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SEPARATION
Somehow, I entered into many of my biggest deals over the years
in May. The cycle seemed as regular as the seasons: another year,
another deal. My colleagues insisted I'd purposely announce an
acquisition by Memorial Day simply to wreck their summer vacation
plans and demand that we roll up our sleeves with yet another big
merger. Looking back on my very first deal, though, I barely could
have imagined possessing that sort of sway over other people's lives.
For four years, my friend Arthur Carter and I dreamed of starting
our own company. Arthur was a fledgling investment banker at Lehman
Brothers while I had made my way from Bear Stearns to Burnham &
Company as a young stockbroker. Commuting into Manhattan each
morning to our respective jobs, we talked incessantly of pooling our
resources and opening our own business. It was the late 1950s; I was in
my mid-twenties; and the Space Age was upon us. American industry
was benefiting from an explosion of new technologies, and prosperity
was in the air. The promise of a new decade was at hand, and the stock
market was surging. We had a limited perspective on the securities business,
but we were young, optimistic, and infused with self-confidence.
As we imagined our new business, we looked to Allen & Company,
the prestigious merchant bank. Charles Allen had made a fortune
investing in start-up companies and profiting as the companies in which
his firm had ownership stakes sold out to the public. We were drawn to
that sort of enterprise but knew we didn't want to stop there. I had
experience selling securities to individuals and figured a brokerage
business alongside a merchant bank would cover our day-to-day operating
costs.
How to produce sufficient cash flow to have enough left over to
feed our families soon became our major challenge. Before long, we
effectively solved that problem by bringing in two additional partners,
Roger Berlind and Peter Potoma. Like me, Roger and Peter were
brokers who could be relied upon to generate a steady stream of business
while we'd hunt for the episodic and lucrative investment banking
deal.
Opening day for Carter, Berlind, Potoma & Weill was thrilling. It
was May 2, 1960. We had found a small no-frills office with an address
that oozed respectability within sight of the New York Stock Exchange:
37 Wall Street. Along with a newly hired secretary, the four of us spent
our first day in cramped quarters opening boxes, getting our phone
lines working, and calling as many clients as we could to announce our
new venture. Conscious of our young age-we were all in our twenties-
Peter Potoma had suggested that we buy hats and black umbrellas
so that we might appear older. After all, with our own money on the
line, credibility and bringing in new accounts would be more important
than ever.
Shortly after we set up shop, the four of us and our wives convened
at Arthur's home on Long Island to celebrate. It was a festive occasion,
and we all openly shared our aspirations. To this day, I remember the
others stressing over and over their desire to become wealthy. Given that
Joanie and I were raising two toddlers and lived nearly hand to mouth,
the talk was certainly seductive. Still, what I remember most from that
dinner was my declaration that the money should be secondary-what
mattered more to me was to build a great firm: one that would lead the
industry, employ lots of people, endure over many years, and importantly,
command respect.
Over the next forty-three years, I never altered my priorities.
I don't recall how my partners reacted to my idealism that evening. It was probably a good thing that none had known me in my
younger years. Had they been more familiar with my up-and-down
experiences growing up and my family background, I'm sure they
would have snickered at my outburst and accused me of hubris. In
truth, setting off with my new partners amounted to a genuine coming of-
age. Being my own boss was empowering and nerve-wracking all
at the same time. It allowed me to dream, but it also instilled discipline,
self-confidence, and a work ethic the likes of which I had never consistently
mustered before.
I'm still amazed I was able to summon the confidence to start my own
business. I was shy as a child and through all my years of schooling
was at best an uneven student. My parents never enjoyed a close relationship,
and neither represented a particularly good role model. And
I lacked the family connections that gave many of my college classmates
and early colleagues that certain swagger as they approached
their first jobs.
I was born on March 16, 1933, and lived in a modest three-story
home in the Bensonhurst section of Brooklyn until I was ten. My
mother's parents owned the home and lived on the first floor with my
Aunt Rose, while my family lived in two bedrooms on the second level.
The third floor was reserved for tenants. Since I was meek and introverted,
I depended heavily on an Irish nanny, Miss Heally, with whom
I shared a room and who doted on me so much that I almost looked to
her as my real mother. Our neighborhood was filled with Italian, Jewish,
and Irish kids, but I never went out of my way to make friends.
Between my shyness and reliance on my nanny, I must have been sort
of a sissy. It was always easier to talk to Miss Heally or play with my
younger sister, Helen.
Summers were special, as we spent them in Peekskill, New York,
then a largely agricultural community on the Hudson River. My
mother's father originally had owned a hotel there; by the time I was
born, he had sold it and bought a farm. It was a terrific escape from the
noise and hubbub of Brooklyn. The farm was a gathering point for my
extended family, which included my mother's four siblings and their
spouses and children. While my mother would move up for the full
summer, dad commuted from his city job on weekends. Helen and I had
a great time at that farm swimming in the pond, learning to milk cows,
fishing, and racing down a sweeping hill in our matching red wagons.
By the time I knew them, my maternal grandparents were already
well on in years. In his prime, though, my grandfather, Philip Kalika,
must have been a risk taker with good business sense. He had grown up
in what is now Poland but then was part of Russia. Though he had been
engaged to someone from his hometown, he met my grandmother, Riwe
Schwartz, while serving in the Russian army. Falling in love, my grandfather
never returned home and instead married my grandmother and
settled in a village northwest of Warsaw. Before long, with three of their
five children born, including my three-year-old mother, they emigrated
to the United States, entering through Ellis Island in 1908.
I don't know the story of how my grandfather went from being a
penniless newcomer to his later prosperity; by 1919, he had bought his
first home in Brooklyn (the house in which I grew up) and by 1926
opened his own business mass-producing black mourning dresses.
Somehow, the company thrived through the Depression years to the
point where my grandfather was investing in hotels and farmland and
giving his children trips abroad for high school graduation presents.
My grandmother played the role of supportive wife-she was a
tiny lady and very old-world in her ways. However, she knew how to
juggle the household and raise her kids with a strong hand. I never had
the chance to understand what lay behind my grandfather's business
success since he was in failing health by the time I knew him. All I recall
is an old man suffering from consumption and spitting constantly into
an oatmeal box.
My grandparents' children followed fairly predictable routes. My
uncles joined the family business while my mother and aunts stayed close
to home. My mother, Etta, was an old-fashioned Jewish mother-she
cooked and cleaned and was always loving. Her family meant everything.
Like her mother, she physically was short of stature and unsophisticated in her ways. Shy to the point of being socially awkward, she never
liked going out and was given to housedresses and hairnets. She never
learned to drive and was a penny-pincher by nature, often walking ten
blocks if she could buy something for a few cents cheaper. Until the day
she died in 1994, she never used a credit card.
My mother was no great intellect, yet she had a terrific head for
numbers and always was concerned that Helen and I should have a
good education. Maybe it was because of her basic frugality, but my
mother had an unbelievable knack for memorizing and calculating
figures, and she taught me at a very early age about arithmetic before
it was called modern math. To this day, I can manipulate numbers in
my head with ease.
As a child, I certainly didn't appreciate the mismatch, but my father
and mother were worlds apart. I see now that theirs had to have been an
arranged marriage of some sort. In fact, it wouldn't surprise me if my
father was attracted to my mother because of her family's money. After
their wedding in 1932, Max "Mac" Weill went to work with my maternal
grandfather in the dressmaking business-accommodating his new son-in-
law, my grandfather changed the company name to Kalika & Weill.
Over the years, my relationship with my father would change dramatically,
and I'd come to resent him in many ways. As a child,
though, I adored him. He was tall and athletic and enjoyed the gift of
an ebullient personality. I marveled at his gregarious nature, his terrific
sense of humor, and his ease with people. Like my mother, he had
been born in Poland and came to America as a child-insisting he
hailed from more aristocratic stock, he used to contend (I assume
tongue in cheek) that his family had migrated to Poland from Alsace.
Unlike my mother's family, my paternal grandparents remain
largely a mystery. My grandmother died at a young age, and we didn't
have much to do with my grandfather since my mother didn't enjoy his
company. I know that my grandfather was a religious man with little
money. After the death of his second wife, he apparently married again,
this time to a disabled cousin as a mitzvah. I don't know much beyond
those few facts.
By the outbreak of the Second World War, my father had split off
from my grandfather and had established his own dressmaking business.
For a while, his business thrived. I admired his work ethic and
took note that he seemed more prosperous than anyone else in the
family. Sadly, though, disaster suddenly struck. To the eyes of a tenyear-
old, little made sense. By my early twenties, though, I pieced
together what happened in this period. In the early 1940s, my father
had taken advantage of wartime price controls for personal profit. He
was caught by the Office of Price Administration for buying raw
materials at controlled prices and then selling the goods on the black
market at an inflated price rather than producing dresses for a fixed
price as the rules dictated. He was convicted and given a probationary
sentence.
My parents did their best to protect Helen and me from those dif-
ficult events. In 1943, for instance, we learned abruptly that the family
was moving to Miami Beach. Our parents told us only that we had to
move there for business reasons. In truth, my father sought to gain
physical distance from his legal troubles and probably felt it was too
risky to stay in business for himself. I learned much later that he secretly
maintained a stake in the garment business in New York by having
others front for him.
I had mixed feelings about our move to Miami. Emotionally, I was
uprooted from my comfortable surroundings and experienced a sense
of loss at being told I would no longer have Miss Heally taking care of
me. I was devastated as though I had lost a parent. Joanie contends this
forced separation from my surrogate mother had a deep psychological
impact on me for the rest of my life. She often reminds me how I consistently
attached great importance to personal loyalty, both in business
and in my personal life. While I don't know if in fact there was a lasting
impact, my world certainly was turned upside down.
Arriving in Florida, we settled into a house on Royal Palm Avenue
five blocks from the ocean. My parents insisted that I drop back
a year in school but that did little to improve my academic performance. Over the three years we spent in Florida, I was a terrible
student. On the other hand, I enjoyed the sunshine and was constantly
outside riding my bike or playing basketball with my nextdoor
neighbor, Frankie. All of the physical activity helped me realize
that I had natural athletic abilities. Within a year, I took on my first
job, delivering newspapers, and used to pay Helen a penny a paper to
act as my assistant and roll each paper. I proved good at sales and
making on-time deliveries and soon began winning contests for new
subscriptions.
As I reached my teens, I became conscious of my father's boisterous
personality. He dominated our household, always forcing my
mother to take a back seat. He'd often embarrass me in front of my
friends by telling lewd jokes or pointing out my inadequacies. In restaurants,
he'd flirt with pretty waitresses and extravagantly grab the
check when we ate with friends. These were little things that were
harbingers of a gradually diminishing reverence I'd have for him over
the next several years. The louder he became, the more I shrank back
in shyness and passivity.
In 1947, my father surprised us again by announcing that we
were heading back to New York. He had decided to start a new business
with a partner importing steel. In the years following the war,
New York suffered one of its periodic housing shortages, and we
struggled to find a place to live. Reluctantly, my father moved the
family into his father's house in Brooklyn for a year. One of my
great-aunts already shared the house with my grandfather and his
second wife, and quarters would be tight. At the same time, I was still
doing poorly in school-in fact, my freshman high school grades in
Florida were horrible. To ease the housing crunch and also acknowledge
my scholastic difficulties, my parents decided I should go to
boarding school upon our return.
From our summers spent in Peekskill, my parents were familiar
with the Peekskill Military Academy. With little time to research alternatives
and my parents' sense that I might benefit from a disciplined
environment, I was enrolled as a lowly plebe. As had been the
case when we moved to Florida, I was put back a year, while my more
academically inclined sister was skipped forward. We might have
been three years apart in age, yet grade-wise she was steadily catching
up on me.
Originally, I was supposed to go to PMA only for a year until my
parents found more permanent living accommodations, but I really
took to the school and insisted on staying the full four years even after
my family found a home of their own in the Flatbush section of
Brooklyn. Military school was fantastic for me. There was plenty of
hazing my first year, and I learned how to take criticism before dishing
it out, a skill with lifelong value. The attractive campus with its ivycovered
redbrick buildings did little to detract from the administration's
insistence on tight discipline and hard work. We attended classes
six days a week, and there were strictly enforced curfews. The discipline
was exactly what I needed.
Early on, I had the good fortune to develop a close relationship with
Clare Frantz, who was my Latin teacher and tennis coach. Tall and lean,
the Germanic Frantz took an active interest in me and motivated me to
improve my study habits. He worked with me both in the classroom and
on the tennis court and tremendously boosted my self-confidence. Unlike
my father, who always seemed immersed in business, Clare and I related
well to one another.
He had an attractive wife, and the two would often invite me to their
on-campus house for dinner. It didn't take long for rumors to fly that I
was having an affair with Clare's wife, but the gossip simply reflected
the fantasies of my classmates. By my second semester, my academic
performance had begun to improve visibly. By the third term, I really
took off, and my grades consistently ranked in the top two or three out
of a class of thirty-five for the rest of my years at PMA. One year, I
ranked top in my class and earned high honors.
PMA also allowed me to experiment with a variety of extracurricular
activities. For a time, I worked for the school newspaper, The Reveille,
but I wasn't much of a reporter. Being a bass drummer in the
marching band was much more to my liking. I still remember marching
in a Columbus Day parade down the main street in Peekskill with my
large bass drum hoisted from my shoulders-a German shepherd leapt
from the curb and began nipping at my heels before sinking its teeth into
my leg. Undeterred, I insisted on finishing the parade before attending
to my wound.
With Frantz's steady encouragement, I worked at my tennis game
with passion and soon excelled. I loved representing the school in various
competitions. By my senior year, I won the Westchester County singles
tournament for private and parochial school teenage boys and was invited
to join the Junior Davis Cup team from New York, which gave me
the opportunity to practice in the professional stadium in Forest Hills
with Pancho Segura, then one of the sport's great professionals. The
thrill of those tennis experiences represented a high point of my high
school years.
I matured tremendously during my teenage years at Peekskill
Military Academy. My teachers and peers liked me and gave me two
nicknames: "Duck" (because they claimed I waddled) and "Mr. Five
O'Clock Shadow." By my junior year I was appointed an officer with
the rank of first lieutenant. Being on the battalion staff accorded me
certain privileges such as officer's quarters (still awfully spartan), later
curfews, and opportunities to head into Peekskill on weekends.
I also discovered girls while at PMA. My first experience came the
summer after my sophomore year when I worked as a lifeguard at a
hotel near my grandparents' farm. There I met a college-aged girl who
took more than a casual interest in me. The relationship was brief, but
she gave a terrific boost to my self-esteem at a time when I was figuring
out my place in the world. Later, I had my first real girlfriend when I
met Marian Rogers. Neighbors of my parents were friends with Marian's
folks and made the introduction. For the next two years, Marian
and I saw one another steadily-she'd come up to PMA on weekends
to attend dances and other social functions.
Marian's father owned a pipe and tobacco store in Manhattan. He
taught me the art of breaking in a pipe and how to distinguish good
tobacco. Soon I became his unofficial distributor in Peekskill. I was the
only one with this special blend of tobacco, and it was 100 percent
legal! I still have a black-and-white photo of me wearing a sweater
and leaning back in a comfortable chair with crossed legs, confidently
clutching my pipe. Whatever serenity that picture may have shown, I
never felt it once I headed off into the real world.
During my years at PMA, my parents were regular visitors. Sometimes
they'd arrive together, while on other occasions my father would
drive up alone. Either way, my father never failed to make his presence
known to all and always eclipsed my mother when they came together.
Chomping on a big cigar, he'd typically beckon my friends and regale
them with stories and jokes. I was embarrassed and proud all at the
same time.
By now, my father was engaged in his steel importing business
operating under the name the American Steel Company. To outward
appearances, the business seemed hugely successful as my father lived
extravagantly. He drove expensive cars, owned tons of clothes, and
took a haircut and manicure weekly. I learned later, though, that all
was not as it seemed. The business was highly cyclical and did well
only during steel industry strikes, which pushed up prices and profit
margins for my father's company. Also, working at the company one
summer, I noticed my father and his partner seemed constantly to be
in a competition on who could run up the largest expense account. I
thought such a practice represented a bad culture for building a business,
and it troubled me that the company was absorbing personal
expenditures.
These were observations that would only hit home in later life as
I reflected on my father's business practices. For the most part, I respected
my father greatly in those years and felt he could offer me
important life lessons. Indeed, during another summer, he arranged a
job for me in a pocketbook factory doing piecework installing metal
fasteners. All my co-workers were hardworking and friendly minorities
who I realized were locked into their menial jobs. My father made a
point to tell me, "If you don't do well in school, this is the type of job
that will be available to you. If you want more, you have to apply yourself."
On another occasion driving back to New York from a stay in
Florida, he put us up at the fancy Mayflower Hotel in Washington.
Seeing how I enjoyed the hotel's luxurious appointments, my father
stressed that "as an adult, you'll only get to enjoy such nice things if
you're willing to work very hard." These were simple statements, but
somehow the words hit home.
By early 1951, my days at Peekskill Military Academy were quickly
drawing to a close, and I knew it was time to think about my future.
After a weak start, I finished nearly at the top of my class, which
taught me a valuable lesson in the importance of self-discipline. My
hard work paid off, for I was accepted at both Harvard and Cornell. I
felt my aptitude lay in math and science, as I particularly excelled in
those subjects at PMA, and I was also interested in metallurgy thinking
that I might eventually join my father in his business. Accordingly,
I enrolled in Cornell's well-regarded Engineering School. As a graduation
gift, my ever extravagant father presented me with a yellow
Plymouth convertible in which I drove off to find my destiny.
My high school years were terrific, but they conveyed a false sense
of security. In fact, the following four years were turbulent to say the
least. Yes, I'd meet and fall in love with Joanie, but I'd also recognize
that I was not cut out for my chosen field of study, and more important,
face the crushing news of the disintegration of my parents' marriage.
I quickly came to realize that I could never take the future for granted
and that attaining one's goals only comes from hard work and self-reliance.
My first experiences at Cornell were deceptively enjoyable. Freed
from the rigid restraints of life in military school, I settled into the
freewheeling social scene and enjoyed dating and drinking with friends.
Cornell had an extensive fraternity system, and I quickly decided to
pledge Alpha Epsilon Pi. In the 1950s, fraternities were almost entirely
segregated. All I cared about was feeling at home with the members
who happened to be Jewish and predominantly from the New York
area. I was a skillful Ping-Pong player, which helped boost my popularity
with the older brothers. I integrated in no time into the fraternity's
social scene, which included great weekend parties with sister sororities.
With my yellow convertible and my father's credit card, I found it
easy to impress my dates, and I soon learned the joys of weekend road
trips with friends to neighboring schools.
The freedom was seductive, but it didn't take long for the reality
to set in that Cornell was a place of academic rigor. In my orientation
to the metallurgy program, I recall the department head asking us to
"look to your left and right because most of you won't be here at
graduation." It was an early lesson in how not to motivate people.
Before long, I realized firsthand that his admonition was no joke. I may
have done well in math and science at PMA but I now was thrown in
with truly exceptional students, and I began to struggle.
Things got progressively worse. I'll never forget my physics midterm
in which we had to determine where a cannonball would land in
relation to a group of hills. Though I wasn't cheating, I happened to
notice my neighbor was drawing a landing spot across his piece of
paper on a far hill whereas the best I could figure the shell would barely
hit the nearest hill. Stumped, I decided to write on my paper that I
couldn't answer the question because "my cannon was malfunctioning."
When the graded paper came back, I received a zero alongside a
sarcastic comment from the professor.
By November, I was doing so poorly that I decided to drop out. I
went home for Thanksgiving and told my parents I'd transfer to NYU,
an idea they acceded to so long as I'd commit to finishing college.
Within weeks, however, Cornell sent me a letter saying that the school
had set up a special probationary program for eleven students that
would allow me to switch to a liberal arts program to which I might be
better suited. I took the opportunity and subsequently went to summer
school at the University of Wisconsin and Cornell to make up for my
lost semester. Fortunately, the switch was just what I needed. I ended
up avoiding science classes and instead focused on economics and government.
My grades improved, and I eventually spent my final year
taking courses from the graduate business school.
With a more manageable academic load, I began to enjoy college
life once more. I took a two-bedroom apartment with three of my
fraternity brothers my junior year where we had never-ending bridge
tournaments. I figured out how to study just hard enough to get by
without sacrificing my active social schedule while my weekend road
trips became more regular and far-reaching. By now, Helen was studying
at Smith College and had begun dating my roommate Lenny
Zucker. He and I often would snag one of our other friends and head
off to Massachusetts in search of a good time.
My days of playing the field soon ended abruptly. While I was
home for spring recess, my aunt told me of an attractive nineteen-yearold
named Joan Mosher whose family had just moved to the neighborhood
from California. My solicitous relative suggested I call her for a
date. Having just broken up with a girlfriend, I eagerly called Joan to
ask her out. I was disappointed when I heard her say, "I have a party
that night and won't be able to meet you, but I have a friend who you
might like . . ." Undeterred, I replied firmly, "There's no way I'm going
out with a blind date set up by a blind date . . . I'll call again."
My steadfastness paid off, and we soon arranged to meet on April
Fool's Day 1954. That evening, I was greeted by Joanie's mother, who
carefully looked me up and down so she could report to her daughter,
who was strategically waiting in her room-the big issue at that moment
was to determine my height so Joanie could decide whether she
should wear heels. In a flash, I saw an energetic and very beautiful girl
in flat-soled shoes come bounding down the hall. On the way to drinks
at the White Cannon Inn in Freeport, Joanie ribbed that I was nothing
like the fair-haired boys she knew in California and joked that at least
I didn't have a New York accent.
From the first moment, I was drawn in completely. I felt relaxed and
comfortable around her. I had done my share of dating, but no one attracted
me like Joanie. She was beautiful and vivacious, confident, full
of easy conversation, and quick with a joke. The entire evening proved
exciting and intoxicating. Neither of us wanted it to end; at nearly
3:00 A.M., we reluctantly agreed it was time to go home.
Joanie and I were eager to see each other again. Unfortunately, she
had another date for the following evening. I couldn't bear the thought
of her seeing someone else, so I decided to cruise by her house with my
car's top down to check out her date that night as he picked her up. Joanie
probably didn't appreciate the gesture, but I wanted her to know I would
not be deterred.
We saw a lot of each other over the next several weeks. Joanie was
finishing her junior year at Brooklyn College so we were limited to
weekends. She'd either come up to Cornell for one of our bacchanalian
fraternity parties or I'd drive to her house. Yet time seemed in short
supply. I was receiving reserve officer training (ROTC) during college
with the notion that I'd receive an officer's commission in the air force
upon my graduation. That summer I was due to report for training in
South Carolina. We dated a lot right up to the day I left. We proved to
be avid letter writers that summer-each time I'd receive a note from
Joanie, she'd enclose my last letter complete with corrections to all my
misspelled words. I should have realized then and there that Joanie
would make me a better person!
Copyright © 2006 by Sanford I. Weill
