Chapter 9 A Second Sort of Life

DURING Franklin D. Roosevelt’s Presidency, when Wall Streetand Washington tended to be on cat-and-dog terms, perhapsno New Dealer other than That Man himself better typified theNew Deal in the eyes of Wall Street than David Eli Lilienthal.
The explanation of this estimate of him in southern Manhattanlay not in any specific anti-Wall Street acts ofLilienthal’s—indeed, the scattering of financiers, among themWendell L. Willkie, who had personal dealings with himgenerally found him to be a reasonable sort of fellow—but inwhat he had come to symbolize through his association withthe Tennessee Valley Authority, which, as a government-ownedelectric-power concern far larger than any private powercorporation in the country, embodied Wall Street’s notion ofgalloping Socialism. Because Lilienthal was a conspicuous andvigorous member of the T.V.A.’s three-man board of directorsfrom 1933 until 1941, and was its chairman from 1941 until1946, the business community of that period, in his phrase,thought he “wore horns.” In 1946, he became the firstchairman of the United States Atomic Energy Commission, andwhen he gave up that position, in February, 1950, at the ageof fifty, the Times said in a news story that he had been“perhaps the most controversial figure in Washington since theend of the war.”
What has Lilienthal been up to in the years since he left thegovernment? As a matter of public record, he has been up toa number of things, all of them, surprisingly, centered on WallStreet or on private business, or both. For one thing, Lilienthalis listed in any number of business compendiums as theco-founder and the chairman of the board of the Development& Resources Corporation. Several years ago, I phoned D. &R.’s offices, then at 50 Broadway, New York City, anddiscovered it to be a private firm—Wall Street-backed as well as,give or take a block, Wall Street-based—that providesmanagerial, technical, business, and planning services toward thedevelopment of natural resources abroad. That is to say, D. &R.—whose other co-founder, the late Gordon R. Clapp, wasLilienthal’s successor as T.V.A. chairman—is in the business ofhelping governments set up programs more or less similar tothe T.V.A. Since its formation, in 1955, I learned, D. & R. had,at moderate but gratifying profit to itself, planned and managedthe beginnings of a vast scheme for the reclamation ofKhuzistan, an arid and poverty-stricken, though oil-rich, regionof western Iran; advised the government of Italy on thedevelopment of its backward southern provinces; helped theRepublic of Colombia set up a T.V.A.-like authority for itspotentially fertile but flood-plagued Cauca Valley; and offeredadvice to Ghana on water supply, to the Ivory Coast onmineral development, and to Puerto Rico on electric power andatomic energy.
For another thing—and when I found out about this, it struckme as considerably more astonishing, on form, than D. &R.—Lilienthal has made an authentic fortune as a corporateofficer and entrepreneur. In a proxy statement of the Minerals& Chemicals Corporation of America, dated June 24, 1960, thatfell into my hands, I found Lilienthal listed as a director of thefirm and the holder of 41,366 shares of its common stock.
These shares at the time of my investigation were being tradedon the New York Stock Exchange at something overtwenty-five dollars each, and simple multiplication revealed thatthey represented a thumping sum by most men’s standards,certainly including those of a man who had spent most of hislife on government wages, without the help of private resources.
And, for still another thing, in 1953 Harper & Brothersbrought out Lilienthal’s third book, “Big Business: A New Era.”
(His previous books were “T.V.A.: Democracy on the March”
and “This I Do Believe,” which appeared in 1944 and 1949,respectively.) In “Big Business,” Lilienthal argues that not onlythe productive and distributive superiority of the United Statesbut also its national security depends on industrial bigness; thatwe now have adequate public safeguards against abuses of bigbusiness, or know well enough how to fashion them asrequired; that big business does not tend to destroy smallbusiness, as is often supposed, but, rather, tends to promote it;and, finally, that a big-business society does not suppressindividualism, as most intellectuals believe, but actually tends toencourage it by reducing poverty, disease, and physicalinsecurity and increasing the opportunities for leisure and travel.
Fighting words, in short, from an old New Dealer.
Lilienthal is a man whose government career I, as anewspaper reader, had followed fairly closely. My interest inhim as a government official had reached its peak in February,1947, when, in answer to a fierce attack on him by his oldenemy Senator Kenneth D. McKellar, of Tennessee, duringCongressional hearings on his fitness for the A.E.C. job, heuttered a spontaneous statement of personal democratic faiththat for many people still ranks as one of the most stirringattacks on what later came to be known as McCarthyism.
(“One of the tenets of democracy that grow out of this centralcore of a belief that the individual comes first, that all men arethe children of God and their personalities are thereforesacred,” Lilienthal said, among other things, “is a deep belief incivil liberties and their protection; and a repugnance to anyonewho would steal from a human being that which is mostprecious to him, his good name, by imputing things to him, byinnuendo, or by insinuation.”) The fragments of information Ipicked up about his new, private career left me confused.
Wondering how Wall Street and business life had affectedLilienthal, and vice versa, in their belated rapprochement, I gotin touch with him, and a day or so later, at his invitation,drove out to New Jersey to spend the afternoon with him.
LILIENTHAL and his wife, Helen Lamb Lilienthal, lived on BattleRoad, in Princeton, where they had settled in 1957, after sixyears in New York City, at first in a house on Beekman Placeand later in an apartment on Sutton Place. The Princetonhouse, which stands in a plot of less than an acre, is ofGeorgian brick with green shutters. Surrounded by otherhouses of its kind, the place is capacious yet anything butpretentious. Lilienthal, wearing gray slacks and a plaid sportsshirt, met me at the front door. At just past sixty, he was atall, trim man with a receding hairline, a slightly hawklikeprofile, and candid, piercing eyes. He led me into the livingroom, where he introduced Mrs. Lilienthal and then pointed outa couple of household treasures—a large Oriental rug in frontof the fireplace, which he said was a gift from the Shah ofIran, and, hanging on the wall opposite the fireplace, a Chinesescroll of the late nineteenth century showing four rather roguishmen, who, he told me, have a special meaning for him, sincethey are upper-middle-rank civil servants. Pointing to aparticularly enigmatic-looking fellow, he added, with a smile, thathe always thought of that one as his Oriental counterpart.
Mrs. Lilienthal went to get coffee, and while she was gone, Iasked Lilienthal to tell me something of his post-governmentlife, starting at the beginning. “All right,” he said. “Thebeginning: I left the A.E.C. for a number of reasons. In thatkind of work, I feel, a fellow is highly expendable. If you stayedtoo long, you might find yourself placating industry or themilitary, or both—building up what would amount to an atomicpork barrel. Another thing—I wanted to be allowed to speakmy mind more freely than I could as a government official. Ifelt I’d served my term. So I turned in my resignation inNovember, 1949, and it went into effect three months later. Asfor the timing, I resigned then because, for once, I wasn’tunder fire. Originally, I’d planned to do it earlier in 1949, butthen came the last Congressional attack on me—the timeHickenlooper, of Iowa, accused me of ‘incrediblemismanagement.’” I noticed that Lilienthal did not smile inreferring to the Hickenlooper affair. “I entered private life withboth trepidation and relief,” he went on. “The trepidation wasabout my ability to make a living, and it was very real. Oh, I’dbeen a practicing lawyer as a young man, in Chicago, beforegoing into government work, and made quite a lot of money atit, too. But now I didn’t want to practice law. And I wasworried about what else I could do. I was so obsessed withthe subject that I harped on it all the time, and my wife andmy friends began to kid me. That Christmas of 1949, my wifegave me a beggar’s tin cup, and one of my friends gave me aguitar to go with it. The feeling of relief—well, that was amatter of personal privacy and freedom. As a private citizen, Iwouldn’t have to be trailed around by hordes of securityofficers as I had been at the A.E.C. I wouldn’t have to answerthe charges of Congressional committees. And, above all, I’d beable to talk freely to my wife again.”
Mrs. Lilienthal had returned with the coffee as her husbandwas talking, and now she sat down with us. She comes, Iknew, from a family of pioneers who, over several generations,moved westward from New England to Ohio to Indiana toOklahoma, where she was born. She seemed to me to look thepart—that of a woman of dignity, patience, practicality, andgentle strength. “I can tell you that my husband’s resignationwas a relief to me,” she said. “Before he went with the A.E.C.,we’d always talked over all aspects of his work. When he tookthat job, we agreed between us that although we’d indulge inthe discussion of personalities as freely as we pleased, he wouldnever tell me anything about the work of the A.E.C. that Icouldn’t read in the newspapers. It was a terrible constraint tobe under.”
Lilienthal nodded. “I’d come home at night with some frightfulexperience in me,” he said. “No one who so much as touchesthe atom is ever quite the same again. Perhaps I’d have beenin a series of conferences and listened to the kind of talk thatmany military and scientific men go in for—cities full of humanbeings referred to as ‘targets,’ and that sort of thing. I nevergot used to that impersonal jargon. I’d come home sick atheart. But I couldn’t talk about it to Helen. I wasn’t allowed toget it off my chest.”
“And now there wouldn’t be any more hearings,” Mrs.
Lilienthal said. “Those terrible hearings! I’ll never forget oneWashington cocktail party we went to, for our sins. Myhusband had been going through one of the endless series ofCongressional hearings. A woman in a funny hat came gushingup to him and said something like ‘Oh, Mr. Lilienthal, I was soanxious to come to your hearings, but I just couldn’t make it.
I’m so sorry. I just love hearings, don’t you?’”
Husband and wife looked at each other, and this timeLilienthal managed a grin.
LILIENTHAL seemed glad to get on to what happened next. Atabout the time his resignation became effective, he told me, hewas approached by various men from Harvard representing thefields of history, public administration, and law, who asked himto accept an appointment to the faculty. But he decided hedidn’t want to become a professor any more than he wantedto practice law. Within the next few weeks came offers fromnumerous law firms in New York and Washington, and fromsome industrial companies. Reassured by these that he was notgoing to need the tin cup and guitar after all, Lilienthal, aftermulling over the offers, finally turned them all down andsettled, in May, 1950, for a part-time job as a consultant to thecelebrated banking firm of Lazard Frères & Co., whose seniorpartner, André Meyer, he had met through Albert Lasker, amutual friend. Lazard gave him an office in its headquarters at44 Wall, but before he could do much consulting, he was offon a lecture tour across the United States, followed by a tripto Europe that summer, with his wife, on behalf of the lateCollier’s magazine. The trip did not result in any articles,though, and on returning home in the fall he found itnecessary to get back on a full-time income-producing basis;this he did by becoming a consultant to various othercompanies, among them the Carrier Corporation and the RadioCorporation of America. To Carrier he offered advice onmanagerial problems. For R.C.A., he worked on the question ofcolor television, ultimately advising his client to concentrate ontechnical research rather than on law-court squabbles overpatents; he also helped persuade the company to press itscomputer program and to stay out of the construction ofatomic reactors. Early in 1951, he took another trip abroad forCollier’s—to India, Pakistan, Thailand, and Japan. This tripproduced an article—published in Collier’s that August—in whichhe proposed a solution to the dispute between India andPakistan over Kashmir and the headwaters of the Indus River.
Lilienthal’s idea was that the tension between the two countriescould best be lessened by a co?perative program to improveliving conditions in the whole disputed area through economicdevelopment of the Indus Basin. Nine years later, largelythrough the financial backing and moral support of Eugene R.
Black and the World Bank, the Lilienthal plan was essentiallyadopted, and an Indus treaty signed between India andPakistan. But the immediate reaction to his article was generalindifference, and Lilienthal, temporarily stymied and considerablydisillusioned, once more settled down to the humbler problemsof private business.
At this point in Lilienthal’s narrative, the doorbell rang. Mrs.
Lilienthal went to answer it, and I could hear her talking tosomeone—a gardener, evidently—about the pruning of someroses. After listening restlessly for a minute or two, Lilienthalcalled to his wife, “Helen, please tell Domenic to prune thoseroses farther back than he did last year!” Mrs. Lilienthal wentoutside with Domenic, and Lilienthal remarked, “Domenic alwaysprunes too gently, to my way of thinking. It’s a case of ourbackgrounds—Italy versus the Middle West.” Then, resumingwhere he had left off, he said that his association with LazardFrères, and more particularly with Meyer, had led him into anassociation, first as a consultant and later as an executive, witha small company called the Minerals Separation North AmericanCorporation, in which Lazard Frères had a large interest. Itwas in this undertaking that, unexpectedly, he made his fortune.
The company was in trouble, and Meyer’s notion was thatLilienthal might be the man to do something about it.
Subsequently, in the course of a series of mergers, acquisitions,and other maneuvers, the company’s name was changed to,successively, the Attapulgus Minerals & Chemicals Corporation,the Minerals & Chemicals Corporation of America, and, in 1960,the Minerals & Chemicals Philipp Corporation; meanwhile, itsannual receipts rose from about seven hundred and fiftythousand dollars, for 1952, to something over two hundred andseventy-four million, for 1960. For Lilienthal, the acceptance ofMeyer’s commission to look into the company’s affairs was thebeginning of a four-year immersion in the day-to-day problemsof managing a business; the experience, he said decisively,turned out to be one of his life’s richest, and by no meansonly in the literal sense of that word.
I HAVE reconstructed the corporate facts behind Lilienthal’sexperience partly from what he told me in Princeton, partlyfrom a subsequent study of some of the company’s publisheddocuments, and partly from talks with other persons interestedin the firm. Minerals Separation North American, which wasfounded in 1916 as an offshoot of a British firm, was a patentcompany, deriving its chief income from royalties on patents forprocesses used in refining copper ore and the ores of othernonferrous minerals. Its activities were twofold—attempting todevelop new patents in its research laboratory, and offeringtechnical services to the mining and manufacturing companiesthat leased its old ones. By 1950, although it was still netting anice annual profit, it was in a bad way. Under the direction ofits long-time president, Dr. Seth Gregory—who was then overninety but still ruled the company with an iron hand,commuting daily between his midtown apartment hotel and hisoffice, at 11 Broadway, in a regally purple Rolls-Royce—it hadcut down its research activities to almost nothing and was livingon half a dozen old patents, all of which were scheduled to gointo the public domain in from five to eight years. In effect, itwas a still healthy company living under a death sentence.
Lazard Frères, as a large stockholder, was understandablyconcerned. Dr. Gregory was persuaded to retire on ahandsome pension, and in February, 1952, after working withMinerals Separation for some time as a consultant, Lilienthalwas installed as the company’s president and a member of itsboard of directors. His first task was to find a new source ofincome to replace the fast-expiring patents, and he and theother directors agreed that the way to accomplish this wasthrough a merger; it fell to Lilienthal to participate in arrangingone between Minerals Separation and another company inwhich Lazard Frères—along with the Wall Street firm of F.
Eberstadt & Co.—had large holdings: the Attapulgus ClayCompany, of Attapulgus, Georgia, which produced a very rarekind of clay that is useful in purifying petroleum products, andwhich manufactured various household products, among them afloor cleaner called Speedi-Dri.
As a marriage broker between Minerals Separation andAttapulgus, Lilienthal had the touchy job of persuading theexecutives of the Southern company that they were not beingused as pawns by a bunch of rapacious Wall Street bankers.
Being an agent of the bankers was an unaccustomed role forLilienthal, but he evidently carried it off with aplomb, despitethe fact that his presence complicated the emotional problemsstill further by introducing into the situation a whiff of gallopingSocialism. “Dave was very effective in building up the Attapulguspeople’s morale and confidence,” another Wall Streeter has toldme. “He reconciled them to the merger, and showed them itsadvantages for them.” Lilienthal himself told me, “I felt at homein the administrative and technical parts of the job, but thefinancial part had to be done by the people from Lazard andEberstadt. Every time they began talking about spinoffs andexchanges of shares, I was lost. I didn’t even know what aspinoff was.” (As Lilienthal knows now, it is, not to get tootechnical about it, a division of a company into two or morecompanies—the opposite of a merger.) The merger took placein December, 1952, and neither the Attapulgus people nor theMinerals Separation people had any reason to regret it, becauseboth the profits and the stock price of the newly formedcompany—the Attapulgus Minerals & ChemicalsCorporation—soon began to rise. At the time of the merger,Lilienthal was made chairman of the board of directors, at anannual salary of eighteen thousand dollars. Over the next threeyears, while serving first in this position and later as chairmanof the executive committee, he had a large part not only in theconduct of the company’s routine affairs but also in its furthergrowth through a series of new mergers—one in 1954, withEdgar Brothers, a leading producer of kaolin for paper coating,and two in 1955, with a pair of limestone concerns in Ohioand Virginia. The mergers and the increased efficiency thatwent with them were not long in paying off; between 1952 and1955 the company’s net profit per share more than quintupled.
The mechanics of Lilienthal’s own rise from the comparativerags of a public servant to the riches of a successfulentrepreneur are baldly outlined in the company’s proxystatements for its annual and special stockholders’ meetings.
(There are few public documents more indiscreet than proxystatements, in which the precise private stockholdings ofdirectors must be listed.) In November, 1952, MineralsSeparation North American granted Lilienthal, as a supplementto his annual salary, a stock option.* His option entitled him tobuy as many as fifty thousand shares of the firm’s stock fromits treasury at $4.87? per share, then the going rate, any timebefore the end of 1955, and in exchange he signed a contractagreeing to serve the company as an active executivethroughout 1953, 1954, and 1955. The potential financialadvantage to him, of course, as to all other recipients of stockoptions, lay in the fact that if the price of the stock rosesubstantially, he could buy shares at the option price and thushave a holding that would immediately be worth much morethan he paid for it. Furthermore, and more important, if heshould later decide to sell his shares, the proceeds would be acapital gain, taxable at a maximum rate of 25%. Of course, ifthe stock failed to go up, the option would be worthless. But,like so many stocks of the mid-fifties, Lilienthal’s did go up,fantastically. By the end of 1954, according to the proxystatements, Lilienthal had exercised his option to the extent ofbuying twelve thousand seven hundred and fifty shares, whichwere then worth not $4.87? each but about $20. InFebruary, 1955, he sold off four thousand shares at $22.75each, bringing in ninety-one thousand dollars. This sum, lesscapital-gains tax, was then applied against further purchasesunder the option, and in August, 1955, the proxy statementsshow, Lilienthal raised his holdings to almost forty thousandshares, or close to the number he held at the time of my visitto him. By that time, the stock, which had at first been soldover the counter, not only had achieved a listing on the NewYork Stock Exchange but had become one of the Exchange’shighflying speculative favorites; its price had skyrocketed toabout forty dollars a share, and Lilienthal, obviously, was solidlyin the millionaire class. Moreover, the company was now on asound long-term basis, paying an annual cash dividend of fiftycents a share, and the Lilienthal family’s financial worries werepermanently over.
Fiscally speaking, Lilienthal told me, his symbolic moment oftriumph was the day, in June of 1955, when the shares ofMinerals & Chemicals graduated to a listing on the New YorkStock Exchange. In accordance with custom, Lilienthal, as a topofficer, was invited onto the floor to shake hands with thepresident of the Exchange and be shown around generally. “Iwent through it in a daze,” Lilienthal told me. “Until then, I’dnever been inside any stock exchange in my life. It was allmysterious and fascinating. No zoo could have seemed morestrange to me.” How the Stock Exchange felt at this stageabout having the former wearer of horns on its floor is notrecorded.
IN telling me about his experience with the company, Lilienthalhad spoken with zest and had made the whole thing soundmysterious and fascinating. I asked him what, apart from theobvious financial inducement, had led him to devote himself tothe affairs of a small firm, and how it had felt for the formerboss of T.V.A. and A.E.C. to be, in effect, peddling Attapulgite,kaolin, limestone, and Speedi-Dri. Lilienthal leaned back in hischair and stared at the ceiling. “I wanted an entrepreneurialexperience,” he said. “I found a great appeal in the idea oftaking a small and quite crippled company and trying to makesomething of it. Building. That kind of building, I thought, is thecentral thing in American free enterprise, and something I’dmissed in all my government work. I wanted to try my handat it. Now, about how it felt. Well, it felt plenty exciting. It wasfull of intellectual stimulation, and a lot of my old ideaschanged. I conceived a great new respect for financiers—menlike André Meyer. There’s a correctness about them, a certainhigh sense of honor, that I’d never had any conception of. Ifound that business life is full of creative, original minds—alongwith the usual number of second-guessers, of course.
Furthermore, I found it seductive. In fact, I was in danger ofbecoming a slave. Business has its man-eating side, and part ofthe man-eating side is that it’s so absorbing. I found that thethings you read—for instance, that acquiring money for its ownsake can become an addiction if you’re not careful—are literallytrue. Certain good friends helped keep me on the track—menlike Ferdinand Eberstadt, who became my fellow-director afterthe Attapulgus merger, and Nathan Greene, special counsel toLazard Frères, who was on the board for a while. Greene wasa kind of business father confessor to me. I remember hissaying, ‘You think you’ll make your pile and then beindependent. My friend, in Wall Street you don’t just win yourindependence at one stroke. To paraphrase Thomas Jefferson,you have to win your independence over again every day.’ Ifound that he was right about that. Oh, I had my problems. Iquestioned myself at every step. It was exhausting. You see, forso long I’d been associated with two pretty far-reachingthings—institutions. I had a feeling of identity with them; in thatkind of work you are able to lose your sense of self. Now,with myself to worry about—my personal standards as well asmy financial future—I found myself wondering all the timewhether I was making the right move. But that part’s all in myjournal, and you can read it there, if you like.” *I said I certainly would like to read it, and Lilienthal led meto his study, in the basement. It proved to be a good-sizedroom whose windows opened on window wells into whichstrands of ivy were trailing; light came in from outside, andeven a little slanting sunshine, but the tops of the window wellswere too high to permit a view of the garden or theneighborhood. Lilienthal remarked, “My neighbor RobertOppenheimer complained about the enclosed feeling when hefirst saw this room. I told him that was just the feeling Iwanted!” Then he showed me a filing cabinet, standing in acorner; it contained the journal, in rows and rows of loose-leafnotebooks, the earliest of them dating back to its author’shigh-school days. Having invited me to make myself at home,Lilienthal left me alone in his study and went back upstairs.
Taking him at his word, I went for a turn or two around theroom, looking at the pictures on the walls and finding aboutwhat might have been expected: inscribed photographs fromFranklin D. Roosevelt, Harry S. Truman, Senator George Norris,Louis Brandeis; pictures of Lilienthal with Roosevelt, with Willkie,with Fiorello LaGuardia, with Nelson Rockefeller, with Nehru inIndia; a night view of the Fontana Dam, in the TennesseeValley, being built under a blaze of electricity supplied by T.V.A.
power plants. A man’s study reflects himself as he wishes to beseen publicly, but his journal, if he is honest, reflects somethingelse. I had not browsed long in Lilienthal’s journal before Irealized that it was an extraordinary document—not merely ahistorical source of unusual interest but a searching record of apublic man’s thoughts and emotions. I leafed through the yearsof his association with Minerals & Chemicals, and, scatteredamid much about family, Democratic politics, friends, tripsabroad, reflections on national policies, and hopes and fears forthe republic, I came upon the following entries having to dowith business and life in New York:
May 24, 1951: Looks as if I am in the minerals business. In a small way,that could become a big way. [He goes on to explain that he has justhad his first interview with Dr. Gregory, and is apparently acceptable to theold man as the new president of the company.]
May 31, 1951: [Starting in business] is like learning to walk after a longillness.… At first you have to think: move the right foot, move the leftfoot, etc. Then you are walking without thinking, and then walking issomething one does with unconsciousness and utter confidence. This latterstate, as to business, has yet to come, but I had the first touch of ittoday.
July 22, 1951: I recall Wendell Willkie saying to me years ago, “Living inNew York is a great experience. I wouldn’t live anywhere else. It is themost exciting, stimulating, satisfying spot in the world,” etc. I think this wasapropos of some remark I had made on a business visit to NewYork—that I was certainly glad I didn’t have to live in that madhouse ofnoise and dirt. [Last] Thursday was a day in which I shared some ofWillkie’s feeling.… There was a grandeur about the place, and adventure, asense of being in the center of a great achievement, New York City in thefifties.
October 28, 1951: What I am reaching for, perhaps, is to have my cakeand eat it, too, but in a way this is not wholly senseless nor futile. Thatis, I can have enough actual contact with the affairs of business to keep asense of reality, or develop one. How otherwise can I explain the pleasureI get in visiting a copper mine or talking to operators of an electricfurnace, or a coal-research project, or watching how André Meyer works.…But along with that I want to be free enough to think about what thesethings mean, free enough to read outside the immediate field of interest.
This requires keeping out of status (the absence of which I know makesme vaguely unhappy).
December 8, 1952: What is it that investment bankers do for theirmoney? Well, I have certainly had my eyes opened, as to the amount oftoil, sweat, frustrations, problems—yes, and tears—that has to be gonethrough.… If everyone who has something to sell in the market had to beas meticulous and detailed in his statements about what he is selling asthose who offer stock in the market are now, under the Truth inSecurities law, darn little would be sold, in time to be useful, at least.
December 20, 1952: My purpose in this Attapulgus venture is to make agood deal of money in a short time, in a way (i.e., old man capital gains)that enables me to keep three-fourths of it, instead of paying 80% ormore in income taxes.… But there is another purpose: to have had theexperience of business.… The real reason, or the chief reason, is a feelingthat my life wouldn’t be complete, living in a business period—that is, atime dominated by the business of business—unless I had been active inthat area. What I wanted was to be an observer of this fascinating activitythat so colors and affects the world’s life, not … an observer from without(as a writer, teacher) but from the arena itself. I still have this feeling, andwhen I get low and glad to chuck the whole thing (as I have from timeto time), the sustaining part is that even the bumps and sore spots areexperiences, actual experiences within the business world.…Then, too, [I wanted to be able to make] a comparison of the managersof business, the spirit, the tensions, the motivations, etc., with those ofgovernment (something I keep doing anyway)—and that needs doing tounderstand either government or business. This requires actual validexperience in the business world somewhat comparable to my long hiringout in government matters.
I don’t kid myself that I will ever be accepted as a businessman, notafter those long years when I wore horns, for all of them outside theTennessee Valley at least. And I feel less defensive—usually shown by abelligerence—on this score than I did when I rarely saw a tycoon or aWall Streeter, whereas now I live with them.…January 18, 1953: I am now definitely committed [to Minerals &Chemicals] for not less than three more years … and morally committed tosee the thing through. While I can’t conceive that this business will everseem enough, an end of itself, to make up a satisfactory life, yet thebusy-ness, the activity, the crises, the gambles, the management problems Imust face, the judgment about people, all combine to make something farfrom dull. Add to this the good chance of making a good deal of money.…My decision to try business—that seemed to so many people a bit ofromantic moonshine—makes more sense today than it did a year ago.
But there is something missing.…December 2, 1953: Crawford Greenewalt [president of du Pont] …introduced me in a speech (in Philadelphia).… He noted that I had enteredthe chemical business; bearing in mind that I had previously headed thebiggest things in America, bigger than [any] private corporations, he wasnaturally a little nervous about seeing me become a potential competitor. Itwas kidding, but it was good kidding. And it certainly gave little oleAttapulgus quite a notice.
June 30, 1954: I have found a new kind of satisfaction, and in a sense,fulfillment, in a business career. I really never felt that the “consultant”
thing was being a businessman, or engaging in the realities of a life ofbusiness. Too remote from the actual thinking process, the exercise ofjudgment and decision.… In this company, as we are evolving it, there areso many of the elements of fun.… The starting with almost nothing … thecompany depending on patents alone … acquisition, mergers, stock issues,proxy statements, the methods of financing internally and by bank loans …also the way stock prices are made, the silly and almost childlike basisupon which grown men decide that a stock should be bought, and atwhat price … the merger with Edgar, the great [subsequent] rise in theprice of their stock … the review of the price structure. The beginning ofbetter costs. The catalyst idea. The drive and energy and imagination: thenights and days (in the lab until 2 A.M. night after night) and finally thebeginning of a new business.… It is quite a story.
(Later I got a rather different perspective on Lilienthal’sreactions to the transition from government to business bytalking to the man he had described as his “business fatherconfessor,” Nathan Greene. “What happens to a man wholeaves top-level government work and comes to Wall Street asa consultant?” Greene asked me rhetorically. “Well, usually it’s abig letdown. In the government, Dave was used to a sense ofgreat authority and power—tremendous national andinternational responsibility. People wanted to be seen with him.
Foreign dignitaries sought him out. He had all sorts offacilities—rows of buttons on his desk. He pushed them, andlawyers, technicians, accountants appeared to do his bidding. Allright, now he comes to Wall Street. There’s a big welcomingreception, he meets all the partners of his new firm and theirwives, he’s given a nice office with a carpet. But there’s nothingon his desk—only one button, and all it summons is asecretary. He doesn’t have perquisites like limousines.
Furthermore, he really has no responsibility. He says to himself,‘I’m an idea man, I’ve got to have some ideas.’ He has some,but they’re not given much attention by the partners. So theoutward form of his new work is a letdown. The same with itscontent. In Washington, it had been development of naturalresources, atomic energy, or the like—world-shaking things. Nowit turns out to be some little business to make money. It allseems a bit petty.
“Then, there’s the matter of money itself. In the government,our hypothetical man didn’t need it so badly. He had all theseservices and the basic comforts supplied him at no personalcost, and besides he had a great sense of moral superiority.
He was able to sneer at people who were out making money.
He could think of somebody in his law-school class who wasmaking a pile in the Street, and say, ‘He’s sold out.’ Then ourman leaves government and goes to the Wall Street fleshpotshimself, and he says, ‘Boy, am I going to make these guys payfor my services!’ They do pay, too. He gets big fees forconsulting. Then he finds out about big income taxes, how hehas to pay most of his income to the government now insteadof getting his livelihood from it. The shoe is on the other foot.
He may—sometimes he does—begin to scream ‘Confiscation!,’
just like any old Wall Streeter.
“How did Dave handle these problems? Well, he had histroubles—after all, he was starting a second sort of life—but hehandled them just about as well as they can be handled. Hewas never bored, and he never screamed ‘Confiscation!’ Hehas a great capacity for sinking himself in something. Thesubject matter isn’t so important to him. It’s almost as if hewere able to think that what he’s doing is important, whether itis or not, simply because he’s doing it. His ability wasinvaluable to Minerals & Chemicals, and not just as anadministrator. Dave is a lawyer, after all; he knows more aboutcorporate finances than he likes to admit. He enjoys playingthe barefoot boy, but he’s hardly that. Dave is an almostperfect example of somebody who kept his independence whilegetting rich on Wall Street.”)One way and another, then—reading through these ambivalentprotestations in the journal, and later hearing Greene—I seemedto detect under the exuberance and the absorption a naggingsense of dissatisfaction, almost of compromise. For Lilienthal, theobviously genuine thrill of having a new kind of experience, andan almost unimaginably profitable one, had been, I sensed, arose with a worm in it. I went back up to the living room.
There I found Lilienthal fiat on his back on the Shah’s rugunderneath a pile of pre-school-age children. At least, it lookedat first glance like a pile; on closer inspection I found that itconsisted of just two boys. Mrs. Lilienthal, who had returnedfrom the garden, introduced them as Allen and DanielBromberger, sons of the Lilienthals’ daughter, Nancy, andSylvain Bromberger, adding that the Brombergers were livingnearby, since Sylvain was teaching philosophy at the university.
(A few weeks later, Bromberger moved on to the University ofChicago.) The Lilienthals’ only other offspring, David, Jr., livedin Edgartown, Massachusetts, where he had settled down tobecome a writer, as he subsequently did. In response to theurging of the senior Lilienthals, the grandchildren climbed offtheir grandfather and disappeared from the room. When thingswere normal again, I told Lilienthal my reaction to the entries Ihad read in the journal, and he hesitated for a while beforespeaking. “Yes,” he said, finally. “Well, one thing—it wasn’tmaking all that money that worried me. That didn’t make mefeel either good or bad, by itself. In the government years,we’d always paid our bills, and by scrimping we’d been able tosave enough to send the kids to college. We’d never thoughtmuch about money. And then making a lot of it, making amillion—I was surprised, of course. I’d never especially aimed atthat or thought it might happen to me. It’s like when you’re aboy and you try to jump six feet. Then you find you canjump six feet, and you say, ‘Well, so what?’ It’s sort ofirrelevant. Over the past few years, a lot of people have said tome, ‘How does it feel to be rich?’ At first, I was kind ofoffended—there seemed to be an implied criticism in thequestion—but I’m over that. I tell them it doesn’t feel anyspecial way. The way I feel is—But this is going to soundstuffy.”
“No, I don’t think it’s stuffy,” said Mrs. Lilienthal, anticipatingwhat was coming.
“Yes, it is, but I’m going to say it anyway,” said Lilienthal. “Idon’t think money makes much difference, as long as you haveenough.”
“I don’t quite agree,” said Mrs. Lilienthal. “It doesn’t makemuch difference when you’re young. You don’t mind then, aslong as you can struggle along. But as you get older, it ishelpful.”
Lilienthal nodded in deference to that. Then he said that hethought the undertone of dissatisfaction I had noticed in thejournal probably stemmed, at least in part, from the fact thathis career in private business, absorbing though it was, did notbring with it the gratifications of public-service work. True, hehad not been deprived of them entirely, because it was at theheight of his Minerals & Chemicals operations, in 1954, that hefirst went to Colombia, at the request of that country’sgovernment, and, serving as a peso-a-year consultant, startedthe Cauca Valley project that was later continued by theDevelopment & Resources Corporation. But for the most partbeing a top officer of Minerals & Chemicals had kept himpretty well tied down, and he’d had to regard the Colombiawork as a sideline, if not merely a hobby. I found it impossibleto avoid seeing symbolic significance in the fact that theprincipal material with which Lilienthal the businessman hadbeen engaged was—clay.
I thought of something else in Lilienthal’s life at that time thatmight have taken some of the kick out of the process ofbecoming a successful businessman. His “Big Business” bookhad come out when he was in the thick of the Minerals &Chemicals work. I wondered whether, since it is such anuncritical paean to free enterprise, it had been construed bysome people as a rationalization of his new career, and I askedabout this.
“Well, the ideas in the book were rather a shock to some ofmy husband’s New Deal friends, all right,” Mrs. Lilienthal said,a bit dryly.
“They needed shocking, damn it!” Lilienthal burst out. Hespoke with some heat, and I thought of the phrase in hisjournal—used there in an entirely different context but still inreference to himself—about defensiveness shown by belligerence.
After a moment, he went on, in a normal tone, “My wife anddaughter thought I didn’t spend enough time working on thebook, and they were right. I wrote it in too much of a hurry.
My conclusions aren’t supported by enough argument. For onething, I should have spelled out in more detail my opposition tothe way the antitrust laws are administered. But the anti-trustpart wasn’t the real trouble. The thing that really shook upsome of my old friends was what I said about big industry inrelation to individualism, and about the machine in relation toaesthetics. Morris Cooke, who used to be administrator of theRural Electrification Administration—he was one who wasshaken up. He took me apart over the book, and I took himapart back. The anti-bigness dogmatists stopped having anythingto do with me. They simply wrote me off. I wasn’t hurt ordisappointed. Those people are living on nostalgia; they lookbackward, and I try to look forward. Then, of course, therewere the trust busters. They really went after me. But isn’ttrust busting, in the sense of breaking up big companies simplybecause they’re big, pretty much a relic of a past era? Yes, Istill think I was right in the main things I said—perhaps aheadof my time, but right.”
“The trouble was the timing,” Mrs. Lilienthal said. “The bookcame so close to coinciding with my husband’s leaving publicservice and going into private business. Some people thought itrepresented a change in point of view induced by expediency.
Which it didn’t!”
“No,” Lilienthal said. “The book was written mostly in 1952,but all the ideas in it were hatched while I was still in publicservice. For example, my idea that bigness is essential fornational security came in large part out of my experiences inthe A.E.C. The company that had the research andmanufacturing facilities to make the atomic bomb an operationalweapon, so engineered that it wouldn’t require Ph.D.s to use itin the field—Bell Telephone, to be specific—was a big company.
Because it was so big, the Anti-Trust Division of theDepartment of Justice was seeking to break the Bell Systeminto several parts—unsuccessfully, as it turned out—at the verytime we in the A.E.C. were calling on it to do a vital defensejob that required unity. That seemed wrong. More generally,the whole point of view I expressed in the book goes wayback to my quarrel with Arthur Morgan, the first T.V.A.
chairman, in the early thirties. He had great faith in ahandicraft economy, I was for large-scale industry. T.V.A., afterall, was, and is, the biggest power system in the free world. InT.V.A. I always believed in bigness—along with decentralization.
But, you know, the chapter I hoped would produce the mostdiscussion was the one on bigness as a promoter ofindividualism. It did produce discussion, of a sort. I rememberpeople—academic people, mostly—coming up to me withincredulous expressions and saying something that started with‘Do you really believe …’ Well, my answer would start with‘Yes, I really do believe …’”
One other touchy matter that Lilienthal may have questionedhimself about in the process of making his Wall Street fortunewas the fact that in making it he had not really needed toscream “Confiscation,” since he had made it through a taxloophole, the stock option. Possibly there have been liberal,reformist businessmen who have refused to accept stockoptions on principle, although I have never heard of one doingso, and I am not convinced that such a renunciation would bea sensible or useful form of protest. In any event, I didn’t askLilienthal about the matter; in the absence of any acceptedcode of journalism every journalist writes his own, and in mine,such a question would have come close to invasion of moralprivacy. In retrospect, though, I almost wish I had violated mycode that one time. Lilienthal, being Lilienthal, might haveobjected to the question strenuously, but I think he would haveanswered it equally strenuously, and without hedging. As thingswere, after discoursing on the critical reactions to his book, “BigBusiness,” he got up and walked to a window. “I see Domenichas been pretty cautious about his rose-pruning,” he said to hiswife. “Maybe I’ll go out later and cut them back some more.”
His jaw was set in a way that made me feel pretty sure Iknew how the rose-pruning controversy was going to beresolved.
THE triumphant solution to Lilienthal’s problem—the way that heeventually found to have his cake and eat it—was theDevelopment & Resources Corporation. The corporation aroseout of a series of conversations between Lilienthal and Meyerduring the spring of 1955, in the course of which Lilienthalpointed out that he was well acquainted with dozens of foreigndignitaries and technical personnel who had come to visit theT.V.A., and said that their intense interest in that projectseemed to indicate that at least some of their countries wouldbe receptive to the idea of starting similar programs. “Our aimin forming D. & R. was not to try to remold the world, or anylarge part of it, but only to try to help accomplish some ratherspecific things, and, incidentally, make a profit,” Lilienthal toldme. “André was not so sure about the profit—we both knewthere would be a deficit at first—but he liked the idea of doingconstructive things, and Lazard Frères decided to back us, inreturn for a half interest in the corporation.” Clapp, who wasserving at the time as deputy New York City administrator,came in as co-founder of the venture, and the subsequentexecutive appointments made D. & R. virtually a T.V.A. alumniassociation: John Oliver, who became executive vice-president,had been with T.V.A. from 1942 to 1954, ending up as itsgeneral manager; W. L. Voorduin, who became director ofengineering, had been with T.V.A. for a decade and hadplanned its whole system of dams; Walton Seymour, whobecame vice-president for industrial development, had been aT.V.A. consultant on electric-power marketing for thirteen years;and a dozen other former T.V.A. men were scattered on downthrough the ranks.
In July, 1955, D. & R. set up shop at 44 Wall, and set towork finding clients. What was to prove its most important onecame to light during a World Bank meeting in Istanbul thatLilienthal and his wife attended in September of that year. Atthe meeting, Lilienthal fell in with Abolhassan Ebtehaj, thenhead of a seven-year development plan in Iran; as it happened,Iran was just about the ideal D. & R. client, since, for onething, the royalties on its nationalized oil industry gave itconsiderable capital with which to pay for the development ofits resources, and, for another, what it desperately needed wastechnical and professional guidance. The encounter with Ebtehajled to an invitation to Lilienthal and Clapp to visit Iran as theguests of the Shah, and see what they thought could be doneabout Khuzistan. Lilienthal’s employment contract with Minerals& Chemicals ended that December; although he stayed on as adirector, he was now free to devote all his time, or nearly allof it, to D. & R. In February, 1956, he and Clapp went toIran. “Before then, I blush to say, I had never heard ofKhuzistan,” Lilienthal told me. “I’ve learned a lot about it sincethen. It was the heart of the Old Testament Elamite kingdomand later of the Persian Empire. The ruins of Persepolis arenot far away, and those of Susa, where King Darius had hiswinter palace, are in the very center of Khuzistan. In ancienttimes, the whole region had an extensive water-conservationsystem—you can still find the remains of canals that wereprobably built by Darius twenty-five hundred years ago—butafter the decline of the Persian Empire the water system wasruined by invasion and neglect. Lord Curzon described whatthe Khuzistan uplands looked like a century ago—‘a desert overwhich the eye may roam unarrested for miles.’ It was that waywhen we got there. Nowadays, Khuzistan is one of the world’srichest oil fields—the famous Abadan refinery is at its southerntip—but the inhabitants, two and a half million of them, haven’tbenefited from that. The rivers have flowed unused, thefabulously rich soil has lain fallow, and all but a tiny fraction ofthe people have continued to live in desperate poverty. WhenClapp and I first saw the place, we were appalled. Still, for twoold T.V.A. hands like us, it was a dream; it was simply cryingout for development. We looked for sites for dams, likely spotsto hunt for minerals and make soil-fertility studies, and so on.
We saw flares of natural gas rising from oil fields. That waswaste, and it suggested petrochemical plants, to use the gas formaking fertilizer and plastics. In eight days we’d roughed out aplan, and in about two weeks D. & R. had signed a five-yearcontract with the Iranian government.
“That was only the beginning. Bill Voorduin, our chiefengineer, flew out there and spotted a wonderful dam site at aplace just a few miles from the ruins of Susa—a narrowcanyon with walls that rise almost vertically from the bed of theDez River. We found we were going to have to manage theproject as well as advise on it, and so our next job was liningup our managerial group. To give you some idea of the size ofthe project, right now there are about seven hundred peopleworking on it at the professional level—a hundred Americans,three hundred Iranians, and three hundred others, mostlyEuropeans, who work directly for firms under subcontracts.
Besides that, there are about forty-seven hundred Iranianlaborers. Over five thousand people, all told. The entire planincludes fourteen dams, on five different rivers, and will takemany years to finish. D. & R. has just completed its firstcontract, for five years, and signed a new one, for a year anda half, with option to renew for another five years. Quite a bithas been accomplished already. Take the first dam—the Dezone. It’s to be six hundred and twenty feet high, or more thanhalf again as high as the Aswan, in Egypt, and it will eventuallyirrigate three hundred and sixty thousand acres and generatefive hundred and twenty thousand kilowatts of electricity. Itshould be finished early in 1963. Meanwhile, a sugarplantation—the first in Khuzistan in twenty-five centuries—hasbeen started, with irrigation by pumped water; it should yieldits first crop this summer, and a sugar refinery will be readyby the time the sugar is. Another thing: eventually the regionwill supply its own electric power from the dams, but for theinterim period a high-tension line, the first anywhere in Iran,has been put in over the seventy-two miles from Abadan toAhwaz—a city of a hundred and twenty thousand thatpreviously had no power source except half a dozen littlediesels, which seldom worked.”
While the Iranian project was proceeding, D. & R. was alsobusy lining up and carrying out its programs for Italy,Colombia, Ghana, the Ivory Coast, and Puerto Rico, as well asprograms for private business groups in Chile and thePhilippines. A job that D. & R. had just taken on for theUnited States Army Corps of Engineers excited Lilienthalenormously—an investigation of the economic impact of powerfrom a proposed dam on the Alaskan sector of the Yukon,which he described as “the river with the greatest hydroelectricpotential remaining on this continent.” Meanwhile, Lazard Frèresretained its financial interest in the firm and now very happilycollected its share of a substantial annual profit, and Lilienthalhappily took to teasing Meyer about his former skepticism as toD. & R. financial prospects.
Lilienthal’s new career had meant a highly peripatetic life bothfor him and for Mrs. Lilienthal. He showed me hisforeign-travel log for 1960, which he said was a fairly typicalyear, and it read as follows:
January 23-March 26: Honolulu, Tokyo, Manila; Iligan, Mindanao;Manila, Bangkok, Siemreap, Bangkok; Tehran, Ahwaz, Andimeshk, Ahwaz,Tehran; Geneva, Brussels, Madrid; home.
October 11–17: Buenos Aires; Patagonia; home.
November 18–December 5: London, Tehran, Rome, Milan, Paris, home.
Then he went and got the volume of his journal that relatesto those trips. Turning to the pages on his stay in Iran earlylast spring, I was particularly struck by a few excerpts:
Ahwaz, March 5: The cry of the Arab women as the Shah’s big blackChrysler passed them, a solid row along the road from the airport, mademe think of the rebel yell; then I recognized it: it was the Indian yelp, thekind we used to make as kids, moving our hand over our mouths to givethat undulating wail.
Ahwaz, March 11: Our experience in the villagers’ huts on Wednesdaythrew me into a deep pit. I hovered between despair—which is an emotionI consider a sin—and anger, which doesn’t do much good, I suppose.
Andimeshk, March 9: … We have travelled many miles, through dust,mudholes where we got stuck fast, and some of the roughest “roads” Ihave ever known—and we also travelled back to the ninth century, andearlier, visiting villages and going into mud “homes” quite unbelievable—andunforgettable forever and ever. As the Biblical oath has it: Let my righthand wither if I ever forget how some of the most attractive of my fellowhuman beings live—are living tonight, only a few kilometres from here,where we visited them this afternoon.…And yet I am as sure as I am writing these notes that the Ghebli area,of only 45,000 acres, swallowed in the vastness of the Khuzistan, willbecome as well known as, say, the community of Tupelo … became, orNew Harmony or Salt Lake City when it was founded by a handful ofdedicated men in a pass of the great Rockies.
The afternoon shadows were getting long on Battle Road, andit was time for me to be going. Lilienthal walked out to my carwith me, and on the way I asked him whether he ever missedthe rough-and-tumble, and the limelight, of being perhaps themost controversial man in Washington. He grinned, and said,“Sure.” When we reached the car, he went on, “I neverintended to be especially combative, in Washington or in theTennessee Valley. It was just that people kept disagreeing withme. But, all right, I wouldn’t have put myself in controversialsituations so much if I hadn’t wanted to. I guess I wascombative. When I was a kid, I was interested in boxing. Athigh school—in Michigan City, Indiana—I boxed a lot with acousin of mine, and while I was in college, at DePauw, incentral Indiana, I took to boxing during the summers with aman who had been a professional light-heavyweight. TheTacoma Tiger, he’d been called. Working out with him was achallenge. If I made a mistake, I’d be on the floor. I wantedjust once to land on him good. It was my ambition. I neverdid, of course, but I got to be a fairly good boxer. I becameboxing coach at DePauw while I was an undergraduate. Lateron, at Harvard Law, I didn’t have time to keep it up, and Inever boxed seriously again. But I don’t think that for meboxing was an expression of combativeness for its own sake. Ithink I considered competence at defending yourself a means ofpreserving your personal independence. I learned that from myfather. ‘Be your own man,’ he used to say. He’d come fromAustria-Hungary, the part that’s now eastern Czechoslovakia, inthe eighteen-eighties, when he was about twenty, and he spenthis adult life as a storekeeper in various Middle Western towns:
Morton, Illinois, where I was born; Valparaiso, Indiana;Springfield, Missouri; Michigan City and, later, Winamac, Indiana.
He had very pale-blue eyes that reflected the insides of him.
You could tell by looking at him that he wouldn’t tradeindependence for security. He didn’t know how to dissemble,and wouldn’t have wanted to if he had known how. Well, toget back to my being controversial, or combative, or whateveryou call it, in Washington—yes, there’s something missing whenyou don’t have a McKellar laying it on the line any more. Themoral equivalent of that for me now is taking on challenges,different kinds of McKellars or Tacoma Tigers, maybe—theMinerals & Chemicals thing, the D. & R. thing—and trying tomeet them.”
I revisited Lilienthal in early summer, 1968, this time at D. &R.’s third home office, a suite with a splendid harbor view at IWhitehall Street. Both D. & R. and he had moved along in theinterim. In Khuzistan, the Dez Dam had been completed onschedule; water impounding had begun in November, 1962, thefirst power had been delivered in May, 1963, and the regionwas now not only supplying its own power but producingenough surplus to attract foreign industry. Meanwhile,agriculture in the once-barren region was flourishing as a resultof irrigation made possible by the dam, and, asLilienthal—sixty-eight now, and as combative as ever—put it,“The gloomy economists have to be gloomy about some otherunderdeveloped country.” D. & R. had just signed a newfive-year contract with Iran to carry on the work. Otherwise,the firm had expanded its clientele to include fourteencountries; its most controversial undertaking was in Vietnam,where, under contract with the United States government, itwas cooperating with a similar group of South Vietnamese inworking up plans for the postwar development of the MekongValley. (This assignment had led to criticism of Lilienthal bythose who took it to imply that he supported the war; in fact,he told me, he regarded the war as the disastrous outcome ofa series of “horrible miscalculations,” and the planning ofpostwar resources development as a separate matter. It wasclear enough, nevertheless, that the criticism hurt. At the sametime, D. & R. was widening its horizons by beginning to move,unexpectedly, into domestic urban development, having beenengaged by private foundation-sponsored groups in QueensCounty, New York and Oakland County, Michigan to seewhether the T.V.A. approach might have some value in dealingwith those modern deserts, the slums. “Just pretend this isZambia and tell us what you would do,” these groups had said,in effect, to D. & R.—a wildly imaginative idea, surely, theusefulness of which remained to be proved.
As for D. & R. itself and its place in American business,Lilienthal recounted that since I had seen him it had expandedto the extent of opening a second permanent office on theWest Coast, had considerably increased its profits, and becomeessentially employee-owned, with Lazard retaining only a tokeninterest. Most encouraging of all, at a time when old-linebusiness was having serious recruitment problems because itsobsession with profit was repelling high-minded youth, D. & R.
found that its idealistic objectives made it a magnet for themost promising new graduates. And as a result of all thesethings, Lillienthal could at last say what he had not been ableto say on the earlier occasion—that private enterprise was nowaffording him more satisfaction than he had ever derived frompublic service.
Is D. & R., then, a prototype of the free enterprise of thefuture, accountable half to its stockholders and half to the restof humanity? If so, then the irony is complete, and Lilienthal, ofall people, ends up as the prototypical businessman.
* For a detailed discussion of stock options, see p. 101.
* This part of Lilienthal’s journal was eventually published, in 1966.