Financial History Issue 120 (Winter 2017) | Page 16

incredibly proud of and humbled to support . But I think he ’ d be the first to tell you that none of this would have been possible if it had not been for that initial $ 12,500 investment .
Joe was a big supporter of mine on the eve of the financial crisis . I had just taken on the role of CEO of TD Ameritrade . As we all know , it was quite a crisis . Our clients were scared ; our employees were scared ; I would say that some of our shareholders were scared . I went to the board at that time and said I thought we should go for growth and do what we ’ ve always done , which is to disrupt the traditional wire houses who were in tough shape back then . If that didn ’ t work , we could always do what we had to do , which was to cut expenses . Joe quickly endorsed that strategy and supported it . He said go for growth , disrupt as we ’ ve always done and don ’ t pull back . So that ’ s what we did , and it worked . We really started on the asset gathering journey at that time .
Over the years Joe and I have become good friends . He has a lot of love within him ; that you have to have to believe in people to the extent that he does . And we believe in him , and that ’ s why we ’ re here tonight . Congratulations , Joe .
JOE RICKETTS Founder , Former CEO and Former Chairman TD Ameritrade
I would like to start by saying thank you to the members and Board of Directors of this Museum for nominating me , and thank you Chuck Schwab for having me be here . It is quite an honor , and I would like to say that in 1960 I had a sociology teacher tell our class that the reason the United States was rich and prosperous was because we had a lot of natural resources . I thought , “ Oh my God , how lucky are we ?” When I got out of school into the real world , I found out that wasn ’ t really true . There are a lot of countries that are really wealthy with a lot of natural resources , and their countries don ’ t do well . An example currently is Venezuela ; an example from the last century and still today is Argentina . And there are many , many more . Socialism just really doesn ’ t work .
I came to realize the thing that made us strong , the thing that made us rich , the thing that made us prosperous was free enterprise . And free enterprise doesn ’ t happen without finance . So this is an important institution . This Museum captures the history of the financial well-being of the United States , from the colonial times to the settlement of the West to the industrial revolution to the technology revolution today . We would not be where we are — society would not be , our country would not be — without finance . So , as this is an important institution , I would like to ask you to be generous in your donations .
In 1969 , I went to work for Dean Witter . One of the first things we had to do was study the history of the securities industry and the history of the stock exchange . One of the first things I read was that the early brokers met under a buttonwood tree in this neighborhood in Lower Manhattan . I was born and raised in Nebraska City , the home of Arbor Day , and I didn ’ t know what a buttonwood tree was . But I had in my mind it was a great big tree that put out a lot of shade so that the early financiers in their funny clothes and their funny hats and funny shoes could get together in the shade and map out the rules and regulations that they knew they needed in order to make the financial services industry grow and be strong .
Now they were very successful , as you know . Along the way one of the rules that they picked up was the minimum commission . So they said among themselves , if you are going to be a part of our association , there is a commission rate by which you cannot go below . You can charge as much as you want on the top , but there is a rate you cannot go below . And I am sure in the early days when the industry was a baby , when it was brittle , when they were having a hard time getting it started , that was an important regulation to make the industry successful .
But as they became successful , incredibly successful , the Justice Department , the Congress and the SEC came to realize that that rule — that regulation — was in restraint of trade , and they were going to have to get rid of it . The industry , knowing they could not fight the powers that be , started to abide by their direction and by the late 1960s some of the larger trades were eliminated from that rule and went to what was called negotiated commissions . And I think in 1973 the trades above $ 500,000 or more became unregulated by that commission and traded on negotiated commissions , and then of course May 1 , 1975 everything went in that direction .
Because of an elimination of that regulation we had the industry take off . Millions of people flocked to the industry in the succeeding years , and they added breadth , depth , liquidity and size , and that really kind of transferred around the world . So as we take a look at what our government does , let ’ s keep in mind if we eliminated regulations a good share of the time we are going to benefit greatly .
Now , as I look around this room , I see a lot of important people . There are a couple I want to call your attention to — the first is my wife . 38 years ago I came home from work one day and I said , “ Marlene , we are opening up a lot of new accounts , but since they are not open they are not providing us any commissions at the current time . We really don ’ t have money to hire a new accounts clerk . Will you come to work at the business ?” She said , “ How much do I get paid ?” “ Like I just told you , honey , we can ’ t afford to pay anything .” She said , “ Joe , I really don ’ t want to .” She was a school teacher . She said , “ I enjoy my job , but more importantly every day after school our son , Todd , comes in the kitchen door and the first thing he says is ‘ Mom .’” So she knew the family needed her . But she also knew I needed her in the business , so she gave up her personal life that she enjoyed very much and came to work for us at Ameritrade to help us make it be a success . She worked for us for many , many years .
14 FINANCIAL HISTORY | Winter 2017 | www . MoAF . org