All in a Life-time

by Henry Morgenthau; French Strother

Southack and James H. Post, who was a director in the National City Bank, presented the scheme to Mr. Stillman, who kept it under advisement for several weeks, but finally declined because he had been advised that some of our operations might be too speculative. In the meantime, Southack and Ball had, in addition to Mr. Post, interested Henry O. Havemeyer, John D. Crimmins, and several others. They then presented the matter to Mr. F. P. Olcott, president of the Central Trust Company, who was a trustee of the estate of Southack’s father. Olcott listened to the outlining of the plans of such a company, and when they proposed me as president and told him of the great profits I had made in real estate, he said that when it came to any proposition involving real estate, he was entirely guided by Hugh J. Grant, whose office adjoined his.

Grant had, while Mayor of New York, appointed Olcott to the first Rapid Transit Commission, and when he was appointed receiver of the St. Nicholas Bank, Grant called on Olcott and availed himself of an offer theretofore made him by Olcott to be of service to him. He told Olcott that he was very anxious to make a record as receiver, and asked an immediate loan of as much as the assets of the bank justified to enable him to declare promptly a substantial dividend to the depositors. Olcott not only did this, but was so pleased with the manner in which Grant handled the receivership, that he urged him to abandon his railway advertising business. He did so, and took offices next to Olcott and above those of Brady, and became the third member of that famous combination—Brady, the creator of the schemes; Olcott, the financier; and Grant, the expert in political and municipal affairs.

He called Grant into the office. Grant listened most attentively to the proposition, and then said:

“Morgenthau has been too successful to be willing to work for a salary and accept the presidency of a company.”

As Southack and Ball insisted that he was mistaken, Grant, with his usual directness, came right over to see me. That visit was a very memorable one for me. We carefully canvassed the entire proposition and concluded then and there that not only was I to take the presidency, but that Grant should take the vice-presidency, and become a visible figure in finance and cease being known as an unattached associate of Olcott and Brady.

Grant’s greatest faculty was in being able to “sniff” success, and through his tremendous amiability—which had made him so popular a man in New York—he was able to appeal to successful men, who heartily welcomed his coöperation on equal terms with themselves in their various enterprises. He also had watched me during my career, and realized the wisdom of a combination with me from his point of view; while I realized that a close coöperation—a supplementing of one another—would benefit us both, so we fell into each other’s arms. Grant and I then and there agreed to join forces. He agreed to take 1,000 shares for himself, 1,000 shares for Mr. Olcott, and within an hour telephoned me to note also Anthony N. Brady’s subscription for 1,000 shares. That afternoon when Southack and Ball came in and heard of the subscriptions, they each insisted upon the right to subscribe for 1,000 shares.

This disposed of one half of the stock. I wanted one half of the remaining 5,000 shares, but unfortunately for me, the others insisted that I should content myself with 1,000, and that the other 4,000 should be distributed amongst the rest of the directors, and amongst lawyers and real estate operators and brokers, whose interests would produce business for the company. There was a tremendous scramble for the stock, and it was impossible for us to satisfy the demand.

A few days later Grant introduced me to Olcott, who gave me quite a dissertation on how to run a trust company. He said that the most important thing was to have no men around who had any “yellow” in them and that the president must get the business and leave it to the other officers to execute it and carry out the details. He laid the greatest stress on the fact that the head of a company must disregard details entirely.

“He ought constantly to have his mind,” said Olcott, “on the larger matters, and should abstain from doing any work that can be done by any expert help that can be hired.”

On my part, I gave to Olcott a sketch of how I thought the company should be developed, explaining to him that the prejudice of the big trust companies and banks against real estate was not justified, and that the financial interests of New York had so far failed to recognize the increased stability of real estate, due to the enlarged population of the city and to the definite fixation of certain trades in certain neighbourhoods. I instanced the financial centre in Wall Street; the jewellery centre in Maiden Lane; the retail centres, and the definite northward development of Broadway. I also explained how many very substantial men had entered the real estate field, and how the general prosperity of the country had improved values in New York City.