Fall 1982- Thanksgiving, the Waiting Ends

October 28, 2016

The ninth exclusive for Dynamic Commodities in my series- becoming a commodities trader

After passing the traffic test, Keith Rhoden had the same reaction as when I had failed months earlier, he laughed. I had assumed that my days in the telex department would soon end but days turned into weeks and weeks into months with no word from Max Stern.

I went to see my Godfather in the company, Bert Fontaine, to ask advice. He told me to be patient, keep working hard and eventually things will work out. I followed Bert’s advice but became nervous as things began to change at Philipp Brothers. The profits of the company slipped, and rumors of layoffs and cost-cutting swirled around the firm. At the highest levels, a power struggle began to develop between Gutfreund and Tendler the co-Chairmen of the holding company as earnings soared in the financial division and plunged in the commodities trading business. The marriage was on the rocks, but there would be no divorce.

The first round of layoffs at Philipp Brothers affected those employees who had been around for decades and whose roles at the company had diminished dramatically. Philipp Brothers had a percentage of staff that were charity cases. Many were survivors of the Holocaust with numbers tattooed on their arms from time spent in Nazi concentration camps in Europe. The Chairman emeritus of the firm, Ludwig Jesselson was a philanthropist who took care of many Jews who had survived Nazi Germany and gave them jobs at the company.

As a family, Philipp Brothers rarely fired employees for any reason. However, that was changing fast. Many of the first to go had been with the company for decades. They received generous severance packages and in most cases were close to retirement age. However, an undertone of woe gripped many of those remaining who began calling John Gutfreund, the Salomon chief, the angel of death. As the rumors swirled, I felt like I had passed the traffic test too late and I would never get a chance to move into another role within the company. However, in the late fall of 1982, the call from Stern finally came. I was told to report to the traffic training section the very next day. It was almost Thanksgiving, and the waiting had ended.

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