I have little doubt that a majority of the board would have jumped at the chance of appointing George as chairman and chief executive officer if I was willing to stay on in a subordinate position. Frankly, I was not. I had worked with George for fourteen years—the last four in a roughly equal position—and I was convinced that if he had sole responsibility, he would lead the bank in a direction that would prevent Chase from becoming a serious force in international banking. I made it clear to board members who sounded me out, particularly J. Richardson (Dick) Dilworth and Jack McCloy, that I would leave the bank if the board chose to give George full and unchecked authority.
My response created a difficult dilemma. The directors were not prepared to make me chairman and chief executive. Had they done so, George would have resigned, a risk no one was prepared to run. Faced with a showdown between George and me, the board blinked. They suggested a face-saving compromise: George would become chairman, and I would be president, but we would be considered “co–chief executive officers.” Although George would have full control of the day-to-day operations of the bank, we would share responsibility for policy decisions.
But I wanted more than the appearance of equal authority. I feared the board’s proposal would not provide me with the clout necessary to stand up to George on critical issues. I dug in my heels and insisted that I be named chairman of the executive committee as well as president and that the agreement be in writing and signed by the two of us. Without these conditions I believed that George would unilaterally redefine the terms of the mandate and that I would find myself powerless to do anything about it. The final agreement was negotiated through intermediaries—George and I never met face-to-face to discuss it—but in the end we both signed. The dual CEO arrangement was the only viable alternative; both of us had reservations, but we hoped it could be made to work. The announcement of our joint appointment in October 1960 included the following language: “Each will be concerned with and responsible for all aspects of the Bank, but each will supply special leadership in certain areas of his total responsibility. Mr. Champion will give particular attention to the operational and lending policies of the Bank, to the investment funds in its portfolio and to its fiduciary responsibilities. Mr. Rockefeller will give particular attention to forward planning with emphasis on manpower, facilities and markets, to activities abroad and to domestic expansion.”
Our joint appointment was a prescription for conflict and indecision. Co–chief executive arrangements rarely work because they represent an uncomfortable compromise. Institutions do best when they have strong and unified leadership. George and I were never able to provide that leadership since we disagreed so profoundly about the direction in which the bank should move. His reluctance to commit to the aggressive program of international expansion that I proposed led to delays and missed opportunities. We lost ground to our archcompetitor, City Bank, which continued to expand aggressively and consolidate its position around the world. The real competition should have been with City Bank and the other American international banks, not between George and me.
Concealed within the boilerplate of the press release was the inescapable reality that George and I had each been given veto power over the actions of the other. George was always a consummate professional, but in his heart he never accepted the agreement we had both signed. I suspect that he never fully forgave me for challenging his right to become chairman and sole chief executive officer of the bank.*
“BUMPING” UP AGAINST TASTE
An incident from our first days in joint command highlighted our basic incompatibility and typified the manner in which we would deal with most issues. Not surprisingly, it concerned the bank’s art program and the choices we were making to furnish and embellish the modern design of our new head office.
In contrast to the modern decor of most of One Chase Manhattan Plaza, George decorated his office with antiques. For his desk he used an attractive eighteenth-century English curved hunt table, and his walls were hung with rather conventional paintings. A large Remington bronze sculpture of a bucking bronco took pride of place in the center of his office. With these decorative elements in place, George believed that his banking friends from around the country would be reassured that he had not been corrupted by the “wild and modern” ideas I had introduced to the bank in the new building.
Some of the art selected by the Art Committee, of which I was a member, simply exhausted George’s patience. One of the first pieces of sculpture acquired was by Jason Seley, a composition of automobile bumpers welded together, forming a kind of bas relief that measured about seven feet long and seven feet high. It was hung against a red mosaic tile wall on the concourse level of One Chase Plaza and to my mind was well suited to the location.
The mistake we made was putting it up during lunch hour. A crowd of Chase employees gathered around to watch the installation. When they realized that this piece of art was “just a bunch of bumpers,” there was a stir of protest. Someone called George to tell him what was going on, and he got extremely exercised. He sent down instructions to take the bumpers down immediately. I decided not to press the matter for the time being.
As part of our purchase agreement the piece was to go on a year’s traveling exhibition before we could have it, so I decided to buy it personally and figure out what to do with it when it returned. A year later I discussed it again with the Art Committee, all of whom still felt it was an excellent piece and very appropriate for the location. We waited for a weekend when no one was around to hang it in its original location. There it was on Monday morning when everybody came to work. Nobody said a thing; the bank bought it back from me, and it has remained in place ever since. During the entire time George and I never discussed the controversial artwork.
A HOUSE DIVIDED
The “bumpers” episode revealed a great deal about how George and I dealt with each other, most often by indirection and usually through intermediaries. As much as possible we avoided outright confrontation.
On those occasions when George countermanded a decision of mine that I felt was too important to let go by, I would take it to him personally and try to find a solution. If the disagreement was strong enough, we could end up pretty close to the borderline of incivility. George would be abrupt and condescending, explaining to me that I “obviously didn’t understand” the fundamentals of banking. I couldn’t deny his superior competence as a credit officer, but there were often other issues where I felt my competence and judgment were at least equal to his. When I would remind him that we had coequal authority, he would remind me that the agreement gave him discretion in day-to-day matters of loan decisions and treasury policy. I would counter by saying that the issue had long-range policy implications and was therefore within my jurisdiction as well. Sometimes this circular process would continue without result for weeks. In most cases we worked out a compromise, but on a few rare occasions I told him that I would take the matter to the board. Rather than have that happen, George would usually capitulate.
To be fair, George and I agreed on many issues, most notably the domestic expansion of the bank, which became possible as national and state regulatory restrictions began to ease in the early 1960s. Although we avoided open confrontation, our differences were widely recognized among officers in the bank, with the result that those with an idea they wanted to promote would go to whichever of us they thought would be most sympathetic, an informal procedure that quickly became known as “weathervaning.” In a very real sense we became a “house divided,” caught up in our own struggles with no consensus on how to move forward or even on which way “forward” was.
Most of our disagreements concerned the manner and degree to which we would internationalize the bank, but here rapid changes in the global economy clearly supported my views.
CONFRONTING A NEW GLOBAL ENVIRONMENT
Jack McCloy turned over a very healthy company to George Champion and me on January 1, 1961. During his eight years as chairman the
bank’s assets had almost doubled, to more than $9 billion; deposits had increased to just over $8 billion; loans and mortgages had risen to nearly $5 billion; and our net operating earnings had tripled, to almost $75 million. Chase was the leading commercial bank in New York City and trailed only the Bank of America nationally. However, I saw two major vulnerabilities in our otherwise favorable position.
First was our deposit base, which had not kept pace with the explosive growth in credit demand despite the addition of the Bank of Manhattan’s large retail deposits and the creation of many new branches within New York City, to which outdated federal regulations confined us. It was only in mid-1960 that New York State’s banking regulations were eased to permit New York City commercial banks to branch into the adjacent Westchester and Nassau County suburbs.
The second problem was the low level of our foreign lending. While Chase retained its position as the top-ranked U.S. bank in foreign correspondent banking, we were not a “leading international bank” either in terms of our physical presence or as a supplier of credits. I considered the old guard’s commitment to maintaining the primacy of domestic lending tantamount to acquiescing in our becoming a second-tier institution, which might, over time, threaten our survival as an independent bank.
Because I argued for a bold strategy of foreign expansion that George viscerally opposed, our joint tenure at the bank would be an extended and often unpleasant struggle for primacy.
*Peggy and I were intrigued by the plans to improve soil fertility by adding trace mineral elements and fertilizer. We bought a sixteen-thousand-acre lot in partnership with Benno Schmidt and operated it as a sheep ranch.
*Peter Drucker, the esteemed management consultant, was retained to help make this arrangement work, but even Peter could not bring it off. He refers to this assignment as his greatest failure.
CHAPTER 14
DIFFICULT TRANSITIONS
Mother died early in the morning of April 5, 1948. She died in her bed at 740 Park Avenue in New York City with Father by her side. She had complained of some discomfort earlier, and as she described her symptoms to the doctor who had been called to her bedside, she lay her head back on the pillow and was gone. The doctor attributed her death to a “tired heart.”
Nelson called me with the news, reaching me at the bank just after I arrived for work. I can hardly express the grief I felt at her death. Peggy and I had spent the two previous days with her at Kykuit, a peaceful weekend filled with quiet talks. Though we could see she was tired and frail, there had been no dramatic symptoms or warning of what happened so suddenly. Mother loved children, and I will forever remember a final picture of her holding our tiny daughter Peggy in her arms, her loving smile reflected in the little one’s face. As we drove back to the city Sunday night, Peggy and I agreed that the weekend had been very special; everyone had felt particularly close to Mother, more so than usual. But for the second time we had a premonition, as with Dick Gilder several years earlier—an intense, sad feeling that this might well be the last time we would see Mother alive.
We had all drawn from the infinite well of Mother’s love, and it had sustained us more than we knew. Her passing left a void in all our lives, but no one felt the loss as deeply or desperately as Father. He and Mother had been inseparable throughout their forty-seven years of marriage, and like vines whose braided branches grow together, their lives had become one.
A PROFOUND LOSS
While Mother’s death took its heaviest toll on Father, it had a profound effect on me as well. No one else had had a comparable influence on my beliefs, my tastes, and my capacity to enjoy the world around me. My love for her was very great. She was pure of heart and put her family and her deeply held convictions ahead of all else.
At the same time she was fun to be with. She loved the beauties of nature: flowers, the song of the wood thrush in the forest, and the crashing of waves on the beach in Maine. She also loved people. Her standards were high, however, and she was intolerant of those she felt were shallow, lacking in moral principles, or pretentious. She was gentle and the essence of a lady, but unyielding and insistent on issues that she considered important.
Mother read a great deal: history, novels, biography, and sometimes detective stories. She believed that the more one knew about the world, the greater the chance one had to achieve something important. She taught me the enjoyment of learning and living life to the fullest, of savoring the excitement of meeting new and interesting people, of tasting new food and seeing new places, and of exploring the unknown.
Mother was also fond of adventure. When someone came up with a daring idea, she was always prepared to explore it—provided, of course, that Father was not around to discourage her from it! Of the six children I believe Nelson and I were the two who most shared her love of people and adventure. But Mother scrupulously avoided playing favorites among her children; she was devoted to all of us.
THE MATISSE WINDOW
I do not recall who first suggested commissioning a window in the Union Church at Pocantico, the little church just outside the gates of Pocantico, as a lasting memorial to Mother, but the idea was quickly and unanimously accepted by all the brothers and Babs. Nelson, then president of the Museum of Modern Art, was designated to work with Alfred Barr in finding the right artist.
Alfred suggested Henri Matisse; Mother had known him quite well and owned a number of his paintings and drawings. Matisse was in his eighties, however, and it was uncertain whether he would be able to undertake the work. While we felt a rose window over the altar would be the most suitable location, thick wooden mullions broke up the circular space and placed severe limitations on any artist’s creativity. But Matisse had begun to focus almost exclusively on intricate abstract compositions of pure color, which could be adapted to the window’s configuration. In addition, Matisse had just completed a magnificent set of stained-glass windows for the Dominican Chapel of the Rosary in Vence in the south of France, which demonstrated his great competence in this difficult medium. Happily, Matisse agreed to our request.
It turned out to be his last work of art—the maquette was in his bedroom when he died. The rose window was a beautiful, simple, and appropriate masterpiece. We dedicated it on Mother’s Day 1956, and it reminds me of Mother every time I attend church in Pocantico. The sunlight streaming through it creates a wonderful radiance and feeling of joy.
REMARRIAGE AND WITHDRAWAL
After Mother’s death, Father was sad and lonely, and we worried about him. I thought a change of scene might help him deal with his grief, so in May, just a month after Mother died, I proposed that he and I set off on a quiet drive together. He eagerly agreed and suggested that we take the Blue Ridge Parkway from Washington to Asheville, North Carolina. It was the height of springtime, and the hills were gloriously beautiful, with the rhododendrons and mountain laurel in full bloom. We had a cozy time together, the last intimate time I would ever have with him. We spoke mostly of Mother. Her presence was still so powerful that we wanted to hang on to it for as long as we could. It was healing to both of us and remains a memory I treasure.
Three years after Mother’s death, Father told me of his plans to marry Martha Baird Allen and asked me what I thought. Martha was a widow and almost twenty years younger than Father. She had been married to Arthur Allen, an old friend and college classmate of Father’s. The Allens had lived in Providence but summered in Seal Harbor for several years before World War II, and so had kept in close touch with my parents.
Although I had been aware for some time that Father was seeing Martha, when he asked me how I felt, I did not say, “I think that would be wonderful.” I knew Mother had not thought highly of Martha, and I said so, expressing my reservations in general to the idea of his remarrying. In retrospect this was unwise and certainly unkind. I should have realized that Father was seeking my blessing on a decision he had already made, not asking for my opinion. I had put Mother’s memory before Father’s happiness. I knew how lonely
he was and that it was natural and right for him to find a companion with whom to share his final years.
My indiscretion caused no outright rupture between us, but it may well have contributed to a gradual distancing on Father’s part from his children. There were no scenes, no dramatic episodes or quarrels. Overtly, our relationship remained the same: emotionally muted and perfectly proper and correct. In fact, shortly after he married Martha, Father created a new series of trusts with a combined value of slightly more than $61 million, one for Martha and one for each of the brothers, giving us the option of naming our children income beneficiaries for all or part of the new trusts.
Memoirs Page 23