FOUR GENERATIONS OF MANAGEMENT: THE SIMPSON-REED STORY An Interview with William G. Reed by Elwood R. Maunder with Charles Buchwalter Edited by Robert E. Ficken Barbara D. Holman Pamela S. O'Neal Forest History Society, Santa Cruz, California 1977 TABLE OF CONTENTS INTRODUCTION BRIEF BIOGRAPHIES OF WILLIAM G. REED AND ELWOOD R. MAUNDER ..... xi INTERVIEW I Session 1, November 6, 1974, Seattle 1 Family history, Simpsons and Garrards; S. G. Simpson & Co. ' s early business years in Seattle area; build- ing of Port Blakely railroad; Simpson Logging Company incorporated, 1895; Alfred H. Anderson and Benjamin B. Healey purchase timberlands in Mason County; Sol G. Simpson's personality; his business interests; develop- ment of logging interests; timberland ownership; company labor; company store; taxation; early timber fires; sustained-yield planning; Port Blakely business records; Mark E. and Irene Reed trip to Alaska on Simpson busi- ness venture; Mark's early business endeavors; Sol's achievements in lumbering technology; interest in Rainier Pulp and Paper Company plant built in Shelton, 1920s; Henry McCleary interests, Reed Mill Company, Olympic Plywood Company, and integration; decision making then and now—Simpson, Anderson, Reeds, Govey, Kreienbaum, Henry, Hillier, Wilson; William G. Reed and committee or board rule; Transamerica venture; Sol Simpson and Port Blakely timber claims; railroad ship- ping; Puget Sound Log Scaling and Grading Bureau. Session 2, November 6, 1974 39 World War I, Industrial Workers of the World, and Mark E. Reed; rough and tumble law and order; Washington Log Brokerage Association; Loyal Legion of Loggers and Lumbermen; Mark Reed's management of Simpson company; Geo. S. Long; publicity; William G. Reed and company growth; Puget Sound Associated Mills, sales agent for sawmills on Puget Sound; political contributions; company ethics; safety consciousness; company mergers and industry consolidation; wooden shingle industry; timber yield and taxation during iii IV Mark Reed's era; land classification; public rela- tions and Dave James; tariffs; Washington Forest Fire Protective Association; trade with Japanese; Jones Act and Canadian operations; foreign markets; east coast market; Mark Reed, Shelton leader; oyster business and mill pollution; Simpson Reed family investments. INTERVIEW II Session 1, August 26, 1975, Graysmarsh 77 Organization of family and business affairs upon Mark Reed's death; company board of directors; Kreienbaum's administration; Bill Reed manages father's estate; Depression years; Frank Reed manages Simpson; organization of Malahat Logging Company; efforts at industry consolidation; Bill Reed and company expansion; tree selection theory; disposal of logged-off land; forest management and George L. Drake; management and labor relations, 1920s and 1930s; sustained-yield contract and community stability. Session 2, August 26, 1975 99 History of Graysmarsh and its owners; changes in company orientation after Mark Reed's death; Kreienbaum era; company integration—redwood opera- tions, pulp and paper industry, Chilean timber. Session 3, August 26, 1975 124 BIMA operations in Chile; Saskatchewan operations; product utilization and company research; family interest in business; company stockholders; philan- thropies; family life and friends; financial struc- ture of business and company expansion; taxation issues; Bill Reed's board memberships. Session 4, August 27, 1975 154 Rayonier escapade; paper business; Canadian industry and Jones Act; oyster business; banking interests; Simpson Employees Retirement Trust; company stock; Philanthropic interests--Simpson Reed Foundation. APPENDIX: "Acquisition of M&M Woodworking Company and Northern Redwood Lumber Company," by William G. Reed 172 INDEX .............. ..... 176 INTRODUCTION SERIOUS STUDENTS OF forest history can reel off the names of many families which have played important roles in the history of the American forest products industries— Weyerhaeuser, Hines, Winton, Camp, Kurth, White, Dulany, Musser, Jewett, Zellerbach, Pope, Talbot, Laird, Murphy, Johnson, Hardtner, Clark, Gilchrist, Collins, Davis, McGowin, Griggs—all of these and a good many more have produced more than one generation of successful lumbermen or papermakers. Any recounting would be deficient if it did not include the Simpsons and Reeds of Seattle, Washing- ton. Their contributions to the economic and political history of their native state have been of signal importance and it has been my privilege and pleasure to bring those contributions to wider public recognition in two earlier books of oral history published by the Forest History Society, and now in a third. The Pacific Northwest has for nearly a century played a center-stage role in meeting the world's solid wood needs. Simpson-Reed interests have been in the forefront of that colorful era of forest history. Their entrance came in 1888 when Sol G. Simpson took his knowledge of road-building into the towering forests of Puget Sound and applied it to logging. His enterprise flourished and in due course became established as the Simpson Logging Company, later to become the world-famous Simpson Timber Company. This volume is the outgrowth of the two earlier works of oral history which the Forest History Society issued in 1972 and 1975.* These works were composed from interviews I made with long-term Simpson employees and executives, Chris H. Kreienbaum and George L. Drake. Both men urged taping also the memoirs of William G. Reed and that work was begun in 1974 with special funding provided by the Oral History Fund of the Forest History Society. *C. H. Kreienbaum, The Development of a Sustained-Yield Indus try: The Simpson-Reed Lumber Interests in the Padfic Northwest, 1920s to 1960s; and George L. Drake, A Forester's Log: Fifty Years in the Pacific Northwest, interviews con- ducted by Elwood R. Maunder (Santa Cruz, California; Forest History Society, 1972 and 1975, respectively,) v VI "I would like to have you drain out of me everything you want and get it down on tape so 1 won't have to worry about whether I get run over," Reed told me at the start of our first interview. The remark was typical of an openness in answering questions drawn from preliminary research I had done in family and business records. More questions were posed in a follow-up interview as the result of fur- ther research by my associates, Dr. Robert E. Ficken and Mr. Charles Buchwalter, both recent graduates of the University of Washington. Reed's recollections of times past are refreshingly peppered with confession of errors made along the way and he is particularly candid in self-criticism. Yet the reader will find plenty of evidence of the pride felt by this man in the growth and accomplishments of the family and the company which has developed an international mar- ket and broadly expanded into the ever-growing list of forest products manufacturers. Sol G. Simpson and Mark E. Reed were legendary figures in their times. Simpson was perhaps the most successful commercial logger operating in the Puget Sound area during the last two decades of the nineteenth century and until his death in 1906. Until as late as 1925, the Simpson Logging Company had no peer in the field of Pacific Northwest logging. Mark Reed proved an able successor to Sol Simpson, one who continued to build the Simpson Logging Company and the Simpson Timber Company into positions of important economic power. Mark Reed also achieved statewide and national fame as the leader of the Republican party of Washington. He served a number of terms in the state legislature in Olympia and rose to the position of Speaker of the House, He was one of the primary figures in the growth and development of the town of Shelton, Washington. In his book, Green commonwealth, Stewart Holbrook wrote extensively the earlier history of Simpson and some part of that era is touched upon in this volume.* But the main thrust of Bill Reed's oral history is a tracing of events since the 1920s and more particularly from the post- Depression years down to the recent past. It was following the untimely death of Mark E. Reed in 1933 that his two sons, Frank and Bill, took up the management of the company. Another brother, Sol, had met a tragic shooting death earlier at the hands of a deranged logger. Tragedy was to stalk the family again and when fire took the lives of Frank Reed, his wife and their children, Bill Reed became sole head of the business in 1942. *Stewart Holbrook, Green Commonwealth, A Narrative of the Past and a Look at the Future of One Forest Products Community (Seattle, Washington: Dogwood Press, 1945). Vll Here it would be appropriate to provide an explanation of the intricate web that wends its way through the Simpson- Reed business interests. The first Simpson forest products operation was a sole proprietorship organized by Sol Simpson in 1888. It was succeeded by Simpson Logging Company which was incorporated in 1895 and took over all operations of the proprietorship. The corporation still exists, but in 1956 its name was changed to Simpson Timber Company. In 1938 Simpson Reed & Co. was formed as a partnership to own the Simpson and Reed family assets, in- cluding control of Simpson Logging Company. The partner- ship succeeded a personal holding company called Simpson Investment Company, which was incorporated in 1906 and dissolved in 1940; and in 1975 Simpson Reed & Co.'s stock in Simpson Timber Company was transferred to a new personal holding company. Changes in the income tax laws brought about these changes from holding company to partnership and back to holding company. THE FIRST INTERVIEW on November 6, 1974 was conducted in Reed's private office atop the Exchange Building in downtown Seattle. It was a clear day and the view of Puget Sound and the city was unforgettable. The office was smartly but modestly furnished and contained a large conference table. On the walls were historic pictures relating to Simpson and lumbering history.