Well, not exactly. But he did, in the 1950s, come up with the idea under which a majority of equity and debt trades today are effected in current financial markets. Not that the markets followed his proposal at the time. Far from it. But with this idea, my Dad did actually see around the corner. Let me explain.
Dad was essentially an inventor at heart. This is what engineers do, conceive of new things. As People’s Exhibit No. 1, consider the following work:
This is the cover of a treatise entitled “Motor Design.” It was his final project for his first year at Cooper Union. Dated May 18, 1938, it concerns engines for boats. Of course boats! What else would a waterman write about?
An excerpt from the opening paragraph:
“The designers of the new Staten Island Ferryboats were confronted with many unique problems when they were called upon to design the new million dollar ultra-modern [versions]. There were no precedents to follow in this new design for the old coal burning Staten Island ferries [that] were built 35 years ago. The designers incorporated as many of the existing standard features and principles of ferryboat design as they dared and supplemented construction with new innovations.”
Dad’s treatise goes on from there, diving directly into what he knew, in great detail, about motor types and design. Amid his exposition are few words of introduction or high level explanation as to what his paper was about. Accordingly, he didn’t waste time with a formal prologue and a summarizing conclusion was similarly dispensed with.
The paper is carefully and passionately decorated and immaculately typed. The cover is perhaps Dad’s best work of art that I have come across. Check out the art deco font!!! One can readily see that he spent hours polishing and editing so that it would be perfect.
The first chapter concerns the use of aluminum for the new ferryboats, together with the problem of serious vibration caused by the reciprocating engines. Dad’s solution? A turbine-electric drive.
Let me see. An aluminum hull. An electric motor. If he had written this today, he would have gotten the attention of Elon Musk and scored an engineering job with Tesla Motors!!!
I have written before that my Dad was a man of letters. He liked to write to everyone and anybody to tell them what he knew. About boats, patents, even software! After I left Olcott International and became an SAP consultant, he even wrote to Hasso Plattner, one of the original founders of the German über-company, pitching him on a joint software venture to marry ERP and patent management software. I had the chance to follow up with Hasso personally sometime afterwards at a SAPPHIRE conference, who seemed to be knowledgeable about Dad’s letter and the patent management/renewal industry. I was impressed!
If you asked me if my Dad had any hobbies, I would say, yes, work, with posturing for litigation a close second. But if you were to press me and demand something classically hobbyish, I would say sailing, because tinkering with machines doesn’t sound like a hobby.
But it was for him! His first wife Pat Terry explained to me that while married, he was always playing with the compressor in the apartment refrigerator. “What was he doing there? Can’t he leave it alone?” she wondered.
In such ways, Dad was always searching for maximum efficiency. Even if it became annoying. Fiddling and experimenting were the journey for him.
Like the Cadillacs mentioned in “SOMETHING ABOUT DAD, PART 2: FREE PARKING,” most cars owned by him were always a work in progress. Dad had a theory that if you disabled a cylinder in your V-8, you would reduce the flow of gasoline into the engine, and therefore abate the incremental expense of driving.
However, this had the corollary of under powering the engine below specifications. To Dad, however, that was part of the fun. For example, he didn’t care about air conditioning in his vehicles because, well, it diminished fuel economy. As for me, however, who had been exiled to Florida after failed marriage number 2, driving an air conditioned car in a New Jersey summer was a necessity.
However, an under powered engine is not able to maintain an idling engine and A/C both, at the same time. How about trying to drive that car through the Lincoln Tunnel and having it stall in an inconvenient place? You see, not so much fun for others.
But that is what an iconoclast does. His vision for new ideas was not limited to boats, software, and cars. In fact, one day on the early Fifties, he had a new concept for trading on the floor of the New York Stock Exchange!
One day while I was working at Olcott International in the early 1980s, Dad came up to my desk and presented me with a binder in his usual style, without warning.
It was professionally bound in a way similar to his Motor Design Treatise.
“What’s this?” I said to myself.
It was a neatly typed and written proposal, complete with a surrealistic illustration of faceless traders sitting in matrix of desks on a trading floor. I’ll never forget that picture, sketched in a 1940s film noir professional style, displaying a phalanx of brokers, each with a phone to his head. You see, in this permutation of the Exchange, the market makers were stationary, anchored at their desks. Instead of running around, they would receive calls to execute requested trades from rep offices around the country.
It was an amazing proposal! And I have to say, it filled me with some amount of pride. It was personally addressed to the President of the New York Stock Exchange at the time, Mr. G. Keith Funston.
He left me alone with it while I read the document. I ran upstairs up to his office immediately afterwards and asked if he really sent it.
“Yes,” he said to me, smiling.
“So what happened?”
“Well, I got a nice letter back thanking me for it. They promised to study and review it”
“Yes, eventually they got back to me and explained that they liked the idea. But after discussing it with the traders, everybody explained that they enjoyed being on their feet, running around. Even if it was less efficient.”
I should have asked him what someone would do in his scheme if they called the specialist to execute a trade and the line just happened to be busy.
And today? The floor of the New York Stock Exchange is considered to be strictly vestigial. Only 15% of trading volume is exchanged via the Stock Exchange’s open outcry system. The other 85% is handled electronically at the Exchange’s data center in Mahwah, New Jersey.
You see, the trading today is effected on floors just like this one, exactly as Dad proposed:
The old trading floor at UBS in Stamford, Connecticut. Although this has been closed, there are dozens like it worldwide in active use today. They look exactly like the one in my Dad’s proposal.
Sadly the proposal has been misplaced, hopefully not next to the Einstein letter. If I ever find it, the Bernard Olcott Story will feature it here!