, Stuart. But the Chicago firm took about one-third the risk to itself with a commitment of $32,600,000 as compared to the next highest commitments which were $8,000,000.

Having won the biggest issue ever offered at competitive bidding, Banker Stuart is now working on a still larger deal. In October, the Commonwealth Edison Co. may offer $178,000,000 of bonds, terms of which are likely to be negotiated privately between the company and its traditional banking house--Halsey, Stuart & Co.

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