[Congressional Record Volume 140, Number 29 (Wednesday, March 16, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 16, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
        HAROLD E. DOLEY, JR.--RECOGNIZED FOR HIS PIONEERING WORK

                                 ______


                          HON. EDOLPHUS TOWNS

                              of new york

                    in the house of representatives

                       Wednesday, March 16, 1994

  Mr. TOWNS. Mr. Speaker, I have the privilege of entering into the 
Congressional Record an article from MBE magazine which recognizes the 
pioneering work of Mr. Harold E. Doley, Jr., chairman of Doley 
Securities, Inc.
  This year marks the 20th year that Mr. Doley has been a member of the 
New York Stock Exchange. I also note that he is the only African-
American who now occupies such a position.
  Mr. Doley's accomplishments deserve special recognition.

Portfolio of Success--Harold Doley, Jr. Uses ``Faith in the Future'' To 
               Help Build Sound Black Owned Institutions

                         [By Jeanie M. Barnett]

       Fifteen minutes before the closing bell, the trading floor 
     of the New York Stock Exchange resembles an oversized 
     basketball court that's been rushed by thousands of crazed 
     fans and weird aliens from outer space. The latter are the 
     octagonal islands of computer monitors from which glow 
     columns of numbers and abbreviations. The monitors are banked 
     three-high, the ones overhead attached to mechanical arms, 
     another bank at eye-level facing the swirl of people milling 
     about in a flutter of papers, talking on telephones or 
     punching on keyboards at still other computer consoles. 
     Clerks in blue and green jackets rush about; others scribble 
     notes or intently study the monitors--and wait.
       On this October afternoon, the market will close at 
     precisely 4 p.m., as it does five days a week, 52 weeks a 
     year. In an average five minutes on the stock exchange, $100 
     million in securities will change hands. But during the last 
     few minutes the pitch rises, as thousands of traders--mostly 
     male, mostly white, their ties long since loosened--make 
     split-second decisions on whether to sell or buy.
       Harold Doley, Jr. watches the commotion from above, in the 
     members' gallery, a second-floor open balcony flanking the 
     trading floor.
       Doley and his guest are the only ones on the member's side, 
     along with an elderly Asian woman who is painting at an 
     easel. She was commissioned, Doley explains, to capture the 
     scenes of the Exchange's 200th anniversary.
       Despite being himself one of 1,366 individuals to hold a 
     seat on the New York Stock Exchange, Doley, the founder and 
     chairman of Doley Securities, the second oldest black owned 
     investment banking and brokerage firm in the nation, still 
     speaks with a certain awe and fascination about the action 
     taking place below.
       ``This,'' he says, nearly shouting above the din, 
     ``represents faith in the future.'' Doley measures his words 
     with care, in an unmistakably Southern drawl. ``Markets are 
     people, made up of their thoughts, their goals, their 
     aspirations.''
       Doley notes that this particular day also marks the sixth 
     anniversary of the Crash of 1987. ``That day showed the true 
     fragility of this market, and markets around the world as a 
     whole.''
       Directly opposite is the visitor's gallery, which, he 
     points out, is sealed off by clear plexiglass--a result of 
     the commotion that ensued after a visit in 1968 by members of 
     the Yippies, a radical political organization, who threw 
     handfuls of dollar bills over the railing and sent traders 
     scrambling to pick them up.
       Next, he points out a young African American woman on the 
     floor, explaining that she is a reporter who stands in the 
     crowd and listens to the transactions, then puts them on a 
     computer pad and feeds the information directly on-line. ``In 
     a matter of seconds, that computer reads out all over the 
     world. If you disrupt this market, you could affect the 
     financial integrity of the world.''
       The bell clangs for the last 10 seconds of trading. Despite 
     the day's officially being over, the noise level doesn't 
     diminish. ``They'll work up the paperwork for a while,'' 
     Doley explains, ``and check to see if orders they have left 
     with the market makers, or specialists, were executed and at 
     what level. You'll see the results of all this later tonight 
     on the news.
       ``If there's one thing that's consistently part of the news 
     every evening,'' he adds, ``it's what happens in the stock 
     market.''
       Harold Doley, Jr. first visited the New York Stock Exchange 
     when he was 11. He was on a family vacation with his parents, 
     and the Exchange was part of their sight-seeing.
       Playing the stock market was a family tradition, started by 
     Doley's maternal grandmother, whose investments allowed her 
     to acquire substantial real estate holdings--enough that the 
     small Texas town where she lived bore the family name. 
     Doley's father, who ran a corner grocery store and later 
     taught high school math, also invested in real estate.
       Twenty years ago, when he was just 26, Harold Doley, Jr. 
     purchased a seat on the New York Stock Exchange--becoming the 
     first African American individual to do so. (Doley emphasizes 
     the word individual, pointing out that two other black owned 
     firms had preceded him to the floor--Daniels & Bell and First 
     Harlem Securities. It was the late Travers Bell, founder of 
     the nation's first black owned investment banking firm, who 
     ``sponsored'' Doley in his seat purchase.)
       Doley started buying stocks when he was 13, and by the time 
     he enrolled at Xavier University to study accounting, Doley 
     had built a sturdy portfolio. He started an investment club 
     with schoolmates and before turning 21, he had made his first 
     real estate purchase--an apartment building in downtown New 
     Orleans.
       After graduating from college, Doley was hired at Bache 
     (now Prudential Securities), and went to New York to train as 
     a broker. ``When I first went to Wall Street in 1968, I 
     couldn't believe the absence of blacks, even in menial 
     positions.'' He secured accounts nobody else seemed to want: 
     black insurance companies, black colleges, black churches, 
     black banks.
       After several years behind the desk, Doley wanted to be on 
     the trading floor. Bache's management ``told me I didn't have 
     the right type of personality for the floor,'' he says. 
     ``They were later proved right, but I was mad.''
       His purchase of the seat was rather straightforward: he 
     used his real estate assets and investments to do it. The 
     seat cost him $90,000, in 1973 dollars. At the time, the 
     ``Big Board'' was still being tabulated by hand. ``The 
     paperwork was so enormous that they had to start closing the 
     exchange one day a week,'' Doley says, shaking his head 
     incredulously. ``Naturally, volume dropped precipitously and 
     so did the price on a seat.'' He still chuckles when he 
     mentions it.
       Doley worked the floor as a ``two-dollar broker''--one who 
     deals with the overflow should a big firm have too many 
     orders to execute. But he found that he in fact did not like 
     being on the floor. In 1976, he started his own brokerage 
     business.
       Today, Doley Securities performs the same services as 
     ``bulge bracket'' firms like Merrill Lynch, Goldman Sachs, 
     J.P. Morgan and Bear, Stearns. In fact, Doley Securities, 
     which is headquartered at Doley's commercial building in New 
     Orleans, has an office in New York in the Bear, Stearns 
     building on Park Avenue. The difference is one of scale: with 
     15 employees between the two offices, Doley Securities 
     operates on a much smaller level.
       ``It is not my intention to grow Doley Securities to 
     compete with the big firms,'' Doley says. ``We are very 
     selective about the opportunities we pursue.''
       As a broker/dealer, Doley buys and sells securities for 
     institutional accounts, and works with some of the largest 
     companies in America, as well as some of the smallest. One 
     client is TIAA Cref, at $100 billion the largest pension fund 
     in the U.S., which was started by Andrew Carnegie for 
     university professors and employees. The firm also does 
     corporate underwriting for clients including General Motors, 
     Sears and Fannie Mae, the privately held, federal home 
     mortgage corporation. The firm also works with federal 
     agencies including the Resolution Trust Corporation and the 
     Veterans Administration. In the international arena, Doley 
     Securities works with the African Development Bank, a 
     multilateral development institution.
       At the other end of the spectrum are the small black owned 
     insurance companies in the South that were Doley's first 
     accounts, and which still represent the firm's core clients: 
     companies like Protective Life Insurance Co. of Birmingham, 
     Alabama, with $15 million in assets; and the New Orleans-
     based Majestic Life and Safety Life, the latter ``which 
     doesn't even have a million dollars in assets,'' he notes. 
     ``But even with such a small portfolio, they do very well.
       ``We can, and do, put stocks and bonds of our major 
     corporate clients into minority financial institutions, 
     historically black colleges and universities and insurance 
     companies,'' Doley says. ``We believe in these clients.''
       For example, if a company life GM wants to make a stock 
     offering, Doley Securities will be part of a syndicate that 
     underwrites it. As an underwriter, he takes the risk on the 
     portion he's underwriting, meaning he has to buy what he 
     doesn't sell. Doley may sell some of the securities--stocks 
     or bonds--to a company like Protective Life. He could just as 
     well call on a big state pension fund, like a lot of other 
     brokers--and he often does. ``But we also make the calls to 
     black owned companies and give them the same opportunity [to 
     purchase stocks and bonds] that big companies like Aetna and 
     the state pension funds of New York and California have,'' 
     says Doley.
       Doley sees his firm as having played an integral role in 
     the development and growth of black financial institutions. 
     Some of the insurance companies he began selling to during 
     his days at Bache ``were primarily burial. Somebody would buy 
     a burial policy of $1,000, which 20 years later they would 
     have paid $1,000 for. It did have some economic value, but 
     the life insurance business has evolved, and [black owned 
     companies] have much more competitive premiums now. One of 
     the reasons for this transition is the success they've had in 
     their portfolios.
       ``Many of their portfolios have my signature on them,'' 
     says Doley, who still handles the accounts himself, ``and I'm 
     very proud of it.''
       Minorities and women are relative latecomers to the world 
     of high finance. Their entry followed the increasing number 
     of black elected officials at the local and state levels in 
     the late 1970s and early 1980s. Atlanta Mayor Maynard Jackson 
     in the 1970s opened the door for black bankers on bond sales 
     for the building of Atlanta's airport. And the late Chicago 
     Mayor Harold Washington set the pace in municipal finance 
     when he required the participation of minority firms in city 
     bond issues. Today, a growing number of minority and women 
     owned securities firms are serving as senior managers on 
     offerings by governmental entities.
       What sets Doley Securities apart from the others, observes 
     Harold Doley, III, the firm's 25-year-old president and the 
     older of Doley's two children, ``is that my father started 
     out 20 years ago on the corporate side. Most others start out 
     on the public side.''
       Among the firm's early public sector clients was the 
     Department of Transportation. In 1987, Doley was a co-manager 
     on an initial public offering of Conrail, a beleaguered 
     freight carrier which the U.S. government had taken over in 
     the 1970s and then sought to privatize. It put up 59 million 
     shares of common stock valued at about $1.6 billion, which at 
     the time was the largest initial public offering in history. 
     (The sale of Argentina's state owned oil company now holds 
     that distinction.) Doley Securities was one of only six 
     minority or women owned firms in the 148-firm underwriting 
     syndicate.
       While the public arena provides the most opportunity for 
     minority owned firms, ``it isn't our primary focus,'' says 
     Doley. Corporate underwriting is. But unlike public finance, 
     there are no mandates in the private sector that require 
     minority involvement. And with few minorities in the 
     boardrooms of the Fortune 500, the doors aren't exactly 
     swinging wide open. Still, Doley names a number of 
     progressive companies that are involving more minority owned 
     firms in their pension fund management and stock offerings--
     and Doley is usually on the list. When Sears sold its 
     insurance subsidiary Allstate earlier this year, for 
     instance, Doley Securities was among the few minority 
     underwriting firms on the offering. Currently, the firm is in 
     the syndicate on Pacific Telesis' sale of its holdings in the 
     cellular phone industry. It is the third largest initial 
     public offering ever, says Doley.
       Doley Securities is also expanding its global financings 
     through its work with the African Development Bank (ADB). 
     Doley had taken a brief respite from his business in 1982 to 
     serve as the first director of the U.S. Department of 
     Interior's Minerals Management Service (MMS), which at the 
     time was the second-largest source of revenue to the federal 
     government. MMS leases federal and Indian owned lands and the 
     outer continental shelf for oil and gas exploration and 
     collects the royalties.
       After one year with the MMS, Doley was named U.S. executive 
     director of the ADB. The position carries the rank of 
     ambassador. He spent two years in Abidjan, Ivory Coast, where 
     the bank is headquartered. The bank has financed such 
     projects as railways, agriculture, schools and hospitals 
     throughout the continent. During his tenure, he was actively 
     involved in structuring lending packages between the ADB and 
     international commercial banks, and worked with staff in 
     formulating country-specific development strategies. In 1988, 
     Doley Securities was an underwriter in $200 million of U.S. 
     offerings by the ADB in the U.S. market. In the last two 
     years, the firm has served as a manager for a $300 million 
     Yankee bond offering, and was the sole placement agent on an 
     issue of $100 million in Medium-Term Notes by the ADB. 
     Overall, Doley Securities has served as managers in over $1 
     billion in ADB's Yankee bond offerings.
       This past summer, Doley Securities added even more clout to 
     its African pursuits when retired California Congressman 
     Mervyn Dymally joined the firm. Dymally, who served as 
     chairman of the Subcommittee on Africa for the House Foreign 
     Affairs Committee, has traveled extensively throughout the 
     continent and, since his retirement from public service, has 
     been representing Mauritania and Namibia on some private 
     sector fishing contracts. Dymally got involved with the firm 
     after a chance meeting with Doley, III outside the United 
     Nations building in New York. Dymally asked him why the firm 
     wasn't doing more business in California, which has one of 
     the largest pension funds in the world and has state laws 
     that govern minority and women business participation.
       ``When you check the record, Doley Securities is very 
     impressive,'' says Dymally, who maintains an office in Los 
     Angeles and Washington, D.C. (Federal law prohibits him from 
     lobbying the government for one year.)
       ``Africa is changing,'' observes Doley, who claims to have 
     roots from East and West Africa to Ireland. (Doley, he notes, 
     is a derivative of Doyle, which means black or dark foreigner 
     in Gaelic.)
       In Africa, ``there are more opportunities, and more 
     pitfalls.'' He envisions that the several small exchanges in 
     a handful of countries (Ghana, Zimbabwe, Zambia, Senegal and 
     Kenya), will one day be linked together through the 
     Johannesburg exchange. He points out that South Africa has a 
     developed banking system which is linked to the rest of the 
     world, and a convertible currency--features many other 
     countries on the continent lack. (During the days of 
     apartheid, Doley was more enthusiastic about disinvestment in 
     South Africa. In 1977, his firm did an analysis on platinum, 
     of which South Africa and the then Soviet Union had the 
     world's largest reserves. The report emphasized that South 
     Africa was not a stable source for the strategic metal since 
     the country was a political and socioeconomic ``powderkeg.'')
       ``Africa will have opportunities Eastern Europe won't,'' he 
     predicts. ``Africans are traders. They understand the concept 
     of profit.''
       But both Dymally and Doley caution would-be entrepreneurs 
     about catching the next plane out.
       ``You just can't expect to set up an outpost and make 
     money,'' says Doley. ``It takes a long-term commitment.''
       Adds Dymally: ``Losses and expenses are high. Africa is not 
     good for small businesses. It is good for corporations that 
     have a checkbook open and can afford to wait.''
       Over the next four years, Doley plans to distance himself 
     from the firm's day-to-day operations. ``If my son wants to 
     go from 15 to 2,000 employees, that'll be on him.'' Doley's 
     not planning on retiring, though. He'll step up his 
     consulting with various nations in Africa, and continue to 
     handle the accounts he started his firm with. He'll also 
     spend some time refurbishing the Madame C.J. Walker estate in 
     Westchester County, north of New York City, which he recently 
     purchased. Doley plans to restore the ``Villa Lewaro'' to its 
     original luster when Walker, the black hair care entrepreneur 
     and first black multimillionaire, resided there during the 
     early part of this century.
       ``A businessman is a manager,'' he explains. ``I'm not 
     interested in continuing to be a manager, If anything, I'm an 
     entrepreneur. Entrepreneurs create.''

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