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their worth and something unforeseen Insull himself knew how much he'd have Such a lecture. of course. was wasted "Tveter, after explaining what had occurs, that optimistic appraisal backfires. co account for, and he and all his holdings on Henry. He might not ha\'e expressed happened, added, That is the end of my When those auditors reported to First collapsed." himself in such formal terms. but his own job.' 'Not at all, Tveter,' I said. 'I have your National that we were in good shape, Henry's association with Hugo philosophy of business dealings was. point promise that you would stay for a full two that saved us." Anderson turned out to be a hugely signifi­ for point, just the same. vears. Go back and continue with your ~-esponsibilities as if the incident had never "Insull had piled Yet behind the scenes, Henry's cant one: the most essential of all his occurred, and I assure you, you will never equities upon equities, company was still being threatened. wide-ranging business relationships, second Investors of the Consumer Company only, perhaps, to that with Conrad Hilton hear of it again from Mr. Crown.' When securities upon To help lift Material Sen-ice back were working hard to gain Anderson's following World War II. Both men, while Tveter finally left [Material Service] after securities," Colonel to a steady financial t<.)oting. Anderson confidence, trying ( as always) to discredit very different, shared fundamental princi­ two years, Crown not only tried to per­ Crown explained. recommended a man named Martin Material Service and keep the First ples. Anderson's training at the First suade him to remain, but also sought my "He'd issue preferred Tveter to serve f<.)r two yea,·s as comptrol­ National Bank from backing it. "But National Bank had imbued him with a influence.... to try to get him to return stock and then a ler. Tveter had worked the same job for these efforts boomeranged," Anderson strong sense of ethics. Honesty was better at a very substantial salary." second preferred stock Chicago's 1933 A Century of Progress remembered. "I became more determined than gain, he was taught. "It is better to As Anderson's regard for Henry and then a third world's fair, which, held as it was in the to help Crown save his company." be the best bank, rather than the largest increased, so too did his financial com­ preferred stock." teeth of the Depression. had gi\'en Tveter It was the Consumer Company's own bank." After two years of retaining Henry's mitment. "I called in Crown's largest ample chance to prove his mettle. soundness which was falling into question, Foreman Bank loans, Anderson decided competitors," Anderson wrote, "and told As he began his new assignment, mostly because, in the wake of the stock to transfer the debt, so that the notes chem that I was giving him a line of credit Tveter learned about the informal payment crash, Insull's financial empire lay in ruins. became those of the First National Bank sufficient for all of his company's needs, schedules afforded many contractors "lnsull had piled equities upon equities, of Chicago. It was, Henry knew, a major and that it was time for everyone to drop J:' Material Service supplied. Far tM informal. securities upon securities," Colonel Crown gesture of good faith; but along with it the 'dog eat dog' attitude that was ruining r-' in the new comptroller's eyes. He contacted ) explained. "He'd issue preferred stock and came a stern warnmg: the industry.'' Anderson suggested the one of MSC:'s longtime customers, suggest­ then a second preferred stock and then a "This is also a time we should come owners of the three largest material supply ing firmly that he bring his account up third preferred stock. When things were to a complete understanding of what we companies meet, to try to resolve their dif­ , to date. The customer complained to going well, that was fine. He could pay the demand of each other," Anderson admon­ frrences. They did so one week later at the Henry, who in turn confronted Tveter carrying charges on these junior securities. ished. "I am not trying to run a Sunday LaSalle Hotel. with Anderson himself with outrage. He'd built his business based He created a vast pyramid of nonworking School, but we must be clear as to what refereeing. After many hours of hearing on trust, not on rigid accounting. and trusts and holding companies, then mass­ we consider a lie. It doesn't matter whether the men air their gripes, Anderson con­ that approach wasn't going to change. marketed stocks in those firms while it's a white or a black lie. I might ask a cluded that the problem was simple. Not for Tveter, or the bank. or anyone using the proceeds to secure his control question which you could answer frankly. There was not enough business to support else, for that matter! of other companies. but you know in your own mind I have combined operating costs. Why not, "[Tveter's] reaction." Anderson "But when things started going badly," not received the information I was seeking. during chis economic crisis, agree to a remembered, "was something Mr. ( :rown the Colonel continued, "when maturities Under those circumstances I must have division of all monthly sales? The company had never experienced. ·hTtcr \'cry quietly on all these securities came together so more than a yes or no. I don't believe the closest to a customer would receive his told him never to enter his office without tangled, there was a question whether Mr. day will come when you would decei\'e me. business, therebv reducing the price ascertaining if he wcTT free to sec him bur you will never have a second chance. of transportation. and then, picking up his hat. ldt to should you try it." report to me. IIISIIY < llll\V" He pointed out that thanks to their partic­ "I told him I was sure that if I hadn't boats would not be seen. I flew in an Army of course, is not to be interpreted as any reflection ipation in the war effort, Caterpillar and done it some ) , I I • - < nL c se wou d have some- plane piloted by a major general and we Allis-Chambers machines be in use 011 Century Steel, but far personal reasons purchases would where along ti,, 1· I t . ,1 ~ l Inc, on \" OCC1USC It maL1C took a dozen aerial photographs. After all over the world. The exposure to new are not to be made from there as long as I am in sense." Th O f-fi · c ICcr, however, no doubt developing the pictures we had people in this office. markets would be enormous; after the believed otherwise_ the offices come in and we'd ask them to "That last bite of war was over the companies would be The "personal reasons?" Colonel (±1 compare photographs of the rubber ships the apple was the flooded with new orders. For this reason, "That was a terrible and planes with the real rhino. Thev Crown owned stock in Century Steel. hardest to swallow," said the Colonel, Caterpil1ar should not - Id ' b , reminder to all of us cou n t tell one from the other." Bomber the Colonel remem­ only charge regular prices, they should give In addition to his work t<.1r the US. that the war wasn't Government c~ I I c~ · pilots, it turned out, were equally bered, (?Jut in the their government the 20 percent discount, • .o one .rown was rcspons1- over, that Japan still blc for F--irovid 1' · I · , perplexed. The Army and Navy used the end, the company fair reward for the bonanza they were ng n1atcna to A111cnca s In late 1944, the war in both theaters was had the capacity to allies includin I f.J · h · h Targets as decoys throughout World War leaders agreed." certain to reap. ' g t 1c ,ussian Ann\', w 1c , entering its final stage. In Europe, after hurt us." II, distracting the enemy from real assaults, "That last bite of the apple was the to his dismav, • r CCCJVCLI· J Its· supp 1JCS. ' 1.oc1ore £ suffering great losses in the Battle of the and getting them to waste valuable hardest to swallow," the Colonel remem­ any allocation was made to the American Bulge, America and its allies regrouped, weapons. bered, "but in the end, the company militarv, - "And , o f course, Luc:l to t h at moving inexorably into German territory. leaders agreed. They were decent men, priority for the shipments to Russia, some While Colonel Crown's industry In January of 1945, Franklin Roosevelt was knowledge and contacts helped him get quite willing to help their country in any of our own 111 1·1· Itary rcL1u1rc1ncnts- were inaugurated for his fourth term as presi­ better deals from manufacturers and way they could, but since nobody had ever reduced," the Colonel said. "But I had dent, then died shortly afterwards at specific orders that I followed rc<Tardlcss suppliers, he was careful not to let his own bothered to ask them for the discount, co . - - Warm Springs, Georgia, just.a month they hadn't offered it themselves." of m y own i:rce 1·mgs. I presume thee commit- mparncs gam from such arrangements. before Germany officially surrendered. st As a result of those meetings Colonel ment was made by our leaders, and all we The Colonel di ributed an office directive "We celebrated the surrender," cautioning buvcrs Il')t to - d d - Crown initiated, the Caterpillar Tractor could do was follow their instructions." 1 - , sen a vert1se- Colonel Crown remembered, "but less ments or similar- notices to Material Company refunded almost $1 million Also falling undc1· Colonel Crown's than one week later a Japanese kamikaze Servic~.
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