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For the time being, Witness Stanley was permitted only a brief statement, but as the hearing neared its close the most persistent man in Wall Street plowed back to his favorite subject. Said he: "... I put my own ideas in the form of a memorandum which I would like very much to submit. . . ." Up rose Leon Henderson: "I object. ... I regard it as decidedly a disregardance of the orderly presentation of information. ... If it needs any stronger language I will be glad to offer it."
Waved away by Leon Henderson was Chairman O'Mahoney's peace-making observation that Harold Stanley's statement was not to go into the record, that in any event he could mail it to any committee member. "It makes no difference," sulked Mr. Henderson. Joe O'Mahoney's lips curled in a sarcastic grin.
"I feel myself," he purred, "by some inadvertent question which I addressed to the committee without first submitting it to the SEC, that I provoked this matter. ... I am perfectly willing and happy to receive the letter." While Leon Henderson glowered, Witness Stanley handed out his attack on compulsory competitive bidding, which he and other investment brokers can see as a likely outgrowth of SEC's investigation. Next day it led the TNEC story in metropolitan newspapers. The Morgan Stanley thesis:
Competitive bidding minimizes the banker's sense of responsibility and destroys his professional relationship with his client; it tends to cause overpricing of securities and high-pressure salesmanship of "shoddy goods" to unwary buyers; competing brokers, unsure who will get the order, tend to make superficial studies of securities' quality; competitive bidding, in the long run, would eliminate the small dealer, now supported by sharing on flotations.