Richard Whitney (financier) - Biography

Biography

He was born on August 1, 1888 in Boston, Massachusetts to George Whitney, Sr.

He was a descendant of John Whitney (1589/92 - 1673), an English immigrant who arrived with the Winthrop Fleet in 1630 and who settled in Watertown, Massachusetts. This prominent branch of the Whitney family of New York descends from Boston. Richard Whitney's father, George Whitney, Sr., of Boston, Massachusetts, was president of North National Union Bank, and educated Richard and his older brother George Whitney, Jr., at Groton School and Harvard University.

In 1910 he followed his brother, George Whitney, Jr. to New York City where he established his own bond brokerage firm Richard Whitney & Co. Two years later, using money borrowed from his family, Richard Whitney & Co. purchased a seat on the New York Stock Exchange. His uncle had been a partner in J.P. Morgan & Co., and brother George proved invaluable because of his position at the Morgan Bank which allowed him to direct substantial business to Richard's brokerage.

Richard Whitney married the widow Gertrude Sheldon Sands in 1916. She was from Brooklyn, New York, and her first husband Samuel Steven Sands III was the step-son of William Kissam Vanderbilt (1849-1920). She had three children with Whitney. His father-in-law had served as president of the powerful Union League Club and Whitney became a member of a number of the city's elite social clubs and was appointed treasurer of the New York Yacht Club. In 1919, he was elected to the Board of Governors of the New York Stock Exchange and not long thereafter was named its vice-president.

On October 24, 1929, Black Thursday, he attempted to avert the Wall Street Crash of 1929. Alarmed by rapidly falling stock prices, several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor of the New York Stock Exchange. The meeting included Thomas W. Lamont, acting head of Morgan Bank; Albert Wiggin, head of the Chase National Bank; and Charles E. Mitchell, president of the National City Bank of New York. They chose Whitney, then vice president of the Exchange, to act on their behalf.

With the bankers' financial resources behind him, Whitney went onto the floor of the Exchange and ostentatiously placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As traders watched, Whitney then placed similar bids on other "blue chip" stocks. This tactic was similar to a tactic that had ended the Panic of 1907, and succeeded in halting the slide that day. The Dow Jones Industrial Average recovered with a slight increase, closing with it down only 6.38 points for that day. In this case, however, the respite was only temporary; stocks subsequently collapsed catastrophically on Black Tuesday, October 29.