Front Page Titles (by Subject) PART III: Businessmen with the Midas Touch - The Goodriches: An American Family
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PART III: Businessmen with the Midas Touch - Dane Starbuck, The Goodriches: An American Family 
The Goodriches: An American Family (Indianapolis: Liberty Fund, 2001).
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Businessmen with the Midas Touch
The business of America is business.
calvin coolidge, Speech to the Society of American Newspaper Editors, January 17, 1925
The 1920s marked both the best and worst of times in Indiana. On the one hand, soldiers from the war had returned to their families, the nonfarm economy was booming, and prosperity and “speakeasies” reigned, prompting the decade to become popularly known as the “Roaring Twenties.” On the other hand, the same type of intolerance that had resulted in blatant discrimination against Americans of German heritage during the “European War” once again returned, clad in white hoods and sheets, to menace Catholics, Jews, and African Americans. By 1923, the Ku Klux Klan (KKK), which had originated in the South, took hold in a serious way in Indiana. By that year, the KKK claimed a membership of three hundred thousand in Indiana, and the Hoosier state was the home of the Grand Dragon of the Klan, David Curtis Stephenson. Many municipal, county, state, and federal politicians were members. Klan endorsement was seen by many as a necessary prerequisite for public office. The Klan allegedly helped to elect two Indiana governors and two senators, including Edward L. Jackson, who was governor from 1925 to 1929. In his reelection bid for the Senate in 1926, James Watson was even accused of seeking Klan endorsement.1
Shortly after leaving office as governor in January 1921, James Goodrich was appointed president of the National City Bank of Indianapolis. He had been associated with the bank as a client since his early days in the statehouse. Because of the bank’s poor financial health, which made either reorganization or merger inevitable, the directors sought out Goodrich for his managerial abilities, and he became a major stockholder. In 1923, Goodrich arranged for the National City Bank to be merged with another longtime Indianapolis financial institution, American Fletcher Bank.2 In the early 1920s, the former governor also managed to purchase a controlling interest in the Aetna Trust and Savings Company in Indianapolis. These commercial ties would continue to keep him and his family involved with Indianapolis businesses. They would lead to larger commercial opportunities in the 1930s.
By the early 1920s, Indianapolis had become an important midwestern business and cultural center. Several publishing houses had located in Indianapolis, and some important authors, most notably James Whitcomb Riley and Booth Tarkington, did their best work there. The city, which was the state’s capital, had grown to a population of 320,000 residents. At the same time, Indianapolis retained a certain small-town atmosphere, no doubt in part because so many of its inhabitants were, in fact, recent migrants from Hoosier farms and small towns in search of opportunity.
By 1923, Pierre and Dorothy had made the move from Winchester to an affluent and scenic neighborhood in Indianapolis at 1529 Park Avenue.3 In Indianapolis, Pierre practiced law as a junior partner with the firm of Haynes, Mote and Goodrich in the Hume-Mansur Building. Pierre knew both Haynes and Mote because they had served in his father’s administration. Paul H. Haynes died shortly after Pierre joined the firm. Mote was a Randolph County native and had been a top campaign adviser to James Goodrich in his 1916 race for governor. For Mote’s efforts, in 1917 James Goodrich appointed him secretary of the Indiana Public Service Commission, chairman of the governor’s Legislative Council, and chief oil inspector until the position was abolished in 1920. Mote later became president of the Northern Indiana Telephone Company and ran unsuccessfully for the United States Senate in 1944. Pierre and Mote, who advertised themselves as public utility counselors, severed their partnership in the fall of 1926 after a falling out.4
Pierre practiced alone for the next year and a half, taking offices on the seventh floor of the Continental Bank Building. In 1928, he and John Raab Emison formed a partnership. James Goodrich served in the position of counsel to the firm. Emison, a native of Vincennes, Indiana, was a graduate of DePauw University (1919) and Harvard Law School (1922), where he and Goodrich first met in 1920. Before going into partnership with Pierre, Emison had served as assistant United States attorney for the Southern District of Indiana and as judge of the Superior Court of Knox County.5
The two attorneys, under the firm name of Goodrich and Emison, remained in Goodrich’s Continental Bank Building offices. The building, now called the Electric Building, faced Indianapolis’s Monument Circle. Both Pierre and Emison had a penchant for corporate law and seldom took on legal work that involved the writing of briefs or practice before courts. In 1929, Goodrich and Emison hired a young associate lawyer, Albert Campbell. Campbell, also a DePauw and Harvard Law graduate, became a partner in the 1930s. His professional relationship with Pierre was one of the longest Goodrich ever had.6
At the same time that Pierre was developing a successful corporate practice with his small law firm, he was also seizing upon business opportunities with his father through Engineers Incorporated, the family investment company. Engineers Incorporated was originally organized as a company that owned gas, water, and electric companies and provided financial, and some managerial, services for them.7 Formed on November 20, 1925, Engineers Incorporated purchased a number of struggling companies in the 1930s. Pierre later (with the aid of family members) turned these companies into highly profitable business operations and sold them at huge profits in the 1960s and 1970s. Over the years, a number of close family members or friends were made directors of Engineers Incorporated: Perce G. Goodrich (1952); Russell Martin of Tipton, Indiana (1953); Benjamin Rogge (1960); and J. Dwight Peterson (1961).8 Even before the Depression, Pierre had established himself as a leading corporate lawyer. Until 1927, he was president of the Indiana-Ohio and the Western Ohio Public Services companies, and by 1929, at the age of thirty-five, he was the president of Engineers Incorporated, the Interstate Telephone and Telegraph Company, and the P. F. Goodrich Corporation (a personal holding-investment company).
Pierre was also a director of the Union Insurance Company, the Continental National Bank of Indianapolis, the Aetna Trust and Savings Company, the Equitable Securities Company of Indianapolis, the Peoples Loan and Trust Company, and the Peoples Investment Company of Winchester.9 In addition, he was secretary, treasurer, and a director of the Patoka Coal Company, located near Winslow, Indiana.10 Over the course of his lifetime, the number of companies Pierre would control through his family’s fortune expanded even more, numbering in the dozens.
If the natural gas boom marked the decade of the 1890s, the 1920s can be most closely identified with the automobile revolution. Almost overnight, the horse and buggy disappeared. In 1910, there were only a few hundred cars in east-central Indiana, but by 1923, several thousand loud and strange-looking motorized vehicles could be seen scurrying about, operated by inexperienced and erratic drivers. Driving standards were lax at the time. There was no driver’s training, licensing of drivers involved no test of skill or equipment, and traffic was largely unregulated. This resulted in a high rate of accidents, as James Goodrich could attest. Those who were not affluent enough to travel in their own vehicles hitched rides or used another growing type of transportation—the interurban.11
At the end of his term as governor, James Goodrich vowed that he would never seek elective office again. While he remained true to this personal pledge, he did not quit undertaking acts of public service. His most noteworthy work, documented in the preceding chapters, was in the former Soviet Union on behalf of the American Relief Administration and the Warren G. Harding administration. Over the course of the next two decades, however, James Goodrich held several other important positions in the administration of public and private affairs.
In 1923, James Goodrich was appointed to the Indiana Deep Waterways Commission to investigate the possibility of securing a deep-water channel between the Great Lakes and the Atlantic Ocean via the St. Lawrence River. At the same time, the former governor was also appointed to the Great Lakes–St. Lawrence Tide Water Commission. This latter commission was established by eighteen states that combined their efforts to investigate the opening of the Great Lakes to oceangoing vessels through the St. Lawrence River. The commission found that deepening the St. Lawrence Seaway to thirty feet would allow up to 88 percent of all ships entering American ports to travel, through a series of locks, nearly the complete distance of the Great Lakes.
Ultimately, the need to take action was seen as so great as to compel the creation of a commission at the federal level. Therefore, on March 14, 1924, President Coolidge established the International St. Lawrence Waterways Commission, and Coolidge appointed James Goodrich to serve on this commission. Herbert Hoover, still United States secretary of commerce, chaired the commission. The commission was charged to advise the president on the development of shipping from the Great Lakes to the Atlantic Ocean. The commission was established because of the need for a number of upper-Midwest and Northeast states—Ohio, Indiana, Kentucky, Illinois, Iowa, Missouri, Kansas, Nebraska, North and South Dakota, Wisconsin, Minnesota, Pennsylvania, and New York—to have a natural transportation link to the rest of the trading world. The completion of the Panama Canal in 1914 had put these states—which collectively had more than forty million inhabitants who gained their livelihood from basic industries—at a distinct economic disadvantage to other regions of the country when it came to the transportation of goods.12
From the summer of 1924 until December 1926, the commission studied the benefits and costs of making the St. Lawrence Seaway navigable for oceangoing vessels.13 On December 27, 1926, the commission issued its report to President Coolidge.14 After James Goodrich’s work on the commission was completed, the issue had a long debate before resolution occurred. The Senate in 1932 rejected the proposed seaway treaty between the United States and Canada; a second treaty, signed by President Franklin D. Roosevelt in 1941, remained unratified by the Senate for the next eight years. Finally, the Senate approved a treaty with Canada in 1954 when it became apparent that Canada would proceed on its own with the seaway project if the United States did not cooperate.15
Although it was nearly thirty years after the St. Lawrence Seaway Commission’s report was completed that the project was finally attempted, the commission’s study laid the groundwork for the ultimate success of the seaway. When the project was finally begun in May 1954, it followed many of the recommendations that were contained in the Hoover Commission’s report of December 1926. More than twenty-two thousand workers were employed on the project over the next five years. They deepened channels, constructed locks and channels, and created a thirty-mile-long Lake St. Lawrence. When the project was completed in April 1959, the St. Lawrence Seaway provided 9,500 miles of navigable waterways, allowing some forty million tons of cargo to move through the system annually. It was one of the largest civil engineering feats ever undertaken.16
Another event occurred in 1923 that preoccupied Goodrich for several months. Warren T. McCray, who had succeeded Goodrich as governor, became embroiled in a personal financial crisis and had to plead for relief from creditors. McCray and Goodrich, who had previously run against each other for governor in the Republican primary of 1916, were not friends. Thus, when Goodrich came to McCray’s rescue, it was not out of any sense of fondness or loyalty he had for McCray, but an attempt to mitigate the embarrassment that disclosure of McCray’s financial situation would bring to the Republican Party. Goodrich claimed that he helped raise $350,000 to save McCray. Apparently, the effort was all for naught, because shortly thereafter the Bank of Kentland, to which McCray owed the money, failed. McCray was subsequently charged with and convicted of mail fraud. He resigned the governorship in April 1924 and received a ten-year prison sentence.17
At about this time, Goodrich began to raise money for a more worthwhile cause. In 1924, at the age of sixty, Goodrich became chairman of the board of trustees at Wabash College.
In this position Goodrich provided frequent investment advice to the college treasurer and solicited money for the endowment fund. Seeking a contribution from John D. Rockefeller, Goodrich wrote that Wabash College sought to achieve, in the midwest, a position comparable to that of Amherst, Bowdoin, and Williams colleges in the east. Increasingly it was Goodrich who became the financial guardian angel of the college. He personally assumed the cost of remodelling the president’s home and repairing its furnace, and in 1919 he pledged the substantial sum of $50,000 to the Wabash College endowment fund.18
The 1928 presidential election was another event that greatly preoccupied James Goodrich during the 1920s. While Goodrich himself was no longer considered for the top national post, he was a close friend to the two Republican candidates who were: Herbert Hoover and James Watson. Watson had been a leading candidate for vice-president in the 1924 election before Calvin Coolidge selected a little-known Chicago banker, Charles Gates Dawes, as his running mate. Watson, who had allowed the 1920 Republican presidential nomination to slip through his fingers, was determined to garner the 1928 nomination. On February 8, 1928, he announced his intention to run for the office he had desired from the time he and James Goodrich were high school classmates in the 1870s. On April 14, Watson returned to Winchester to proclaim his candidacy before his hometown well-wishers.19 A packed crowd of two thousand attended the ceremony at the new Winchester High School gymnasium. A parade made up of marching bands, local Girl Scout and Boy Scout troops, and others marched from downtown under a large banner that crossed South Street and which read “Our Jim for President.” The south pole anchoring the banner was planted in James Goodrich’s front yard.20 Ironically, Goodrich did not support his childhood friend. He opposed Watson’s entry into the presidential race, believing it would destroy party unity, and supported Hoover. Goodrich’s disappointment in Watson’s candidacy is evident in a letter he wrote to the United States congressman Will Wood:
I have known [Watson] all his life [and] you are perfectly at liberty to tell him all I have said in this letter. There has never been a time and I can cite you to numerous occasions where the interest of the party conflicted with Jim’s desires, when he didn’t sacrifice the party. . . . I only have sympathy and pity for him. It is discouraging to see him with his really unusual ability betraying the great trust the people have committed into his hands, for the simple reason that he has no moral foundation on which to build. I say this not in anger but rather in sorrow.21
Watson ended up defeating Hoover by twenty-five thousand votes in the Indiana primary election, but Hoover captured all other states and easily won the presidential nomination at the Kansas City national convention. Much to the chagrin of Goodrich, he was asked by Hoover’s Indiana state campaign manager to remain in the background and not to publicly support Hoover during the national campaign.22
On November 4, Hoover defeated Democratic candidate Alfred E. Smith of New York, receiving the electoral-college vote of forty of the forty-eight states. With the conservative Hoover in the White House, most Americans were convinced that prosperous times would continue. Indeed, the “Great Engineer” and humanitarian, as Hoover was known, had repeatedly pronounced that an indefinite continuation of a businessman’s government would result in unfettered growth. Only months before his overwhelming victory over Smith, Hoover proclaimed, “We in America today are nearer to the final triumph over poverty than ever before in the history of any land.”23 Of course, less than fourteen months later, with the occurrence of “Black Friday” in October 1929, all such rosy projections changed.
While James Watson would never realize his dream of being president, he would be almost as near in power to the top position as any elected official could be. In January 1929, Watson was elected majority leader of the United States Senate, a position he would hold throughout the duration of the Hoover administration. James Goodrich would often travel to Washington to see Watson, now an important spoke in the inner circle of Washington power. Will Hays, Goodrich’s other longtime political colleague who had Washington connections, had resigned his position as President Harding’s postmaster general in 1922 to become the first president of the Motion Picture Producers and Distributors of America, at the princely salary of $100,000 a year.24
Goodrich’s other close friends in the nation’s capital included President and Mrs. Hoover. If anything, the friendship between the Hoovers and the Goodriches grew closer while Hoover occupied the presidency. At the age of sixty-five, Goodrich was not interested in obtaining a post in Hoover’s administration, but he regularly offered advice to the president. For instance, while staying at the White House (in the Lincoln suite) in February 1932, Goodrich again approached Hoover about recognizing the Soviet Union. Preoccupied with the prolongation of the Depression and only months away from undertaking a presidential campaign, Hoover had no interest in taking on the thorny issue. “No occasion to recognize Russia, no sentiment in [the] country for it,” he told his good friend.25
The Goodriches also arranged for several groups of Indiana friends to be received by the Hoovers.26 One such occasion was described by Emma Lieber in a humorous vignette about Cora Goodrich that was recorded in Lieber’s biography about her husband, Richard Lieber. Mrs. Lieber wrote:
Though Governor Goodrich never was President of these United States, he and his wife frequently were house guests in the White House. I want to tell you of an amusing instance. The Goodriches happened to be guests of the President on one occasion when Richard and I (and of course many others) were invited to be in the receiving line at one of the receptions that President and Mrs. Hoover were giving. . . .
That evening we all were invited to a dinner at the home of Senator and Mrs. James Davis [of Pennsylvania]. Again a White House automobile was sent to the hotel to take us and Governor and Mrs. Goodrich to the home of Senator Davis and then after the dinner return us to the White House for the reception. . . . [Later], Mrs. Goodrich, who noticed how tired we were, thought we ought to go back to our hotel and to bed. She beckoned to a very fine looking gold-braided man, believing him to be a servant in livery, and said, “Please call one of the White House automobiles and see that Colonel Lieber and his ladies are taken to their hotel.”
Mrs. Goodrich did not realize it, but poor Richard did, and for once he was embarrassed, that she had made this request to an—Admiral! The Admiral had a sense of humor and merely winked an eye at Richard, then personally saw to it that a chauffeur was notified and we were taken to our hotel in grand style.27
At a professional level, James Goodrich only once served as a formal adviser to Hoover. On October 18, 1929, the president appointed Goodrich to an important commission on conservation. Hoover did this at a news conference at the White House in which he announced the formation of the Commission on the Conservation and Administration of Public Domain (commonly known as the Public Lands Commission).28 The commission was composed of one representative from each of the eleven western states in which public land existed. J. R. Garfield, secretary of the interior under President Theodore Roosevelt, chaired the committee. Hoover appointed James Goodrich as a general representative. Hoover’s previous work with Goodrich, as well as the former governor’s own reputation in establishing Indiana’s conservation program and state park system, were factors that led to Goodrich’s appointment.29
The commission first met in June 1930. During that summer, members traveled approximately nine thousand miles by automobile throughout the western states, gathering data. At that time, approximately 179 million acres of land remained in public domain (owned neither by states nor by individuals). The commission was charged with evaluating how best to preserve and make use of the land. The commission initially examined how to dispose of the surface rights of the land; at that time up to 50 percent of all sheep and 15 percent of all cattle in the United States grazed on public land. The commission later investigated a host of ancillary issues: land reclamation; national forests; flood control; power sites; reservations for Native Americans; the extraction of minerals, including oil and gas; national parks; bird refuges; and game reserves.30 Finally, on January 16, 1931, the commission issued its final report to President Hoover.31
The commission’s far-ranging report has implications even to this day. For instance, the commission’s recommendations for water conservation and flood control led to the building of hundreds of dams and irrigation projects that made millions of acres tillable and suitable for grazing. The commission’s recommendations with regard to the appropriation of public lands to the states caused many states to create and develop conservation programs, nature preserves, and state parks.32
Goodrich disagreed with much of the report and signed it reluctantly. He insisted that the states could administer public lands better than Washington could and that the commission had recommended the relinquishment of too little federal control. “My position is so diametrically opposite to that of the rest of the Commission that I wonder why I was put on it,” he wrote to Garfield. “I should have resigned when the report first came in.”33
Previously, in March 1927, James Goodrich had begun serving on the board of directors of the American-Russian Chamber of Commerce, located on West Fifty-seventh Street in New York City. In this capacity, he was able to renew his acquaintance with Maxim Litvinoff, the Soviet foreign minister, with whom he worked closely. Most of the American directors were heads of large corporations doing business in the Soviet Union, such as the Westinghouse Corporation, United States Steel, Chase National Bank, General Electric, and the Remington Typewriter Company. The Chamber of Commerce published a series of reports promoting a “how-to” guide for companies trading in the Soviet Union and sponsored informal trade delegations between the two countries. Goodrich’s inability to influence American foreign policy toward Russia through the Harding and Coolidge administrations was apparently why he sought to encourage trade between the two powers through private channels.34
Because of his close affiliation with Teddy Roosevelt, Goodrich was appointed in 1920 as a member of the Theodore Roosevelt Memorial Trust, a commission charged with honoring the twenty-sixth president of the United States. In the private sphere, Goodrich, in addition to being chairman of the Wabash College Board of Trustees, also served as a trustee of the Presbyterian Theological Seminary in Chicago (from 1919 to 1940), as a trustee of the American Child Welfare Association, and as vice-president and member of the executive committee of the Civil Legion of America.35 Occasionally, he spoke at such occasions as the dedication of the World War I monument in his hometown of Winchester on November 11, 1928. The monument, the statue of a doughboy, had been donated by the Goodrich family in recognition of the thirty-six men from Randolph County who died during the war.36 And although he would not seek elective office again, James Goodrich was still sought by the Republican Party for his leadership. From the time he stepped down as governor in 1920, he attended until his death nearly every Republican national and state convention as a delegate from Indiana.
During the 1920s, Pierre was enjoying great success in the business world. In his private life, however, the situation was not the same, at least in the latter half of the decade. On September 16, 1926, his boyhood friend and the best man at his wedding, Carl McCamish, traveled to Cincinnati and committed suicide by shooting himself through the chest. In the early 1920s, after the death of his sister, Carl McCamish had moved back to Winchester from Indianapolis to work in the family business, a highly successful burial-supply company. Carl had given up being a doctor to assist his parents with the family company. He also served on the town council. According to newspaper accounts, poor health and overcommitment both at work and in the community led McCamish to take his own life.37
In 1927, Pierre began experiencing excruciating back pain. The condition worsened to the point that in late September he sought medical attention at the Mayo Clinic in Rochester, Minnesota. He had back surgery in Indianapolis the following year. Another blow, emotionally more agonizing than any physical pain he would suffer, struck Pierre shortly after.38 In August 1928, after eight years of marriage, Dorothy divorced him. Their only child, Frances (whom they called “Nancy”), was not quite seven years old.39
Family members and close friends suggested a number of reasons for the marriage’s breakup. First, Dorothy was a socialite and conversationalist who enjoyed parties and outings with friends. She was also a consummate storyteller who needed a willing audience of listeners.40 As for Pierre, cocktail parties and social gatherings completely bored him. To his way of thinking, these occasions provided little opportunity to engage in meaningful (philosophical) conversations. Moreover, they kept him away from his business and intellectual pursuits.41 Pierre was known to work extremely long hours, which did not accommodate Dorothy’s desire to be more social.
Second, during the early years of his marriage, Pierre was quite frugal. Despite enjoying early financial success from his legal practice and businesses, he was ever mindful, almost as if he were still at college, of unnecessary expenditures. His parsimony did not suit Dorothy, who had grown up in comfortable environs as the daughter of a wealthy Indiana banker.42 Finally, there may have been another love interest. Pierre’s parents were heartbroken over the divorce.
Pierre remained single for the next twelve years, while Dorothy, on Christmas Day in 1933, married Louis Haerle, an Indianapolis businessman.43 Dorothy’s second marriage appeared to be a happy one. She became active in Indianapolis social circles and, for a time, worked as an occupational therapist for the Riley Hospital for Children.44 In 1965, she and Haerle moved to La Jolla, California, to retire. Dorothy passed away in February 1987.45
For many years after their divorce, Pierre and Dorothy remained in contact over the upbringing of their daughter. Nancy had gone to school at Shortridge High School in Indianapolis but graduated from Tudor Hall School in 1939. She then matriculated at Vassar College in Poughkeepsie, New York, her mother’s alma mater. After only two years, however, she ran away from the campus, causing substantial distress to both of her parents. She later traveled extensively in Europe, and she enrolled at Oxford and the Sorbonne but failed to earn a degree.46
James Goodrich’s work on various federal and state commissions enabled him to continue his long-term interest in public affairs. Financially secure, James was able to devote much time to serving on these commissions and on the boards of several private organizations. The bulk of his time, however, was still spent in increasing his own and his family’s fortunes.
President Coolidge’s philosophy that “the business of America is business” was taken to heart by the Goodriches: In June 1920, while James was still governor, his family founded the Railway Service and Supply Company in Indianapolis, which primarily repaired freight cars and constructed or repaired railway equipment.47 In 1923, James became a major investor in and treasurer of the Patoka Coal Company, a strip mine in Pike County, Indiana.48 In November 1925, James established Engineers Incorporated, and in April 1926, the Goodriches formed the Interstate Telephone and Telegraph Company, which provided telephone service to communities in both Indiana and Ohio.49 In May 1926, Pierre was one of three incorporators who founded the Muncie Theatre Realty Company, a holding company for movie theaters in Muncie, Indiana.50
Despite forming and acquiring interests in these companies in the mid 1920s, James Goodrich detected something wrong in the economy. The former Indiana governor was a master at seeing a business opportunity and capitalizing on it. He was especially keen when it came to anticipating economic cycles and the profitability of various enterprises. His most far-reaching and important business decision came approximately two years before the Great Depression. James Goodrich’s nephew and cousin to Pierre, Perce “Bud” Goodrich, tells the story:
The Goodrich brothers had family meetings often and Uncle Jim came into a family meeting and just told his brothers, “We’re going to get out of the utility business.” He sensed something was wrong with the economy and that things were going to happen that he didn’t like. Uncle James told his brothers, “We’re going to pool our money and form a corporation so if, down the road, we see something we want to buy or something we want to invest in, we’ll have the cash to do it. In the meantime we’ll invest the money in short term securities.”51
Obviously, James Goodrich’s experience as governor and in banking gave him a certain advantage in foretelling the onset of the Great Depression. It is equally evident, however, that thousands of other politicians, businessmen, and bankers either totally misread or disregarded the signs that foretold the horrific economic times to come. James’s brothers followed the former governor’s directions precisely. The five businessmen soon liquidated their interests in most of the small-town utility companies, such as Citizens Heat, Power and Light Company in Winchester; Washington Heat, Light and Power Company in Daviess County; Jeffersonville Water, Light and Power Company in Clark County; Union Power, Heat and Light Company of Union City, Indiana; and the Indiana-Ohio and the Western Ohio Public Services companies. The sales generated huge profits for the family. For instance, the sales of the Washington Heat, Light and Power Company and the Jeffersonville Water, Light and Power Company, according to James Goodrich, amounted to half a million dollars.52
The brothers continued to maintain controlling ownership or a large interest, however, in the Goodrich Brothers Hay and Grain Company, Peoples Loan and Trust Company, Patoka Coal, and a handful of utilities, such as the Eastern Indiana Telephone Company. As Percy recalled years later, the grain and feed business was “recession proof,” whereas many of the family’s other holdings were not.53 The money they received from selling their interests in the utilities was invested in short-term certificates of deposit by Engineers Incorporated. The year was 1927. That move would make it possible for the family to increase its fortune tenfold in the 1930s and 1940s.
. . . I am very happy over the way the telephone companies are coming out. They are bound to be very profitable in the long run . . . I think you ought to keep after Frazier about the sales of Peru plants. Also call up Thompson, of the Milan Furniture Company at Milan, Indiana, and see if he has made any progress in that direction. I suggest that you do not liquidate any more of No. 3 until you come on [to Baltimore], unless conditions out there make it necessary. I think it was a good idea to liquidate Ohio Telephone Service 101. It will convince the bank department that bonds of that character are not affected by market conditions. This market is going to touch bottom before a great length of time, and when it does it will be a good time to begin to buy some stocks. . . . I think you are doing a splendid job on things, Pierre, and I heartily approve [of] everything you have done.
James Goodrich, September 27, 1937
In september 1937, James Goodrich lay in a Baltimore bed at Johns Hopkins Hospital suffering from an irregular heartbeat. The condition was so serious that he would be bedridden for the next several weeks. He had suffered a heart attack in June, causing him to cancel a planned extensive tour of the Soviet Union that summer. He had hoped to study the industrial progress the Great Bear had made under Stalin since his last trip in 1925. After his release, he began giving more time to his philanthropic interests, particularly educational and religious institutions. Two of his larger gifts were to Wabash College: $150,000 for the construction of a much-needed science hall and $113,000 to establish scholarships for advanced studies in honor of a former president of the college. He also contributed more than $90,000 to Hanover College, part of which was to help endow a chair in musical education.1
Goodrich’s illness brought him face-to-face with his own mortality and also resulted in a de facto change in the chain of command. Pierre was now in control of the family’s financial empire. Pierre did, however, receive weekly letters from his father while James was recuperating at Johns Hopkins. The letters offered Pierre advice and encouragement regarding many of the decisions he had to make: when to sell what stocks, what loans should be made and for how much and under what conditions, recommendations on how to cut operating expenses, and so forth.2
At the time, there were many successful family-run businesses in central Indiana: the five Ball brothers (glass) and the Kitselmans (wire and steel) in Muncie; the Irwin and Miller families (diesel engines and banking) of Columbus; and, of course, the Lilly family of Indianapolis (pharmaceuticals). But Pierre Goodrich had no need to look beyond the mentoring of his own father and four uncles to obtain most of the knowledge and cunning that would make him a highly successful businessman. Other family-run companies might have been larger, but few, if any, families in the Midwest had their fingers in so many corporate pies. By the late 1930s, the Goodriches had already established themselves as a financial powerhouse in banking and securities, commodities, newspapers, transportation, and public utilities. They would add others.
Everyone in the family was a partner in the dynasty. William Wallace, the youngest Goodrich brother, graduated from Winchester High School in 1889. He then attended Wabash College briefly before studying electrical engineering at the Armour Institute in Chicago. In the early 1890s, he returned to Indiana and got his start in the hay and grain business in New Castle, where he stayed and operated a gas company. He returned to Winchester and operated the Rock Oil Company and, for a time, the Union Heat, Light and Power Company, the utility that provided Union City and Portland with natural gas. When Union Heat was sold in the 1920s, William became the manager of the Indiana-Ohio Public Service Company, an electric utility, until it was sold in 1927. He then became associated with the Peoples Loan and Trust Company in Winchester, where he remained until he retired. William passed away in November 1948.3
With his second wife, Louise Gordon, William Wallace had two children: Elizabeth and Perce. Elizabeth “Betty” Goodrich Terry was born in 1906. She married Phillip Terry in September 1939. The couple lived in Indianapolis for twenty-five years until Phillip’s death in 1967, at which time Elizabeth returned to her hometown. Elizabeth had no children. She continues to reside in Winchester.
Perce Gordon “Bud” Goodrich grew up in Winchester and graduated from Wabash College in 1930. He was successful in the business world in his own right, serving as president and director of the Indiana Telephone Corporation; the Public Telephone Corporation in Greensburg, Indiana; and the Peoples Loan and Trust Company. Perce would serve as an officer and director of several of the Goodrich company boards over the years, including that of Engineers Incorporated. Perce was also president of his own companies in Portland, Indiana—the Portland Service Company, Inc., and the Portland Insurance Company—as well as a co-owner of several other businesses.
From his first marriage to Gaynel Graber, Perce had a daughter, Elizabeth Putnam Orrill, who lives in Madison, Indiana. From his second marriage to Frances Ann Hawkins in December 1939, Perce had two other children: Janice Gordon Goodrich Gerson, who resides in Zionsville, Indiana, and John Baldwin Goodrich, who owns and manages a plating company in Portland, Indiana. John Baldwin also serves as a director of the Peoples Loan and Trust Bank and is on the Portland school board. Perce Goodrich passed away in September 1996.4
John “Jay” Goodrich, the middle brother, oversaw the operation of seven large farms in Randolph and Jay counties. He had started out in 1884 buying and shipping hay, but in 1888 he went into partnership with Percy in the hardware and furniture business. In 1891, he sold his interest in the business to his brother Ed and again became involved in the hay business. He became president of the Goodrich Brothers Hay and Grain Company in January 1898, when the company was formed. By the time of Jay’s death, Goodrich Brothers owned approximately twenty-four grain elevators throughout central and northern Indiana. At times, there were as many as 150 railroad cars waiting to be loaded at the Goodrich Brothers’ huge grain elevator on the north edge of Winchester. Although he was a very successful farmer, a costly hobby nearly caused Jay to be alienated from the family. Shortly after the turn of the century, Jay became active breeding, training, and racing trotting and pacing horses. He eventually became destitute from the wealthy-man’s sport, since his horses were perennial bridesmaids. Finally, the other four Goodrich brothers paid off Jay’s debts on the condition that he forgo any further association with the sport.5
Jay’s marriage to Charlotte Martin resulted in the birth of two sons: John Baldwin, who was born in the same year as Pierre, 1894; and James, who was born in 1897 but died four years later. After attending Wabash College for one year (1912), John Baldwin worked for Peoples Loan and Trust Company. He then served in the United States military, fighting in France during World War I. On his return, he became secretary and later manager of the insurance department of the Peoples Investment and Guaranty Company. He later obtained the sole interest in the Peoples Investment and Guaranty Company and changed its name to Standard Securities. John’s only marriage was to Helen C. Cummins in 1964, when he was nearly seventy years old. The couple had no children together. John B. Goodrich is perhaps best remembered as a generous benefactor to Wabash College, the First Presbyterian Church of Winchester, Goodrich Park, and the American Legion Post in Winchester.6
Edward Goodrich, the second-youngest of the original five Goodrich brothers, was born the day that Ulysses Grant was elected president for the second time in 1871. In January 1911, he became a director of the Randolph County Bank, the local competitor of his brother James’s Peoples Loan and Trust Company. Two years later, he was named vice-president, and in 1918 he ascended to the presidency of the financial institution. Ed would remain president of the Randolph County Bank until his death in 1953. Beginning in 1912, he also managed the local electrical and water company, Citizens Heat, Light and Power. Ed Goodrich held this position until 1926, when Citizens was sold. In 1922, Ed became chairman of the board of the Railway Service and Supply Company in Indianapolis. Ed was perhaps the most competitive of all the Goodrich brothers. Moreover, he was the one most likely to disagree with James on business decisions.
If James was impulsive and quick to react, Ed was just the opposite—cautious, guarded, refusing to make a decision until he absolutely had to. Handsome and big, Ed was known as “King Ed” because of his imposing presence. He was so conservative that legend has it that he would refuse to tell someone the time when asked for fear of getting it wrong.7 Ed’s marriage to Elizabeth Neff resulted in one child, Florence, who was born on May 12, 1897. She married Francis Dunn, originally from Marion, Indiana, in November 1921. Florence and Francis Dunn had two sons: Wesley, a retired psychologist, lives in Florida; Edward, once a jewelry manufacturer in Elwood, Indiana, is now retired and resides in Indianapolis. Before her death in 1994, Florence contributed approximately $1 million to the Indianapolis Symphony Orchestra and another $1 million to Butler University in Indianapolis.8
Percy, the oldest brother, was born in 1861. He operated the coal business in Winchester and worked as secretary and manager of the Goodrich Brothers Hay and Grain Company. The power for the electric company was generated locally by burning coal and fuel oil. Percy had been president of the National Hay and Grain Association in the 1920s and 1930s; vice-president and director of the family investment company, Engineers Incorporated; and a founding investor of the Eastern Indiana Telephone Company, the Rock Oil Company, and several other early family businesses. Percy was also a director of the Grain Dealers National Mutual Fire Insurance Company in Indianapolis for thirty-three years, serving as vice-president of the company from 1929 to 1935 and chairman of the board from 1947 to 1951. During the early years of the twentieth century, operators of country grain elevators had difficulty obtaining insurance coverage, because of the high incidence of explosions caused by grain dust. The only insurance they were able to obtain was from East Coast insurers at extremely high premiums. Therefore, a group of Hoosier grain owners formed the Grain Dealers National Mutual Fire Insurance Company. The company eventually wrote policies in states throughout the country.9 Despite two marriages, Percy had no children.
Thus, by the 1930s the family held a substantial interest in many of the core businesses in east-central Indiana:
James Goodrich’s business interests extended into coal, railroads, and oil refining. The family also owned a water company and an ice-delivery business, and sold farm machinery.10 Thus, it is evident that the Goodrich financial dynasty was truly a family empire, built by the hard work of all five original brothers.
Besides their varied business interests, the Goodriches were active in other endeavors throughout the community. They seemed to be omnipresent in their hometown. Ed served as president of the Winchester school board, and James had been a board member in the 1890s and early 1900s. Ed was also a leader and benefactor of the local Masonic lodge. John and William Wallace took on leadership positions in the Presbyterian Church, and William was a charter and lifelong member of the Elks Lodge of New Castle, Indiana. Cora and the brothers’ mother, Elizabeth, were active in the local library association and stalwart members of the Presbyterian Church. Percy and James were charter members of the Winchester Rotary Club in 1919, and James was a founding library board member. It seemed to some people that there was not much that went on in the local community that the Goodriches were not involved with in some way.
Their influence also extended beyond their local community. Percy Goodrich, for instance, was a family historian and a generous philanthropist. Percy’s foremost interest, like James’s, was education. What James Goodrich was to Wabash College as a valued trustee and benefactor, Percy was to Hanover College of Indiana. Although he never attended college, Percy was a member of the Hanover College Board of Trustees from 1921 until his death in 1951. During that time, he served for eighteen years as president of the board (1930 to 1948). When he passed away, his widow, Ethyl, served on the board of trustees until her retirement in 1967. The beautiful southern Indiana campus, nestled on a mountainside overlooking the Ohio River, held a certain charm for Percy. Percy’s first wife, Susan, died in 1932. In February 1940, when he married Ethyl Jones Kuhner, he insisted that the small, simple ceremony be held in the Hanover chapel, officiated by Hanover’s president. Percy devoted much of his free time and most of his resources to Hanover: He endowed chairs in speech and business administration (the Elizabeth Edger Goodrich Chair of Public Speaking and the Goodrich Professorship of Business Administration) and four student scholarships. The Goodrich Science Building on campus is named for Percy. He contributed nearly $500,000 to Hanover during his lifetime, and on the death of Ethyl in 1970, the remainder of his estate, in excess of $1,500,000, devolved to Hanover.11
From 1947 to 1950, Percy wrote a weekly newsletter entitled Down in Indiana. Mailed to a select group of thirty members of the National Grain Dealers Association, the newsletter contained ramblings and reminiscences about family, friends, and events that Percy had experienced during his nearly ninety years of life.12 A year before Percy’s death, Percy and Calvin Goodrich, a first cousin to the five Goodrich brothers, wrote a history of the Goodrich family’s early years.13 James had traveled with Percy to Virginia in the late 1930s to complete some of the research for the family history. Percy, like his brother James, was an ardent Republican. He greatly admired Abraham Lincoln, co-founding and serving as president of the Randolph County Lincoln Club in 1932. For the next twenty-five years, the Lincoln Club held annual meetings in Winchester, where speakers included United States senators and representatives, governors, and other political and military leaders. Percy also gathered an impressive collection of books and articles about Lincoln during his lifetime, which was donated to the Winchester Public Library at his death.14
In temperament and personality, Pierre was probably more like his uncles Percy and Ed than like his own father. Percy and Ed were also shrewd businessmen, not least because they had ability to keep their employees’ noses to the grindstone. Gene Comer, a Winchester resident, worked for Percy Goodrich as a young man fresh out of high school. His employer’s attitude prompted Comer to write the following poem when he was just eighteen years old and give it to his boss:
“A lot of people were down on the Goodriches as businessmen,” said Ivan Barr, who worked for the Goodrich Brothers Company and its successor from 1946 to 1968. “I think a lot of it was because of their success. They were considered crooked. That’s very unfair and very unjust, because they were honest,” Barr stated. “If you were found as an employee cheating on the scales [weighing grain or coal] in the Goodriches’ favor, you were fired immediately,” Barr stated. “They wouldn’t tolerate that. So I found they were criticized very unjustly because of the fact, I think, that they were so successful.”16
Not every local resident that remembers the Goodrich family in the 1930s and 1940s is as charitable as Barr. In east-central Indiana, the Goodrich brothers were often viewed as predators, ravenous in seizing every opportunity to gobble up utilities, banks, grain elevators, and farms whenever such businesses became available at low prices. Moreover, many disgruntled workers complained about the low wages the Goodriches paid.17 It was well and good, many complained, that the Goodriches gave away tremendous sums to educational institutions such as Wabash and Hanover. If you were the breadwinner responsible for raising a family, however, that knowledge little compensated for low pay.
Another reason for grumblings about the Goodrich brothers’ business prowess was the timing of their success. Their prosperity as a family became particularly conspicuous during the late 1920s and 1930s, when other families were struggling for their very survival. The Great Depression was especially tough on the farm community. Many farm families were losing their properties and their way of living. From 1921 to 1928, the United States agricultural population decreased by three million farmers. Nearly every family had to contend with unemployment and meager times. In 1927, the annual income of all 6.3 million farmers in the country averaged only $548. It only became worse when the Great Depression hit two years later. By 1932, twelve million Americans were unemployed and five thousand banks had failed.18
Moreover, the perception (and to a large degree the reality) was that the Goodrich family had a monopoly in many area businesses. Winchester resident Ralph Owens rented a farm from John “Jay” Goodrich in the 1920s. He believes that the Goodrich brothers could drive a hard bargain with the local farmers because they owned all the grain elevators within the geographical area. They were by far the largest grain dealers in Indiana. “You were forced to buy and sell from the Goodrich brothers,” said Owens. “There were no other elevators [under different ownership] doing business.”19
But some stories about the Goodrich brothers’ supposed exploitations bordered on the ridiculous. For instance, one longtime Winchester attorney remembers a childhood rumor about James Goodrich’s alleged exploitation of the Russian famine relief effort for his own private gain. The story held that the former governor successfully raised $10 million from private sources, contributed only $2 million to the starving Russian children, and pocketed the rest.20 Another rumor was that the Goodrich brothers had intentionally decreased the gas pressure on a wellhead. They then allegedly bought the gas well for a pittance when the owner believed it was going dry.21 It is true that the Goodrich brothers bought almost all their businesses at extremely depressed prices, but there is no evidence that they did anything illegal. The Depression had brought about many bankruptcies and receiverships. Invariably, almost every corporation the Goodriches took over in the 1930s, as will be seen, was bought for well below previous market prices.22
During the 1930s, James Goodrich strongly opposed President Franklin Delano Roosevelt’s economic remedies for the sorry state of the country. He believed that Roosevelt’s New Deal programs of intervention in business would make matters only worse. In 1936, Goodrich wrote to Frank Litschert, his longtime secretary: “This whole New Deal is about to go to smash. . . . Roosevelt and the whole outfit are mad, charging everyone who fails to agree with them, with bad faith.”23
Goodrich especially ridiculed the high salaries that he saw postal workers receive and the subsidies extended to the farm community. He believed that cutting federal spending, not increasing it, was the only way to restore the nation to prosperity. He had written in 1933 to Herbert Hoover, who had been out of the White House for nine months: “Had we been permitted to go on without Government interference, while we might have had the wage increase that follows every recovery, yet with increasing employment and accelerated demand for goods and a gradual improvement in farm prices already under way, our situation would have been vastly better, in my opinion, than it is at this time.”24
Interestingly, less than two months after he had written to Hoover condemning Roosevelt’s domestic policies, Goodrich wrote to Roosevelt, praising him for his foreign policy in granting recognition to the Soviet Union:
Although I am not of your political faith, as you know, I want to congratulate you upon the invitation extended to Russia to send someone here to discuss the matter of the resumption of relations between America and Russia.
I am glad to know Mr. Litvinov is coming over. I got quite well acquainted with him on my four trips to Russia. He is a man of undoubted ability, sensible and realistic in his dealings.
I trust that you will see your way clear to extend recognition without any strings tied to it and then sit down as equals and discuss the question of just how the situation is to be handled.
Experience and observation have taught me that Russia can be depended upon to meet her obligations, her record in that respect is at least as good as that of any of our “associates” in the World War.
I shall not hesitate publicly and otherwise to support you in this matter.
Roosevelt acknowledged Goodrich’s letter, thanking him for his support and advice. It would seem that that was the only issue on which Goodrich ever agreed with the longtime president.25
In June 1936, Goodrich attended the Republican National Convention in Cleveland, Ohio, serving as a member of the platform committee. At the time, he still had hopes of drafting Hoover for the party nomination. When Hoover refused to seek the position, Goodrich willingly endorsed Governor Alf Landon of Kansas for the nomination. Goodrich was not surprised, however, by Roosevelt’s landslide victory over Landon in November.26 The times were desperate, and the American people had little interest in changing the path toward recovery that the charismatic incumbent promised.
In the spring of 1940, James Goodrich contracted pneumonia and was briefly hospitalized in March and April. He had remained intermittently ill since his hospitalization in Baltimore in the fall of 1937 and had been hospitalized several times since, including a stint at a well-known Battle Creek, Michigan, sanitarium in the spring of 1938.27 Since then, he and Cora had spent the winters in Fort Lauderdale, Florida. Finally, in May 1940, Goodrich recovered sufficiently to attend the Republican State Convention, where presidential hopeful Wendell Willkie spoke. In June, James Goodrich felt well enough to attend the Republican National Convention in Philadelphia. He went to the convention as a delegate from Indiana’s Tenth Congressional District. Goodrich had hoped to see the New York district attorney Thomas E. Dewey (who was just thirty-eight years old) or Ohio Senator Robert Taft receive the Republican presidential nomination. Instead, Willkie won the race.
Goodrich, James Watson, and other Hoosiers were Willkie’s breakfast guests on the day that Willkie garnered the nomination. Watson was also an Indiana delegate to the convention, as he had been to every Republican National Convention since 1912. Willkie and Watson had made up after Watson had criticized Willkie for his previous Democratic Party membership. As Watson had told Willkie when he first learned that Willkie was seeking the Republican presidential nomination, he was glad to have a reformed prostitute (Willkie) in his church (the Republican Party), but he didn’t want him leading the choir the next Sunday.28
The meeting of Watson and Goodrich in Philadelphia marked the last time the two longtime chums and politicians would be together. Although marked by jealousy and often strained, the friendship of these two men had endured a lifetime, no doubt largely because of their mutual passion for Republican politics, conservative values, and public service. Together, Goodrich and Watson had dominated Indiana Republican politics during the first thirty years of the century. “Sunny Jim” Watson, the humorous, backslapping, and scandal-ridden politician, had lost his United States Senate seat in the 1932 Democratic landslide after being considered one of the most powerful and colorful figures on the national political scene. He remained in Washington, D.C., and practiced law until his death in 1948.29
When James Goodrich returned to his hometown after the 1940 Republican National Convention, he experienced a recurrence of “nervous heart.” In late July, he suffered a stroke and became bedridden again. His last political act was to write Willkie on August 10 to offer him encouragement in his national race against Roosevelt. “I do not believe any President has ever, on his inauguration, faced as serious a situation as you will confront next January.”30 On the following day, Goodrich suffered another stroke. Four days later, James Goodrich died, at the age of seventy-six, at the Randolph County Hospital in Winchester, of a cerebral hemorrhage. Cora and Pierre, as well as other family members, were at the former governor’s bedside at the time of his death.
On August 18, James Goodrich’s funeral was held in Winchester. The service was marred by a torrential rainstorm that had traffic in a logjam throughout the streets of the small community. Several hundred people came to pay their final respects: politicians, businessmen, religious leaders, and townspeople who had been the governor’s longtime friends. Some of the most noteworthy were James Watson; Will Hays; the Reverend John F. O’Hara from New York; Will Irwin from Columbus, Indiana; Glen R. Hillis, the 1940 Republican nominee for governor; Archibald Bobbitt, Republican state chairman; and the presidents of Wabash and Hanover colleges. Herbert Hoover and Thomas Dewey sent telegrams conveying their condolences. The Reverend Gustav Papperman, the former minister of the Winchester Presbyterian Church who then served as pastor of the Irving Park Presbyterian Church in Chicago, performed the services. The statehouse flags were lowered to half-staff in remembrance of the state’s twenty-eighth governor.31
With the death of James Goodrich, Pierre lost the most significant person in his life, a father and mentor of exceptional influence. James Goodrich was one of the most accomplished men in modern Indiana history. In public life, his contributions and range of interests are both numerous and laudable: He was Indiana’s highly successful World War I governor (1917–21); Indiana state Republican chairman for nearly a decade (1901–10); Republican national committeeman (1912–16); chairman and member, respectively, of the Indiana and International St. Lawrence Waterways commissions, appointed by President Coolidge (1923–27); lead American Relief Administration investigator of the Soviet Union Famine Relief Commission and special United States envoy to Russia (1921–23), appointed by President Harding; member of the National Public Lands Committee, appointed by President Hoover (1929–30); and trustee of the Theodore Roosevelt Memorial Committee.
His civic, educational, and religious contributions were nearly as impressive: trustee of Wabash College (1904–40) and board chairman for sixteen years (1924–40); leadership positions in the Knights of Pythias (a fraternal and charitable society), Knights of Labor, and the National Grange; founding member of the Winchester Volunteer Fire Department (1897) and Winchester Rotary Club (1919);32 trustee of the McCormick Theological Seminary and the Presbyterian Theological Seminary in Chicago; Winchester School Board member for fourteen years and founding member of the Winchester Library Board; elder and Sunday school teacher of the Winchester Presbyterian Church for twenty-five years; a thirty-second-degree Mason; and member of numerous other organizations.
As a philanthropist, he had contributed approximately $1 million to charitable causes, particularly favoring private higher education: nearly $400,000 to Wabash College, where he received an honorary master’s degree in 1915 and an honorary doctorate in 1917; large sums to Oakland City College, the Presbyterian Theological Seminary in Chicago, Hanover College, where he was awarded an honorary Doctor of Science degree in 1938, and the University of Notre Dame, where he received an honorary LL.D. in 1917 (he had been a very close friend of Notre Dame’s eighth president, Father John W. Cavanaugh). In June 1937, James Goodrich gave twenty-eight acres of parkland to the town of Winchester. This acreage was added to eighty acres that the Goodrich family had previously donated to their hometown. Also in June 1937, James gave $50,000 to beautify the park.33
It was in the business arena that James Goodrich left his greatest legacy to his family. Jim Goodrich’s life was one which Horatio Alger himself would have admired. James and his four brothers had started as youths with little, working as farmhands for pennies an hour. By the end of his life, James had amassed millions and had laid the groundwork for his son to achieve far greater wealth. Pierre would be the biggest beneficiary of his father’s amazing entrepreneurship. He would step into the leadership position of several companies left to him at his father’s death.
The deaths of the original five Goodrich brothers happened over a period of sixteen years: John on November 7, 1937; James on August 15, 1940; William Wallace on November 22, 1948; Percy on August 11, 1951; and Ed on November 21, 1953. The remaining family members—the wives and children of the original five Goodrich brothers—subsequently pooled their individual shares of the various family businesses into a voting trust. They allowed Pierre to exercise virtual control over the trust, delegating to him the authority to make the day-to-day corporate decisions.34 The family members were content to allow Pierre to have such discretionary control because he and his father had a tremendous record of making the right corporate decisions. Moreover, Pierre’s two male cousins—John and Perce—were engaged in successful businesses of their own. They had little time to contribute to the daily decisions of the Indianapolis-based corporations, although they served as board members of many of the companies.
How Pierre operated as a businessman is illuminated by an account given by E. F. Gallahue in his autobiography, Edward’s Odyssey.35 Gallahue became a highly successful entrepreneur in his own right as president of American States Insurance, based in Indianapolis. He shared with Pierre not only the ability to build a business, but also a great yearning to understand human nature. A reader of Sigmund Freud and the Swiss psychiatrist Carl Jung, Gallahue had a lifelong interest in literature, religion, and, especially, matters involving mental health. No doubt this background prevented Gallahue from becoming discouraged when negotiations between Goodrich and him for the sale of the Union Insurance Company continued without result for several months in 1941. Even after several meetings between the two men, a deal had not been struck. Gallahue’s attorneys told their boss that it was foolish for him to pursue the matter with Goodrich any further. But Gallahue did not give up.36 Gallahue recalled how his patience paid off:
Pierre was a very gracious person, and if he wanted to take up part of our meeting talking about Greek philosophy and Asiatic mysticism, it was all right with me; for I had some knowledge of these subjects and would at least find them interesting. He was a highly intelligent person who simply approached matters differently from most businessmen. Instead of moving directly from “A” to “B,” he chose to surround a subject in concentric circles. While his method took longer, it was effective in covering every item. Finally, after several months, Pierre and I arrived at the basis for a sale.37
Pierre’s methodical, painstaking style of negotiation was totally unlike his father’s. Despite its nontraditional nature, it was a style that almost always proved financially fruitful. The sale of the Union Insurance Company was the first of many successful business deals that Pierre would execute on his own.
Companies! Companies! Companies!
A well-run company is not accidental. . . . Our company must be well-run from every aspect, with prompt and reliable accounting, highly intelligent engineering, the development of very superior personnel in every department and effective public relations. . . . If you will study all I have said, I think you will see what it is we need during the next 7–10 years. We cannot do it overnight. We can only do it by being prompt in our own action; and that means we must have intelligent information promptly.
pierre f. goodrich, Memorandum, Indiana Telephone Corp., May 30, 1973
The goodrich brothers’ decision in 1927 to sell their interests in several public utilities was the genesis of bigger things to come. With the premium prices they were able to command for the companies, they deposited the profits and waited for even better business opportunities.
What came first would shock and alarm the nation. On what would become known as Black Friday (October 29, 1929), the stock market crashed. In that one day, an unprecedented sixteen million stocks were sold. Over the next two weeks, stocks lost more than 40 percent of their value. The slide continued until 1932, when stocks were worth barely one-fourth what they had been worth before the crash. Employment was slashed. By 1933, more than 25 percent of able-bodied workers were out of jobs. Factory jobs were extremely scarce, because companies were pouring out more goods than consumers could purchase. Those who were fortunate enough to have work toiled for meager pay.
Thirty percent of Americans still made their living on farms. Commodity prices collapsed to such an extent that a farmer was able to sell a bushel of corn, on average, for only 31¢ in 1932, whereas he had received $1.51 a bushel in 1919. Wheat had gone from $2.16 per bushel in 1919 to 38¢ per bushel in 1933. Prices became so depressed that many farmers started burning corn in their homes for heat. It was cheaper than burning coal. It took ten bushels of wheat to buy a cheap pair of shoes. Banks folded, securities crashed, relief lines grew longer, and the nation’s confidence in itself dived to unprecedented depths. The worst possible combination of economic factors produced the deepest and longest depression in America’s history.1
Ironically, the five Goodrich brothers prospered during this period, because they had what few others did: hundreds of thousands, perhaps even millions, of dollars deposited in banks that they controlled. They were not immune, however, to anxious customers who rushed to financial institutions throughout the country seeking a return of their deposits. They were, however, in a position to control their own destiny in a way that the overwhelming majority of others could not. By February 1933, five thousand banks had failed across the country. During the bank holidays from February to March 1933, Peoples Loan and Trust Company was one of the few banks in Indiana (perhaps in the nation) that never closed. When depositors lined up to withdraw their deposits at the bank in Farmland, Indiana, James Goodrich (who owned a large share of the bank) purportedly took a couple of suitcases of money to the bank and handed out withdrawals to any depositor who demanded one. Within hours, the run on the bank had stopped.2
The Great Depression of the 1930s gave the Goodrich family the opportunity to enter the big leagues of corporate owners. One of their first buys would be in a business in which the family was already well established—the telephone industry. The industry was still in its infancy when the Goodriches began to invest in it heavily. In 1929, only one in every ten families had a telephone.3 Thus, the potential for growth was tremendous. By 1929, Pierre was already president of the Interstate Telephone and Telegraph Company and vice-president of the Investors Telephone Company. Moreover, he was a director of the Batesville (Indiana) Telephone Company; the Public Telephone Company at Greensburg, Indiana; and the United Telephone Company, which served Portland and Union City, Indiana, and Greenville, Ohio. His family still retained a large interest in the Eastern Indiana Telephone Company, which served their home county. Pierre was also a director of telephone companies in Iowa, Arkansas, and North Carolina. His expertise and his ability to invest in the industry made him a much-sought-after director.4
The family’s largest investment in the telephone industry, however, would be the purchase of what would become the Indiana Telephone Corporation (ITC). Based in Seymour, Indiana, ITC served a large geographical area across south-central Indiana. At the time it was sold in 1978, ITC had grown to be the fourteenth largest of approximately sixteen hundred independently owned telephone companies in the country. It served 122,000 households.5
In October 1934, Engineers Incorporated (the Goodrich family) purchased the Southern Indiana Telephone and Telegraph Company when the business was in receivership.6 The Goodriches had the name of the company changed to the Indiana Telephone Corporation. Pierre served as president and chairman of the board of ITC from October 18, 1934, until his death in October 1973. It is interesting to note that the stockholders of the bankrupt Southern Indiana Telephone and Telegraph Company had been offered a substantially higher price from other wooers. These other potential purchasers wanted to buy on credit, but the Goodriches offered cash.
“No one had cash during the Depression. They merely had paper which was worthless in the eyes of creditors and stockholders,” said Gilbert Snider. “Thus, Engineers Incorporated was able to pay a pittance for the business,” added Snider.7 Indeed, stock in the bankrupt Southern Indiana Telephone and Telegraph Company was purchased for a few cents a share in 1934. When the company was sold in 1978, the per-share sale price was one hundred seven dollars.8
Over the next forty years, Pierre Goodrich took tremendous pride in reorganizing and controlling the operations of the newly formed ITC. True to his management style, he personally visited with employees, often spending hours observing operations and asking technical questions. Although the region that ITC serviced included mostly rural areas, ITC had some of the most up-to-date technology available in the telephone industry. Goodrich was especially excited about the future use of fiber optics, which at the time of his death was just developing. He took every opportunity he could to remain informed about new equipment. In September 1960, in conjunction with a trip to Germany to attend a Mont Pelerin Society meeting, Pierre visited the giant high-tech company Siemens at Lengerich, Germany. He went to learn about the latest European communications developments.9
In the 1940s, Goodrich became convinced that the United States would experience a period of substantial inflation in the 1950s, 1960s, and 1970s. At the time, that was not an uncommon projection among many economists. It was a result of the perception that the United States was going to suffer hyperinflation, just as South American countries had, because of governmental deficit spending and devaluation of the currency. Goodrich acted on his hunch. As early as 1947, he began refinancing ITC’s debt on a long-term basis at very low fixed interest rates. This astute business decision was a major contribution to the company’s subsequent profitability when it was sold in 1978.10
After Goodrich’s death, his former secretary, Helen Schultz, was named president of ITC. She had previously served as ITC’s secretary-treasurer as well as Goodrich’s secretary. William Fletcher, an accountant, and Goodrich’s friend and adviser, was selected as executive vice-president.11 Fletcher had worked for the accountancy firm Arthur Andersen and Company.
In 1977, Lovett C. Peters, whom Goodrich had previously employed to arrange the sale of the Ayrshire Collieries Corporation in 1969, was again hired. This time he oversaw the sale of ITC. A merger was struck in January 1978 whereby ITC shareholders received stock in Continental Telephone Corporation. Continental was then the third-largest independent telephone company in the country. The sale was valuated at approximately $52 million. The Goodrich family owned approximately 46 percent of ITC’s stock, making their share of the sale worth approximately $24 million.12 In 1989, GTE purchased Continental Telephone, and the original ITC shareholders received GTE stock in exchange.
Eugene C. Pulliam and Pierre F. Goodrich came from very different backgrounds, but the two men shared many of the same conservative values and deep convictions. Pulliam, the grandfather of the former vice-president Dan Quayle and the son of a poor Methodist minister, was a self-made newspaper titan.13 His career spanned sixty-five years in journalism. During that time, he bought and sold some fifty newspapers in thirteen states, still controlling at the time of his death in 1975 the Indianapolis Star, the Indianapolis News, the Muncie Star, the Arizona Republic, the Phoenix Gazette, and several smaller city dailies in Indiana.14
In the early 1930s, the Depression hit Pulliam particularly hard. He had overextended himself financially by buying a chain of newspapers, particularly a number of smaller papers in Oklahoma. In March 1934, Pulliam established Central Newspapers, a holding company for his newspapers in Oklahoma and Indiana.15 A short time later, he sold several of these papers to the managers who were running them at the time.16
Pulliam also wanted to own an Indianapolis radio station and Indianapolis newspapers. This desire eventually brought him together with James and Pierre Goodrich, who, at the time, were directors of City Securities, the securities firm that Pulliam went to for financing. Pulliam saw the tremendous potential that radio offered as a news medium. In 1936, he became interested in purchasing radio station WIRE in Indianapolis. The station was owned by a Chicago businessman who sold it to Pulliam for $340,000. Pulliam raised the capital for the purchase by selling his Oklahoma newspapers and borrowing the rest.17 Hard currency was especially difficult to come by, and thus James and Pierre Goodrich entered the picture. They were in the position to invest in Central Newspapers with cash they had on hand from the sale of the Goodrich public utility companies in the 1920s.
In exchange for the cash investment by the Goodriches, through Engineers Incorporated, James and Pierre negotiated with Pulliam a business arrangement that gave the Goodrich family a slightly less than 20 percent interest in Central Newspapers. The deal was struck on the condition that Central Newspapers shares were not to be sold publicly or passed on to nonfamily members. Purportedly, another agreement between the Goodrich and Pulliam families was that nothing was to appear on the editorial pages of any of Central Newspapers’ papers that would conflict with the ideas of free enterprise and individual freedom.18
As long as Eugene C. Pulliam and Pierre Goodrich were alive, there was little chance that this agreement would be breached. Although later in life Pulliam enjoyed hobnobbing with the likes of Lyndon B. Johnson, Hubert Humphrey, and lesser-known liberals, he was more comfortable with such conservatives as Barry Goldwater and Richard Nixon.19 Pierre, always looking ahead, was concerned with what would happen after he and Pulliam were gone from the scene. In a section in the Liberty Fund Basic Memorandum on the free press, Goodrich stipulated that the directors of Central Shares and Liberty Fund have an obligation to use their minority ownership in Central Newspapers to help keep the newspapers true to the ideals of Eugene C. Pulliam.20
The contractual provision that restricted shareholders from liquidating their Central Shares stock proved to be a formidable obstacle. The fewer than two hundred stockholders in Central Newspapers were unable to sell their shares in Central Newspapers on the open market. As a result, it was impossible for Pulliam and Goodrich family members to realize the substantial increased value that was created by the quickly growing newspaper company. Finally, as a result of a “restructuring” that was worked out in 1989, Central Newspapers became publicly traded on the New York Stock Exchange. This listing on a publicly traded stock market allowed family members to sell their shares.21
In 1940, Pierre formed a holding company called Central Shares. Central Shares’ sole function was to hold the stock the Goodrich family owned in Central Newspapers. Central Shares was dissolved in 1989, and its stock was dispersed to the individual shareholders (all Goodrich family members).22 Clearly, the investment in Central Newspapers was one of the best business deals the Goodrich family ever made. The four major newspapers that Pulliam purchased in the 1940s came to dominate the print markets in Indianapolis and Phoenix when these capital cities experienced explosive growth. Phoenix has grown from just seventy-five thousand residents shortly after World War II to in excess of one million people in the 1990s.23
This increased circulation, combined with Pulliam’s hard-hitting news style and sophisticated marketing, increased Central Newspapers’ value from a few million dollars in the late 1940s to well in excess of $500 million by the 1990s. Central Shares was the third-largest shareholder of Central Newspapers stock when it was dissolved in 1989. In exchange for Central Shares stock, Central Shares shareholders received Central Newspapers nonvoting stock. In 1996, the shares owned by the estate of Enid Goodrich and Liberty Fund still accounted for approximately an 16.6 percent interest in Central Newspapers.24
City Securities Corporation is the oldest and largest investment banking company in Indiana and one of the largest in the Midwest. It is responsible for underwriting many of the largest municipal and corporate capital projects that have taken place in Indiana. For instance, it took the lead in 1953 in structuring revenue bonds for the building of the $280 million Indiana Toll Road that crosses the northern border of Indiana.
City Securities also became a leader in underwriting university and college building projects. It has handled the financing for the construction of such projects as Indiana University’s Memorial Stadium (football), Assembly Hall (basketball), and dozens of other building projects on the campuses of Indiana, Purdue, Ball State, and Indiana State universities. At the municipal level, it has been the underwriter for hundreds of municipal securities projects; for new sewage, water, and electric utility facilities; roads; and public buildings (such as the RCA Dome in Indianapolis).
At the corporate level, City Securities assisted in the financing of major corporations.25 From 1945 to 1960, a time when Pierre Goodrich was very much involved as vice-president and a director on the board, City Securities underwrote commitments to 160 separate corporate finance offerings totaling more than $67 million.26
Despite these later successes, City Securities nearly folded during the early years of the Great Depression. In 1930, its parent holding company, City Shareholders, and two sister subsidiaries failed and were placed into receivership by Indiana’s banking department.27 J. Dwight Peterson, who later became president and chairman of the board, saved City Securities from a similar plight. He convinced Indiana’s banking authorities of the company’s solvency. He accomplished this difficult task by obtaining financial backing from James Goodrich, whom Peterson had first met in the late 1920s.
“In the late 1920s, dad called on Governor Goodrich in Winchester for investments,” said John Peterson, son of J. Dwight. “Governor Goodrich liked my father and they became very close friends.”28 A few years later, James Goodrich provided the capital support needed to keep City Securities’ doors open. A summary of minutes from a City Securities board meeting records how the Goodrich-Peterson agreement proceeded:
On May 1, 1931, Peterson explained to the corporation’s Board of Directors that he and the Goodrich family proposed to purchase the outstanding shares . . . held by its receiver (. . . a 1930s version of a leveraged buy-out) and take any other measures necessary to maintain the firm’s activity. The directors approved the plan and, over the course of the next seven months, Peterson subsequently gained the approval of Indiana’s banking authorities for the reorganization of City Securities Corporation under the ownership of the Peterson and Goodrich families.29
Peterson’s ability to obtain the financial backing of a former governor would have helped persuade Indiana’s banking authorities to approve the deal. As a result, the Goodrich family negotiated a 51 percent interest in City Securities.30 Pierre became a member of the board and vice-president in 1934. Because the securities that City Securities held were worth only a portion of their pre-Depression value, the company had to look for alternative sources of income to keep the doors open. With James Goodrich’s assistance, Peterson purchased the Aetna Trust and Savings Company in 1933 for only five thousand dollars.31 James was a former president of Aetna Trust and Savings Company, and in 1933, Pierre served as one of its directors.32 Thus, it was apparently the Goodrich father-son connection that enabled the financial deal to be struck. The new insurance division of City Securities proved to be immediately profitable. The premiums generated from insurance sales helped to keep City Securities solvent until municipal and corporate bond underwriting recovered in 1935.33
After World War II, City Securities Corporation grew at a rapid rate. It arranged financial deals for such construction projects as bridges, courthouses, public schools, college dormitories, athletic facilities, and university buildings.34 It established itself as the number-one banking investor in municipal, school, and corporate bonds in Indiana. As the oldest and largest independently owned broker-dealer in Indiana, City Securities owed much of its success to the connections that its board of directors and management personnel had established. In 1954, when City Securities was growing at a phenomenal rate, J. Dwight Peterson served on the boards of directors of twenty-one companies, and Pierre Goodrich served on the boards of thirteen others.35
During the first half of Goodrich’s long tenure as a director (1935–53), City Securities was the sole underwriter for sixty-two corporate securities ventures,36 which meant that fledgling companies wanting to attract outside investment would hire City Securities to underwrite a corporate bond. During that time, for every company City Securities took on as a client, five more were knocking on its door. The board reviewed these proposals, often in a painstaking way, before voting on whether to accept underwriting responsibility. The proposals, reviewed quarterly, numbered in the hundreds. Corporate proposals came from all types of businesses: automobile parts, meat-packing, electronics, banking, home appliances, mining, insurance, textiles, jewelry, and soft-drinks, just to name a few.37
Goodrich’s experience—derived from decades of decision making—taught him what worked and what did not. It was experience that Pierre could translate into other aspects of life. One would be hard-pressed to find in academia anything closely resembling that type of exposure.
In 1889, John B. Goodrich, one of the five original Goodrich brothers, started a hay-baling and -buying business in Winchester at the same location where the brothers’ father, John B. Goodrich, and maternal grandfather, Edward Edger, had begun a grain business in 1860.38 Later, on January 5, 1898, the five brothers—Percy, James, John, Ed, and William Wallace—incorporated the business, naming it the Goodrich Brothers Hay and Grain Company.
Percy Goodrich took over the management of the hay and grain company. Early on, the five brothers and their wives were the sole stockholders of the company, which bought grain and shipped it by train primarily to East Coast markets. It also sold feed for stock, seed, and farm machinery, and, before refrigeration, operated an ice company.
By the late 1920s, Goodrich Brothers had acquired twenty-four grain elevators in central and northern Indiana, becoming Indiana’s largest grain business. In the mid 1940s, Percy Goodrich, who was then well into his eighties and had no children, approached his nephew Perce about taking over the management of the company. Perce did manage Goodrich Brothers for about a year but was also actively engaged in overseeing his own companies in Portland, Indiana. He soon resigned from the position. At that time, in 1947, Percy turned to a young acquaintance by the name of Samuel R. Harrell, seeking a friendly merger.
Percy Goodrich had become friends with Sam Harrell in the mid 1940s while on vacation in Fort Lauderdale, Florida.39 At the time, Harrell was already chairman of the board of Acme-Evans, an Indianapolis milling company that owned several large city elevators. Percy and Harrell reached an amicable agreement for a merger. A fairly complex deal was struck. Harrell did not have the cash to buy out the Goodrich family stockholders. Therefore, in exchange for relinquishing its common stock in the twenty-four elevators, the Goodrich family received preferred shares in the company that was formed from the merger, Acme-Goodrich. Harrell was named president and Percy Goodrich was elected chairman of the board. Another five grain elevators already owned by Acme-Evans were added to the twenty-four owned by the Goodrich family, so, after the merger, Acme-Goodrich controlled twenty-nine grain elevators. The deal at the time (December 12, 1947) was valued at $1.8 million. Pierre and his law partner Claude Warren did the legal work for the Goodrich side of the merger.40
Acme-Goodrich eventually operated some thirty-seven grain elevators in Indiana, and Percy Goodrich remained chairman of the board until his death in 1951. On January 23, 1950, a special luncheon was held at the Columbia Club in Indianapolis in recognition of ninety years of operation of the Goodrich family grain company (1860–1950). Indiana’s governor, Henry F. Schricker, was the guest speaker at the luncheon.41 Unfortunately for the Goodrich family, the occasion was one of the last things to celebrate about the grain company. Troubled times lay ahead for Acme-Goodrich.42
It is a fact of United States westward expansion that whenever a community was established, three buildings would almost invariably appear first: a church, a tavern, and a bank. Almost every small town had its own locally operated lending institution. James Goodrich capitalized on small-town banking, making it the linchpin of all his other highly successful business operations. In addition to Peoples Loan and Trust Company, the Goodriches owned substantial interests in nearly a dozen other small-town Indiana banks at one time or another.43
When James Goodrich died in August 1940, Pierre became president of Peoples and remained chief executive until his death. After Pierre passed away, he was succeeded by his cousin, Perce G. Goodrich. In 1984, Pierre’s widow, Enid, sold her controlling interest in the bank. At that time, the assets of the bank totaled more than $50 million.44 Begun at the turn of the century, the Peoples Loan and Trust Company was the start of much of the Goodrich family’s success. It provided not only necessary capital, but also many of the personal contacts that resulted in investments in the other family business holdings.
The smaller companies that Pierre Goodrich controlled or on whose boards of directors he served numbered in the dozens. In addition to those already mentioned, they included the Continental National Bank of Indianapolis; the Union Insurance Company; Equitable Securities Company of Indianapolis; Muncie Theatre Realty Corporation (which owned and operated eight movie theaters in the Muncie, Indiana, area); Indiana Produce (a commodities company based in Huntingburg, Indiana); PLatCo Realty Corporation (which owned and leased real estate, primarily bank property); the Peoples Investment Company of Winchester; the Calumet Refining Company; the Bankers Trust Company in Gary, Indiana; Gary First National Corporation; Equitable Securities Company; Cumberland Quarries; Indianapolis Broadcasting; High Vacuum Processes; the Kingston Oil Company; Indianapolis Railways; and the Railroad Service and Supply Company in Indianapolis. In the 1920s and 1930s, Goodrich was also involved in companies that his father and uncles had invested in, including the Wasmuth-Goodrich Company and the Indianapolis Transit Company. The latter operated interurban trains in central Indiana and later ran streetcars and buses in Indianapolis. At one time, Pierre even owned a small railroad called the Algers, Winslow and Western Railway Company. The railroad operated along a twenty-two mile stretch of track in southern Indiana and hauled coal from the Ayrshire and Patoka coalfields to the main rail lines. Thus, by the 1940s, the Goodrich financial empire was in place. But there was one more large corporation that would play an extremely important role in Pierre Goodrich’s future plans.
Ayrshire Collieries Corporation
Responsibilities of management in a country, the expressed policy of which is to maintain a free competitive economy, are weighty. We must constantly endeavor to produce coal at low prices to assure continuity of sales and to protect our markets from competitive sources of energy. . . . It is paramount that the coal industry adopt a progressive and enlightened policy in respect to wages and hours, safety, working conditions and other related problems. Finally, we must strive to obtain a fair return to our stockholders and thus make it possible to obtain capital for future needs of the industry.
robert p. koenig, foreword to “The Ayrshire Story”
In 1923, James Goodrich obtained a large interest in a small coal company named Patoka Coal in southwestern Indiana. Within twenty-five years, Pierre Goodrich went on to become chairman of the board of a company that merged with Patoka Coal, the Ayrshire Collieries Corporation. It became the Goodrich family’s largest business holding. Interestingly, two other extremely important entities spun off from the coal company: first, Meadowlark Farms, a subsidiary company dealing with land reclamation and ecology; and, second, Liberty Fund, Inc., whose primary endowment devolved from the personal proceeds Pierre Goodrich realized when he sold Ayrshire in 1969 (see chapter 29).
The coal mines that made up the Ayrshire Collieries Corporation are located in Illinois, southwestern Indiana, Kentucky, and Wyoming. They are now owned by the Cyprus-Amax Minerals Company, a large conglomerate. Pierre’s association with Ayrshire went all the way back to his father’s business dealings immediately after James Goodrich had served as governor.
James Goodrich became treasurer of the Patoka Coal Company in 1923 through association with Jesse Moorman of Winchester, Indiana, then president of Patoka Coal.1 Moorman and James Goodrich were longtime friends and business partners. (In 1912, for instance, James Goodrich had assisted Moorman in obtaining the contract for citywide garbage disposal in Indianapolis.)2 At the time, Patoka Coal was a small colliery that operated from a single strip mine in Pike County, Indiana.3 James Goodrich had gained considerable knowledge about the coal industry from attempting to manage a coal crisis during his time as governor.4
Pierre Goodrich became secretary and treasurer of Patoka Coal in 1929. In 1937, he was appointed executive vice-president. After this time, another coal company, the Electric Shovel Coal Corporation, had gone into receivership. At the public hearing in Chicago, Pierre Goodrich had become acquainted with Electric Shovel’s top management: Tommy Hitchcock, Jr., Robert P. Koenig, and James Melville. Subsequently, Patoka Coal Company transferred its operating properties to Patoka Coal Company of Delaware, which was then merged with Electric Shovel Coal Corporation in 1939. The original name of the resulting company was Ayrshire Patoka Collieries Corporation, later to become simply Ayrshire Collieries Corporation. The consolidated company had eight directors. Pierre and his law partner at the time, Albert M. Campbell, represented Patoka Coal’s interests on the board. Even after the merger, Patoka Coal continued to exist as a separate legal entity, as a holding company for stock in the Ayrshire Patoka Collieries Corporation.5
On the board of directors, Goodrich was outnumbered by the five Ayrshire directors, based in New York, who held all the major offices of the company.6 Over the next seven years, however, Goodrich managed to increase his family’s interest in the consolidated company so that by 1946 he was elected chairman of the board of directors. How did he do it? Apparently, the major cause was beyond Goodrich’s control—the onset of World War II. In the early 1940s, Hitchcock and Koenig were chairman of the board and president of Ayrshire, respectively. Hitchcock was also a partner in Lehman Brothers, an investment company in New York. He had married Margaret Mellon of the extremely wealthy Pittsburgh banking family. Koenig, a brilliant corporate strategist, was a mining engineer by training and had served as president of the Electric Shovel Coal Corporation before it merged with Ayrshire and Patoka. Both Hitchcock and Koenig served in World War II, leaving Ayrshire.7
In addition to being a successful banker, Hitchcock may well have been the greatest polo player that the United States has ever produced. In April 1944, Hitchcock was killed in England while flying a training mission, ending what the New York Times called “one of the most gallant and one of the most spectacular careers in modern American life.”8 His death left his widow, Margaret, with large estate taxes. She decided to sell Hitchcock’s shares to help pay off the death taxes, and Goodrich bought a large percentage of the available stock.9
Koenig, who had been gone from Ayrshire for nearly three and a half years while serving in Europe, did not return to his position until October 1945.10 During that time, Goodrich had purchased enough stock so that by 1946 he had a controlling interest in the company. He subsequently replaced a sufficient number of directors to be elected chairman.11 By 1949, only two New York directors remained on the Ayrshire board, neither of whom was an original member.12
During the years of Goodrich’s management, Ayrshire’s growth, both in terms of coal production and in terms of sales, increased at an impressive rate. In 1940, Ayrshire’s sales had been $2.27 million; by 1968, the company’s sales had climbed to almost $60 million, some twenty-six times 1940 sales. Also, by 1968, income had increased to a lofty $5.45 per share from just 15¢ per share in 1940. Moreover, the number of Ayrshire employees had grown from 484 in 1940 to 1,064 in 1968. This increase had occurred in spite of advanced technology that had eliminated hundreds of positions.13
By the time Goodrich sought to sell Ayrshire in 1968, the company was the eleventh-largest producer of bituminous coal in the country. Ayrshire had some of its strongest years just before Goodrich sought a merger with potential purchasers. At the age of seventy-four, however, Goodrich recognized that his own mortality would not allow him and the company’s other aging managers (Ayrshire’s president, Norman Kelb, was seventy-five years old) to continue Ayrshire’s growth without the infusion of new management and additional capital.
Goodrich was forced to either bring in younger management or sell Ayrshire outright. In the company’s 1968 Annual Report, Goodrich reported that Lovett C. Peters had been hired “as agent of the company, looking toward the sale of the company’s assets or merger into another company.”14 Pierre had first become acquainted with Peters in 1955 when they both served on the board of the Foundation for Economic Education in Irvington-on-Hudson, New York. In 1968, Peters had left top-level management at the Continental Oil Company, and Goodrich offered him the position of president at Ayrshire. Although Peters turned down the position, he did suggest to Goodrich that an added incentive made the timing right for the sale of Ayrshire.15
Peters and others in the oil and coal industries had successfully lobbied Congress to adopt legislation that had the net effect of increasing the worth of oil and coal companies by as much as 50 percent. The legislation, known as Reserve Production Payment, allowed a purchasing company to borrow money on the basis of the value of the reserves of an oil or coal company and then pay off the loan with pretax, instead of aftertax, dollars.16
Goodrich took Peters’s advice and invited five companies to discuss the possibility of a sale or merger.17 The two leading contenders were the Ashland Oil and Refining Company of Ashland, Kentucky, and American Metal Climax (AMAX) of Greenwich, Connecticut. A deal was struck between Ashland and Ayrshire in January 1969. At that time, Goodrich and the president of Ashland made a joint announcement that both boards of directors had approved the purchase of Ayrshire. In a complex financial arrangement, Ayrshire stockholders were to receive approximately $125 million.18
The deal between Ayrshire and Ashland fell through in early April 1969, however, because of an escape clause in the agreement of which Ashland was able to take advantage.19 The winter of 1968 had been particularly harsh in the Midwest. The amount of coal that was mined was subsequently reduced, and Ayrshire’s profits plummeted. This prompted Ashland’s management to exercise its escape clause.20 Kerr-McGee, an oil exploration company out of Oklahoma, tried to take over Ayrshire by offering less than half what Ashland did. Goodrich became extremely upset with Kerr-McGee’s proposed takeover plan and immediately contacted AMAX to arrange a sale.21
In less than three weeks from the time that the Ayrshire-Ashland deal fell through, Goodrich had reached a tentative agreement with American Metal Climax, subject to approval by the directors and stockholders of both companies.22 This agreement culminated with the sale of Ayrshire to American Metal Climax in October 1969. At the time, American Metal Climax owned no coal mines. Although it was a large minerals conglomerate, its primary business operations involved mining molybdenum, lead, and copper in the upper Midwest.23
Goodrich and his family were by far the largest owners of Ayrshire, controlling 334,000 of the total 790,891 shares in the company, or about 44 percent. The second-largest owner of Ayrshire stock was Henry Crown of Chicago, who held a 17.7 percent interest. Crown was also the major stockholder in General Dynamics, one of the largest military defense companies in the world. For some reason, Goodrich would not talk to Crown. As a result, Lovett Peters had to serve as the negotiator between the two men, shuttling back and forth between Indianapolis and Chicago in an attempt to strike a deal that was acceptable to both men. Finally, in October 1969, Crown was satisfied that Goodrich had obtained what was believed at the time to be top dollar for the coal company.24 The sale of Ayrshire was reported in the Wall Street Journal to be valued in excess of $100 million.25 The actual amount of Goodrich’s personal interest in the sale is purported to have been between $25 and $30 million.26 Lovett Peters received a handsome fee for negotiating the deal, purportedly $750,000.27
Much of the constant profitability of Ayrshire under Goodrich’s control can be attributed to his ability to capitalize on emerging markets and to hire extremely capable personnel. When it came to selling Ayrshire, however, Goodrich and Peters may well have underestimated the company’s true worth because of their inability to foresee the future desirability of low-sulfur coal, the growing political hostility toward nuclear generated power, and the Arab oil embargo of 1973.
During Pierre Goodrich’s forty years of association with the coal industry, a dramatic shift had occurred in markets. When James and Pierre first began with Patoka Coal in the 1920s, the demand for coal came primarily from railroads and domestic consumers. By the 1960s, most of Ayrshire’s sales were to electric utility companies and industrial customers. Ayrshire weathered the transitional period of the 1950s extremely well, whereas other coal companies underwent considerable retrenchment in both production and employment. Ayrshire accomplished this through the efforts of its sales subsidiary, Republic Coal and Coke Company. Goodrich had purchased the Chicago-based coal sales company in 1944. Republic Coal and Coke Company achieved growth for Ayrshire primarily by developing long-term contracts with utility companies.28
According to Richard H. Swallow, who worked for Ayrshire and its predecessors for thirty-seven years, Goodrich’s most important decision was to have Ayrshire obtain as many options for coal reserves as possible.29 Goodrich had as many as nine drill crews exploring potential coal reserves throughout a large portion of the country, including Tennessee, Pennsylvania, Kentucky, Alabama, and Wyoming. Through aggressive leasing practices, Ayrshire’s coal reserves had increased from 52 million tons in 1940 to 2.35 billion tons in 1968. At its peak, Ayrshire owned outright more than 165,000 acres, 50,000 of them in Wyoming alone.30
Therefore, when Ayrshire was purchased in 1969, the real benefit that the Indiana-based company offered was the ownership of huge coal reserves. It was estimated that Ayrshire (or its successor) had enough reserves to sustain production rates at its 1969 levels for two hundred years.31 With AMAX aggressively pumping in millions of dollars in new capital investment into the former Ayrshire holdings, Ayrshire was able to increase production and market share dramatically. AMAX became the third-largest coal company in the United States by 1975 (Ayrshire was the eleventh-largest when Goodrich sold Ayrshire in 1969).
Goodrich and his advisers may have miscalculated in selling Ayrshire by underestimating the worth of the coal-lease reserves Ayrshire had obtained in the Gillette, Wyoming, area (later the Belle Ayr mine). Before the sale to AMAX, Ayrshire put a very low value on these reserves of low-sulfur coal, but they alone are probably worth in excess of $1 billion.32 Coal output from the Belle Ayr mine went from 900,000 tons in 1973 to well over 7 million tons by 1976. By the early 1980s, the combined capacity of the Belle Ayr and Eagle Butte mines (Eagle Butte is north of Belle Ayr in Wyoming) exceeded 30 million tons annually.33
In addition to the size of the Wyoming mines was an additional attraction—they contained low-sulfur coal. Although burning low-sulfur coal produces less energy than does high-sulfur coal, it also produces less air pollution. With the added attention that acid rain and other pollution problems received in the 1970s and 1980s, low-sulfur coal became increasingly more valuable. Therefore, the worth of the Wyoming mines substantially increased.
“There was a lot of doubt whether the western mines were going to amount to much,” said George Martin, retired manager of Ayrshire’s Sun Spot Mine in Illinois. “But these mines became a major factor and carried AMAX coal economically through the late seventies and early eighties.”34
The reasons Goodrich was not more aggressive in the 1950s and 1960s in having Ayrshire exploit its vast coal reserves appear to be twofold: first, to have exercised the coal-field options would have required a considerable infusion of capital. Goodrich was not interested in having the company go into any further debt in order to achieve this large and immediate expansion. At the time of the merger in October 1969, American Metal Climax assumed $40 million of Ayrshire debt as part of the $100 million transaction.35
Goodrich also purportedly thought that atomic energy was eventually going to put the coal industry out of business. Thus, Goodrich’s overestimation of the technical capability and political acceptance of nuclear energy may have prompted him to believe that he had received top dollar for Ayrshire’s holdings.36 Apparently, Goodrich even believed that the use of nuclear “fusion” (as opposed to nuclear “fission”) might become feasible in the near future, so that there would be an overabundance of cheap energy.37
Goodrich’s concern about the widespread use of atomic energy was not unique. Many in the coal industry had been led to believe that atomic energy might produce up to 50 percent of the electric-utility market by the end of the twentieth century.38 Finally, Goodrich and Peters could not have foreseen the 1973 Arab oil crisis and how that would increase the value of energy companies, especially domestic ones.
Goodrich was extremely pleased when a Chicago financial analyst told him, unaware of his Ayrshire connections, that he (the analyst) believed that American Metal Climax (AMAX) had paid too much for Ayrshire in 1969.39 With the benefit of more than twenty-five years of hindsight, it is clear that AMAX received the better end of the deal.40
To waste, to destroy, our natural resources, to skin and exhaust the land instead of using it so as to increase its usefulness, will result in undermining in the days of our children the very prosperity which we ought by right to hand down to them amplified and developed.
president theodore roosevelt, Message to Congress, December 3, 1907
. . . What we need is a good biography of Pierre Goodrich, the pioneer, that can be made required reading in all high school and college courses on ecology.
john chamberlain, “Strip Mining: Can It Unlock Fertile Land?”
During the first twenty years of the twentieth century, many Americans began to be aware of ecology. President Theodore Roosevelt was one of the first national leaders to take an interest in preserving much of America’s most scenic and pristine lands. Local chapters of such conservation organizations as the Sierra Club were also being established across the country, furthering environmental awareness. At the state level, in 1917, James P. Goodrich had been instrumental in creating the Indiana Department of Conservation, which greatly expanded the fledgling Indiana state parks system. At the federal level, in 1930, the former governor served on the Public Lands Commission, which examined land reclamation, wildlife reserves, and other environmental issues. Generally, ecological and wildlife practices became popular and were used as themes in books and movies. One of the best-known naturalist authors in the country was Indiana’s own Geneva “Gene” Stratton-Porter, from nearby Geneva, Indiana. During the early part of the century, Stratton-Porter’s books, such as Freckles (1904), A Girl of the Limberlost (1909), The Harvester (1911), and A Daughter of the Land (1918) were very well received. At the height of Stratton-Porter’s popularity, publishers estimated that she had a following of fifty million readers, making her one of the five most popular American authors of the 1920s. Several of her books were made into popular movies. Pierre Goodrich was related to Stratton-Porter through his first wife, Dorothy Dugan.1
As previously noted, Pierre’s values regarding personal, business, and public conservation can be at least partially attributed to his upbringing. His mother went to extremes to economize. Moreover, James Goodrich was ever watchful as well, constantly questioning how business and government could be conducted more efficiently. For example, in early 1920, while James Goodrich was still governor, he traveled to New York by railcar. When he disembarked at one large train depot, he noticed that railroad workers were extracting used wool packing from casings that covered the old passenger and freight-car axles. James observed that the men were simply throwing the used wool away. He realized that there was a market for recycling the wool. In June 1920, James Goodrich had two employees of the Goodrich Brothers Hay and Grain Company, Claude Barnes and Merl Chenoweth, form the Railway Service and Supply Corporation. Goodrich money was used to finance the new company, which became quite profitable. This episode demonstrates James Goodrich’s shrewd business eye.2
Pierre hated waste of any kind and thought that it was one of man’s greatest sins.3 As a businessman, he took extraordinary measures to preserve his family’s assets, increasing the worth of existing capital through steady, often innovative practices. Pierre Goodrich was not prone to go after quick profits, especially if extravagant expenditures or exploitation of natural resources was involved. He took a tight-fisted approach to investment and relished squeezing more out of less. It was that philosophy that made him, in every sense, a true ecologist.4
Goodrich detested public waste. During World War I, he had served in the Quartermaster Corps, that branch of the army concerned with furnishing war supplies. He often related to employees and friends the story of how the government took over the railroads for the purpose of shipping supplies. The custom at the time was to “featherbed,” a union practice that demanded extra workers by contract in order to provide more jobs and prevent unemployment. Goodrich denounced the practice, especially during a period of national crisis.5
From a business perspective, the operations of the Ayrshire and Patoka collieries provided Pierre Goodrich with one of his greatest challenges: to practice savings and ecology simultaneously. At their height, the collieries owned or leased more than 165,000 acres of land in Kentucky, Illinois, southwestern Indiana, West Virginia, and Wyoming.6 Strip mining had occurred both in the United States and abroad for hundreds of years, and the mined lands often resembled moon craters. At the time, strip-mine operators took the view that there was little or no economic reason to reclaim land. The free market simply did not factor into the cost of mining coal any negative effect on the environment. Pierre Goodrich challenged this view, not only because of potential profits but also because of his belief in responsible land husbandry.7
A singular event occurred in the early 1940s that was a significant factor in Goodrich’s deepening interest in conservation. In the summer of 1942, Richard Lieber, longtime chairman of the Indiana Commission on Conservation, found himself without a job or office. Lieber had previously resigned as chairman of the commission in 1933 after having served under three governors (James P. Goodrich, Warren T. McCray, and Edward L. Jackson). Lieber then served for the next nine years as a paid consultant to the National Park Service. He had an office in Washington, D.C., to which he would commute regularly from Indianapolis. When appropriations for the National Park Service were cut, Lieber had nothing to do.
At that time, in August 1942, Pierre provided Lieber an office, free of charge, in his legal suite on the seventh floor of the Electric Building in downtown Indianapolis. Lieber was very grateful for Goodrich’s generosity. The two, despite a significant age difference, became exceptionally close friends. In December 1942, Lieber’s book America’s Natural Wealth was published by Harper and Brothers in New York. Lieber dedicated the book to James P. Goodrich, who had given him the opportunity to apply his love of nature to the preservation of Indiana’s most pristine land. When Lieber died in April 1944, the normally reserved Pierre took the conservationist’s death extremely hard, telling Lieber’s wife that he felt as though he had lost a second father.8
After Lieber’s death but on his recommendation, Pierre Goodrich established in November 1945 a subsidiary corporation of the Ayrshire Collieries that he called Meadowlark Farms.9 Earlier, Goodrich had contacted the College of Agriculture at the University of Illinois and met with Charles Stewart and Laurence Norton, both professors of agricultural economics. Goodrich explained to the two professors his desire to reclaim the mined coal lands owned by Ayrshire. Professor Stewart initially did not believe Goodrich. He thought that the coal executive was simply attempting to promote public relations in order to improve the bad image that strip-mine operators had because of the way they stripped coal fields. Ultimately, however, Goodrich was able to convince the two academics of his sincerity. Stewart and Norton ultimately put Goodrich in touch with Irwin H. Reiss. Reiss did not immediately take a position with Goodrich. He first served in Burma during World War II and then worked in an avocado business in southern California. In November 1948, Reiss finally returned to Indiana to manage Meadowlark Farms. Goodrich placed the subsidiary’s headquarters in Sullivan, Indiana, which was in proximity to Ayrshire’s coal fields in the southwestern part of the state.10
According to Reiss, who served as general manager and later as president of Meadowlark Farms (1948–83), “[In the mid 1940s], the college courses or even the reference books on reclamation were not available, but Mr. Goodrich felt that with a commonsense application of technology, management and capital, something constructive could be done with surface-mined coal lands.”11
Owners were reluctant to take any measures to restore the land to its prestripped appearance because the cost of reclamation was generally greater than the land’s profitable use; that is, the land could not be easily converted into valuable farm or commercial ground. For ecological reasons, that was especially unfortunate, because stripped land created vast scenic and soil erosion problems.12 As chairman of the Ayrshire Collieries, Goodrich could not tolerate seeing thousands of acres, stripped of coal, lying ruined and useless. The purposes of Meadowlark Farms were twofold: first, to make productive use of the land before strip mining; and, second, after the coal had been removed, to make the stripped land suitable for some profitable use, preferably agricultural or recreational. Today, this is common practice and is, in fact, mandated by federal and state laws. When Goodrich began the reclamation process in the 1940s, however, he was one of the first in the nation to practice reclamation on a large scale. The problem was not that there was insufficient technology available to reclaim the land, but that the job had to be accomplished on the basis of very thin profit margins.
Meadowlark Farms also came about because of the demands of the coal industry. To be in the coal business, a colliery had to enter into long-term contracts (twenty to thirty years). To have sufficient reserves to deliver on those long-term contracts, coal companies had to buy the reserves and the surface land rights to guarantee delivery. Thus, farming Ayrshire’s land was natural, both before and after mining.13
To accomplish reclamation successfully, Goodrich sought out soil specialists and applied practical business methods. “He would buy grass seed by the truck loads,” said Roy Barnes, who worked at the Goodrich Brothers Hay and Grain Company in Winchester.14 Goodrich had soil specialists analyze the soil to see what would be the best use of the land once the coal had been removed. Options included agricultural use, such as the planting of crops or the grazing of livestock; reforestation; and recreational use. In the 1960s, after Ayrshire strip mined forty acres near Fairview, Illinois, Meadowlark Farms created a lake on the land on the town’s outskirts.15 By the early 1970s, a million bushels of corn a year were being grown on land controlled by Meadowlark Farms, and five hundred head of cattle and two thousand hogs per year were being produced on Meadowlark land.16 At its height, Meadowlark Farms was farming and managing approximately fifty thousand acres of land owned by Ayrshire Collieries.17
For the first three years of Meadowlark’s existence (1945–48), it became involved in farming by establishing six corporate farms. A resident manager supervised the farm and the farmhands who lived there. All the livestock and farm machinery were owned by Ayrshire. Goodrich and Reiss soon realized that that type of operation was not necessary. In fact, they found that the practice was counterproductive in that the employees had no vested interest in what was being produced or in turning a profit. Soon after, an arrangement was instituted whereby farmers could stay on their land. Leases were adopted that encouraged farming both before and after coal was removed. Approximately two hundred tenant farmers were cultivating Meadowlark land by the early 1980s.18
By the early 1970s, AMAX (the successor to Ayrshire) owned land and held options to mine coal in twenty counties in Illinois, Indiana, Kentucky, Wyoming, and Montana. At that time in Indiana alone, Meadowlark Farms had leased approximately twenty-five hundred acres to the Department of Conservation for public fishing, camping, boating, swimming, and hiking. Other lands were resown with clover and other seed, which turned wasteland into valuable farm ground. Ayrshire and AMAX, through Meadowlark Farms, were able to accomplish this while turning a profit.
When Goodrich sold the Ayrshire Collieries Corporation to American Metal Climax (AMAX) in 1969, part of the agreement was that American Metal Climax had to maintain Meadowlark Farms’ reclamation operations. So successful were Meadowlark Farms’ practices that they were adopted by AMAX and other strip-mining operations throughout the country. As a result, wheat, corn, and other crops are now raised over played-out coal seams. Other uses of the land, such as the grazing of livestock, continue to this day.19
Another reason for Goodrich’s concern about reclamation came from L. E. “Buck” Sawyer. Sawyer served as director of forestry and reclamation for the Indiana Coal Producers from 1944 to 1969. In that position, Sawyer encouraged corporate owners such as Goodrich to practice sound reclamation and assisted them in doing so, especially with the planting of trees.20 Thus, the efforts of Goodrich, Lieber, Reiss, and Sawyer had a significant influence in making Indiana a state leader in reclamation practices long before state and federal governments passed legislation mandating such actions. Probably the most important and comprehensive federal legislation regulating reclamation did not occur until 1977, when Congress passed the Surface Mining and Control Reclamation Act. That was more than thirty years after Goodrich had established Meadowlark Farms.
Anne C. Lawrason, who worked for Goodrich, recalls how important the work of Meadowlark Farms was to her employer: “I believe [Mr. Goodrich’s] greatest accomplishment, in his own eyes, was creating the beautiful Meadowlark Farms out of an ugly, scarred former strip-mining project. He never tired of telling how he used the same machinery that did the mining to renovate the land and make it productive.”21
Goodrich’s ecological efforts have not gone unnoticed. Over the past fifteen years, John A. Baden, chairman of the Foundation for Research on Economics and the Environment (FREE) in Bozeman, Montana, has conducted more than two dozen Liberty Fund conferences linking the ideas of liberty and ecology. In the early 1980s, Baden established the Pierre F. Goodrich Conservation Award. To date, two individuals have received the honor: Arthur Temple, Jr., of Diboll and Lufkin, Texas; and David True of Casper, Wyoming. Temple, a third-generation owner of a large east Texas timber company, has been instrumental in reintroducing nearly extinct native species into more than twenty thousand acres of woodland in Texas and Louisiana. True, formerly an independent oil driller and chairman of the board of regents at the University of Wyoming, has managed and cared for indigenous wildlife on two large ranches in Wyoming.22
The Later Years, 1940–1960
The liberal party is a party which believes that, as new conditions and problems arise beyond the power of men and women to meet as individuals, it becomes the duty of the Government itself to find new remedies with which to meet them. The liberal party insists that the Government has the definite duty to use all its power and resources to meet new social problems with new social controls. . . .
franklin delano roosevelt, The Public Papers and Addresses of Franklin D. Roosevelt
As the rumblings of World War II began in the late 1930s, Pierre Goodrich opposed the United States’ entering into another European conflict just as he had opposed America’s “unnecessary” involvement in World War I. He supported the isolationist views espoused by the America First campaign and conservatives such as Senator Robert Taft of Ohio.1 Goodrich also opposed conscription. He believed that mandating the draft should never precede a large-scale voluntary appeal to participate in armed conflict.2
Moreover, Pierre, like his father, was no friend of Franklin Roosevelt’s New Deal policies, which, among other things, promoted governmental expansion into business and individual affairs. The acts of Congress and the regulations of agencies and commissions in the 1930s added a new federal level to what had been previously governed by state law. One day in the late 1930s, Pierre attended a weekly roundtable luncheon of local Harvard Law School graduates at the Athenaeum Club in Indianapolis. During the luncheon, Goodrich blasted President Roosevelt. He stated that the New Deal “was destroying the country in general and lawyers in particular.”3 It was a belief he would hold for the rest of his life. At a more personal level, Goodrich passionately opposed Roosevelt’s decision to intern American citizens of Japanese descent during World War II. He hired several persons of Japanese heritage to work for him during the war, a practice that was apparently not well received in his northern Indianapolis neighborhood.4
At about this time, Goodrich became interested in a small newsletter known as Human Events. Frank Hanighen and Felix Morley were the two founders of Human Events. Early on in the newsletter’s formation, Henry Regnery, a young and upcoming Chicago publisher, was a financial backer of the enterprise, along with Joseph N. Pew, Jr., the vice-president of Sun Oil Company. Morley, a former Rhodes Scholar and Pulitzer Prize–winning newspaper columnist, had been editor of the Washington Post in the 1930s and early 1940s. He was president of Haverford College when Hanighen approached him in 1944 about beginning the publishing venture. The purpose of Human Events, according to Morley, was to promote ideas that advocated means to a “durable peace” and involved “the reporting of facts which newspapers overlook.”5
Though the magazine’s circulation amounted to only a few thousand in the months immediately after World War II, its influence was far greater than its numbers would indicate.6 Goodrich met Morley in the early years of Morley’s involvement with Human Events. Pierre thought highly of the conservative publication and its attempt to deal with the problems that the end of World War II brought to the world. Morley aptly described the magazine’s approach of addressing the centralization of power, a concern Goodrich obviously shared:
Get the journalists, the professors, the clergy and the women’s leadership on your side, I argued, and the masses will in time follow automatically. . . . those who formulated public opinion must first be shown that it was contrary to their personal interests [to have the centralization of power in government]. . . . Therefore the contrary appeal, as old as that of Cicero, should be clearly and unemotionally made to Reason, on the perhaps optimistic assumption that this would in time trickle down to lower levels.7
Goodrich often sent subscriptions to Human Events to family members, employees, and acquaintances.8 In May 1947, Goodrich invited Morley to lecture at Wabash College. Morley’s three lectures at Wabash were later published as part of a book, The Power in the People. In 1981, Liberty Fund republished Morley’s Freedom and Federalism.9 Goodrich and Morley’s friendship deepened through meetings of the Mont Pelerin Society and personal visits.10 Goodrich also funded scholarships through the Winchester Foundation for an elementary school that Morley was associated with in Gibson Island, Maryland, Morley’s retirement home.11
In the spring of 1949, Goodrich became interested in another publishing venture. While on a trip to New York City, he visited the Liberal Arts Press, located on Seventy-second Street. Goodrich took an immediate interest in the small publishing company and its owner, Oskar Piest. Piest was a German native and a former economics adviser to a large Berlin bank. In 1935, he fled Germany because of the political turmoil that existed during Hitler’s rise to power. Once in the United States, Piest became involved in publishing, serving as editor in chief to the Hafner Press and publisher of the Library of Liberal Arts.12
The Library of Liberal Arts published a series of inexpensive, paper-bound reprints of shorter classics in the fields of philosophy, religion, political science, education, and literature. Among the authors published by the press were Plato, Aristotle, Augustine, Thomas Aquinas, and Thomas Hobbes. Goodrich entered into what eventually became a twenty-thousand-dollar loan agreement with Piest, which enabled Piest to expand the offerings of inexpensive classic texts. As a result, between 1950 and 1960, the Library of Liberal Arts was able to increase publication from a few titles to hundreds. At the publishing company’s height, its books were used in approximately eight hundred colleges and universities. Goodrich was so pleased with the outcome of this loan to Piest that he wrote about the transaction in Liberty Fund’s Basic Memorandum. Goodrich used the success story as an example of a time when the Liberty Fund directors should be willing to consider extending loans to further a cause consistent with the foundation’s philosophy.13
In 1939, James and Cora Goodrich donated $11,000 to Cora’s hometown of Lynn, Indiana, for the construction of a community library in memory of her parents.14 The donation was matched by $11,800 from the Federal Work Projects Administration (WPA). On July 4, 1941, 150 Lynn citizens began razing an old building on the site where the new Frist Memorial Library would be built.15 Cora did not live to see the completion of the library named in her family’s honor. She passed away on October 31, 1941, slightly more than a year after her husband’s death.16 While most of Cora’s life had been spent as a supporter of James Goodrich’s amazing range of accomplishments, she had assumed leadership positions in her own right in a number of state and local organizations: In 1909, she became district president of the Indiana Federation of Clubs; in 1914, she began the Madonna Class, a women’s Bible study at the Presbyterian Church; from 1925 to 1926, she served as local chapter president of the Daughters of the American Revolution.17 Moreover, in rearing Pierre, the diminutive woman had perhaps as much influence on him as his powerful father.
Pierre and his second wife, Enid, attended the library’s dedication on Sunday, June 13, 1943.18 The ceremony included the unveiling of a large portrait of Cora’s family, the Frists, which still hangs in the library.19 Also in 1943, the unveiling of another portrait of interest to Pierre took place. Goodrich had hired Wayman Adams, one of America’s great portrait painters, to rework a portrait of his father. Adams had originally begun the portrait of James P. Goodrich when the latter was still in the governor’s office, in December 1920. The portrait was hung in the Indiana statehouse, where it remains to this day.20
On February 3, 1941, in Chicago, between the deaths of his parents, Pierre had married Enid Smith of Indianapolis. Pierre had first become acquainted with Enid in 1928, when she was his nurse at St. Vincent Hospital in Indianapolis, where he had back surgery. Enid was born in Enid, Oklahoma, on May 17, 1903. Her family moved to Indianapolis shortly after her birth. She attended Shortridge High School and received a resident nursing degree from St. Vincent Hospital and a bachelor’s degree from Case Western Reserve University in Cleveland, Ohio.
Enid was one of six children. She did not come from a wealthy, well-known family, as had Pierre’s first wife. The couple’s long courtship was strained by circumstances largely beyond their control. James and Cora Goodrich had never totally understood or gotten over their son’s divorce. As a result, Pierre was placed in a delicate position: He wanted very much to remain on good terms with his parents yet retain the close relationship he had developed with Enid. It was a troubled situation that only partially resolved itself in the autumn of 1941, after the passing of both of his parents.21
Throughout her life with Pierre, Enid showed great tolerance and understanding of her husband’s time-consuming interests. As for Pierre, he had considerable confidence in Enid and valued her advice. Although Enid never had the scholarly interests that her husband had, she possessed a great deal of common sense. When Pierre established Liberty Fund in 1960, he kept Enid well advised of the details, and she was made a founding lifetime board member. Enid attended Liberty Fund board meetings regularly for more than twenty-five years. She was also a director of Pierre’s other foundations: Thirty Five Twenty, Inc., based in Indianapolis, and the Winchester Foundation. After Pierre’s death, Enid continued to be active in philanthropic circles in the Indianapolis area: she was a trustee of the Indianapolis Museum of Art; a member of the President’s Council at Conner Prairie, a restored pioneer village; and a 1994 recipient of the Individual Philanthropist Award by the Indiana chapter of the National Society of Fund Raising Executives. In 1994 she was named by Indiana’s former governor Evan Bayh as a Sagamore of the Wabash, the state’s highest civilian honor. Enid passed away in November 1996 at the age of ninety-three.22
After they were married, Pierre and Enid went to Hawaii on their honeymoon. While in Hawaii, the newlyweds visited Admiral Husband Kimmel, the officer in charge of the soon to be infamous naval base at Pearl Harbor.23 Pierre took along on his honeymoon a suitcase full of books. Albert Campbell, Pierre’s longtime law partner, joked that one of the first things Enid would have to get used to in married life was Pierre’s preoccupation with reading. Goodrich could become so immersed in a book that he became oblivious to anything else going on around him, even a honeymoon.24
Several years later, another marriage took place in Goodrich’s immediate family. In May 1952, his daughter, Nancy, married a Polish prince, Edmond Poniatowski, at the Vincent Astor estate in Rhinebeck, New York. Pierre was concerned that whoever married his daughter might find his wealth the primary attraction. The couple later lived in Paris for several years, during which time father and daughter seldom saw each other. It was the beginning of a strained relationship.25
In May 1946, Pierre and Enid moved to 4220 Central Avenue in northern Indianapolis, where they would live during the remainder of Pierre’s life. Set in a lovely neighborhood across from the St. Joan of Arc Catholic Church, the home is a beautiful example of Georgian architecture. In the late 1960s, Goodrich had extensive renovation done to the home, including surrounding it with an iron fence and building a carriage house.26
Despite his father’s longtime involvement in politics, particularly partisan Republican politics, Pierre himself was pretty much a bystander in the political arena. During his fifty years of residence in Indianapolis, however, many a Republican candidate came knocking at Goodrich’s door seeking his support. In February 1972, Dr. Otis Bowen, then a Republican candidate for governor, visited Goodrich, looking for a campaign contribution and endorsement. Bowen was treated no differently from any other visitor. Goodrich proceeded to engage Bowen in a lengthy discussion, challenging Bowen on what he believed were the candidate’s less than conservative beliefs. After a fairly virulent exchange, Bowen left, disgruntled. The future two-time Indiana governor was not the first candidate who left Goodrich’s office shaking his head. Bowen left with empty hands, not receiving the campaign contribution he had sought. Instead, Goodrich sent him literature, including Lord Acton’s letter containing the admonition that “power tends to corrupt and absolute power corrupts absolutely.” As Bowen recalls, “Those who knew of my appointment were very interested in the outcome. [My campaign manager] asked if I thought a follow-up appointment would be productive. I advised that I had no desire to face [Mr. Goodrich] again.”27
The 1952 Republican National Convention in Chicago marked an exception to Pierre Goodrich’s tendency not to become directly involved in politics. In this contest, the stakes were high. Goodrich had been a longtime supporter of the United States senator Robert Taft, who was challenging Dwight D. Eisenhower for the Republican presidential nomination. Goodrich, like most supporters of the conservative wing of the Republican Party, was suspicious of Eisenhower’s “internationalist” views and believed that he would do little to roll back Franklin Roosevelt’s New Deal policies. Almost all political insiders and columnists believed that the race between Taft and Eisenhower would be extremely close. Therefore, every delegate was deemed critical. A hotly contested battle for control of Indiana’s delegates to the convention ensued. What added fuel to the controversy was the power play that had developed between Goodrich’s business partner Eugene C. Pulliam, an Eisenhower backer, and Indiana’s two Republican United States senators, Homer Capehart and William Jenner, both strong Taft supporters.
As publisher of Indiana’s two largest newspapers, Pulliam was not content to report on the bruising tug of war in Chicago. He had finagled to get himself “elected” as a delegate to the convention in a deal with Senator Jenner that many considered highly suspicious. “We decided it’d be better to make him a delegate than have him hounding us all the time,” explained Lisle Wallace, chairman of the Taft campaign in Indiana.28 Nonetheless, Jenner and the other Taft supporters wanted a delegation that was 100 percent loyal to Taft. This is where Goodrich came in.
The controversy began with the issue of whether the Indiana state Republican convention could force Pulliam or any other delegate to vote for Taft. Pulliam took his fight straight to the readers of his newspapers, threatening to sue the Republican Party if he was not allowed to vote as a delegate for Eisenhower.29 After Pulliam won a minor victory that allowed him free rein to vote for whomever he wanted, the challenge was to hold onto Indiana’s other delegates who had earlier committed to Taft.30 Goodrich, in an uncharacteristic role, worked the Indiana delegation both on and off the convention floor. He tried to persuade them not to defect to Pulliam’s (and therefore Eisenhower’s) camp.31
As an interesting side note, at the July convention, Goodrich was introduced to William Casey by Henry Regnery. At the time, Casey was a New York City tax attorney and a strong Taft supporter.32 While Goodrich met with most of Indiana’s thirty-two delegates to the convention privately, Casey campaigned for Taft in a tenacious manner similar to Pulliam’s. Casey had set up an underground newspaper. Each morning on the doorstep of every delegate and alternate, a paper appeared with headlines that read, “We All Like Ike, but Ike Can’t Win” and “Ike’s a Me-Too Republican—Let’s Nominate a Real Republican.”33
The significance of Goodrich’s meeting with Casey is not that the two men ultimately succeeded in helping Taft garner the nomination. They did not. Eisenhower won on the first ballot in an unexpected landslide. The important thing about their meeting is that Goodrich had made contact with a man who would later play a very important role in Goodrich’s establishment of Liberty Fund. Casey did much of the legal and tax preparation work involved in forming the foundation between 1960 and 1962. He would later hold high public office, becoming chairman of the United States Securities and Exchange Commission (SEC), director of the Central Intelligence Agency (CIA), and chairman of Ronald Reagan’s 1980 presidential campaign.
As Goodrich came to know Casey, he saw a man much like himself: unflappable and impatient, a voracious reader and lover of ideas, a lawyer with such tremendous energy that he often kept three secretaries busy at once. Casey’s shambling manner totally belied his considerable intellect and scholarly erudition. Moreover, like Goodrich, Casey possessed the ability to absorb new information and new ideas like a sponge yet relentlessly held to the moral traditions of his middle-class Catholic upbringing in Queens.34 Because he met Casey there, Goodrich’s work at the Chicago convention proved to be not totally fruitless, despite Taft’s landslide defeat.
Goodrich’s numerous businesses generally enjoyed a string of years of strong success. In the late 1950s, however, his fortune turned when a business deal went sour. In December 1947, Pierre’s uncle, Percy Goodrich, had struck a deal with Indianapolis businessman and attorney Samuel Harrell. The purchase arrangement involved the sale of the Goodrich family’s twenty-four grain elevators in central and northern Indiana to Acme-Evans, a large grain and milling company in Indianapolis. The resulting company became known as Acme-Goodrich. Harrell took over the presidency of Acme-Goodrich while Percy Goodrich, at the age of eighty-six, became chairman of the board. The Goodrich family received $1.8 million plus preferred stock in Acme-Goodrich. Moreover, approximately one hundred other stockholders received preferred stock in Acme-Goodrich.
After Percy Goodrich died in 1951, Pierre was the largest minority shareholder and the second major force, behind Harrell, in the company. By that time, the company was the dominant grain business in Indiana, owning thirty-seven grain elevators across the state.
In Harrell, a hard-nosed and successful businessman, Goodrich had met his match. Harrell was a large, imposing man who was also bright, ambitious, and polished. He had grown up in Noblesville, Indiana, and had served as a World War I navy pilot before graduating from the University of Pennsylvania and Yale Law School. In the mid 1920s, Harrell returned to practice law in Indianapolis and became involved in the grain and milling business. He later served as chairman of the board of directors of the Indianapolis Board of Trade, founded Indiana’s honorary order the Sagamore of the Wabash, and ran unsuccessfully for governor in 1952 and lieutenant governor in 1956.35
In the mid 1950s, Harrell had the idea of creating a grain company that would be structurally similar to General Motors, having five independent divisions, and he established General Grain. In 1958, Harrell’s plan was to make General Grain the umbrella company for the five divisions, which were Acme-Goodrich (rural Indiana grain elevators), Acme-Evans (a milling company based in Indianapolis), Early and Daniels (Cincinnati), Cleveland Grain (Cleveland, Ohio), and the Tidewater Grain Company (a Philadelphia grain export company).36
From the start, Goodrich and the other minority stockholders in Acme-Goodrich were against the merger. They believed that the preferred shares, which they owned, were considerably undervalued by Harrell. At the August 10, 1958, stockholders’ meeting, the minority shareholders formally voted against the consolidation plan.37 Under Indiana law, any stockholder who opposes a merger has the right to have his or her shares purchased by the new or surviving company at the price of the shares on the effective date of the merger. Harrell proposed such a purchase price and the Indiana Securities Exchange Commission found the merger fair and equitable, but the minority stockholders objected to the appraised value of the stock. Goodrich and a Winchester dentist by the name of John Beals (Pierre’s second cousin) subsequently brought a legal action on behalf of all 104 minority stockholders.38
At a lengthy trial before the Boone Circuit Court in Lebanon, Indiana, in July 1962, Beals and Goodrich succeeded in winning a jury verdict for the minority shareholders that increased their preferred stock value almost twenty dollars per share. Harrell appealed the verdict. Finally, in December 1966, the Indiana Court of Appeals ruled in General Grain, Inc. v. Pierre F. Goodrich in favor of Harrell.39 Goodrich appealed the decision to the Indiana Supreme Court. In June 1967, the state’s highest court affirmed the decision of the court of appeals in favor of Harrell.40
The lengthy legal contest between Goodrich and Harrell is interesting for two reasons. First, it was probably the first large dissenting shareholder case in Indiana, therefore setting an important precedent for later case law.41 Second, it is an instance in which a conflict of personalities came back to haunt Pierre. Goodrich was accustomed to being able to control events that involved his business interests. In this situation, however, he did not have the votes to control the direction of Acme-Goodrich, and he could not move Harrell to oppose the consolidation plan. As a result, the two men had a falling out, and the legal battle that ensued was inevitable.42
After the Indiana Supreme Court decision, settlement negotiations resulted in Harrell’s returning six elevators to the preferred (minority) stockholders in exchange for their releasing all claims against General Grain. With six elevators, the minority stockholders formed a company called Indiana Elevators. The company was based in Winchester, the original location of the Goodrich Hay and Grain Company seventy years before. Unfortunately, the lengthy legal battle had taken its toll on the grain elevators’ business. The substantial legal costs, combined with Harrell’s failure to maintain the grain operations, resulted in a substantial loss of business for Indiana Elevator. It folded in 1968, less than a year from start-up. It was one of the few business deals in which the Goodrich family came out on the losing end.43
The Later Years, 1960–1973
It is inconceivable to me that businessmen generally, and utility managers almost consistently, think that by ignoring the effects of monetary inflation, they are somehow going to avoid the problem. If they did not ignore the subject but made an attempt to report it publicly—which they can do if their auditors, lawyers, and economists are willing to inform themselves—I am quite sure that they would be much farther along than they are now.
pierre f. goodrich, “Monetary Inflation, Growth and Accounting”
In the early 1960s, Goodrich decided that he had outgrown his office space on the seventh floor of the Electric Building, where he had been since 1935. He began to examine other business offices in downtown Indianapolis. Not finding any office quarters suitable, he decided to build his own office building. He purchased property at 3520 Washington Boulevard, which was owned and occupied by Mrs. Bertha Caldwell, Richard Lugar’s mother, and had been the United States senator’s childhood home.1 In 1962, Goodrich had the house demolished and the land rezoned, and replaced the home with a modern office building. The building, which still stands, is now occupied by an architectural firm.
The building served as the nerve center for Goodrich’s many corporate operations. But probably more important to Pierre, it was also the location for the early work of Liberty Fund. The care with which Goodrich oversaw the building’s construction is indicative of the time and thought he could put into a project once he became interested in it. Goodrich spared no expense. In landscaping the grounds, he had shrubs and trees transported from southern Indiana at a cost of thirty-five thousand dollars.2 Moreover, he duplexed the utilities of the building so that it could function in times of emergency. In addition to having the building connected to city water, he had a deep well dug. He also had both gas and oil boiler systems put in place for heat. An air-handling system regulated the air moisture content so that the office always had fifty percent humidity, and an electric generator was installed to serve in case of a power outage. Goodrich even had double ceilings and extra-thick walls constructed to add to the building’s sturdiness and soundproofing. He had a large oval conference table designed for Liberty Fund conferences and special chairs made to order.3
“He was a man of great thought,” said Robert Longardner, who purchased the building in the mid 1970s and still occupies it today. Goodrich obviously believed “the work of the [Liberty Fund] was very important and it had to be physically protected in case there was ever a catastrophe,” added Longardner.4
Goodrich’s partnership with John Raab Emison terminated in 1939. Emison returned to his hometown of Vincennes to practice with his family’s law firm, the oldest firm west of the Allegheny Mountains.5 Goodrich’s partnership with Albert Campbell continued intact, however, and in 1941 a young attorney by the name of Claude Warren joined the firm of Goodrich and Campbell. This relationship proved very fruitful, and the three attorneys practiced law together for the next twenty-one years. After Campbell left in 1962, Warren remained with Goodrich as a partner until Pierre passed away.
By the early 1960s, the Goodrich family companies were enjoying tremendous success. The country’s economy had flourished during the decades of the 1940s and 1950s, and so had Ayrshire Collieries Corporation, the Indiana Telephone Corporation, City Securities, Central Newspapers, and the many other smaller companies in which the Goodrich family held a large interest. Most of Goodrich’s legal work involved companies in which he had a financial stake, but the firm of Goodrich, Campbell, and Warren also took on a few outside clients, such as public utility companies. Warren became an expert in public utility law and was sought after for his expertise. While Albert Campbell and Claude Warren practiced with Goodrich at different times for the better part of three decades, a number of younger attorneys also practiced with the firm as associates, including John M. Kitchen, Carter W. Eltzroth, and Gilbert Snider.6
In March 1957, Goodrich hired a young woman by the name of Helen Schultz. Miss Schultz, as Pierre would always refer to her, became his top assistant. She had graduated from Culver-Stockton College in Missouri and had worked for Illinois Bell before beginning her apprenticeship under Goodrich. Schultz was an extremely capable person, and over the course of several years, her boss and mentor began to trust her more and more with the handling of top administrative duties. Schultz’s competency was evident to others as well. Martha Wharton, who met Goodrich and Helen Schultz only once, in 1966 for a job interview, recalled thirty years later that “Miss Helen Schultz ran that [office] and, indeed, gave orders to Mr. Goodrich! I may not have been in awe of him, but I was agape at her competence and commanding presence!”7 Indeed, after Goodrich’s death in 1973, Schultz replaced him as president of both the Indiana Telephone Corporation and Liberty Fund.
The 1960s marked a relatively stable period in Goodrich’s life. With the exception of the Acme-Goodrich failure, his businesses were doing well, and he enjoyed considerable satisfaction in his involvement with several educational organizations. Goodrich initiated a number of policy changes for his companies that only years later would be adopted by competing businesses. Because of his concern over inflation, he restricted the Peoples Loan and Trust Company’s ability to lend money at a fixed interest rate to five years. Goodrich believed that to predict what interest rates would be beyond that would be pure speculation. In essence, that had the effect of creating variable-rate mortgages, because borrowers had to renegotiate the interest rate of their mortgages every five years or seek financing elsewhere. Although variable-rate mortgages are now extremely common, they were unheard of in the 1960s. Of course, that conservative decision put Peoples Loan and Trust Company at a distinct disadvantage in competition with other banks, which made fixed-rate home loans for periods as long as thirty years. But the policy helped to save Peoples from the dire situation that many banks found themselves in during the late 1970s and early 1980s, when banks were holding long-term loans that yielded 6 to 8 percent interest but had to pay depositors interest at 15 to 16 percent.8 Goodrich also initiated fee-based services long before they became common in other banks. This reflected his belief, which he stated often in his memorandums to employees, that those who benefit from a service should pay for it, and that costs should not be passed on to all ratepayers or depositors.9
In the telephone industry, Goodrich advanced policies that reflected his awareness of how quickly the industry was changing. For example, he depreciated the expense of new equipment at a far faster rate than was allowed under the depreciation schedules of state and federal tax laws. This had the effect of enabling his telephone companies to deduct the expense of the new equipment from income sooner rather than later, therefore reducing annual corporate income and dividends to shareholders. Goodrich’s belief in the faster depreciation rates reflected his views about the true rate at which new equipment would become obsolete and need replacing. He used this logic (along with the argument about how inflation increased the expense of new equipment at a cost higher than was generally calculated) to justify higher rate increases before the Indiana Public Service Commission.10
At the same time, Goodrich also negotiated long-term contracts with telephone-equipment suppliers. Most generally, he required from these suppliers contractual commitments of up to twenty years. The normal commitment was less than half that time. In other words, if a company wanted to sell telephone equipment to the Indiana Telephone Corporation or the Public Telephone Corporation at Greensburg, then that supplier would have to agree to provide parts for that equipment for up to twenty years after the sale. Goodrich justified this “apparent conflict between our twenty year provision for parts and a nine year obsolescence plan” based on the ability of larger telephone companies (such as AT&T and Western Electric) to have “captive manufacturing companies” (meaning they, not the suppliers, could dictate the terms and price of new and repaired equipment).11
Throughout the 1950s and 1960s, the issue of labor unions continually was one that Goodrich had to confront. Goodrich strongly opposed unions: He believed that they protect poor employees at the expense of good employees and unnecessarily handcuff management in adopting work changes. He further believed that the call to unionize would succeed only if employees were not being treated right by the employing company. The Ayrshire Collieries Corporation was unionized by one or more of the miners’ unions, and the Indiana Telephone Corporation (ITC) was temporarily unionized for about two years before Goodrich’s death. The ITC employees later decertified the union. The existence and the threat of organized labor forced the boards of the various Goodrich companies to change their compensation packages. In the 1950s, ITC employees started to receive pension benefits after the threat of unionization was repeatedly made. Generally, Goodrich saw to it that his employees received a compensation package, complete with benefits as good as those of competing companies that were unionized. He believed that if he did that, there would be little chance for union efforts to succeed.12
The business practice that Goodrich took the greatest long-term interest in was the accounting of inflation. As a business executive overseeing companies that were constantly replacing expensive equipment, Goodrich was greatly concerned about inflation. He took on the analysis of the problem much as he took on anything that had stirred his curiosity, with almost obsessive attention. Goodrich recognized that inflation erodes profits because the replacement rate of equipment in today’s dollars does not accurately reflect the true cost when inflation is factored in.13 Goodrich was greatly concerned about the practical effects of inflation. In the late 1960s and early 1970s, inflation was high. On the basis of what he had observed in several South American countries, he knew that inflation could wreak havoc, not only on individual businesses, but on whole economies as well.14 Goodrich was so convinced in the 1940s that the United States was going to experience a period of substantial inflation that he refinanced the whole of the Indiana Telephone Corporation’s debt on a long-term basis at low fixed interest rates.15
In support of his warnings about inflation, Goodrich hosted Ludwig Erhard, chancellor of West Germany from 1963 to 1966, in Indianapolis on February 19, 1968. Erhard is credited with performing the “German economic miracle” when he was the German minister of economics. In that position, on Sunday, June 20, 1948, he abolished all wage and price controls and introduced a new German currency, the deutsche mark. These bold initiatives resulted in Germany’s having one of the strongest economies in Europe within a decade. Erhard and Goodrich had become friends through their mutual association with the Mont Pelerin Society. The former chancellor spoke at the Columbia Club about the evils of inflation and countries’ engaging in deficit financing to support ballooning budgets.16
Goodrich became an expert on inflation and spoke often about the need to control and properly account for it to anyone who would listen. He believed that most people (including many economists) simply did not understand how inflation could lead to political and social upheaval. Goodrich often discussed, with an economic historian’s knowledge, how past national crises such as the French Revolution and the rise in power of Napoleon in France and of Hitler in Germany had been brought about by the manipulation of money.17 A 1979 article in the Indianapolis Star paid a late tribute to Pierre for his recognition of the importance of accounting for the effect of inflation in a business context:18
Goodrich, noted for his financial genius and wide-ranging scholarship, urged other companies to [account for inflation], observing that people and firms might do well to chart financial progress two ways: In the common arithmetic language of current dollars that everyone uses and in constant dollars which have been adjusted for inflation.
. . . With double-digit inflation jolting the nation in the early 1970s, Goodrich began to get some attention for his theory. Nobel Laureate Milton Friedman, the University of Chicago economist who had long been acquainted with Goodrich’s work, began suggesting in national speeches that corporations might do well to follow the lead of Indiana Telephone in accounting for inflation.19
Goodrich knew that there is a built-in pressure for company officials not to report the effects of inflation: inflated figures look good to shareholders and mitigate the chance that financial analysts will spot a firm’s poor performance.20 Goodrich’s method of accounting (price-level accounting) eventually attracted national and even international attention. He corresponded with businessmen and academics from all over the country.21 Stanford University, the University of Pittsburgh, and the University of Michigan used Indiana Telephone Corporation’s annual reports in their graduate business courses. England’s largest news magazine, The Economist, favorably discussed ITC’s accounting methods in a January 1971 article. In 1978, the Shell Oil Company, a Dutch corporation, became the first major company to record inflationary dollars in its annual reports.22
In support of his theories, Goodrich employed top accountants and economists to appear before the Indiana Public Service Commission on behalf of the ITC. Experts such as Dr. William A. Paton, a professor of accounting at the University of Michigan; Dr. John K. Langum, former vice-president of the Federal Reserve Bank of Chicago; and Dr. Benjamin A. Rogge, Distinguished Professor of Political Economy from Wabash College, often represented Goodrich before rate hearings. Of course, Goodrich was attempting to justify rate increases. But it was just as important to him to enlist the testimony of these experts to educate the commission and orient them to his way of thinking.
“One of [Goodrich’s] pet projects was to devise an accounting system that would prevent the government from taxing away the so-called capital gains of business through the ravages of inflation,” wrote Paul L. Poirot, who knew Goodrich from their mutual involvement with the Foundation for Economic Education. “What [Goodrich] did not seem to realize is that there is no way to prevent inflation if the government is in charge of the monetary system,” Poirot added.23
It would seem inconceivable that Goodrich was not aware of the Federal Reserve’s role in controlling inflation through monetary policy, especially given Goodrich’s familiarity with the writings of Milton Friedman and other monetarists. Goodrich probably believed that it was only by educating others regarding the havoc that inflation could create that monetary policy would eventually be reviewed. Goodrich did not believe that a person had to be an elected official, a Washington, D.C., lobbyist, or an academic to influence governmental decisions. Ultimately, Goodrich’s unwavering attack against inflationary policies may have had a significant influence. On his periodic trips to Chicago in the late 1960s and early 1970s, Goodrich often visited Harris Bank and talked with the bank’s top economist, Dr. Beryl Sprinkel. The two men discussed a wide range of issues, and especially the pitfalls of inflation. Some years later, Sprinkel became a high-level official at the United States Treasury Department. Toward the end of Ronald Reagan’s first term, Sprinkel was named chairman of the Council of Economic Advisers. In this role, he had considerable influence in helping further anti-inflationary policies both with the administration and through discussions with Federal Reserve officials.
“Mr. Goodrich believed that preaching the correct doctrine about inflation might well have an effect on policy,” said Sprinkel. “He saw in me a kindred soul. We might each learn something from a discussion of these issues,” Sprinkel added.24
Pierre Goodrich was as much interested in the capital growth of the companies he and his family held controlling interests in as he was in their dividend income. One reason was that he hated paying taxes. He loathed the thought that the government would profit from his and his employees’ hard work, only to spend the money on boondoggles of one kind or another. Under United States tax law, the paying of corporate dividends amounts to double taxation. First, the company pays tax on the income as corporate tax. Second, whenever there is a distribution of dividends, the individual shareholder must report the dividend as personal income and pay tax on it. The top accounting firm of Arthur Andersen and Company, based in Chicago, established a branch office in Indianapolis in 1960, at first to advise Goodrich’s companies. William Fletcher, the managing partner of Arthur Andersen’s branch office, became a close adviser to Goodrich, spending hundreds of hours annually consulting him on business matters. Fletcher later served on the board of the Indiana Telephone Corporation and as an executive with the Peoples Loan and Trust Company. Goodrich went to extraordinary efforts to see that Uncle Sam’s share was as minuscule as possible, all within the confines of the law.25
Toward the end of each fiscal year, Goodrich would hire extra accountants and require existing employees to work overtime figuring out the maximum amount of charitable deduction vis-à-vis dividends that would result in the least tax liability.26 Goodrich would often contribute stock in one of his companies to Wabash College or to other charitable institutions. By contributing stock rather than cash, Goodrich was able to deduct the market value of the stock at the time it was given, not when it was purchased. By doing this, he avoided any capital gains taxes and was able to deduct the value of the stock from current income. At the same time, the educational institutions enjoyed the appreciated value of the stock. Goodrich used this to tremendous advantage in both reducing his tax liability and benefiting the charitable organizations he supported.27
Goodrich’s insistence on paying low dividends and investing profits back into his companies was not popular. Other directors in his companies were constantly informing Goodrich that shareholder interest would diminish if the policy of paying low dividends continued; moreover, those investors who needed the income from the shares in order to live were also extremely upset. Despite this opposition, Goodrich generally prevailed in maintaining the paying out of low dividends. Of course, those investors who did hold on to the stock until the time the company was sold enjoyed extremely handsome profits as a result of the huge capital appreciation of the stock.28
Toward the end of his life, the central and overriding business concern that Goodrich confronted was liquidating his many corporate interests and laying the foundation for the work of Liberty Fund, Inc. In 1968, Indiana Elevators, the successor to the Goodrich Brothers Hay and Grain Company, went into bankruptcy. On May 8 and May 9, 1969, respectively, Goodrich held shareholders meetings in Indianapolis to dissolve the holding companies of Engineers Incorporated and the Patoka Coal Company. Engineers Incorporated was the family company that was responsible for most of the corporate purchases in the 1930s and 1940s. Patoka Coal had merged with Ayrshire Collieries in 1939 but had technically remained a holding company of Ayrshire stock until its liquidation. Another holding company, the P. F. Goodrich Corporation, was also dissolved in the mid 1960s, dispensing the stock it held directly to investors, who were mostly Goodrich family members.29 In October 1969, Goodrich sold Ayrshire Collieries to American Metal Climax. Less than a year later, in August 1970, he sold the Goodrich family’s 51 percent ownership in City Securities to Dwight Peterson, who was already president.30 The Goodrich family, under Pierre’s management, continued to hold either a controlling or a large interest in the Indiana Telephone Corporation, Central Shares (the holding company for Central Newspapers stock), the Peoples Loan and Trust Company, and the Eastern Indiana Telephone Company in Winchester.
To what degree Goodrich had plans of selling off these other corporate interests before his death is unknown, but he acknowledged in Liberty Fund’s Basic Memorandum that the securities of a utility company (undoubtedly his own) would be one of the main assets of the foundation.31 He had hoped that Liberty Fund might be able to operate the businesses he still owned and apply the profits toward the purposes of the Liberty Fund.32 The tax problems that arose from this plan proved formidable, however, and were not totally resolved even at the time of his death (see chapter 29).33 Nonetheless, Goodrich’s desire to see Liberty Fund come to fruition under his guidance became an overriding concern.
In addition to liquidating the Goodrich holding companies, Goodrich stepped down from a number of foundation boards: the Great Books Foundation (1957), the Indianapolis Symphony Orchestra (late 1950s), the China Institute of America (1965), the Intercollegiate Studies Institute (1965), the Institute for Humane Studies (1963), and Wabash College (1969). Although only a handful of Liberty Fund conferences had been held by the early 1970s, Goodrich had laid the groundwork for his greatest contribution to society.
[1. ]For Klan activity in Indiana, see M. William Lutholtz, Grand Dragon: D. C. Stephenson and the Ku Klux Klan in Indiana (West Lafayette, Ind.: Purdue University Press, 1993); Kathleen M. Thee, Women of the Klan: Racism and Gender in the 1920s (Berkeley: University of California Press, 1992); and Virginia Black, “Behind the Hood,” Fort Wayne (Ind.) News-Sentinel, January 25, 1992, summit sec., pp. 6–8. Regarding the KKK’s alleged support of James Watson, see “Watson Declares Klan Indorsement Work of Enemies,” Indianapolis Star, June 10, 1924, p. 1, col. 5; “Watson Denies Deals for Support of Klan,” Indianapolis Star, October 23, 1926, p. 3, col. 2.
[2. ]See “J. P. Goodrich, Former Governor of Indiana, Dead at 76 Years,” Indianapolis News, August 18, 1940, p. 1, col. 6.
[3. ]1924 Indianapolis (City) Directory, roll 17, Indiana State Library, Indiana Division.
[4. ]Mote grew up in Spartansburg, Indiana. He was superintendent of the Parker City school system and principal of the Union City High School before leaving Randolph County and getting involved in politics with James Goodrich in Indianapolis. See “Carl H. Mote, Head of Farm Group, Dies,” Indianapolis Star, April 30, 1946, p. 4, col. 2. Pierre and Mote practiced at 1109–10 Hume-Mansur Building, Indianapolis.
[5. ]Mrs. John Raab (Kathryn) Emison, interview, November 24, 1992.
[7. ]P. F. Goodrich to E. Victor Willetts, Jr., December 27, 1972. The articles of incorporation of Engineers Incorporated were filed with the Indiana secretary of state’s office on November 20, 1925. The incorporators were James, William Wallace (“W. W.”), and Pierre Goodrich. Pierre was president and W. W. was secretary. The five directors were James, Pierre, W. W., Percy, and John B. Goodrich. Engineers Incorporated was reorganized on September 19, 1938. Its office was always that of Pierre’s law practice. It was dissolved as of December 29, 1969. See “Engineers Incorporated,” Closed Corporations, State Archives, Indiana Commission on Public Records, AR 17-650.
[8. ]See the annual reports for these years for the additions of directors to the board of Engineers Incorporated. In 1960, Helen Schultz was made secretary and treasurer of Engineers Incorporated. “Engineers Incorporated,” Closed Corporations, State Archives, Indiana Commission on Public Records, AR 17-650.
[9. ]Book of Indiana (Indianapolis: James O. Jones, 1929), p. 326.
[10. ]See William H. Andrews, “Ayrshire Collieries Corporation—Profit with Ecology” (research paper, Indiana University, n.d.).
[11. ]Dwight W. Hoover, Magic Middletown (Bloomington: Indiana University Press, 1986), pp. 48–51.
[12. ]See U.S. Congress, Senate, St. Lawrence Waterway Project, 69th Cong., 2d sess., 1927, S. Rept. 183, pp. 2–10. In 1924, ten years after the completion of the Panama Canal, shipping a ton of staple goods by sea from New York City to San Francisco cost approximately half of what it cost to ship the same goods from Chicago to San Francisco by rail. Similar discrepancies existed with regard to the transportation of goods from the Midwest to ports in South America and overseas. As a result, the cost of transporting one bushel of grain, for example, from the Midwest had increased six to eighteen cents.
[13. ]The commission also examined two other routes: an “all-American” route that did not cross Canada’s southern border and therefore did not require the complications of treaty negotiations with Canada, and the Lake Ontario–Hudson River route that passed through New York state. The commission found that there would be a tremendous savings in adopting the St. Lawrence Seaway route. The commission cited the following reasons for adopting the St. Lawrence Seaway route: there would be fewer navigable miles through canals—137 miles on the All-American route, 128 miles on the Ontario-Hudson route, 21 to 25 miles on the St. Lawrence route; there would be fewer locks—nine locks compared with twenty locks on the Ontario-Hudson route; the number of obstructed bridges would be substantially smaller—eight bridges compared with fifty-four on the Ontario-Hudson route; and, finally, the distance via the St. Lawrence from Great Lake ports to northern European ports would be shorter than the Ontario-Hudson route by 625 miles. Completion of the St. Lawrence Seaway had other economic advantages beyond lower transportation costs. For example, the development of the St. Lawrence waterway could result in harnessing huge hydroelectric power from the great rapids which then obstructed navigation on the river (ibid.).
[14. ]The commission’s report was referred to the U.S. Senate Committee on Commerce on January 3, 1927, and a number of hearings and follow-up studies were held on the report.
[15. ]See “St. Lawrence Seaway,” in The New Encyclopaedia Britannica, 15th ed., vol. 24 (Chicago: Encyclopaedia Britannica, 1992), pp. 1073–76, particularly p. 1075.
[17. ]“M’Cray Not to Resign; Sees Politicians’ Hand,” Indianapolis News, October 1, 1923, p. 1, col. 1; “Indiana in Turmoil over M’Cray’s Case: Goodrich Denies Charge,” New York Times, October 3, 1923, p. 1, col. 5; “M’Cray Bank Shuts; Asserts Solvency,” New York Times, October 14, 1923, p. 1, col. 4; “Gov. McCray Guilty of Attempted Fraud; He Goes to Jail and Is Not Likely to Appeal,” New York Times, April 29, 1924, p. 1, col. 4; “Indiana” (editorial on McCray), New York Times, April 30, 1924, p. 18, col. 1; Benjamin D. Rhodes, James P. Goodrich, Indiana’s “Governor Strangelove” (London: Associated University Presses, 1996), pp. 136–37.
[18. ]Rhodes, James P. Goodrich, Indiana’s “Governor Strangelove,” p. 138. See also Wabash Bulletin 39 (October 1940), supplement, pp. 11–12; letter from Goodrich to Treasurer O. E. Gregg, June 30, 1920, James P. Goodrich Papers, box 3; letter from Goodrich to John D. Rockefeller, June 21, 1920, James P. Goodrich Papers, box 2; letter from Goodrich to Dr. George L. McIntosh, September 16, 1919, James P. Goodrich Papers, box 2.
[19. ]“Watson Announces Candidacy for President; Selects M. Bert Thurman for Campaign Manager,” Indianapolis News, February 9, 1928, p. 1, col. 4; Maurice Early, “Watson Defines Policies in Talk at Native Town,” Indianapolis Star, April 15, 1928, p. 1, col. 3.
[20. ]Marianna Reed, interview, July 20, 1992. Ms. Reed, a Girl Scout at the time, participated in the parade and ceremony.
[21. ]Letter from Goodrich to Wood, March 13, 1928, James P. Goodrich Papers, box 13.
[22. ]See Rhodes, James P. Goodrich, Indiana’s “Governor Strangelove,” pp. 157–58.
[23. ]Williams, Current, and Freidel, A History of the United States: Since 1865, p. 456.
[24. ]See Will H. Hays, The Memoirs of Will H. Hays, pp. 323–63; Raymond Moley, The Hays Office (Indianapolis: Bobbs-Merrill, 1945), pp. 32–67.
[25. ]James Goodrich, “Diary,” February 2, 1932, James P. Goodrich Papers, box 3; see also Rhodes, James P. Goodrich, Indiana’s “Governor Strangelove,” pp. 156–57.
[26. ]Mary Johnson, formerly Mary Miller and a Girl Scout, recalls that Cora Goodrich arranged for the Girl Scouts of Winchester to visit the White House and have tea with Mrs. Hoover. At the time, Mrs. Hoover was president of the Girl Scouts of America (interview, January 1, 1992).
[27. ]Emma Lieber, Richard Lieber, pp. 96–97.
[28. ]See Herbert Hoover Papers, pp. 330–31, 333–34. The Public Lands Commission was formally created by an Act of Congress dated April 10, 1930.
[30. ]These issues had become critical for analysis because of prior federal legislation and the overuse of some resources. Since 1785, Congress had enacted legislation that encouraged settlement on federal lands. That culminated in the Homestead Act of 1862, which provided 160 acres of public land free of charge to anyone over the age of twenty-one who would settle it for five years. The idea was that, once the land was settled and communities had been established, the territories could be converted into states. Much of this settled public land, however, was eventually abandoned and became wild again. Still other public land was never settled. As a result, overgrazing and erosion depleted the value of the nearly worthless land even more. See Report of the Committee on the Conservation and Administration of the Public Domain (Washington, D.C.: Government Printing Office, January 16, 1931), pp. 11–17.
[31. ]In November 1930, the commission held hearings in Washington, D.C., and studied the material which it had collected in the preceding months. Numerous conservation and wildlife organizations appeared before the commission, presenting evidence and making recommendations.
[32. ]See Report of the Committee on the Conservation and Administration of the Public Domain, pp. 17–37.
[33. ]Letter from Goodrich to Garfield, January 25, 1931, James P. Goodrich Papers, box 3; see also Rhodes, James P. Goodrich, Indiana’s “Governor Strangelove,” p. 159.
[34. ]The first mention of James Goodrich’s serving as a director of the American-Russian Chamber of Commerce is in a March 1927 quarterly publication (Rept. 7) found in the Library of Congress under the American-Russian Chamber of Commerce, HC 331.A8.
[35. ]“James Putnam Goodrich,” Who’s Who in America, vol. 1 (Chicago: A. N. Marquis, 1943), p. 468.
[36. ]“War Memorial: Dedicated on Armistice Day,” Winchester (Ind.) Journal-Herald, November 12, 1928, p. 1, col. 2.
[37. ]Carl McCamish, Pierre’s best man, was the son of James McCamish and Ida Kitselman McCamish, members of what probably were the two most prominent families in Randolph County after the Goodriches. The McCamishes operated a large burial-supply company, and the Kitselmans became wealthy making roller skates and fencing, later moving their operations to Muncie, Indiana. See obituary, Winchester (Ind.) Journal-Herald, September 17, 1926, p. 1, col. 8; “Kills Himself at Cincinnati: Winchester Man Ends His Life with Shotgun, While in Automobile,” Associated Press story (publication unknown), September 16, 1926; “M’Camish Funeral,” Winchester (Ind.) Journal-Herald, September 23, 1926, p. 1, col. 8.
[38. ]We know that Pierre was at the Mayo Clinic from a telegram that was sent there to James Goodrich by James Watson on September 29, 1927, in which Watson refers to Pierre’s condition. Watson also refers to Pierre’s recovery in a letter to James Goodrich dated October 3, 1927, James P. Goodrich Papers, box 28.
[39. ]August 11, 1928, Dorothy Goodrich (Plaintiff), Pierre Goodrich (Defendant), Divorce Index, Marion County, Indiana, Plaintiff, Case A-45384.
[40. ]Margaret Morton Kimball (niece of Dorothy Dugan), interview, October 25, 1992. According to Rosanna Amos, “She [Dorothy] always wanted to be the social butterfly, and even though Pierre Goodrich came from a very well known family, that was never his interest. I don’t think he was ever interested in socializing at all. Being known was not important to him” (interview, December 10, 1991).
[41. ]Gilbert Snider, interview, December 23, 1991.
[42. ]Mary Simpson, interview, April 19, 1992; Elizabeth Goodrich Terry, interview, November 16, 1991.
[43. ]Marriage Records, Marion County, Indiana, Louis Haerle and Dorothy Goodrich, December 25, 1933, bk. 140, p. 425. Haerle worked for the Hibben-Hollweg Company in Indianapolis, a dry-goods establishment that sold textiles, linens, and other cloth products. Dorothy and her new husband lived on an estate in Zionsville, which they called Pinegate Farm.
[44. ]Margaret Kimball, interview, October 25, 1992. According to Mrs. Kimball, Dorothy participated in the Indianapolis Women’s Club (a literary group), the Junior League, the Indiana Vassar Club, and the Indianapolis Dramatics Club (a theater group). She even wrote a cookbook. Dorothy’s involvement in the Indianapolis Literary Club was so well remembered that the club honored her with the dedication of a book in 1987. That was shortly after Dorothy’s death (she died on February 14, 1987) and twenty years after she had resigned from the club to move to California.
[45. ]Obituary, Decatur Democrat, February 23, 1987, p. 4, col. 2.
[46. ]Ibid. For a brief account of Nancy Goodrich Poniatowski, see Margaret Moore Post, “Cora J. Frist Goodrich,” in First Ladies of Indiana and the Governors, 1816–1984 (Indianapolis: Pierson Printing, 1984), p. 134.
[47. ]See “The Railway Service Corporation,” Dissolved Corporations, State Archives, Indiana Commission on Public Records, AR-1988. The Railway Service Corporation was founded on June 26, 1920, by Claude Barnes and Merl Chenoweth, both employees of Goodrich companies. On November 19, 1921, a petition to change the name to the Railway Service and Supply Corporation was filed and granted. On February 1922, Edward Goodrich was elected chairman. According to the March 13, 1922, report, the company had capital stock of $500,000.
[48. ]Patoka Coal Company was formed on July 8, 1919, having previously operated as the Globe Coal Company. There is no indication in the corporate records that the Goodrich family had an interest in Patoka Coal until 1923. At that time, Jesse Moorman was president and James Goodrich was treasurer. See “Patoka Coal Company,” Dissolved Corporations, State Archives, Indiana Commission on Public Records, AR 17-890 and 3055-107.
[49. ]The articles of incorporation were filed for Engineers Incorporated on November 20, 1925. The Interstate Telephone and Telegraph Company was formed on April 7, 1926, by Pierre F. Goodrich. Pierre had to clear the usage of the name “Interstate Telephone Company,” because a company by that name had been founded on December 24, 1910. It was no longer in operation, however, having failed to file annual reports for three consecutive years with the secretary of state’s office. See “Interstate Telephone and Telegraph Company,” Dissolved Corporations, State Archives, Indiana Commission on Public Records, 2547-6.
[50. ]The articles of association of Muncie Theatre Realty Company were filed with the Indiana secretary of state’s office on May 5, 1926. The incorporators were Leslie Colvin, Pierre F. Goodrich, and J. J. Kiser, all of Indianapolis. The capital stock of the corporation was $425,000. The company reincorporated on July 7, 1933. At its height, it owned approximately eight movie theaters in the Muncie, Indiana, area. Its office address was that of Pierre’s law office, 712 Continental Bank Building. See “Muncie Theatre Realty Company,” Dissolved Corporations, State Archives, Indiana Commission on Public Records, AR 2438-9.
[51. ]Perce Goodrich, interview, November 9, 1992.
[52. ]The Jeffersonville Water and Gas Company (which became the Jeffersonville Water, Light and Power Company) was sold to the Interstate Public Service Company on February 1, 1927. The Interstate Public Service Company, based in Indianapolis, had purchased dozens of city electric, water, and gas companies throughout Indiana in the 1920s. See Moody’s Public Utilities (New York City, 1927), p. 366. In 1927, the Goodriches and Jesse Moorman and Carl Semans also sold the Washington Water, Light and Power Company to a group of investors from New York City. The Indiana-Ohio and Western Ohio public services companies were also liquidated in 1927. See annual report, Washington Water, Light and Power Company, 1927, Dissolved Corporations, State Archives, Indiana Commission on Public Records. The annual reports for Citizens Heat, Light and Power of Winchester and Union Heat, Light and Power of Union City show that after 1927 the Goodriches, with one exception, were no longer officers or directors of these companies. The exception is William Wallace Goodrich, who was a director of Citizens Heat, Light and Power until approximately 1930.
[53. ]Percy Goodrich told this to Ivan Barr in the late 1940s. Ivan Barr, telephone interview, March 27, 1993.
[1. ]See “Former Governor Goodrich Gives $150,000 Donation to Wabash College for Building,” Winchester (Ind.) Journal-Herald, November 8, 1937, p. 1, col. 7; O. P. Welborn, secretary-treasurer, the Board of Trustees, “A Statement of the Gifts of James P. Goodrich to Wabash College,” Wabash Bulletin 39 (October 1940), supplement; “Goodrich Grants Hanover $50,000,” Indianapolis Star, December 9, 1937, p. 1, col. 4. In April 1938, the former governor returned to Johns Hopkins Hospital. See “Out of Politics, Goodrich Avers,” Indianapolis Star, April 11, 1938, p. 2, col. 3.
[2. ]Letters between James P. Goodrich and Pierre F. Goodrich, James P. Goodrich Papers, Pierre F. Goodrich folder.
[3. ]“W. W. Goodrich Funeral Services Wednesday at 2,” Winchester (Ind.) News, November 23, 1948, p. 1, col. 7; Richard Wise, “Goodrich Father Was a Public Spirited Citizen,” Winchester (Ind.) News-Gazette, February 19, 1984, p. 1, col. 2.
[4. ]See “Goodrich Dies at 88,” Winchester (Ind.) News, September 4, 1996, p. 1, col. 1; and “‘Bud’ Goodrich, 88, Jay Businessman” (obituary), Muncie (Ind.) Star Press, September 4, 1996, p. 5A, col. 3. Elizabeth Goodrich Terry was born on January 1, 1906. Perce Goodrich was born on August 21, 1908. Perce Goodrich’s holdings and achievements, while not as great as those of his first cousin Pierre, were certainly noteworthy: He was co-owner of the Ramsey Men’s Shop, Portland Office Supply, Quaker Trace Inn, Wayside Furniture Company, and Gulley Ford; director of PLatCo Realty Corporation; and a cofounder of Steed Field Airport in Portland, Indiana.
[5. ]“John B. Goodrich” (obituary), Winchester (Ind.) Journal-Herald, November 8, 1937, p. 1, col. 3; Perce G. Goodrich, interview, November 9, 1992.
[6. ]“John Goodrich Dead at 76,” Winchester (Ind.) News-Gazette, January 7, 1971, p. 2, col. 1.
[7. ]As his brother Percy remembered, Ed would take out his pocket watch, “turn the face toward you so he [wouldn’t] have to make a declaration of time, [and] you [could] look for yourself.” Percy Goodrich, “Ed Goodrich,” Down in Indiana 84 (November 5, 1949), Archives, Indiana Historical Society Library, Indianapolis; Wise, “Goodrich Father Was a Public Spirited Citizen.”
[8. ]Edward Dunn, telephone interview, December 29, 1996.
[9. ]William J. Wood (attorney for the Grain Dealers National Mutual Insurance Company), interview, November 4, 1996.
[10. ]Ivan Barr, telephone interview, March 27, 1993.
[11. ]See “P. E. Goodrich—A Good Trustee,” Bulletin of Hanover College 43 (September 1951), p. 6; Mrs. Albert G. Parker, Jr., “Percy Goodrich Was Our Friend,” Hanover Alumni News 5 (October 1951), p. 3; Katharine McAfee Parker, “In Gratitude for P. E. and Ethyl L. Goodrich,” The Hanoverian 2 (August 1970), pp. 3–7; and “Percy E. Goodrich Leaves Large Trust Fund to Hanover College,” Indianapolis Star, August 24, 1951, p. 14, col. 2. The four student scholarships were the Belle Edger Fund, the Elizabeth Edger Scholarship Fund, the Percy E. Goodrich Fund, and the Susie Engle Goodrich Fund. The science hall at Hanover is named for Percy Goodrich.
[12. ]These “letters” included stories of Percy’s past experiences and short biographies of people Percy knew during his long life. He sent the newsletters to a group of thirty dealers in the National Grain Dealers Association called “The Circle” and to other friends and family members. One collection of the letters is located at the Hanover College Archives, Hanover, Indiana, and another can be found in the library of the Indiana Historical Society, Indianapolis.
[13. ]A Great-Grandmother and Her People (Winchester, Ind.: privately printed, 1950).
[14. ]See “Twenty-second Annual Banquet of the Randolph County Lincoln Club” (program in author’s possession), Thursday, February 11, 1954. The function was held at Beeson Clubhouse in Winchester, Indiana. Some of the better-known speakers to address the Lincoln Club were the United States senators William E. Jenner and Homer Capehart of Indiana, Indiana governors Ralph Gates and George N. Craig, and United States congressmen Charles Halleck of Indiana and William Henry Harrison of Wyoming.
[15. ]“Elevator,” Poems and Short Stories of Gene Comer (privately printed, 1992), p. 9.
[16. ]Ivan Barr, telephone interview, March 27, 1993.
[18. ]Williams, Current, and Freidel, A History of the United States: Since 1865, pp. 443–45.
[19. ]Ralph Owens, interview, July 7, 1992.
[20. ]John T. Cook, interview, November 9, 1995.
[21. ]George Daly, interview, October 25, 1995.
[22. ]In 1933, for instance, James Goodrich was able to secure a 51 percent interest in City Securities when Dwight Peterson came to him in hopes of avoiding bankruptcy; similarly, the Indiana Telephone Corporation was in bankruptcy when the Goodrich brothers bought it for pennies per share in 1934. Pierre gained a controlling interest in the Ayrshire Collieries when Margaret Mellon had to sell shares in order to pay death taxes as a result of her husband’s death in World War II. The Goodrich family received a 20 percent interest in Central Newspapers when Eugene Pulliam needed capital to buy an Indianapolis radio station. In each situation, James and Pierre Goodrich bought at low prices the interests the Goodrich family gained in each of these companies, but there is no evidence that they obtained the interests through illegal measures. See also chapter 17.
[23. ]Letter from Goodrich to Litschert, January 17, 1936, James P. Goodrich Papers, box 13.
[24. ]Letter from Goodrich to Hoover, September 9, 1933, James P. Goodrich Papers, box 23. See also Rhodes, James P. Goodrich, Indiana’s “Governor Strangelove,” p. 162.
[25. ]Letter from Goodrich to Roosevelt, November 6, 1933, James P. Goodrich Papers, box 23; Rhodes, James P. Goodrich, Indiana’s “Governor Strangelove,” p. 162.
[26. ]Rhodes, James P. Goodrich, Indiana’s “Governor Strangelove,” pp. 163–64.
[27. ]See “Out of Politics, Goodrich Avers,” Indianapolis Star, April 11, 1938, p. 2, col. 3 (reports about Goodrich’s hospital stay at the Battle Creek, Michigan, sanitarium).
[28. ]Willkie’s national campaign headquarters was located in Watson’s adopted hometown of Rushville, Indiana. See “Goodbye to Old Jim” (obituary of James E. Watson), Passing Parade, August 4, 1948, pp. 47–49.
[29. ]Watson’s career in politics rivaled that of Goodrich in every way. Until Lee Hamilton, former United States congressman from Indiana’s Ninth Congressional District, surpassed Watson’s record, Watson had served longer in Congress (thirty years and under eight presidents) than any other representative from Indiana. In addition, he was chairman of the Republican State Convention in 1904, 1912, 1918, 1922, and 1924, and had attended every national Republican convention from 1876, when he was twelve years old, to 1948. In 1943, Watson was honored on his eightieth birthday in Rushville, Indiana, for his years of public service (see “Tribute to the Honorable James E. Watson,” brochure in the author’s possession). A feature article in Atlantic Monthly delivers an excellent portrayal of Watson. See “Senator James E. Watson: The Professional Public Servant,” Atlantic Monthly, February 1932, pp. 183–90. Watson died at the age of eighty-three in Washington, D.C., on July 29, 1948. He was buried at Cedar Hill Cemetery in the nation’s capital.
[30. ]Letter from Goodrich to Willkie, August 10, 1940, James P. Goodrich Papers, box 28; see also Rhodes, James P. Goodrich, Indiana’s “Governor Strangelove,” pp. 166–67.
[31. ]“State, National Dignitaries Hear Goodrich Eulogized at Final Rites,” Indianapolis Star, August 19, 1940, p. 3, col. 6; “Tribute Is Paid to J. P. Goodrich,” Indianapolis Star, August 16, 1940, p. 5, col. 3; “J. P. Goodrich, Former Governor of Indiana, Dead at 76 Years,” Indianapolis News, August 18, 1940, p. 1, col. 6.
[32. ]For a reference to Goodrich as a founding member of the Winchester Volunteer Fire Department, see Winchester City Council Records, bk. 1, ordinance 217. Each volunteer of the department was paid one dollar for each run he made. For a reference to James Goodrich as a founding member of the Winchester Rotary Club, see “Winchester Rotary Club Celebrates 75th Anniversary” (special edition), Winchester (Ind.) News-Gazette, December 2, 1994, p. 6.
[33. ]The sum of $1 million that Goodrich gave away is mentioned in Charles F. Remy’s “Governor Goodrich and Indiana Tax Legislation,” Indiana Magazine of History 43 (March 1947): 41–56, at p. 44.
[34. ]The lives of the Goodrich brothers deserve much more elaboration than space will allow here. For the curious reader, a longer account of each brother can be found in the front-page obituaries of the Winchester newspapers (Journal-Herald and News): Jay, November 6, 1937; James, August 16, 1940; William Wallace, November 23, 1948; Percy, August 12, 1951; and Edward, November 22, 1953. The remaining family members included the surviving wives of the original five Goodrich brothers and their children: James’s wife, Cora (Frist), died on October 30, 1941; Jay’s wife, Charlotte (Martin), died on August 12, 1941; Edward’s wife, Elizabeth (Neff), died on November 3, 1958; William Wallace’s first wife, Charlotte (Moore), died in approximately 1899 in childbirth, and his second wife, Louise, passed away on December 21, 1964; Percy’s first wife, Susie (Engle), died in 1934, and his second wife, Ethyl (Jones Kuhner), passed away on November 12, 1973.
[35. ]Edward’s Odyssey: An Autobiography of Edward Gallahue (New York: Doubleday, 1970), p. 88.
[36. ]Ibid. According to Gallahue, his patience in dealing with Goodrich was partly a result of his realization that it was a good deal for both himself and Pierre, partly a result of his understanding how Goodrich operated, and partly purely sentimental. Gallahue’s first job in the insurance business was with the Union Insurance Company, which paid him fifty dollars a month. It would bring Gallahue great satisfaction if he could now own the company that had given him his first job.
[1. ]See Williams, Current, and Freidel, A History of the United States: Since 1865, pp. 463–73.
[2. ]Perce G. Goodrich, interview, November 9, 1992.
[3. ]Williams, Current, and Freidel, A History of the United States: Since 1865, p. 464.
[4. ]“Pierre F. Goodrich, Indianapolis,” Association Book of Indiana (Indianapolis: James O. Jones, 1929), p. 326.
[5. ]“Want Phone Company? Give Board a Ring,” Indianapolis Star, August 25, 1977, p. 62, col. 3.
[6. ]The Indiana Telephone Corporation was incorporated in Indiana on October 18, 1934, as successor in the reorganization of the Southern Indiana Telephone and Telegraph Company. The latter company was originally incorporated in Indiana on December 30, 1919. At one time, ITC operated forty-one exchanges in southern Indiana and had 1,917 miles of pole lines. See Moody’s Public Utility Manual (1960), p. 1717.
[7. ]Gilbert Snider, interview, December 23, 1991. In a company memorandum, Goodrich makes a brief reference to the financial condition of the old Southern Indiana Telephone and Telegraph Company when it was purchased in 1934. See “ITC Memorandum No. 1—Re: Employees; Good Citizens; Good Supervisors; Good Customers,” March 5, 1970 (rev. May 30, 1973), exhibit 3, p. 3 (in the possession of T. Alan Russell, Paris, Ill.).
[8. ]T. Alan Russell, interview, July 2, 1994. As controller of the Indiana Telephone Corporation when ITC was sold in 1978 to the Continental Telephone Corporation, Russell was involved in the valuation of the shares.
[9. ]Goodrich visited the Siemens plant in conjunction with attending a Mont Pelerin Society annual meeting at Kassel, Germany, from September 5 to September 10, 1960. Ruth Connolly, interview, October 25, 1991. Alan Russell also recalled the time in the early 1970s when he and Goodrich “crashed” a local exchanging station owned and operated by the Bell Corporation near where Goodrich lived in northern Indianapolis. Goodrich wanted to learn as much as he could about the competition. The employees recognized Goodrich and invited Russell and him in and showed them around. T. Alan Russell, interview, July 2, 1994.
[10. ]Economist Milton Friedman remembers talking to Goodrich about his decision to refinance the telephone company. Letter from Milton Friedman to author, December 19, 1991. A summary of Goodrich’s refinancing of the ITC’s long-term debt is located in “ITC Memorandum No. 1,” pp. 9–10. Goodrich writes:
[11. ]See “Notable Career of ITC President Goodrich Ends, Helen E. Schultz Advanced to Top Office,” ITC Highlights, November–December 1973, pp. 1 and 3. Although the Indiana Telephone Corporation had approximately three hundred shareholders, the Goodrich family was by far the largest owner, holding, in August 1977, 237,066 of the company’s 512,000 shares of common stock (approximately 46 percent). See “Want Phone Company? Give Board a Ring,” Indianapolis Star, August 25, 1977, p. 62, col. 3.
[12. ]See “Merger with Continental,” Indianapolis Star, June(?) 1978. (A copy of the article is located in the Business and Technology section of the Marion County Public Library, “Indiana Corporations,” general files section.) Continental Telephone acquired the Indiana Telephone Corporation in June 1978 for 3,456,115 common shares. Under the terms of the merger, Indiana Telephone shareholders traded one common share of that stock for approximately 6.75 shares of Continental. The price range of Continental stock per share in 1978 was between $14.16 and $16.83. See Moody’s Public Utility Manual (1979), p. 586.
[13. ]Pulliam’s grandson Russell Pulliam wrote Publisher Gene Pulliam, Last of the Newspaper Titans (Ottawa, Ill.: Jameson Books, 1984).
[14. ]The other Pulliam family newspapers include the Vincennes Sun-Commercial, Topics Newspapers, and the Arizona Business Gazette. The Muncie Star and Muncie Press merged in 1996 to become the Star-Press.
[15. ]Central Newspapers was formed on March 30, 1934. See “Central Newspapers, Inc.,” Office of the Indiana Secretary of State, Corporation Division, packet 193037-082. See also Pulliam, Publisher Gene Pulliam, Last of the Newspaper Titans, p. 76. The newspapers that made up Central Newspapers in 1934 were seven Oklahoma daily papers (El Reno Tribune, Hobart Democrat-Chief, Elk City Daily News, Mangum Daily Star, Clinton Daily News, Altus Times-Democrat, and Alva Review-Courier) and four Indiana newspapers (Lebanon Reporter, Linton Citizen, Vincennes Sun-Commercial, and Huntington Herald-Press).
[16. ]Pulliam, Publisher Gene Pulliam, Last of the Newspaper Titans, pp. 84–85.
[17. ]Ibid., p. 95. At one time, Pulliam went to City Securities to arrange for the underwriting of a corporate bond to purchase one of the Indianapolis newspapers. The Goodrich-Pulliam connection may have been made at that time, since both James and Pierre were affiliated with City Securities. Pierre was a vice-president and board member of City Securities.
[18. ]Ruth Connolly, interview, October 25, 1991; Rosanna Amos, interview, December 10, 1991.
[19. ]Pulliam, Publisher Gene Pulliam, Last of the Newspaper Titans, p. 83. Russ Pulliam quotes Paul Porter, a New Deal Democrat, who began working for Eugene Pulliam in 1929 on one of his papers. Porter later became chairman of the Federal Communications Commission. Porter states, “[Pulliam] was suspicious of power in government and overconcentration of industrial or economic power and had an almost religious faith in individualism.”
[20. ]Pierre F. Goodrich, Liberty Fund Basic Memorandum, p. 93.
[21. ]See Kevin A. Drawbaugh, “Shareholders OK Stock Changes: News and Star Parent Firm Prepares Class A Public Offering,” Indianapolis News, July 28, 1989, sec. C, p. 2, col. 2; Kathy Barks Hoffman, “Quayle Newspaper Going Public,” U.S.A. Today, June 15, 1989, sec. B., p. 2, col. 2.
[22. ]Perce G. Goodrich, interview, May 2, 1993. According to Perce Goodrich, for some unknown reason Engineers Incorporated could not continue to be the holding company for Central Newspapers’ stock. Therefore, in 1940, Pierre Goodrich formed Central Shares for that purpose.
[23. ]Pulliam bought the Indianapolis Star in 1944 for $2.35 million and paid $4 million to obtain both the Arizona Republic and the Phoenix Gazette in 1946. In 1948, he bought the Indianapolis News for $4 million. Pulliam, Publisher Gene Pulliam, Last of the Newspaper Titans, pp. 111–12.
[24. ]The swap amounted to a restructuring because voting-rights stock was exchanged for nonvoting-rights stock. The approximate worth of Central Newspapers is not known, but it has been appraised at between $450 million and $1.5 billion. See “Who Owns Central Newspapers?” Indianapolis Business Journal, October 24–30, 1988, p. 1, col. 1. According to a news article in 1990, Mrs. Pierre F. (Enid) Goodrich and Liberty Fund owned a combined total of 4,314,600 of 23,245,750 shares of class A common stock, which amounted to approximately 18.56 percent of all shares. The stock is now traded on the New York Stock Exchange (NYSE symbol ECP). See “Central Newspapers, Inc.,” Indianapolis Business Journal, May 7–13, 1990, p. 25, col. 2. See also “Central Newspapers, Inc. (Earnings and Dividends),” Indianapolis Business Journal, January 29, 1990, sec. A, p. 26, col. 1; Kathy Barks Hoffman, “Quayle Newspapers Going Public,” U.S.A. Today, June 15, 1989, sec. B, p. 2, col. 2; Kevin A. Drawbaugh, “Shareholders OK Stock Changes: News and Star Parent Firm Prepares Class A Public Offering,” Indianapolis News, June 28, 1989, sec. C, p. 2, col. 2; Julia Flynn Siler and Richard Fly, “The Quayle Family Newspapers: Black, White—and Green All Over,” Business Week, August 28, 1989, pp. 28–29; “Quayle Papers’ Stock Plan,” New York Times, August 14, 1989, sec. C, p. 6, col. 6; and “Prospectus,” Central Newspapers and Subsidiaries (1992), Marion County Public Library, Central Newspapers files.
[25. ]Examples include the Marsh supermarket chain (the largest grocery chain in Indiana), Central Newspapers, the Indiana Insurance Corporation, American States Insurance Corporation, and the Hamilton Manufacturing Company.
[26. ]E. Bruce Geelhoed, Indiana’s Investment Banker: The Story of City Securities Corporation (Muncie, Ind.: Ball State University, 1985), p. 88.
[27. ]Ibid., p. 33. The two sister subsidiaries that folded were the City Trust Company and the City Trading Company.
[28. ]John Peterson, interview, January 15, 1992.
[29. ]Ibid., p. 36. Geelhoed obtained this information from “Minutes of the Board of Directors Meetings,” May 6, 1931, and December 31, 1931, City Securities Corporation records.
[30. ]Cecil Fritz, telephone interview, November 25, 1992.
[31. ]Geelhoed, Indiana’s Investment Banker, p. 38; John L. O’Donnell, “The Financial Operations of a Regional Investment Bank” (Ph.D. diss., School of Business, Indiana University, 1954), p. 103.
[32. ]“Pierre F. Goodrich, Indianapolis,” Association Book of Indiana, p. 326.
[33. ]Geelhoed, Indiana’s Investment Banker, pp. 38–41. In 1930, City Securities underwrote only $75,000 of municipal and corporate securities business. It incurred losses during the next three years through the liquidation of securities of doubtful value. In 1935, however, City Securities underwrote $1,800,000 in municipal and corporate securities and had survived the worst of the Depression years.
[34. ]Ibid., p. 64. According to Geelhoed, between 1949 and 1984, Indiana’s public school corporations issued 773 separate bond issues, with a face value of more than $2 billion. City Securities functioned as manager or joint manager of 390 of those 773 issues, or slightly more than 50 percent of the total.
[35. ]See John L. O’Donnell, “The Financial Operations of a Regional Investment Bank,” p. 81. During his lifetime, Peterson served on the boards of directors of more than fifty-five companies. See Edward Wills, Jr., “City Securities Leader Who Helped Shape Indiana’s Future Is Honored,” Indianapolis Star (republished in Geelhoed, Indiana’s Investment Banker, p. 20).
[36. ]See John L. O’Donnell, “The Financial Operations of a Regional Bank,” p. 81 and table 21.
[38. ]Perce G. Goodrich, interview, November 9, 1992. See also “The 90th Anniversary of the Goodrich Brothers’ Company,” County Elevators, Shippers, and Feeddealers’ Luncheon, January 23, 1950, Columbia Club Ballroom. Guests at the function were Percy E. Goodrich, chairman of the board of Goodrich Brothers, and Henry F. Schricker, governor of Indiana. See also “Indiana Grain Dealers Honor P. E. Goodrich,” Muncie (Ind.) Star, January 24, 1950, p. 14, col. 2.
[39. ]See Percy E. Goodrich, “Sam Harrell,” Down in Indiana 78 (August 27, 1949), Indiana Historical Society Library, Indianapolis, Indiana.
[40. ]Roger Budrow, “S. R. Harrell Group Buys Goodrich Grain Firm,” Indianapolis News, December 12, 1947, p. 1, col. 1; p. 17, col. 8; “The 90th Anniversary of the Goodrich Brothers’ Company”; Donald F. Elliott, telephone interview, April 15, 1993. Elliott knows the history of the Goodrich-Harrell merger, having been one of the lead attorneys for the Goodrich stockholders in the litigation battle between Pierre Goodrich and Samuel Harrell in the mid 1960s.
[41. ]See “Goodrich Brothers’ Company,” County Elevators, Shippers, and Feeddealers’ Luncheon, January 23, 1950.
[42. ]Donald F. Elliott, telephone interview, April 15, 1993.
[43. ]Perce G. Goodrich, interview, May 2, 1993; Ron Medler, interview, June 9, 1993. These included banks in Tipton, Modoc, Redkey, Ridgeville, La Crosse, Eaton, Saratoga, Farmland, and Lynn. James and Pierre also owned interests in the National City Bank (which James became president of in the early 1920s) and the Continental National Bank in Indianapolis.
[44. ]For a brief history of the bank, see “Peoples Loan and Trust Company Sold: Bank Will Remain in Local Hands,” Winchester (Ind.) News-Gazette, February 15, 1984, p. 1, col. 6; and “General Operation Will Continue as in the Past,” Winchester (Ind.) News-Gazette, February 15, 1984, p. 1, col. 2.
[1. ]The first annual report of the Patoka Coal Company, filed with the secretary of state on October 1, 1920, showed an Indianapolis address and listed only two officers, one being J. T. Moorman of Winchester. James Goodrich had apparently become associated with the Patoka Coal Company through a friendship and business affiliation with Moorman. Moorman, like James Goodrich, was one of Winchester’s wealthiest citizens. James Goodrich continued as secretary and treasurer until 1929 and as a director until his death in 1940. From 1937 to 1940, James Goodrich was president of Patoka Coal. See William H. Andrews, “Ayrshire Collieries Corporation—Profit with Ecology” (research paper, Indiana University, n.d.), pp. 5–6. Andrews based most of his paper on an interview with Albert Campbell in the late 1970s or early 1980s.
[2. ]Ronald Medler, interview, April 28, 1993. See also “Moorman Forms Company,” Winchester (Ind.) Democrat, January 11, 1912, p. 1, col. 2. (The article refers to Moorman’s obtaining the garbage collection contract. With capitalization of $200,000, Moorman also formed a reduction company to turn the garbage into fertilizer and tankage.) Marie Moorman, Jesse’s daughter, accompanied James and Cora Goodrich as a companion to Mrs. Goodrich on the Goodriches’ ARA trip to the Soviet Union in 1922.
[3. ]Patoka Coal was located near Winslow. It had been organized in 1918 to take over a partly equipped mine that had belonged to the Globe Coal Mining Company. See “Early History of Ayrshire,” in “Handbook” (Ayshire Coal Company), pt. 1, p. 4 (in Cyprus-AMAX Coal Archives).
[4. ]James P. Goodrich, Autobiography, pp. 131–33.
[5. ]Andrews, “Ayrshire Collieries Corporation—Profit with Ecology,” pp. 6–7. Beyond Andrews’s paper on Ayrshire, several histories of the Ayrshire Coal Company have been written, including Clayton G. Ball, “The Ayrshire Story,” Mechanization, March 1947, pp. 57–66; “Early History of Ayrshire,” pt. 1 (in Cyprus-AMAX Coal Company Archives); and “The Ayrshire Story,” Mechanization, July 1959. See also “Amax Today: How It Came to Be,” Engineering and Mining Journal, September 1972, and letter from Pierre F. Goodrich to E. Victor Willetts, Jr., December 27, 1972 (in the possession of Liberty Fund, Inc.).
[6. ]The five New York board members were Thomas Hitchcock, chairman of the board; Robert P. Koenig, president; William P. McCool, a New York lawyer, secretary; Howard E. Lowman, treasurer and assistant secretary; and Charles Greeff, a Wall Street stockbroker. See Andrews, “Ayrshire Collieries Corporation—Profit with Ecology,” p. 10. According to Pierre Goodrich’s longtime administrative assistant, Helen (Schultz) Fletcher, Goodrich had spent considerable time with Greeff and his wife Adele in the 1930s at their home on Long Island, New York. In fact, Greeff had counseled Goodrich on many of Pierre’s successful investments during this time. Letter from Helen Fletcher to author, June 18, 1996.
[7. ]In addition to being president of Ayrshire, Koenig was president of Fairview Collieries Corporation and Delta Collieries Corporation at the time he left in April 1942 to serve in Europe. Koenig returned from World War II, resumed his former positions, and later became Meadowlark Farms’ first president. Both Delta Collieries and Meadowlark Farms were subsidiaries of Ayrshire Collieries. See Ball, “The Ayrshire Story,” Mechanization, March 1947, p. 63.
[8. ]“Hitchcock Killed in Crash in Britain,” New York Times, April 20, 1944, p. 1, col. 3. According to the obituary, in addition to being a successful banker, Hitchcock, an alumnus of Harvard and Oxford universities, was a colorful military hero (a flyer in both wars).
[9. ]Richard H. Swallow, telephone interview, December 20, 1992. Swallow was chief engineer of Ayrshire (he later became vice-president and chief engineer) at the time Goodrich bought the additional stock from Mrs. Hitchcock and was able to replace the board with his own people. He claimed intimate knowledge of the details. In fact, he stated that he and a group of Ayrshire management personnel had discussed trying to buy the shares themselves in order to take control of the company. According to William Nordhorn, a longtime Ayrshire employee, Goodrich had, in fact, encouraged five or six other investors to purchase some of Hitchcock’s shares. William Nordhorn, telephone interview, January 16, 1993.
[10. ]See Ball, “The Ayrshire Story,” p. 63.
[11. ]Robert Koenig, who had been president of Ayrshire, went on leave from 1942 to 1945 and served on the staff of General Dwight D. Eisenhower in Europe. During that time, Goodrich placed his law partner Albert Campbell in the position of executive vice-president of Ayrshire. After Koenig returned in 1945, he remained with Ayrshire for only five years. According to Richard Swallow, Koenig eventually left because he was disappointed that Goodrich did not want to make the changes necessary to make Ayrshire grow even faster than it did. Koenig moved in 1950 to the presidency of the Cerro de Pasco Copper Corporation, later the Cerro Corporation. There, he had a successful career as an industrialist and financier. Richard H. Swallow, telephone interview, December 20, 1992. See also Charles J. Endicott, Historical Information and Data: Ayrshire Coal Corporation, Now Amax Coal Company, Division of Amax Inc., p. 5; Andrews, “The Ayrshire Collieries Corporation,” p. 32.
[12. ]Ayrshire “Handbook,” pt. 2, p. 1 (directory of personnel, March 1, 1949).
[13. ]See Andrews, “The Ayrshire Collieries Corporation,” p. 11, table 2.
[14. ]Ibid., pp. 23–24 and note 17. Peters had previously been executive vice-president of the Cabot Corporation, a large Boston concern in chemicals, oil, and gas, and before that financial vice-president and treasurer of Continental Oil Company. Peters is now president of the Pioneer Institute for Public Policy in Boston, Massachusetts.
[15. ]Lovett C. Peters, telephone interview, June 25, 1994.
[17. ]According to William Stimart, who was a personal assistant to Ayrshire president Norman Kelb and intimately involved in the negotiations for the sale of Ayrshire, the five companies invited to bid for Ayrshire were Ashland Oil and Refining Company of Ashland, Kentucky; American Metal Climax (AMAX) of Greenwich, Connecticut; Kerr-McGee of Oklahoma City, Oklahoma; Sun Oil of Philadelphia, Pennsylvania, and Dallas, Texas; and FMC of Chicago (telephone interview, January 21, 1993).
[18. ]The Wall Street Journal quoted from a joint announcement between Goodrich and the president of the Ashland Oil Company to the effect that both boards of directors had approved the purchase of Ayrshire by Ashland. See “Ashland Oil Plans to Buy or Lease Ayrshire Assets,” Wall Street Journal, January 22, 1969, p. 34, col. 1. The deal with Ashland was apparently as complete as possible. Peter M. Garson, who later became president of Amax Coal Sales but who at the time worked for Ayrshire’s subsidiary, Republic Coal and Coke Company in Chicago, remembers that Ashland had purchased draglines and trucks from Ayrshire in anticipation that the deal would be completed. Moreover, the Ayrshire employees had a party to celebrate the company’s new Ashland ownership (telephone interview, December 30, 1992). The announcement of the proposed sale in Forbes magazine made Goodrich extremely upset. See “Going, Going, . . . Gone,” Forbes, February 15, 1969, p. 55, col. 1.
[19. ]According to William Stimart, Ashland placed several escape clauses in the original agreement between Ayrshire and Ashland. Stimart said that Ashland was known in the industry to do this in other merger situations in order to escape from bad deals (telephone interview, January 21, 1993).
[21. ]William Stimart said that Ayrshire’s stock got as high as $135 per share when it began to search for a buyer and that Ashland and Ayrshire had agreed on $125 a share in reaching terms on January 22, 1969. When the deal between Ayrshire and Ashland fell through on April 3, however, Kerr-McGee attempted to take Ayrshire over by offering only approximately $50 a share (telephone interview, January 21, 1993).
[22. ]According to William Stimart and Peter M. Garson, the deal between Ayrshire and Ashland fell through because of tax uncertainty about the way Ashland proposed to finance the merger. Also, in the first quarter of 1969, Ayrshire showed a loss for the first time in its history (William Stimart, telephone interview, January 21, 1993; Peter M. Garson, telephone interview, December 30, 1992). William H. Andrews’s assessment is essentially the same. See also Andrews, “The Ayrshire Collieries Corporation,” p. 26. For an announcement of the deal, see “Ayrshire Has Merger Offer,” Indianapolis News, April 24, 1969, p. 43, col. 6. AMAX subsequently merged with Cyprus Minerals on November 15, 1993, and the surviving corporation became known as Cyprus-Amax Minerals Company.
[23. ]Final stockholder approval for the merger between Ayrshire and American Metal Climax came on October 31, 1969. In addition to the Ayrshire Coal Company, the sale included two subsidiaries: Republic Carbon Products, a marketing company; and Dayton Fly Ash, an Ohio-based firm that collected and sold fly ash to the cement industry. See “Amax Today: How It Came to Be,” Engineering and Mining Journal, September 1972. On July 18, 1969, the Indianapolis Star initially reported that the deal between Ayrshire and AMAX was to have a value of approximately $63 million, less than 60 percent of the original Ashland offer (“Ayrshire, AMAX Boards Approve Merger Terms,” p. 32, col. 1). Only two months later, however, the Wall Street Journal estimated the deal to be worth more than $100 million (“Ayrshire Metal Climax and Ayrshire Collieries Tie Backed by Holders,” September 22, 1969, p. 14, col. 2).
[24. ]Lovett C. Peters, telephone interview, June 25, 1994. Peters explained that there were approximately three hundred stockholders of Ayrshire stock. The stock was sold openly on the American Stock Exchange.
[25. ]“American Metal Climax and Ayrshire Collieries Tie Backed by Holders,” Wall Street Journal, September 22, 1969, p. 14, col. 2. See also “Stockholders OK Ayrshire, Amax Merger,” Indianapolis Star, September 20, 1969, p. 30, col. 7; “Amax-Ayrshire Merger Completed,” Black Diamond (coal publication), November 1969, p. 6, col. 1.
[26. ]Andrews, “The Ayrshire Collieries Corporation,” p. 28; see also Byron K. Trippet, “Pierre F. Goodrich,” Wabash on My Mind, pp. 182–83 (Trippet wrote that Goodrich’s personal gain from the sale was in the range of $40 million).
[27. ]Andrews, “The Ayrshire Collieries Corporation,” p. 27. According to Andrews, Peters received $250,000 from Ayrshire and an additional $500,000 payable by AMAX subject to the completion of the merger for a total of $750,000.
[28. ]Ibid., p. 23. Andrews also attributes Ayrshire’s ability to succeed during the difficulties of the 1950s to the increase in industrial and electrical power production in the Midwest and the technological progress of strip mining, which increased productivity at the same time that it was able to cut costs. Goodrich himself makes essentially these same observations in a letter to Dr. Solomon Fabricant, Department of Economics, New York University, January 3, 1972, Pierre F. Goodrich Collection, Archives, Wabash College, Crawfordsville, Indiana.
[29. ]Richard H. Swallow, telephone interview, December 20, 1992. Swallow was vice-president and chief engineer when he retired in 1965. Swallow said that after Robert Koenig returned to Ayrshire from World War II, he wanted Ayrshire to be more aggressive in terms of seeking growth opportunities than Goodrich did. Swallow said that Koenig convinced Goodrich of the importance of expanding coal reserve options and that Goodrich was willing to spend a large amount in research and development to accomplish this end (hiring numerous geologists, land agents, attorneys, and so forth). Goodrich refused, however, to take the steps necessary to make Ayrshire expand faster, which frustrated Koenig, prompting him to leave in 1950. Much of what Swallow remembers is substantiated by Joseph Andrews’s paper on Ayrshire. Andrews also reported that as much as $85 million of the $125 million that Ashland Oil offered Ayrshire in January 1969 was in exchange for coal-reserve leases that Ayrshire owned. See also Andrews, “The Ayrshire Collieries Corporation,” p. 25.
[30. ]Irwin H. Reiss, interview, January 11, 1994.
[31. ]See “Going, Going, . . . Gone,” Forbes, February 15, 1969, p. 55, col. 1.
[32. ]William Stimart, telephone interview, January 21, 1993.
[33. ]See “Welcome to the Mother Lode of Western Energy” (brochure published by AMAX Coal), located at the Indianapolis–Marion County Public Library, Business and Technology Department, Indiana Businesses File, AMAX Company.
[34. ]George Martin, telephone interview, April 27, 1993.
[35. ]Richard H. Swallow, telephone interview, December 20, 1992. When the deal between Ayrshire and Ashland was struck in January 1969, an article in Coal Age reported that with the proceeds from the $125 million sale Ayrshire was going to liquidate approximately $20 million in debt. See Coal Age 75 (February 1969), p. 28. It is believed, however, that a more accurate debt figure is $40 million, as reported in the Wall Street Journal. See “American Metal Climax and Ayrshire Collieries Tie Backed by Holders,” Wall Street Journal, September 22, 1969, p. 14, col. 2.
[36. ]Richard Swallow provided this information and assessment; namely, that Goodrich believed that nuclear energy was going to become much more widely accepted and that the days of burning coal as a primary energy source were numbered. Richard Swallow, telephone interview, December 20, 1992. William Stimart refuted that assessment. He said that Goodrich did not believe that. Stimart said that he was intimately involved in the negotiations, and he would have had better knowledge than Swallow, who had retired four years earlier (in 1965), regarding what Goodrich thought. William Stimart, telephone interview, January 21, 1993. Swallow said, however, that he had had conversations with Goodrich later that led him to believe that Goodrich thought that the coal industry would eventually be harmed by the ready availability of nuclear energy. Apparently, others also thought nuclear energy was a threat to the coal industry. See Brice O’Brien, “Coal Industry: Atomic Power,” Vital Speeches 35 (April 1, 1969): 379–84. While nuclear power is not popular in the United States, its use has increased tremendously worldwide. Today, nuclear power generates more electricity than the world used from all sources of power in 1958. It is estimated that nuclear energy provides 17 percent of the world’s electricity. See “Earth Diary,” The Rotarian, December 1996, p. 14, col. 3.
[37. ]Swallow said that after he retired in 1965 from Ayrshire, Goodrich wrote to him and asked him how soon he (Swallow) thought it would be until nuclear fusion became a reality. Swallow wrote Goodrich and said that he had no idea, but he enclosed an article about fusion from one of the energy magazines he had subscribed to (telephone interview, December 20, 1992).
[38. ]See Brice O’Brien, “Coal Industry: Atomic Power,” pp. 379–84. O’Brien was general counsel of the National Coal Association when he delivered this speech to the San Diego chapter of the American Nuclear Society. O’Brien mentions several times in his address the “oversell” and “propaganda” of atomic energy that has “scared our people to death.” It is interesting that only once in a speech of approximately eight thousand words did O’Brien mention the safety concerns that have subsequently plagued the nuclear energy industry. He believed that coal had a much brighter future than most energy experts forecast. That was true, O’Brien asserted, not because of the political and safety problems that atomic energy would subsequently experience, but because experts concluded that there would not be enough uranium to fuel the large nuclear power plants. O’Brien’s speech says much about man’s ability to forecast the future accurately.
[39. ]Fred Young, interview, September 30, 1992. Young said that Goodrich had visited Harris Bank shortly after selling the Ayrshire Coal Company to American Metal Climax. According to Young, “Pierre Goodrich asked Fred Wightman (a financial analyst working for Harris Bank at the time), ‘What do you think of American Metal Climax?’ Wightman responded, ‘Well, we have a lot of that stock here in the bank and we think a lot of it. But we think they paid too high a price for the coal mines, Ayrshire Collieries.’” Goodrich smiled and was obviously very pleased with what he had heard, said Young.
[40. ]William Stimart admits that AMAX probably got the better of the deal, although he believed that that was solely because of Ayrshire’s undervaluation of the worth of the Belle Ayr mine in Gillette, Wyoming. It was not, according to Stimart, because Goodrich believed that the coal industry’s days were numbered because of the increasing use of nuclear energy (telephone interview, January 21, 1993). It seems to the author that another reason that AMAX may have been able to make a good purchase was that Goodrich was in a hurry to make a deal to keep Kerr-McGee of Oklahoma from achieving a hostile takeover.
[1. ]See Barbara Olenyik Morrow, From “Ben-Hur” to “Sister Carrie”: Remembering the Lives and Works of Five Indiana Authors (Indianapolis: Guild Press of Indiana, 1995), p. 96. Stratton-Porter was married to Charles D. Porter, pharmacist, banker, and great-uncle to Dorothy Dugan.
[2. ]Perce G. Goodrich, interview, November 9, 1991. See also “Railway Service Corporation,” Dissolved Corporations, State Archives, Indiana Commission on Public Records, AR-1988. On November 19, 1921, a petition to change the name of the company to the Railway Service and Supply Corporation was filed and granted. On February 14, 1922, Edward Goodrich was elected chairman. The company had capital stock of $500,000 as of March 13, 1922.
[3. ]Roy Barnes, interview, February 8, 1992.
[4. ]Pierre Goodrich’s abhorrence of waste can be seen in the way he conducted his private life. Time, not money, was his most precious possession, and he safeguarded it prudently—to his way of thinking. He avoided most social or fraternal organizations because he believed them to be time-consuming and nonproductive. For the same reasons, he did not watch television. “I’ve always felt that there are a lot of things to do and learn about in life, and a person can waste a great deal of time on things that don’t matter,” Goodrich once told an interviewer. Thomas R. Keating, “He’s Unknown—and Remarkable,” Indianapolis Star, April 12, 1973, p. 21, col. 1.
[5. ]Rosanna Amos, interview, December 12, 1991.
[6. ]Goodrich wrote to the Wabash College president Paul W. Cook in December 1966 that Meadowlark Farms at the time held between 25,000 and 26,000 acres of land in various states of cultivation. Moreover, “there is in this land relationship to the coal business, around 60,000 acres.” Letter from Goodrich to Paul W. Cook, December 2, 1966, Pierre F. Goodrich Papers, Archives, Wabash College, Crawfordsville, Indiana. Irwin H. Reiss stated that at one time the Ayrshire Collieries Corporation owned as much as 165,000 acres outright. Reiss said that Goodrich never wanted to buy the land on a lease or royalty basis, but to own it outright (interview by William C. Dennis, February 11, 1994).
[7. ]Chamberlain, “Strip Mining: Can It Unlock Fertile Land?” Roanoke (Va.) Times, July 31, 1974.
[8. ]Emma Lieber, Richard Lieber, pp. 160–61; Roy Barnes, interview, February 8, 1992. See also William H. Andrews, “Ayrshire Collieries Corporation—Profit with Ecology” (research paper, Indiana University, n.d.), p. 17 and footnote 15. Andrews briefly describes the relationship between Pierre Goodrich and Lieber based on an interview with Goodrich’s law partner Albert Campbell.
[9. ]William H. Andrews, “The Ayrshire Collieries Corporation—Profit with Ecology,” p. 17 and n. 15. Andrews obtained this information in an interview with Albert M. Campbell, who served as vice-president of the Ayrshire Coal Company and was Goodrich’s law partner beginning in the 1930s. See also Strip Mine Farming (Sullivan, Ind.: Meadowlark Farms, 1952).
[10. ]Irwin H. Reiss, interview, June 29, 1996. Another reason that Sullivan may have been chosen as the headquarters site for Meadowlark Farms, according to Reiss, was that it was the home of Will H. Hays, Sr., a longtime friend of James and Pierre Goodrich.
[11. ]Ibid. Reiss not only became general manager and later president and CEO of Meadowlark Farms, but in 1960 Goodrich appointed Reiss to the board of the Ayrshire Collieries Company and, in 1961, to the board of the Republic Coal and Coke Company. Reiss was also a founding member of Liberty Fund, Inc., in 1960 (Irwin H. Reiss, interview, June 29, 1996).
[12. ]Irwin H. Reiss, “We Are Farmers, Not Miners,” Coal Mining and Processing, May 1974; Carol L. Cornforth, “Reclamation Commitment Proves Rewarding,” Coal Mining and Processing, March 1973; Irwin H. Reiss, interview, June 29, 1996.
[13. ]Irwin H. Reiss, interview by William C. Dennis, February 11, 1991 (tape and transcript of interview are in the possession of Liberty Fund).
[14. ]Roy Barnes, interview, February 8, 1992.
[15. ]Reiss, “We Are Farmers, Not Miners.”
[16. ]Irwin H. Reiss, interview, June 29, 1996.
[17. ]Irwin H. Reiss, interview by William C. Dennis, February 11, 1991.
[18. ]Ibid.; Irwin H. Reiss, interview, June 29, 1996.
[19. ]Irwin H. Reiss, interview, June 29, 1996. According to Reiss, when Cyprus Minerals Company purchased AMAX Coal in December 1993, the operations of Meadowlark Farms were ended. As a result, the farms that were once operated by Meadowlark were sold to farmers and other investors.
[20. ]Andrews, “The Ayrshire Collieries Corporation—Profit with Ecology,” p. 17.
[21. ]Letter from Anne C. Lawrason to author, December 11, 1995.
[22. ]John Baden, telephone interview, December 30, 1996. Baden wrote in a letter to the author: “I believe Mr. Goodrich could be noted as the businessman who has done the most to create the field of restoration ecology” (January 10, 1996).
[1. ]Henry Regnery said that Goodrich’s opposition to the United States’ getting involved in World War II was well known (interview, October 3, 1992). Stephen Tonsor believed that Goodrich might have belonged to the America First campaign in the late 1930s and early 1940s. If Goodrich was not a member, then at least he appeared to be in sympathy with its tenets. The organization, whose most famous member was Charles Lindbergh, opposed the United States’ entry into World War II. It claimed a membership of some 800,000 in 1941 before the Japanese invasion of Pearl Harbor. America First was based in Chicago. Henry Regnery’s father and Robert Hutchins, both of whom Goodrich knew personally, were leaders of the organization. Stephen Tonsor, interview, December 5, 1992. Goodrich’s opposition to “Wilson’s War” (World War I) is summarized in exhibit 5 of his “Memorandum No. 1” to employees of the Indiana Telephone Company.
[2. ]W. W. Hill, interview, May 5, 1993. According to Hill, Goodrich argued that a few should not have the power to risk others’ lives and fortunes. Goodrich believed that a true patriot will risk his life for his country because of his desire to defend it, not because he is compelled to do so. Goodrich’s views regarding the draft seem very similar to Leonard Read’s, whose views on conscription can be found in Government—An Ideal Concept (Foundation for Economic Education: Irvington-on-Hudson, N.Y., 1954), p. 62.
[3. ]Harry T. Ice, History of a Hoosier Law Firm (Indianapolis: privately printed, 1980), p. 143.
[4. ]Letter from Anne C. Lawrason to author, September 20, 1996.
[5. ]Felix Morley, For the Record (South Bend, Ind.: Regnery/Gateway, 1979), p. 401.
[6. ]Articles in Human Events in many ways anticipated and advanced ideas that were later developed and adopted in both the Marshall Plan and the European Common Market. Such essays included Edmund H. Stinnes’s “The Unification of Europe,” May 31, 1944. See Morley, For the Record, p. 401.
[7. ]Morley, For the Record, p. 422.
[8. ]A number of acquaintances and family members, including Dale Braun, Ron Medler, Don Welch, and Elizabeth Terry, recall being sent free issues of Human Events by Goodrich.
[9. ]Morley’s book, which was partially funded by Goodrich, was The Power in the People (New York: D. Van Nostrand, 1949). Morley edited Liberty Fund’s Essays on Individuality (1977), a collection of essays by such well-known contributors as Milton Friedman, Friedrich A. Hayek, and John Dos Passos.
[10. ]Morley was a founding member of the Mont Pelerin Society. Several letters between Morley and Goodrich are located in the Felix Morley Collection, Archives, Herbert Hoover Presidential Library, West Branch, Iowa.
[11. ]Gibson Island Country School in Gibson Island, Maryland. See letter from Goodrich to Morley, May 1, 1959; letter from Morley to Goodrich, May 7, 1959; and letter from Morley to Goodrich, July 26, 1955. Felix Morley Collection, Archives, Herbert Hoover Presidential Library.
[12. ]Once Goodrich met Piest in the spring of 1949, he wrote to Roscoe Pound, inquiring about Piest’s background and qualifications, especially Piest’s intellectual capabilities and integrity. Goodrich wrote to Pound because he learned that Pound was an adviser to the Hafner Press. Pound responded with a recommendation of Piest. See letter from Goodrich to Pound, May 6, 1949, and letter from Pound to Goodrich, May 9, 1949, Roscoe Pound Collection, Pierre F. Goodrich file, Archives, Harvard University Law School. The subsidiary of the Library of Liberal Arts that actually published the books was the Little Library of Liberal Arts.
[13. ]Liberty Fund Basic Memorandum, exhibit II-f, pp. 53–55. Piest makes reference to the first loan that Goodrich agreed to extend to him in a letter to Goodrich dated August 12, 1950. Piest went on to sell the Liberal Arts Press to the Bobbs-Merrill Publishing Company in 1961. He went to work for Bobbs-Merrill before becoming employed by the American Fletcher National Bank and Trust Company in Indianapolis. Piest later returned to Europe and worked as a representative out of American Fletcher’s Brussels, Belgium, office. See file of Oskar Piest, Liberty Fund, Inc., Indianapolis.
[14. ]See “Jonas L. P. Frist Estate Makes Contribution to Town of Lynn Which Will Enable Town to Complete Construction of Library with No Expense to Local Taxpayers,” Lynn (Ind.) Herald, December 22, 1939, p. 1, col. 6; “History of the Lynn Library,” on file at Washington Township Public Library, 106 North Main Street, Lynn, Indiana.
[15. ]“Lynn Residents Celebrate 4th by Working for Community,” Richmond (Ind.) Palladium-Item and Sun-Telegram, July 5, 1941, p. 1, col. 4.
[16. ]“Mrs. James P. Goodrich, Widow of State’s World War Governor, Dies,” Indianapolis Star, November 1, 1941, p. 12, col. 4.
[17. ]“Services for Mrs. Goodrich to Be Sunday,” Indianapolis News, November 1, 1941, p. 4, col. 2. Cora Goodrich was responsible for the establishment in Winchester of the Caroline A. Palmer chapter of the Indiana Federation of Clubs. She was also a charter member of the Woman’s Club of Indiana.
[18. ]See “Frist Memorial Library Building” (program for the building’s dedication, located at Washington Township Public Library, Lynn, Indiana), Lynn, Indiana, Sunday, June 13, 1943, 2:00 p.m. Goodrich’s attendance at the dedication was mentioned in a letter from Merl Chenoweth, then Lynn clerk and treasurer, to Goodrich dated June 9, 1943, in which Chenoweth specifies when Goodrich is to transport the speaker to the dedication. An article in the Lynn Herald also mentions the presence of Pierre and Enid Goodrich at the dedication. See “Dedication Successful,” Lynn (Ind.) Herald, June 18, 1943, p. 1, col. 4.
[19. ]The dedication speaker was William Hough of Greenfield, Indiana, a longtime friend of James Whitcomb Riley. Hough reminisced about the poet and read from Riley’s writings. He also spoke about the war and the needs of the new library. “Dedication Successful,” Lynn Herald, June 18, 1943, p. 1, col. 4.
[20. ]During his lifetime, James Goodrich refused to allow the portrait to be hung. See Wilbur D. Peat, Portraits and Painters of the Governors of Indiana, 1800–1978 (Indianapolis: Indiana Historical Society, 1978), pp. 70–71; “Portrait of James P. Goodrich by Wayman Adams,” Indianapolis News, December 25, 1920, p. 1. col. 2; “Portrait by Wayman Adams Bought for Statehouse,” Indianapolis Star, October 25, 1941, p. 4, col. 5.
[21. ]Elizabeth Terry, interview, November 16, 1991; Florence Dunn, interview, July 18, 1992; and Kathryn Emison, interview, November 24, 1992.
[22. ]Gilbert Snider, interview, December 23, 1991. For more information about Enid Smith Goodrich, see her obituary, “Civic Leader Enid Smith Goodrich Was Fund Director, Museum Trustee,” Indianapolis Star/Indianapolis News, November 28, 1996, sec. D, p. 7, col. 1; Muncie (Ind.) Star Press, November 28, 1996, p. 12A, col. 1; Winchester (Ind.) News-Gazette, November 27, 1996, p. 2, col. 1.
[23. ]“When [Mr. Goodrich] decided he wanted to talk with someone about something, he didn’t give up,” said Ruth Connolly. “He always had great connections” (interview, October 25, 1991). Goodrich’s connections were indeed strong. For instance, twice he met with the West German chancellor Konrad Adenauer (Ronald Medler, interview, June 9, 1993).
[24. ]Henry Regnery (as told to him by Albert Campbell), interview, October 3, 1992.
[25. ]“Anne D. Goodrich, Polish Prince Wed,” Indianapolis Star, May 3, 1952, p. 6, col. 1. Rosanna Amos, interview, December 10, 1991.
[26. ]Letter from Dr. Marvin Vollmer to author, August 5, 1996. Marvin Vollmer and Alicia Byers are the current owners and occupants of the home. The house was built in approximately 1905 by Robert and Alta Hawkins. In 1946, it was sold by Iris T. and Jack Adams to the P. F. Goodrich Corporation, which owned the home from May 1, 1946, to May 4, 1965, when Goodrich liquidated the holding company. The holding company sold the house directly to Pierre and Enid Goodrich. For a chronological history of the ownership of the house, see memo attached to letter of August 5, 1996, from Dr. Marvin Vollmer to author (in author’s possession).
[27. ]Bowen visited Goodrich on February 24, 1972. Just as he did with all his guests, Goodrich sent to Bowen Lord Acton’s letter and the Federalist, nos. 6 and 51. See “Memorandum to Staff, Liberty Fund, Inc.,” from R. Amos, December 1, 1982. Dr. Bowen, who later served as secretary of health and human services in the Ronald Reagan administration, wrote:
[28. ]Quoted from Russell Pulliam, Publisher Gene Pulliam, Last of the Newspaper Titans, p. 158. Technically, Pulliam was elected from the Eleventh Congressional District to the national convention, not at the state Republican convention.
[29. ]At the state convention on June 7, 1952, Homer Capehart was able to get passed a voice-vote resolution that purportedly bound all Indiana delegates to vote for Senator Taft. Pulliam threatened legal action if the Taft forces insisted upon controlling all delegates. See Farwell Rhodes, Jr., “Fight to Keep Muzzle off Indiana Delegates Taken to National GOP,” Indianapolis Star, July 2, 1952, p. 1, col. 4; see also Ben Hibbs, “Will GOP Commit Suicide at Chicago?” Indianapolis Star, July 3, 1952, p. 1, col. 1. Hibbs’s editorial supports Pulliam’s views.
[30. ]Ibid. The next day, Pulliam and the Republican state chairman and senator Homer Capehart reached an agreement that the delegates would not be bound. See “Anti-Ike Yoke Lifted for State Delegates,” Indianapolis Star, July 3, 1952, p. 1, col. 2.
[31. ]Henry Regnery remembers that Goodrich was one of the leaders in successfully holding the Indiana delegation to support Taft (interview, October 3, 1992).
[32. ]Ibid. Regnery said that he introduced Casey to Goodrich on the floor of the convention. At the time of the 1952 convention, Casey served as a director on the board of Henry Regnery’s publishing house. See also Joseph E. Persico, Casey (New York: Viking, 1990), p. 93.
[33. ]Persico, Casey, p. 92.
[34. ]This attribution of characteristics to Casey is detailed in Joseph Persico’s biography Casey, pp. 41–42. A closer examination of Casey reveals an extraordinary number of traits that he shared with Goodrich. See Persico, Casey, p. 45.
[35. ]Goodrich and Harrell also served together as trustees of the National Foundation for Education for American Citizenship. For a summary of Harrell’s life, see “Samuel R. Harrell, President, Acme-Evans Company, Inc.” (unpublished typescript, Citizens Historical Association, Indianapolis, November 20, 1948), Indiana Division, Indiana State Library. See also Noble Reed, “Harrell Seeks GOP Gubernatorial Nomination,” Indianapolis Times, January 25, 1952, p. 8, col. 1; “Lieutenant Governor Job Sought by Harrell,” Indianapolis Star, June 17, 1956, sec. B, p. 4; “Samuel Harrell Was Grain Broker, Lawyer,” Indianapolis News, August 6, 1986, p. 51, cols. 1–2.
[36. ]Ivan Barr, telephone interview, March 27, 1993.
[37. ]See General Grain, Inc. v. Pierre F. Goodrich, 221 N.E. 2d 696, 698 (Ind. Ct. App. 1966).
[38. ]See John Beals et al. v. General Grain, Inc., and Acme Goodrich, Inc. (filed in Marion County Superior Court and venued to Boone Circuit Court, decision July 18, 1962; General Grain, Inc. v. Pierre F. Goodrich et al., 221 N.E. 2d 696 (December 7, 1966).
[39. ]At the trial of John Beals v. General Grain, Inc., and Acme Goodrich, Inc., in the Boone Circuit Court, the jurors found in favor of Beals, Goodrich, and the other minority shareholders on July 18, 1962. The jury awarded the total sum of $585,180.19 to the minority shareholders, which included costs plus interest from August 12, 1958. The Indiana Court of Appeals, however, reversed the trial jury’s award. Reversal was based on the grounds that the jury instructions were improper because they stressed that the jury should apply the book value of liquidating value of the stock instead of the fair-market value (221 N.E. 2d 696, 702–03 [Ind. Ct. App. 1966]; rehearing denied January 3, 1967).
[40. ]See General Grain, Inc. v. Pierre F. Goodrich et al., 227 N.E. 2d 445 (Ind. Sup. Ct. 1967).
[41. ]Alan H. Lobley, telephone interview, April 16, 1993. Lobley was one of three attorneys from the Indianapolis law firm of Ice, Miller, Donadio and Ryan who represented Goodrich and other minority shareholders in the appeal.
[42. ]Goodrich may have suffered from another relationship that had gone sour. Donald R. Mote was an associate judge sitting on the Court of Appeals in 1966 that reversed the jury verdict in favor of Goodrich. Mote’s brother, Carl H. Mote, had been a top adviser to James Goodrich in the governor’s administration and Pierre’s law partner from 1923 to 1926. Donald Mote not only sat on the court of appeals that heard Harrell’s appeal, but was also elevated to Indiana’s supreme court just before Goodrich appealed the decision of the court of appeals. Donald F. Elliott, Jr., an Indianapolis attorney who represented the minority shareholders before both Indiana’s court of appeals and supreme court, believes that a longtime grudge between Goodrich and Judge Mote may have influenced Mote’s Appellate Court and Supreme Court decisions. “[Donald] Mote had an animus against Pierre that went way back and he carried it onto the court’s decision,” claims Elliott (telephone interview, April 15, 1993).
[43. ]Ivan Barr, telephone interview, March 27, 1993. Joe Ebert, who had been a sales representative for Acme-Goodrich, headed up operations of Indiana Elevators. Most of the other grain elevators originally owned by the Goodrich family were eventually sold by General Grain, many of them to the operators who had run them for Acme-Goodrich. Once Harrell won and Goodrich exhausted all appeal rights, Harrell sought costs involved in the appeal against the minority stockholders. The Indiana Court of Appeals awarded Harrell $17,439.20. See General Grain, Inc. v. Pierre F. Goodrich et al., 233 N.E. 2d 187 (Ind. Ct. of App. 1968).
[1. ]Goodrich purchased the property from Bertha Caldwell in 1962. Richard Lugar, interview, October 29, 1992.
[2. ]Robert Longardner, interview, December 28, 1992. The trees and shrubs were purportedly moved from a garden near or in Tell City, Indiana. Longardner was told this by William H. Fletcher, who worked with Goodrich at the time as the Indianapolis manager of Arthur Andersen and Company.
[3. ]Robert Longardner, interview, December 28, 1992; William H. Fletcher, interview by William C. Dennis, January 25, 1991. According to Fletcher, Goodrich had the large oval conference table, which Liberty Fund still uses, designed for twenty-two people to sit around. Goodrich believed that no more than twenty-two people could converse at one time and expect to learn anything of substance. Goodrich wanted the chairs to be ones that participants could sit in comfortably for a long time and still be attentive. He called them his “Du Pont” chairs, for the large chemical company where he got the idea for them.
[4. ]Robert Longardner, interview, December 28, 1992.
[5. ]Mrs. John Raab (Kathryn) Emison, interview, November 24, 1992. Raab Emison (nephew of John Raab), telephone interview, April 12, 1993. The law firm was founded in 1819 and is now called Emison, Doolittle, Kalb and Roellgen. According to Kathryn Emison and John Raab’s son, James, another reason for Emison’s leaving the partnership was that the relationship between John Raab and Goodrich had soured because of Goodrich’s demands for perfection. “My dad could damn near get along with anyone, but he and Pierre just didn’t hit it off,” said James Emison (telephone interview, April 16, 1993).
[6. ]Gilbert Snider, interview, December 23, 1991.
[7. ]Letter from Martha Wharton to author, December 14, 1995. Schultz, now Helen E. Fletcher, lives in Jacksonville, Florida. She denies she ever gave orders to Pierre. She wrote to the author: “I appreciate the compliments which Martha Wharton paid to me but no one (except possibly Mrs. Goodrich) gave orders to Mr. Goodrich—suggestions or reminders, yes; orders, no” (letter, June 18, 1996).
[8. ]Chris Talley, interview, March 20, 1995.
[10. ]T. Alan Russell, interview, July 2, 1994.
[12. ]Ibid.; Walter “Guido” Seaton, interview, January 16, 1993; letter from Helen Fletcher to author, June 18, 1996.
[13. ]Gilbert Snider, interview, December 23, 1991; Don Welch, interview, December 16, 1991; William Fitts, interview, December 28, 1991.
[14. ]Don Welch, interview, December 16, 1991.
[15. ]Letter from Milton Friedman to author, December 19, 1991.
[16. ]Harrison J. Ullman, “Erhard Stresses Dangers of Deficit Financing,” Indianapolis Star, February 20, 1968, p. 2, col. 4; “Erhard Warns of World Inflation,” Indianapolis News, February 20, 1968, p. 2, col. 6; Columbian, April 1968, p. 2. See also “Erhard, Ludwig,” The New Encyclopaedia Britannica, vol. 4 (Chicago: Encyclopaedia Britannica, 1992), p. 540. For a brief discussion of Erhard’s “economic miracle,” see Milton and Rose Friedman, Free to Choose (New York: Harcourt Brace Jovanovich, 1979), p. 56. Erhard’s trip to speak in Indianapolis on February 19, 1968, was his lone appearance in the United States at that time. Goodrich had Erhard and three of Erhard’s assistants flown to Indianapolis from Bonn, Germany, for the speaking engagement. The total cost of the engagement was $7,000, including a speaking fee for Erhard of $1,500. The expenses were paid by Liberty Fund. See “Minutes of the Board of Directors of the Liberty Fund, Inc.,” November 10, 1967, p. 139 (in the possession of Liberty Fund).
[17. ]See “Pierre F. Goodrich Tours Company,” ITC Highlights, July 1971, pp. 1–2; “Indiana Telephone Corporation Annual Report,” December 31, 1972, pp. 3–5.
[18. ]John H. Lyst, “‘Real Dollar’ Statements Gain New Attention,” Indianapolis Star, September 12, 1979, p. 31, col. 1.
[21. ]Letter from Goodrich to Dr. Solomon Fabricant, Department of Economics, New York University, January 3, 1972, Pierre F. Goodrich Collection, Solomon Fabricant file, Archives, Wabash College, Crawfordsville, Indiana.
[22. ]See “How Inflation Warps Accounts,” The Economist, January 16, 1971, pp. 58–59. For a good discussion of Goodrich’s views on inflation, see Pierre F. Goodrich, “Monetary Inflation, Growth, and Accounting,” Public Utilities Fortnightly, October 28, 1971, pp. 79–81. In a 1973 letter to Indiana Telephone Corporation stockholders, Goodrich explained why not reporting the effects of inflation actually undermines many of the reasons that accounting practices are undertaken in the first place: It seems reasonable to state that the first and basic reason for accounting is to ascertain useful information for the management concerning the business and its operation, and that such information being available for management is then also available for shareholders, other security holders and regulatory bodies—tax authorities included. It is important that [businessmen] know the truth concerning the return of the purchasing power of the dollars their shareholders have invested in the business which they manage for the purpose of providing a product for a profit. . . . (John H. Lyst, “‘Real Dollar’ Statements Gain New Attention”)
[23. ]Letter from Paul L. Poirot to author, November 8, 1992.
[24. ]Beryl Sprinkel, telephone interview, January 22, 1993. Despite Goodrich’s desire to have inflation recognized from an accountancy perspective, the government’s objection to doing that seems to have some validity, at least from a practical perspective. Traditionally, the government has been opposed to recognizing inflation for fear of building it into people’s expectations and thereby accelerating it.
[25. ]Gilbert Snider, interview, December 23, 1991; William H. Fletcher, interview by William C. Dennis, January 25, 1991.
[26. ]Gilbert Snider, interview, December 23, 1991.
[29. ]Don Welch, interview, April 29, 1996.
[30. ]When Goodrich sold his family’s interest in City Securities to the Dwight Peterson family, they obtained an 84 percent share of the corporation’s ownership, and the remaining 16 percent was owned by other employees of City Securities Corporation. See E. Bruce Geelhoed, Indiana’s Investment Banker: The Story of City Securities Corporation (Muncie, Ind.: Ball State University, 1985), p. 117.
[31. ]Pierre F. Goodrich, Basic Memorandum, p. 91.
[32. ]Don Welch, interview, December 16, 1991.
[33. ]See Paul M. Doherty, “Foundations’ Status Scrutinized Closer,” Indianapolis Star, n.d. (copy in author’s possession).