The Chairman

by Kai Bird

  More than anything else, he was impatient to get across the Atlantic Ocean, and gave much thought to acquiring the right equipment for every contingency. In March 1918, he wrote Anna from Charlotte, North Carolina, and instructed her to pay $125 for his own private riding saddle. “When I leave for France,” he explained, “I want to feel fully equipped for anything that may happen. . . .”26 This was a considerable expense for Anna, but she promptly sent him the saddle.

  His saddle worries were quite genuine. Though he still lacked grace atop a horse, his usual persistence again caught the eye of one of his superiors. His commanding officer, Brigadier General Guy H. Preston, ran into him just after a long ride. “One day at Fort Ethan Allen,” Preston wrote McCloy years later, “I walked behind you after you had been riding and I could see blood all over your pants. I said to myself that any son of a bitch who could keep riding with that much pain must be a damn good officer.” Preston asked McCloy to serve as his aide-de-camp, a coveted position in any army. When he pointed out to the general that the army hadn’t issued him orders for the job, Preston snapped back, “Pay no attention; I’m certified to have an aide.” Such informality resulted in McCloy’s being carried for some months on the official army lists as AWOL.27

  General Preston, fifty-three, was a gruff career cavalry officer with an earthy sense of humor. When McCloy met him, he was organizing a field-artillery brigade, explaining, “I learned what a trajectory was while pissing against the schoolhouse wall.”28 He regaled his aide with stories of his battles in the Dakotas with the Sioux Indians. (In December 1890, Second Lieutenant Preston was “commended” for his “courage and endurance” at Wounded Knee, where at least 153 Sioux men, women, and children were massacred.) McCloy always remembered him as the general who “fought the Indians on the Plains,” and years later would underline this aspect of his CO’s career to emphasize how few years separated America, the global power, from America the conqueror of Indians. As a nineteenth-century cavalry officer, Preston believed in America’s manifest destiny. With the Indians pacified, he had remained in the cavalry and later served in the Spanish-American War. McCloy grew very fond of Preston; over the years, the general became a father figure—to the point where Preston began signing his letters to him, “Love, Dad.”29

  Preston and McCloy shipped out for France with the 160th Field Artillery Brigade in late July 1918. Stationed in the Toul sector with the Second Army, McCloy didn’t see action until October and November. Even then, he recalled, his “combat service was rather drab.”30 His unit lobbed artillery shells against Germans positioned across the Moselle River for several weeks. The Armistice was signed just before he and his men were to assault the city of Metz.

  On Armistice Day, November 11, 1918, McCloy was sitting with Preston on the parapet of a trench outside Metz, watching French prisoners being released by the defeated Germans. During the next few months, he served in the army of occupation, and saw a good bit of Germany. On March 1, 1919, he was transferred to General John J. “Black Jack” Pershing’s headquarters at Chaumont. By this time, Preston had introduced him to all the leading figures of the American Expeditionary Force, including General Pershing, Colonel George C. Marshall, and Colonel Douglas MacArthur. He also introduced him to the best-known hero of the war, Colonel William J. Donovan. The winner of a half-dozen medals, including the Congressional Medal of Honor, Donovan had already been named by the newspapers back home as “Wild Bill.” “He had the mark of bravery and leadership written all over him,” McCloy later recalled. “I remember how much I then envied him, his elan, his spark, and his record.”31

  Occupation duty at Chaumont left some time for recreational activities, and, characteristically, McCloy was still trying to “run with the swift.” On the tennis court, he frequently played with some of France’s most celebrated pros. One day he had a chance to play with a rising young French champion, Suzanne Lenglen. Later that year, Lenglen became a Wimbledon champion. Known as “The Goddess,” she was rather short-tempered, and on those rare occasions when she felt herself about to be beaten, she might sometimes abruptly walk off the court. This time, McCloy was down four games to love when General Pershing himself walked into the bleachers to watch the play. “Why, he was my commanding general,” remembered McCloy. “I just set to work, serving very hard, running to the net, calling the ball very close, doing whatever I could to win. When I pulled even with her four games to four, she just turned and walked off the court.”32

  At the end of June 1919, McCloy was promoted to the temporary rank of captain, and then shipped home with Preston. His mentor tried to persuade him to make a career of the army. McCloy stood in awe of professional military men like Marshall, Donovan, and MacArthur. But his two years away from Harvard had not shaken his ambition for a legal career. Sitting in Camp Lee, Virginia, waiting to be discharged, he opened a few of his old law books. “One evening McCloy came to eat with me at my camp table in the mess hall,” Preston wrote later. “I saw he was preoccupied. Finally he exclaimed, ‘General, that abstract law is beautiful stuff!’ I glanced at him and saw his face was radiant as an angel’s. I said at once, ‘Mac, I’ll never again ask you to stay in this man’s army. Your destiny is too manifest.’ ”33

  Harvard had changed. Enrollment had dropped from a high of 857 when McCloy left in 1917 to a low of 68 just before the Armistice.34 The elitist luncheon clubs had so shrunk that most were completely disbanded. Ten thousand Harvard men had served in the war, half as officers.35 The students who returned were older and impatient to get on with their careers. McCloy rented an apartment in Cambridge, and his mother decided to move from Philadelphia to take care of him. Anna was now fifty-five, and for the rest of her long life she frequently lived with her son. Finances were tight as usual, so he made a little extra money teaching squash and handball as he resumed his studies. “At first it was not easy,” McCloy recalled. “In fact, it seemed dull, terrible to be sitting in a classroom, reading and rereading cases after having commanded a field artillery battery in the greatest war in history. The studies didn’t seem to bear much relationship to the war. Gradually, however, I caught on.”

  Politically, the postwar mood turned nativist and reactionary, and the country was becoming polarized by a growing and militant trade-union movement. Attorney General A. Mitchell Palmer warned that a “blaze of revolution” threatened to destroy American life, “licking the altars of churches, leaping into the belfry of the school bell, crawling into the sacred corners of American homes, seeking to replace marriage vows with libertine laws, burning up the foundations of society.”36 In January 1920, when Palmer arrested more than five thousand suspected “radicals” in over thirty cities around the country, Frankfurter and a group of his colleagues in the law school condemned the warrantless arrests. Frankfurter and Zachariah Chafee, Jr. an assistant professor since 1916, wrote a brief that was instrumental in obtaining the release of some of those arrested. Chafee wrote a Harvard Law Review article in April 1920 that vigorously criticized the government’s prosecutions under the Espionage Act. And when the Supreme Court upheld the convictions anyway, Frankfurter, Chafee, Pound, and a number of other Harvard Law School personalities signed a petition for clemency addressed to President Wilson.

  Such controversies spilled over into the student body, where opinion became just as polarized. The Harvard Advocate was filled with articles reflecting the views of the two camps, described as “those who would like to see all the Reds and near-Reds dangling from lamp posts, and those who believe that free speech is an absolute right. . . .”37 But McCloy was only a witness, never a participant in these political arguments. Not part of Frankfurter’s favored inner circle, he had no personal involvement in the professor’s political battles. Unlike Dean Acheson, who under Frankfurter’s influence emerged from Harvard Law School a Democrat, McCloy distrusted the trade-union movement and counted himself a Roosevelt Republican. He no doubt agreed with an April 1920 editorial Archie MacLeish wrote on “The Liber
alism of Herbert Hoover.” Hoover’s brand of liberalism had no “old World” roots, papered over “class lines,” and was thoroughly American in its emphasis on individual “opportunity and flexibility.” Hoover was a liberal, wrote MacLeish, “who has not forgotten that liberalism signifies progressive reform, and that in progression there is present the idea of development out of things that have been.”38

  College men in general greatly admired Hoover’s career, and this was particularly true of war veterans who were hearing of his efficient war relief operations in postwar Europe. Hoover’s reputation for an “open-minded ability to find constructive remedies for grievous situations” had caused his name to be bandied about as a possible presidential candidate by the spring of 1920. But no one seemed to know whether the great engineer was a Republican or a Democrat. In the event, Warren Harding was nominated by the Republicans, with Calvin Coolidge, an Amherst man, as his vice-president. McCloy voted Republican.

  Politics did not absorb much of his attention at Harvard. McCloy was, as usual, spending more time than most of his classmates poring over the case histories. Outside the classroom, he began to take tutoring jobs to earn a little more money for tuition. During the summer of 1920, he took his mother up to Mount Desert Island and, instead of chopping wood for George Wharton Pepper, hired himself out as a tutor of history and law. One day Anna urged him to approach the Rockefellers for a job. In 1910, John D. Rockefeller, Jr., had bought a majestic mansion of solid Maine granite perched atop a cove at Seal Harbor. The estate, called the Eyrie, had 104 rooms and a manicured Oriental garden surrounded by a fence adorned with tiles shipped from the Great Wall of China.39

  Such a formidable setting would have led any young man of McCloy’s background to hesitate. But Anna insisted that there was no harm in presenting oneself at the front door and asking for employment. She had knocked on many such doors in the course of soliciting clients. McCloy climbed the hill to the Eyrie three times before he “had the nerve to ring the doorbell.”40 When he told the butler his business, he was curtly informed that the Rockefeller sons already had tutors, and the door was slammed in his face.

  This humiliation was only momentary. By the end of that summer, he was teaching the young Rockefellers sailing in the little harbor below the Eyrie. Rockefeller, Jr., was forty-six years old and had five sons and one daughter, Abby, who was seventeen at the time. John D. 3rd, Nelson, Laurance, Winthrop, and young David ranged in ages from fourteen to five. It was a fleeting relationship, but it set the terms for what turned out to be a lifelong association with the Rockefellers. David was so young at the time that he would scarcely remember the episode. But in the eyes of the other boys, McCloy would always seem a teacher, a mature figure, closer in authority to their father’s generation than to their own. In later years, McCloy always referred to Junior as an elder due the greatest respect, whereas the sons were etched in his mind as those youngsters he had taught sailing so many years ago.

  Back at Harvard for his last year, McCloy concentrated on corporate or commercial law, and relished courses with Austin Scott, a vivacious, intense young professor who paced neatly back and forth in front of his class as he lectured. At the age of thirty-seven, Scott was already probably the country’s foremost legal scholar on trust law, a relatively new and exciting field. The Standard Oil trust controlled by John D. Rockefeller, Sr., had been broken up only a decade earlier. Since then, corporate executives had been paying their lawyers to ensure that they did not become the targets of antitrust legislation. McCloy enjoyed the problem-solving aspects of the trust cases he studied; corporate law seemed more concrete than the subjective and highly political legislative and constitutional law taught by professors like Frankfurter and Chafee.

  His ambition was to seek a job with a large Philadelphia firm specializing in corporate work, an intention that Frankfurter would have scorned. Private practice, Frankfurter wrote in 1913, “means putting one’s time in to put money in other people’s pockets.”41 Frankfurter’s prejudice was in part affected by his own early experiences with anti-Semitism on Wall Street. But he had also hated the work and had jumped at the opportunity to work for Henry Stimson as an assistant attorney general. He encouraged his brightest students to do the same, arguing that no corporate lawyer could affect the public interest.

  Frankfurter’s mentor, Justice Louis D. Brandeis, took another view. Brandeis had made himself a millionaire working for some of the country’s major corporations. He strongly believed that in a democratic society lawyers in particular were trained to distinguish the public interest from the narrow private interests of the moment, and that knowledge of the law made it possible for them to rise above petty, material interests. Far from saying, as Frankfurter did, that a lawyer could not serve the public interest while working for a corporation, Brandeis merely complained that too many lawyers in modern society were suspending their judicial good judgment and independence of mind.

  In the spring of 1905, Brandeis chastised an audience of Harvard Law students, including Frankfurter: “Instead of holding a position of independence, between the wealthy and the people, prepared to curb the excesses of either, able lawyers have to a large extent, allowed themselves to become adjuncts of great corporations and neglected the obligation to use their powers for the protection of the people.”42

  The difference between Brandeis and Frankfurter was ultimately one of temperament. Before joining Harvard’s faculty, Frankfurter had written himself a memo justifying the move. Among other things, he suggested, “In the synthesis of thinking that must shape the Great State, the lawyer is in many ways the coordinator, the mediator, between the various social sciences.” Citing the “easily accountable dominance of the lawyer in our public affairs,” he speculated that only to lawyers would fall the task of mediating between the powerful private and public interests characteristic of any modern industrial society. The battles ahead would center on the “shaping of a jurisprudence to meet the social and industrial needs of the time. . . .”43

  McCloy left Harvard with ideas about his new profession not so dissimilar. Like Frankfurter, he saw his role as an impartial mediator, objective, rational, and capable of discerning the greater public interest. Unlike Frankfurter, he saw no conflict between this and working for large corporate interests. In the spring of 1921, he graduated with more than respectable marks and left to seek work in Philadelphia.

  CHAPTER 4

  Wall Street: 1921–30

  “Brilliant intellectual powers are not essential. Too much imagination, too much wit, too great cleverness, too facile fluency, if not leavened by a sound sense of proportion are quite as likely to impede success as to promote it.”

  PAUL CRAVATH

  McCloy’s role model was still George Wharton Pepper, and upon returning to Philadelphia he went straight to the distinguished lawyer and asked for a job. Pepper’s firm, Pepper, Bodine, Stokes & Schoch, was the leading firm in the city. Pepper’s senior partner, Bayard Henry, had founded the prestigious Lawyers’ Luncheon Club, and the firm represented some of Philadelphia’s leading corporations. In a few months, Pepper, fifty-four, would be appointed to the U.S. Senate seat then occupied by a dying Boies Penrose, boss of the Republican machine in Pennsylvania for the last twenty years. To Anna it only seemed natural and right that her son should go to work for her late husband’s colleague. Pepper had already taken into the firm Ernest Scott, the son of the late Dr. Al Scott, her husband’s close friend.

  Pepper was friendly and polite as ever, but he bluntly told McCloy, “Now, listen John, I know your family well. When your mother wanted to send you away to school, I was against it. I didn’t think she could afford it. I was wrong about that, but I am not wrong about this. I know Philadelphians. It is a city of blood ties. You have good grades, but they don’t mean anything here. Family ties do. Even when I started out here it was difficult and slow. It would be impossible for you. You were born north of the Chinese Wall, and they’ll never take you seriously in this tow
n. In New York, however, your grades will count for something.”1

  Years later, McCloy would remember this little sermon from his Philadelphia patron word for word and smile. He knew right away that Pepper was not snubbing him; it was the city. There was no point wasting the formative years of his legal career in a city that would never really accept him. McCloy didn’t brood about it for a minute, but the same day, after informing Anna of the discouraging interview, he took the train to Manhattan—and left behind the Chinese Wall forever.

  It might not have seemed the best of times to look for a job. The years 1920–21 were years of serious recession. Unemployment throughout the 1920s never fell below 5 percent, and during the ‘21 recession it was much higher.2 When the Republicans elected Warren Harding to the White House, the Federal Reserve clamped down on post-Armistice inflation. Government food-relief operations in Europe were halted, and the price of U.S. wheat plummeted. Whole sectors of the economy were in trouble, including such blue-chip industries as railroads and steel.

  But when businesses falter, America’s lawyers find their offices overflowing with clients in need of sound legal advice. McCloy made the rounds of all the major New York firms and received seven or eight offers. He accepted a position as an associate with Cadwalader, Wickersham & Taft, because “it was a very prestigious firm. There was George Wickersham, the former attorney general, and Henry W. Taft, the brother of the president.”3 The business community regarded the firm as particularly well qualified to defend corporations from antitrust suits; Wickersham, who as attorney general for four years under President Taft had vigorously prosecuted monopolistic behavior, now used his talents on behalf of the defendants.