Markets & Stocks
An exceptional character
January 12, 2001: 1:41 p.m. ET

Kandel remembers Wall Streeter Edwin T. Etherington for his service, integrity
By CNNfn Financial Editor Myron Kandel
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NEW YORK (CNNfn) - An exceptional figure in Wall Street history died on Monday. The death of Edwin T. Etherington probably won't get the kind of attention it deserves in these days of spiraling and nose-diving stock prices, billion-share trading days and mega-mergers, but his life is worthy of special notice.

Ted Etherington died at 76, following a distinguished and varied career in private and public service. There aren't too many of us still around who remember the impact he made on Wall Street, when he and another young Turk from the New York Stock Exchange named Paul Kolton were tapped in 1962 to clean up and reinvigorate the scandal-plagued American Stock Exchange.

Etherington was still in his 30s when he became president and chief executive of the Amex, and he won high praise for his work there and the talented group he gathered around him. Despite the comparatively smaller size of the Amex, its staff was considered the best in the Street.

Ten years later, the chairmanship of the Big Board could have been his for the asking, but he chose instead to become president of his alma mater, Wesleyan University, with his eyes on an eventual political career. His politics were moderate Republican, and there were friends who envisioned a scenario that could have taken him all the way to the White House. It was a bit far-fetched, though possible. But it was derailed by the vagaries of politics and the intrusion of health problems.

graphicEtherington was smart and articulate, handsome and thoughtful. Those attributes, plus his experience on Wall Street and in academe during the campus troubles of the late '60's, made him a good choice for national political office. He aimed for the U.S. Senate. But he had not been politically active and his outspoken views did not endear him to Connecticut's Republican establishment. To obtain the nomination as an insurgent he needed to get on the party's primary ballot. For that, he needed 20 percent of the vote at the state convention.

Going in, he thought he had that much support, but some last-minute political horse-trading left him a few percentage points short. Shortly thereafter, he underwent one of the early heart-bypass operations, and he never resumed his political aspirations.

But that didn't end his public service. He became head of a commission that examined Connecticut's government services and expenditures, dubbed the "little Hoover Commission," after a similar group on the federal level that had been chaired by former President Herbert Hoover. Etherington's commission came up with a number of recommendations that helped streamline his state's operations.

He also accepted a Presidential appointment to head the National Center for Voluntary Action, which encouraged the private sector to do good work on a voluntary basis. (Interestingly, a quarter-century later, a somewhat similar group was headed by now-Secretary of State-designate Colin Powell, and Etherington was amused by those who hailed it as a brand-new idea.) He also served on a number of corporate, philanthropic and civic boards, and was particularly active in recent years in supporting child-care and youth services.

On Wall Street, Etherington made his mark early. After Yale Law School, he clerked for a Federal Appeals judge in Washington, worked for a couple of law firms and became secretary of the New York Stock Exchange. He was a partner at the brokerage firm of Pershing & Co., when he was named to head the Amex, which had been rocked by a series of trading scandals and needed a fresh broom.

He brought with him, as executive vice president, Paul Kolton, a former newspaper reporter and advertising executive, who was then vice president of public information at the Big Board, and to run the Amex regulatory operation, William T. Moran, who headed the New York regional office of the Securities and Exchange Commission. Kolton later became chairman and CEO of the Amex himself (succeeded by Arthur Levitt, now the chairman of the SEC). In a footnote to Wall Street history, a number of industry executives, who admired the job Kolton did running the Amex, wanted him to become chairman of the Big Board in 1972.

But some even more heavyweight Wall Streeters with close ties to the Nixon Administration torpedoed that idea when they heard that Kolton had expressed doubts about the war in Vietnam. And in a footnote to academic history, Etherington brought with him to Wesleyan, the youthful general counsel of the Amex, Colin Campbell, and when he announced he was leaving as president, the university's trustees named Campbell to succeed him.

So Etherington not only left his own legacy on Wall Street in reforming the Amex, but helped the careers of other accomplished people as well. And a personal note: When my old newspaper, the New York Herald Tribune, folded in 1966 and I was out of a job, I was offered an attractive position by an international financier.

Through a mutual friend, Etherington asked me to pay him a visit at the Amex. He said that although we knew each other only casually, he wanted to offer me some advice if I would listen. He said our friend had told him of the offer I had received and noted that on a recent trip abroad, he had learned some disturbing news about the financier who had made it. You have a reputation for integrity, he said to me, and that's something that should be treasured.

It's hard to build such a reputation, but it's easy to lose it, he added. I didn't accept the job offer, for a number of reasons, not the least of which was his advice. But after all these years, I've never forgotten his words. Integrity. That's what Ted Etherington was all about.  graphic


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