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Vanderlip No Pic

Vanderlip No Pic

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Published by Hal Shurtleff

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Published by: Hal Shurtleff on Dec 11, 2012
Copyright:Attribution Non-commercial

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06/18/2014

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FROM FARMBOY TOFINACIERSTORIES OF RAILROAD MOGULS (Saturday Evening Post Feb. 9, 1935)By Frank A. Vanderlip and Boyden SparkesBecause I was a director of many railroads, I travel thousands of miles everyyear on trips of inspection. Consequently, I came to know well and to admiremany of the men who were operating the properties controlled by such giants asHarriman and Hawley. Harriman had been a broker on the New York StockExchange before he began to concern himself with railroads and Hawley
well,Hawley was a mouse-faced, taciturn bachelor who remained to the end of his lifesomething of a mystery. To me, the biggest mystery of all was the fact that with afortune of many millions he died intestate. These great capitalists had as theirlieutenants practical railroad men. Naturally, because of the City Bank
s relationswith Harriman, I was in especially close touch with his roads.Out of a host of men important in Harriman's service who clamor forrecognition, I find myself fixing my mind on Epes Randolph. Mr. Randolph was agrand man, one who was particularly lovable. I am sure you might find a thousandmen who would be as fully aware as I of his endearing qualities; but there wasmuch more to him. After developing tuberculosis, he had moved to Arizona inorder to stay alive. Out there, despite his affliction, he went ahead as a forcefulperson. It was he who built the Southern Pacific Railway of Mexico against abackground and social structure almost medieval. It was a heroic work.Another who greatly helped to give substance
to Harriman’s
visions was JuliusKruttschnitt. Harriman was rich in vision, in imagination; there was in himsomething of the quality which a poet brings to his work. But Kruttschnitt hadabsolutely no imagination. His implements were facts; he was a living index of allrailroad facts.
 
Kruttschnitt himself told me a story one time that illustrates his charactersomewhat. From a quite inconsequential beginning in railroad work, he had risento the post of division superintendent on a railroad that crossed Kansas. In duecourse the president of the railroad was reported as ready to make an inspectiontrip over the line. Young Kruttschnitt determined to be letter perfect in hisknowledge of his own division. He boned up on every possible statistic until hewas prepared to report on each item of physical property for which he wasresponsible. At last, early one frosty morning, the special train arrived at thestation where he waited. The president, from his private car, stepped down to theplatform to young Kruttschnitt propounded a dismaying question; it was the onlyone he was not prepared to answer.
"What”, asked the
president "is the temperature?"Mr. & Mrs. William Rockefeller Kruttschnitt, when I met him, had become aruddy-faced man of great bulk and slow movements. He had become thecatechist of a host of divisional superintendents. Kruttschnitt was the one who
kept Harriman’s railroads in tune. He was not a man to let enthusiasm run away
with his judgment, and that was something that made him the perfectcomplement of E. H. Harriman.Harriman had the philosophy and the methods of a Mesopotamian monarch. Hewas not easy on his subordinates. He did as he pleased, ruthlessly seizing everyadvantage that he saw, regardless of the rules that govern ordinary men. Irecollect a time when Robert Scott Lovett was just about heartbroken by a thingthat Harriman did. Judge Lovett had learned about a certain matter in the strictestconfidence. It was important to his honor that that confidence should not beviolated, particularly from any quarter where violation of it would be harmful.Judge Lovett, who was general counsel of the Harriman roads, also felt obliged totell Mr. Harriman what he knew. In doing so he impressed upon him theconfidential character of what he had told him. Mr. Harriman immediately madeuse of the information.
 
 
“I don’t see how you could have done such a thing to me” Judge Lovett chided
Harriman
in his bewilderment. “I unde
rstand these things so much better than
you do” retorted Harriman, in a tone such as he might have used to a small boy.
 Well, I was not willing to let Mr. Harriman be the judge of right and wrong fromme. There were times during his life, when I was sitting on the boards of hisroads, where I opposed underwriting fees because I felt they were too high. As adirector I believed my obligation of trusteeship ran to the stockholders, and not toMr. Harriman, nor the City Bank. I have in mind recollections of occasions when itwas pointed out to me, in a hurt tone, that the City Bank was sharing in thoseunderwriting profits that I thought were too fat. I hope I do not sound mealy-mouthed now, because, actually, I am trying to throw light upon something thatwas built into my character. Words that were spoken solemnly to me through thebearded lips of my father, when I was small, seem to have filled little reservoirs of emotion that have controlled many of my decisions.
When Directors Don’t Direct
 
Now, it should be said that when a company is run by a strong, dominantexecutive, his board of directors usually is glad to vote for anything he wishes.Quite often, I suspect, directors have voted without troubling themselves toinquire as to the purpose behind some move they authorized. Indeed, I recollectan illuminating story Mr. Stillman once told me concerning the board of the NewYork Central, under the autocratic direction of Commodore Vanderbilt.There had been a leak of some information to the public, and Mr. Vanderbiltwas greatly irked by it. It was information that never had reached the board. Onedirector suggested, with something of a stutter, that the best way to stop furtherleakage was to elect the culprit to a place on the board; then he would not knowanything worth leaking. Well, Harriman did not always take his directors into hisconfidence either.

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