The Online Library of Liberty

A project of Liberty Fund, Inc.

• Illustrations
• Foreword
• Preface
• Acknowledgments
• Part I: Family Life and Early Background
• Chapter 1: An American Family
• Chapter 2: Origins
• Chapter 3: Youth and Experience
• Chapter 4: Initiation Into Politics
• Chapter 5: The Early Years, 1894–1900
• Chapter 6: Entering the Business World
• Chapter 7: The Early Years, 1901–1916
• Part II: James P. Goodrich the Consummate Politician
• Chapter 8: The Political Years
• Chapter 9: The 1916 Campaign
• Chapter 10: Years As Governor, 1917–1921
• Chapter 11: The Middle Years, 1916–1923
• Chapter 12: The Great Russian Famine, 1921–1923
• Chapter 13: Emissary to Russia
• Chapter 14: Return to Russia, 1925
• Part III: Businessmen With the Midas Touch
• Chapter 15: The 1920s
• Chapter 16: The 1930s
• Chapter 17: Companies! Companies! Companies!
• Chapter 18: Ayrshire Collieries Corporation
• Chapter 19: The Ecologist
• Chapter 20: The Later Years, 1940–1960
• Chapter 21: The Later Years, 1960–1973
• Part IV: Pierre F. Goodrich Crusader and Philosopher
• Chapter 22: Associations and Causes
• Chapter 23: Wabash College
• Chapter 24: The Mont Pelerin Society
• Chapter 25: A Scholar’s Life
• Chapter 26: Education In a Free Society
• Chapter 27: Moral, Political, and Metaphysical Beliefs
• Chapter 28: Why Liberty?
• Chapter 29: Liberty Fund, Inc.
• Part V: The Goodriches Assayed
• Chapter 30: Who Was Pierre F. Goodrich?
• Chapter 31: Defining Influences
• Chapter 32: Why Did They Work So Hard? Work, Ideas, Citizenship, and Virtue
• Chapter 33: Epilogue
• Appendixes

Chapter 17

Companies! Companies! Companies!

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:

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.

[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:

Our bond financing is the result of a very long series of negotiations going back as far as 1947. Our conviction that monetary inflation is likely to continue and that this will be reflected in higher interest rates, plus greater governmental interference with the market, have caused us to refinance our Series 1, 2 and 3 bonds which would have matured in 1977, our Series 4 bonds which would have matured in 1984, and Series 5 bonds which would have matured in 1986, as part of the Series 10 bonds which will mature in 2008. The refinancing accounted for $3,375,000 of the total $4,875,000 borrowing. This gives us additional options and hopefully may keep us from having to go to the money market before 1991. . . . In addition to refinancing ITC’s long-term debt at low fixed interest rates, Goodrich made other innovative business decisions that led to the company’s profitability. For example, he negotiated contracts with equipment providers requiring them to guarantee replacement parts for up to twenty years (an exceptionally long time); he also depreciated equipment over a period as short as nine years. T. Alan Russell, interview, July 2, 1994. Goodrich speaks about both the twenty-year provision for parts replacement and the nine-year depreciation of equipment in “ITC Memorandum No. 1,” p. 12.

[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.

The greatest benefit in the 1989 swap of Central Shares stock for Central Newspapers stock was the avoidance of capital-gains tax. The amendments to the 1986 tax code supposedly eliminated this tax advantage. Because the swap was deemed a “restructuring” by the IRS (the Goodrich family giving up voting stock for nonvoting stock), however, no capital gain was recognized. That meant that approximately $130 million in Central Shares stock was allowed to be exchanged for Central Newspapers stock without tax consequences (W. W. Hill, interview, May 25, 1993).

[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.

[37. ]Ibid.

[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.