From Farm Boy to Financier: An autobiography of Frank Vanderlip with a chapter on the story of the secret meeting on Jekyll Island that led to the creation of The Federal Reserve Bank

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FROM FARM BOY

TO

FINANCIER

By

FRANK A. VANDERLIP in collaboration with

...

BOYDEN SPARKES

D. APPLETON-CENTURY COMPANY INCORPORATED

NEW YORK

I

935

LONDON

COPYRIGHT, '935, BY FRANK A. VANDERLIP All rights reserved. This book, or parts thereof, must not be reproduced in any form without permission of the publisher.

Copyright,

'934, '935, by the

Curtis

Publishin/( Company

l'RINTED IN THE UNITED STATES

OF

AMERICA

CONTENTS CHAPTER

PAGE

I. II

.

ON THE FARM

14

FACTORY OVERALLS

III.

ESCAPE FROM OVERALLS

23

I V.

WHITE-COLLAR WORKER

31

V. \rANDERLIP, THE YOUNG REPORTER VI. 'vII. VIII.

FINANCIAL EDITOR

51

Ex-NEWSPAPERMAN

62

A JUNIOR CABINET OFFICER

66

IX. THE SPANISH-AMERICAN \VAR X. AN INVITATION FROM WALL STRUI!T XI. "STILLMAN'S MONEY TRAP" XII. XIII.

XVI

.

II O

THE RANK'S YOUNGEST VICE-PRESIDENT

121 131

MEN BEHIND THE BANK

141

A FOREIGN INVESTMENT

156

.

161

XVII. 1907 XVIII.

THE NEW PRESIDENT OF THE CITY BANK .

XIX. THE ELDER MORGAN AS AN ALLY . XX. AN ADVENTuRE WITH E. H. HARRIMAN XXI.

XII .

79

93 99

THE MASTER OF THE CITY BANK .

XIV. TAKING ROOT XV.

38

178 190 197

A CONCLAVE ON JEKYL ISLAND

210

MILLIONAIRE

220 iii

iv

CONTENTS

CHAPTER

PAGE

XXIII.

RECRUITING FOR THE CITY BANK .

228

XXIV.

WALL STREET ADJUSTS ITS EL F TO WAR

233

FRESH FIELDS TO CULTIVATE

249

NEW PLANS FOR

259

XXV. XXVI. XXVII. XXVIII. XXIX. XXx. INDEX

TIlE

llAN"K .

TROUBLE WITH A ROCKEFELLER

272

THE BURDEN

A BANKER

281

MAN

291

OF

DOLLAR-A-YEAR

I LEAVE THE nANK

298

308

ILLUSTRATIONS frontispiece

Frank A. Vanderlip

FACING PAGE

l\ 1 r. Vanderlip's father

8

Cl-I r. Vanderlip's mother and father

8

IllIme of Harmon Vanderlip, Frank A. Vanderlip's grandfather, near Madison, Ohio

16

\bmily group on Harmon Vanderlip's farm, taken by

Frank"' A. Vanderlip about the time of his trip to President Garfield's funeral F runk

A Vanderlip as a reporter on the Chicago Tribune

('harIes T. Yerkes, Chicago traction magnate .

20 54 54

I< ichard Green, chief messenger in the Treasury Department

68

Ill". P. N. Barnesby as a young man I,yrnan

68

J. Gage, Secretary of the Treasury, and his three O. L.

Assistant Secretaries. Left to right: General

Spaulding, William B. Howell, Frank A. Vander76

lip, and Mr. Gage

I yman J. Gage, center, and Mr. Vanderlip, second from right, on board a revenue-cutter in 1897

84

\Vllr-hond activity in the Treasury Department during the Spanish-American ""Var i,ll'Il('S Stillman

as

President of the National City Bank

84 II2

II. Harriman

144

William Rockefeller

144 150

J I. C. Frick v

ILLUSTRATIONS

ITl

FACING PAGE

150

Jacob Schiff F rank A. Vanderlip after he became President of the N a-

tional City Bank

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180

Frank A. Vanderlip soon after he went into the Nat iona l City Bank

180

J. P. Morgan

194

Marvin Hughitt and Julius Kruttsdll1itt

204

Henry P. Davison

246

Andrew Carnegie

246

Mr. and Mrs. Frank A. Vallderlip

294

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CHAPTER I ON THE FARM IN

THE

garden of my home, Beechwood, at Scar­

borough, there is a bronze statue by Rudulph Evans of a collie dog. The model, a beautiful creature, was a gift graciously made long ago by the elder J. P. Morgan who bred these animals as

a

hobby at kennels

maintained at his country home on the other, the western, side of the Hudson River. The dog was per­ fectly made; and a so richly talented sculptor as my friend Evans certainly fixed in metal the accurate shape of this vanished companion of my eldest son. Yet the statue, which has the magic property of exciting an almost ancient recollection of mine, comes subtly into conflict with the past by putting my memory slightly out of drawing; that is until I close my eyes and the vision comes into focus. Then I can

see

again, satisfy­

ingly, myself and Snap on our way to the pasture to bring up the cows. I was a farm boy and going for the cows was one of my earliest duties; to go along was all I was required to do for the dog did the work, showing admirable intelligence at his job, rounding up the cows and nip­ ping the heels of any that were lazy. Tn our part of the world two miles from Oswego, Illinois, Snap was in­ dexed as a shepherd dog, but he was really a collie, although not, like Mr. Morgan's gift, a show dog.

2

FROM FARM BOY TO FINANCIER

Snap was black with a white collar, a white stripe down his back and at the end of his tail a plume of white. It was an exquisite sensation on a Summer morning to feel with my bare feet the smooth, cool cow path in the prairie sad, to inhale the fragrance and to see the i'lowers, the yellow blossoms with black centers on tall stems that I knew as resinweeds; the pink ones which were called prairie pointers and now have cultivated descendants called cyclamen in many carefully tended gardens; but they were wild Bowers then and all the more charming for that reason. On

a

frosty day when

my feet still were bare I wCiulJ scam per along that path to take a warm stand on a piece of pasture where a cow had been lying; a place surrendered to me at Snap's command. I deserve no patent; on every s q uare mile of the prairies, I suppose, some olher boy was doing that it; yet I was aston­

and possibly they are still dni II

ished years afterward when Leslie M. Shaw while he was secretary of the treasury b r ought such a recol­ lection out of his memories uf his boyhood on a farm. Snap found plenty to do on our farm, where he was rated by my father as half

a

man. T.f a pig got out

of the pen he would round it up; a young pig he would bowl over and hold to earth witl) his open mouth, never hurting it, although from its squealing you mi ght sup­ pose it was being slaughtered. If

a

hicken was wanted

for the dinner-table all that was necessary was to point to a selection in the flock pecking about the barnyard and Snap would get it; but he would never bite it, just hold it on the ground with his open mouth until you

ON THE FARM ral1lc

3

and took it. I remember all those things of Snap,

.llld yet just as vividly I remember when my father 011

a

cold day in our kitchen took from his overcoat

P()cket the black-and-white puppy that became the un­ Jcrstanding dog I tell about. He would follow my

ather behind the walking plough, before we got a riding plough, all day long and any snake he saw was killed on sight. He would grab and bite and shake them until they stopped writhing. Tha t was his method with the ordinary green snakes; but if he came upon a big one or a poisonous snake, he would bark and circle out of .reach until my father or the hired man could come and kill it. I had a very perfect companionship with my father and mother. Physically I resembled my mother; her people had come from a rather distinguished line of pioneers. They came out of Salem,

were

settled for a

time at South Lee, Massachusetts, and at Cleveland. Moses Hoyt, my mother's grandfather, had a powder factory. In Aurora other relatives had a machine-shop and my mother was, so to speak, the daughter of the wagon factory there. M y father had been born in Ohio of pioneer learned the

farmer

blacksmith

stock,

t h e n drifted West, trade and became superin­

tendent of the wagon works of the '7I,T oodworth family; when he married Charlotte Woodworth, my mother, she was only sixteen. Because of poor health he had been rejected from service in the Union Army. He had more education than the average farmer. I know as I got into algebra he was able to help me with it and I always looked up to him as being well informed. He

FROM FARM BOY TO FINANCIER

4

wore a dark beard so long it seemed to accentuate any movement of his head. I would turn the handle of the grindstone for him when he was sharpening the mow­ ing-machine sickle. That blade

was

four feet long and

notched with teeth so that it required a lot of grind­ ing. Sometimes, bent over, I would become so en­ thralled by this drudgery that

even

when he stopped

to examine the edge of the blade I would keep on turn­ ing. Then he would say: "Arc you t ry i ng to get a few turns ahead?" He had a grctlt deal of that capacity for forming sound rules of c()nduct

w h ic h we

mon sense. For example, there wa

tIle

a

call com­

d v i ce he gave

when I was sent into that entrancing place, our cellar, a store-house of food, with bins of app l es, squash, pumpkins; with cider barrel , anJ rows of hang,ing sides of pork and ham; mother would sometimes cau­ t ion me to select apples witll had spots so that they would not be left to contall1in;t,te the sound ones; father would say: "If YOll do that, you will be eating bad apples the rest of your life: Pick out the best ones." One of the first things rny father did on the farm was to construct a blacksmith shnp. He was... such an ingenious mechanic that I helicvcd there was nothing beyond his powers. I recall now w ith what admiration I watched him build a tWO-SCilt slc.:igh mounted on light runners made of oak planks

cut IHlt

in

a

graceful pat­

tern and bound on the bottom with iron. \Vhen the woodwork was finished and naked in its newness I helped to paint it, but it was my father who

w i th

sure

hand and a finer brush put the fa ncy stripe of blood

ON THE FARM

5

carmine along the edges of its glossy panels. When we rode in it on winter days the bottom would be deep in straw and buffalo robes; to cover our laps on special occasions there was a souvenir of my father's courting days, a fine robe of white fox bordered with long, thick tails. That white fox robe was what kept me warm and snug in my bed at the top of the house on arcticly cold nights. My father built an ice-house and then, acting on advice in the A 11lerican A gricul­ turist} we packed the ice in buckwheat straw, which proved the editor wrong by heating so that all our supply of ice melted; we should have used sawdust or sha vings. He built the milk-house, too;

a

half-subter­

ranean structure with masonry waUs two feet thick of carefully mortised roundheads, which was our word for the glacial boulders that were strewn about the farm when we first came. In that first year my father, planting corn, cut the raw prairie sod with a stroke of his ax, and then dropped into tha t earth-wound a seed. He built the cow-barn; a grea t shelter that held fifty head. It was almost cathedral-like in its vastness to me then. From the wide central alley I could look straight up to the beam which was the riJge pole; on either side in the lofts the hay

was

stored. The cows

in two long rows confronted each other. Each through a

corridor that followed the outer wall entered her stall

to be secured within stanchions made of two-by-six boards held by a bolt at the bottom and fastened across the cow's neck by a button of wood. The edges of the boards were rounded and the inner surfaces were as glossy as varnish because of the polishing re­

FROl\1 FARM BOY TO FINANCIER

6

ceived from the movements in these stocks of the cows' necks. We milked thirty to forty cows; they were reddish­ brown or cream and white, and if it was not a blooded herd, at least there was a queen vvhose chief preroga­ tive of which we were awa re was

to

go first into the

barn. This I saw one ti me: Two other cows impatiently entered ahead of her. She waited

si d e , the other

ou t

t(lJlding behind her.

cows like outraged court .ladies

There was no sound apparellt to rny cars but presently the two rude cows emerged in

ki nd of f ri gh t and as

:1

they went wide of her she elltered, full of

m ilk

and

silent indignation. To keep the rats and mice under control in the cow-barn a cat

wa

domiciled there and

he rated for his work a kind of Illilk

t;tX;

but I would

never give it to him in a saucer. lie had learned that no amount of mewing wOl/ld g-aill his breakfast, but that if he sat up, held his forepaws oH the floor and opened his mouth I wou ld squirt milk into it.

A few years later, I was lI1:uk, one summer, the herd boy, cook and tutor

c)

r

t hi

rty -:;ix calves; They

had to be taught to drink. Tht" W:I Y YOll did that was to cup milk in your hand irlllll a pail to the calf's mouth, gradually overcoming his inclination to put his head up for milk; but ev en wirell olle was induced to lower his head into a pail a cIIJltrar y impulse to bunt would frequently result in the upset of a pail. The pails contained a fluid that

was

Illadc of milk and hay

tea, an infusion of hay boiled in kettles suspended over bonfires in the yard. Each cal f had a name that was entered on a ruled page of a patent medicine almanac

ON THE FARM

7

.111

Warburg,

291

Palll,

146,

180,

213,

214, 215, 216, 217, 181

Street,

11r8. Julian,

Strong,

127,

222

Benjamin, IF, 181, 179,

\Vebster,

Edwin

F., 267, 268

Webster, II. T., 102 Club,

180, 213, 214, 215, 216, 217, 218,

Whitechapcl

227

Whitson, G. S., 160

59

\Viggin, Albert H., 1 32, 171, 235, 236, 268

Taft,

Howard, 184, 218

Talbert,

Joseph,

229

Thomas, Augustus, 91, 129

\Vilkie,

John, 38,

39,

78,

91

Williams, John Skelton, lIl, 238, 240, 242

INDEX

312 Wilson,

Woodrow, 8,

207,

208,

212, 218, 224, 225, 226, 227, 244, 301

Wolff, Abrah Woodward,

a , m

145

William,

235,

236,

240

Wilson, Mrs. Woodrow, 138 Winthrop, Beekman, 268 Wister, Owen, 129

Yerkes, Charles T., 54, 55, 56

Witt, Sergius de, 123

Young, Arthur,

II

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