Business Biographies: Shaken, Not Stirred ... With a Twist

by Stephen K. Troy

Overview

Learn life lessons from the experts—twenty-five business leaders who made their marks but did so with a bit of a twist.

In this series of profiles, author Stephen K. Troy takes a detailed look at people who walked down nontraditional paths to achieve success. Many of these leaders are no longer celebrated or remembered, but their achievements changed the course of business and continue to influence society.

You’ll learn about the unassuming billionaire who gave away his entire fortune during his lifetime to better the world. Not everyone was so generous; one scoundrel stole billions. Some are more obscure than others, and this text brings their accomplishments to light. Leaders profiled include Aaron Burr, Henry Ford, John Ringling, Robert Morris, Frank Woolworth, Forrest Mars Sr., Daniel Ludwig, Iva Kreuger and many more.

Whether you are a student, a business leader, or someone considering a career in business, you’ll be entertained, informed, and educated as you read Business Biographies: Shaken, Not Stirred … With a Twist.

Product Details

ISBN-13:	9781450283267
Publisher:	iUniverse, Incorporated
Publication date:	02/08/2011
Sold by:	Barnes & Noble
Format:	eBook
File size:	1 MB

Read an Excerpt

Business Biographies: Shaken, Not Stirred ... With a Twist

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By Stephen Troy

iUniverse, Inc.

Copyright © 2010 Stephen Troy
All right reserved.
ISBN: 978-1-4502-8325-0

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Chapter One

Banking on Water: Aaron Burr

When you think of business and finance, American Revolutionary War figures don't usually come to mind. Several, however, made such an impact on financial markets that their deeds still have an impact more than two hundred years later. One such figure was Aaron Burr.

Burr is one of the most famous—some may say infamous—characters in American history. Revolutionary War officer, adventurer, state senator, and vice president under Jefferson were just a few of the many roles he played. In addition, Burr has the distinction of being the only vice president to be tried for treason, although he was acquitted.

Ironically, Burr may best be remembered as the featured answer in one of the popular "Got Milk?" television commercials of the early 2000s. Remember the scene? A radio show announcer, offering a prize, telephones a contestant at his office to ask the question, "Who killed Alexander Hamilton in a famous duel?" With a mouthful of dry cookies and the famous dueling pistol on the wall above his head, the young man—who just happened to work and be seated in the Aaron Burr museum—couldn't say "Aaron Burr" clearly enough to be understood by the radio host. Thanks to that television advertisement, the general public knows more about the famous duel with Alexander Hamilton than Burr's other remarkable accomplishments. The duel was just the culmination and climax of a very public, personal, political, and business rivalry in the lives of two extraordinary founding fathers.

In addition to being on opposite sides in politics, Burr and Hamilton butted heads over almost every issue. Their bickering spilled over into their personal and business lives as well.

Hamilton was a Federalist, and Burr was a Democratic-Republican. Like today's political party members, politicians would use any means they could to embarrass or thwart an opponent. Hamilton's closeness to our first president gave him tremendous power to block the ambitions of any who would challenge his authority or derail his policies. Burr was no exception to his attacks. When Hamilton was chosen by President Washington to be the first secretary of the treasury, Hamilton gained additional national power. He delighted in using that power against Burr, who himself was gaining enormous national popularity. If Burr tried to build popular support for a position, Hamilton responded by publishing negative attacks about Burr and spreading salacious rumors about his personal life. Burr was right in thinking that Hamilton was conspiring to destroy him both personally and financially.

History has recorded volumes about the political wrangling following the American Revolution. Not much has been devoted to the early commerce of the new republic. Even in the 1700s, business and politics went hand in hand. Everyone wanted to profit from this new young and struggling country, including Burr and Hamilton.

When it came to business, Burr favored real-estate speculation while Hamilton, with his vast financial knowledge, preferred banking. Both were trained and made their primary living as lawyers.

Hamilton, through his very powerful connections, applied for and was granted an early charter to open a new bank to promote commerce and expand our young struggling nation. His newly organized bank, the Bank of New York, opened its first office in lower Manhattan just after the British left American soil. The bank provided Hamilton with both financial and political rewards. As secretary of the treasury, he helped establish the United States Mint and the Bank of the United States to serve the government's financial needs. He controlled the new single federal currency and became a thorn in Burr's side. The Bank of New York is still active today, making it the oldest bank in the America.

Real-estate speculation, Burr's area of interest, was a common investment with post-Revolution citizens. Though Burr was a highly successful lawyer and politician, his track record in real-estate investment was mediocre at best. Some investments you might even call downright disastrous. Nevertheless, he was always on the lookout for the investment that would provide him with the money and prestige he so craved.

Burr's lavish spending drove him to look for alternative methods for financing his lifestyle. He was convinced that real-estate investments would eventually provide him with financial security. To accomplish his goals, he needed money—and lots of it—to buy land. When the famous bank robber Willie Sutton was asked why he robbed banks, his retort was, "That's where the money is." Burr clearly recognized that as well. Burr was driven by the idea of creating a bank of his own.

When Hamilton was awarded his bank charter, the Bank of New York had a virtual monopoly on banking, which prevented any other national banks from being established. That didn't stop Burr from trying. Burr lobbied hard to break the monopoly. He secured a bank charter for his own national bank in New York, only to be denied again and again by a Congress that backed his more popular and well-connected rival.

Tired of failing at a frontal assault, Burr figured out a way to go around through the back door. He found a loophole of sorts that he could exploit to his advantage in eventually establishing a national bank. It wasn't exactly a bank, but it would definitely do for the time being in raising money.

New York City was in desperate need of a fresh water supply for the southern parts of the city. There were outbreaks of yellow fever and other diseases in and around the city. Officials attributed the outbreaks to a shortage of fresh water and a lack of sanitation for the southern part of the city. The known solution was to build a pipeline from the Bronx River in the north and send water through Manhattan to the more populous southern areas. Fresh water flowed abundantly in the Bronx River, and diverting it would greatly improve the health and conditions of the residents of lower Manhattan.

Unfortunately for those citizens, this particular public-works project had been held up for years by the city for lack of funds. Burr, being a state politician serving New York City, was keenly aware of the problems associated with getting the waterworks project moving forward. The city's lack of action provided Burr with a solution to both his and the city's problems: he would build a private pipeline.

In the waterworks project, Burr found his "Trojan horse," a way to get into banking without actually opening a bank. He set in motion the creation of the Manhattan Water Company. The Manhattan Company, as it was called, would supply fresh water to the citizens of New York City.

Private ownership of a utility was not allowed in colonial America. It would take an act of Congress to give Burr the right to build an aqueduct, divert the water in the Bronx River, and sell it to the citizens of New York. He needed the help of the same Congress that had turned him down when he applied for a bank charter. More importantly, he needed the support of Alexander Hamilton. Surprisingly, Hamilton signed on, and the two bitter rivals pushed through the legislation that created the Manhattan Company, headed by Burr.

Hamilton had two motives for promoting Burr's plan. First and foremost, it would help the city of New York. Second, it would be very profitable. Hamilton insisted on one third of the stock in the newly formed company for his services, to which Burr happily agreed. Hamilton wasn't aware that Burr was working behind the scenes to blunt Hamilton's influence in the company. Burr, as the founder of the Manhattan Company, was responsible for writing the charter for the new entity. Along with the standard operating rules, Burr included some very unusual provisions in the bylaws of the utility charter that would help him to one day attain his goal of establishing a bank to compete with the Bank of New York.

Burr, without Hamilton's knowledge, included provisions in the water-company charter that allowed Burr to invest surplus funds of the Manhattan Company as he saw fit. This meant that Burr's Manhattan Company could take deposits and excess cash and loan them to credit-worthy customers, allowing it to act as a de facto bank.

Another unusual decision by Burr was the pricing of the Manhattan Company stock. Burr priced each share at fifty dollars. That seems normal by today's standards, but it was several hundred dollars a share cheaper than most of the stock that was being offered by companies seeking investors. Because the stock was priced so low, more citizens could buy into the company, thereby diluting Hamilton's influence. Should Burr want to compete head-on with the Bank of New York, Hamilton would have to find too many small stockholders to agree with him to change the charter.

There was a third unusual entry in the bylaws that would play a significant role in business history almost 150 years after the death of both Burr and Hamilton.

By no means was Burr done lobbying Congress for a change in the bank-charter laws. With much perseverance, Burr finally did succeed in getting Congress to allow him to establish a fully chartered bank. Burr's new bank, christened the Bank of Manhattan, received its charter from the government in 1799. The Bank of Manhattan was to become one of the most successful banks in the nation. Unfortunately, Burr was not able to enjoy the success.

His new access to easy money proved to be his downfall. Because of the economic roller coaster the new nation experienced in those early days, Burr was caught up in failed real-estate projects and other bad business dealings. He was forced to flee the country to escape his creditors. He did eventually return to America, where he lived under an assumed name in order to avoid his creditors. He died a ruined man in Staten Island, New York, in 1836.

The Bank of Manhattan, on the other hand, outlived its founder by almost two hundred years. The bank operated independently under the name Bank of Manhattan until 1955, when it merged with the much larger Chase Bank. Although Chase Bank was the largest bank in the world, it was Burr's much smaller Bank of Manhattan that swallowed Chase.

As it turned out, Burr had placed one more trick up his sleeve to stop Hamilton from getting control of the water company. One of the many provisions that Burr wrote into the Manhattan Company's charter prevented the Bank of Manhattan from being taken over without the unanimous consent of the stockholders. So in order for the merger to take place, the Bank of Manhattan needed to take over Chase, rather than the other way around. The new entity was called the Chase Manhattan Bank and was controlled by Chase Bank's largest stockholder, the famous Rockefeller family.

A merger in 2000 that joined Chase Manhattan Bank with J. P. Morgan Bank brought about what is known today as JPMorgan Chase. At that time, "Manhattan" was dropped from the corporate name—but not from the new bank's history or identity. After all, who would want to throw away two hundred years of banking history? Instead of casting aside the past, JPMorgan Chase found a way to embrace its 1799 founding in a unique way: not in its name, but in its corporate logo.

If you are near a Chase Bank branch or have a Chase credit card in your wallet, pull it out and look at the corporate logo. To you, it might appear to be a plain octagon. To JPMorgan Chase, it's part of a rich corporate heritage, a two-hundred-year-old symbol of its founder's dream. You might see an octagon. Aaron Burr would know it as a cross-section of wooden water pipe.

Chapter Two

I'm from the Telephone Company, I'm Here To Help: Alexander Graham Bell

The telephone is one of the few inventions that actually changed the course of history. As with many great innovations, several people claimed to be the first and true creators of the device that sent voice over wires. The list of those who claimed to have invented the telephone is extensive, including such names as Thomas Edison, Elisha Gray, Innocenzo Manzetti, Johann Reis, and of course, Alexander Graham Bell.

As we know, the full credit has been given to Bell, since he is the one who filed the first patent. But did he actually invent the telephone? With so many people staking a claim to that accomplishment, it was only natural that one of these men would challenge Bell's patent.

The first challenge came from Elisha Gray. Gray was not only an early inventor of the telephone, but he was also the first to get to the patent office with an application. Gray's problem was that he didn't insist that the clerk immediately file the application the moment he arrived. Unfortunately for Gray, the application was in a basket at the patent office at the time Bell's lawyer arrived and had the clerk file his papers while he waited. Thus, Gray's earlier application was actually logged in later.

The invention of the telephone altered life as we know it, and a simple lack of urgency on Gray's part changed the fortunes of both men and their place in history. Bell went on to become a celebrated and very wealthy inventor. He went down in history for discovering the phone that changed the world.

It might be easy to say that Elisha Gray's mistake made him fade into the background a ruined man, but that is just not the case. Elisha Gray went on to file many more patents. His most famous was the 1888 patent for the telautograph, a machine that could transmit handwritten pages over the phone lines to be received by a machine at the other end. One hundred years later, Gray's machine was renamed the fax machine.

Bell's genius at inventing is undisputed. His skill and success in business, on the other hand, might be attributed to a great deal of luck. Not only was Bell awarded the patent for the telephone ahead of Gray's patent, which arrived at the patent office several hours before, but he was also the recipient of one of the most famous rejections in business history.

After winning his patent lawsuit with Gray, Bell wanted to get back to his laboratory to continue his experiments and solve problems through inventions. Bell was not interested in running a company, manufacturing and selling telephones. He was a researcher and an inventor who wanted to continue his work in the lab. With the patent dispute trial behind him, he offered his telephone patents to the Western Union Company. The asking price was $100,000, an amount that the president of Western Union, William Orton, found outrageous. He thought it much too much to pay for "nothing more than a toy."

Only two years later, William Orton would regret his words. He told a friend that if he could get his hands on the telephone patent for $25 million, it would be a bargain. By this time, Bell was a millionaire many times over from the royalties he was receiving from licensed manufacturers.

The royalties and sales of the telephone allowed Bell to get back into his laboratory and continue his quest for other great innovations. During that period, Bell invented, or co-invented, a slew of products for which he received patents. Some were for improvements to the telephone, while others were totally unrelated, including the hydrofoil boat, alternative fuels, a machine to detect icebergs, and a method for putting magnetic data on tape. His magnetic-data research would later lead to the creation of the tape recorder, floppy disks, and hard drives that ushered in the computer age. Bell is also credited with building the first working metal detector.

Bell's metal detector was the second of his inventions that changed the course of history. While the telephone changed how people communicated and made a big world smaller, the metal detector, or should we say its lack of a working metal detector, changed the political landscape of the United States in a very unusual way. Bell rushed the research and development of the metal detector not to win a race to the patent office, but to save a life.

Bell's inspiration came on July 2, 1881. He spent most of his time before bed reading and looking for areas of interest and problems that needed solutions. It was on one such occasion that he read on the front page of the newspaper that the president of the United States, James Garfield, had been shot by an assassin outside the Sixth Street train station in Washington, DC. The assassin, Charles Guiteau, angry that Garfield's administration would not appoint him to a civil-service job, shot Garfield as the president was on his way to deliver a speech at Williams College, Garfield's alma mater. It is speculated that Guiteau felt he would get better treatment if Garfield's successor, Chester A. Arthur, were president.

(Continues...)

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Excerpted from Business Biographies: Shaken, Not Stirred ... With a Twist by Stephen Troy Copyright © 2010 by Stephen Troy. Excerpted by permission of iUniverse, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Contents

1 Banking on Water:Aaron Burr....................1
2 I'm from the Telephone Company, I'm Here To Help: Alexander Graham Bell....................9
3 Fetch the Wagon, We Are Goin' Banking: A. P. Giannini....................14
4 Hey, That Was My Idea! Benjamin Eisenstadt....................21
5 Who Needs a Billion Dollars? Chuck Feeney....................27
6 Super Size Me! Daniel Ludwig....................33
7 A Fight to the Death Edwin Armstrong....................38
8 Boy, Can That Face Sell Forrest Mars Sr....................45
9 You're In, You're Out, You're In, You're Out, You're Out!: Harry Snyder....................50
10 So Much for Cars Henry Ford....................57
11 Up in Smoke and Mirrors: Ivar Kreuger....................62
12 Bottles You Say? Not Interested John Pemberton—Asa Candler—Ernest Woodruff....................73
13 What a Circus! John Ringling....................80
14 Special Delivery: Larry Hillblom....................86
15 You Have to Give Him Credit: Lewis Tappan....................91
16 Damn, Missed the Boat Again: Milton Hershey....................99
17 Maybe Walking on the Moon Was Worth It: Philo Farnsworth....................105
18 You Figure It Out: Powel Crosley Jr....................111
19 Who's Going to Be Responsible for This?: Robert Morris....................116
20 It's Electrifying!: Samuel Insull....................121
21 You Reap What You Sew: Isaac Merritt Singer....................129
22 Two Tons of What?: Thomas Adams....................135
23 Gentleman, Get Out of My Company!: William Durant....................139
24 Nickel and Dimed: Frank W. Woolworth....................145
25 Out in the Cold: Armand Hammer....................150