Wednesday, October 3, 2012

Businessman William C. Whitney

By George L. Fielder

William C. Whitney
Three hundred years of the most rapid progress in all lines of human activity separate us from the day when d'Ar­tagnan, an awkward, half-grown youth, astride his haggard yellow pony, rode into the city of Meung amid the laughter of the citizens. The Three Musketeers of Dumas rode and fought in the period when war was an elegant art. In our day, business is the most highly developed of arts; our heroes fight with stocks and properties, and they ride in steam yachts or in private cars. Epics are done in syndicating the bowels of the earth; romances may be read in the handling of public commodities. Thus we have our Ulysses and our Achilles handling the yield of the earth, and in railways our Musketeers. And of the last in charm above them all stands d'Artagnan, the man who does business as the other fought, daringly, astutely and picturesquely, but always with the greatest possible pleasure in the task. This man is William C. Whitney.

And yet Mr. Whitney's real business career did not begin until he was forty-five years old.

Today he is fifty-nine. He was born at Conway, Massachusetts, July 15, 1841. His parents were descendants of the earliest Puritans, and his father was Brigadier-General James Scolley Whitney. The family was well-to-do, and both sons were sent to Yale. The people of Conway used to say of these boys that they were sure to amount to something, although William C. was quite a puzzle to them. He was only eighteen when he entered Yale, where he gave tokens of the characteristics that have stood out prominently in his business achievements.



He was essentially a man of peace; nobody knew him ever to threaten or malign an enemy. But he fought him just the same, only shrewdly without exposing himself, and to a finish. He was then, as always since and with deeper effect, a prince of indirec­tion. He boxed and rowed while at college, but did not gain any particular distinction in athletics. He was not a hard student. In fact, that certain confident indolence of the make-up man is a marked feature of his make-up. Yet he was brilliantly successful in his studies, and was elected class orator. On presentation day he shocked the conserva­tive by reading his oration. It was a bold thing to do, especially at Yale, where prece­dents are rigid. William C. Whitney ven­tured this stroke on the impulse of two peculiar motives: his daring initiative and his dislike to be at the pains of memorizing his oration.

The taste of success in athletics that William C. Whitney enjoyed would seem to have inspired the interest he is believed to have taken in guiding his son Payne's atten­tion to athletics while at Yale. Shortly after Bob Cook, the Yale coach, ceased to be publisher of the New York Commercial Advertiser he secured a post with the Metro­politan Street Railway Company. About this time Payne Whitney was elected captain of the Varsity crew. In some small minds this coincidence gave rise to criticism which is too trifling to recall. After a year at the Harvard Law School William C. Whitney came to New York and was admitted to the bar. He did not have much money, and as a young, briefless lawyer he had but few influ­ential friends. He set out at once to make both friends and opportunities. He first struck a matter of value to the projects of Jay Gould. In his own way, Whitney secured an audience with Jay Gould and made plain his proposition. Jay Gould agreed with him, and from that time Whitney held a certain financial influence in this direction. In poli­tics, also, he sought to make his way. He joined Tammany Hall and became a success­ful organizer of Democratic clubs. A young man who worked with him at this time, as a lieutenant, very unwillingly acted as a can­vasser in booming these clubs. In speaking of the matter after twenty years, this man said:

"I didn't want to do that work —I hated it. But Whitney made me do it. I don't know just how, but I did what he wanted, and was glad to do it to please Whitney."

Mr. Whitney's Country House at Westbury, Long Island

As time went on, Whitney be­came more of a force in the party, and when Samuel J. Tilden began his fa­mous fight on Boss Tweed, Whitney proved an invaluable ally. His loyal­ty in this fight made sure for him the lasting friendship and the backing of Tilden. You can see now just how unerring Whitney has been in his faculty for picking the right man to do the right thing. In these days, of course, he had no commissions to bestow, only services to seek. The bril­liant young lawyer who got to his back such a pair as Jay Gould in finance and Samuel J. Tilden in politics could move only one way, and that was ahead. The first notable ad­vance Whitney made, the advance that al­lowed him the opportunity to prove his mettle, came to him when he was thirty-four years old. This is a fact important to re­member when you hear stories of the mar­velous success of young men. William C. Whitney hustled about New York during twelve long, hard years before he got room to swing his powers at the full. In 1875 he was appointed Corporation Counsel of the City of New York. In parenthesis, it may be remarked that he has never held an elec­tive office. He has never had to go before the people to win votes. This is in keeping with his plan of indirection. The office of Corporation Counsel, of all municipal posts, is perhaps, that requiring the most thorough training and the most rare ca­pacity. Most of the men who knew Whitney admitted his brilliant qualifi­cations as a law­yer, but few sus­pected his won­derful talent for organization. When he took office the affairs of the depart­ment were in a tangle apparent­ly hopeless. He plunged into the chaos as fearlessly as d'Ar­tagnan used to parry and thrust with two foes or five,  according to the number of fighting men that happened to be in range of his sword. He weeded out of the bureaus those men that he judged to be weeds, and with his persua­sive persistency, in his own inimitable way, he got more work out of the efficient men than they had ever done before. And he kept things at white heat for seven years. When he went into office there were 3,800 suits pending, involving $40,000,000. He cleared up this deadwood in a year, and in two he had doubled the business of the de­partment and saved the city $2,000,000.
  
Even for a successful politician, the next jump that Whitney made was a record smasher. It landed him as Secretary of the Navy of Cleveland's Cabinet in 1885. Cleve­land is reported to have said on this subject that even he himself did not know how Whitney managed to get in. Once in the Cabinet, however, Whitney began to show his right to be there. His executive capacity and his knack of picking men were again in evidence, and the result of his four years of office became immortal in the creation of the White Squadron. Naturally, there are some who refuse to give the credit of inaug­urating our new navy to Whitney. A man well known in Wall Street, who in a way is a competitor of Whitney and has known him familiarly for a long time, was spoken to on this matter.

"Whitney responsible for the White Squad­ron?" he said, quickly. "Not at all. William E. Chandler is the man that deserves the credit."

It is true that Whitney was severely criti­cized by the Board of Naval Construction for having accepted certain plans from for­eign shipbuilders. The recollection of this episode led the talk over to an opinion of Whitney's judgment.

"I once spoke on this very point with Mr. Whitney himself," said my informant, "and I'll tell you what I told him.

" 'Mr. Whitney,' I said, 'your off-hand judgment is no better than any other man's; but your mature judgment is better than that of almost any other man I know.' "

Confident that the speaker was intimately acquainted with both characters, I inquired whether, as a man of big affairs, Whitney did not move a great deal more swiftly than J. Pierpont Morgan.

"What!" he exclaimed. "Why, my dear sir, Mr. Whitney is a snail. Mr. Morgan is an eagle."

In curious contrast is the utterance of another man, who has had perhaps a more extended intimacy with Whitney.

"What do you consider to be Mr. Whit­ney's most valuable power?" was the ques­tion put to this man.
"His ability to decide a thing while the other man is thinking about it," was the unhesitating reply, "and the fact that be­fore the other man has made up his mind, Mr. Whitney has acted."

House of Mr. Whitney, at Newport

The remarkable thing about William C. Whitney is that his business career began only after he left Washington and when he was ­forty-five years of age. He was now done with politics, apparently. In truth, he has never been out of politics for a month of his life since he came to New York. His influence with Richard Croker is said to be as great as any that the Prophet of Tammany Hall in­clines to; and if, for any reason, it should happen that Whitney and Tammany Hall came to daggers' points, the stock of the Metropolitan Street Railway would be dropped like a hot potato. When Whitney was appointed Secretary of the Navy, Tammany had no bitterer foe than Grover Cleve­land. Towards the close of this administra­tion it used to be said that the government was under the control of Tammany Hall. Cleveland is reported to have uttered these words to Charles S. Fairchild:

"I'm on to Whitney and his tricks, and don't want any more of him."

The methods of the men are diametrically opposed. Cleveland hews his way through opposition by main force, toppling over all that bars progress. Whitney, on the con­trary, builds a bridge over obstacles, or, more frequently, digs a tunnel under them and suddenly reappears to view on the ad­vantageous side. It is only natural that Whitney should be subject to criticism. We have nothing but suspicion for strategy not her own.

As Whitney's public reputation is most closely related to his control of the street railways of New York, we can afford to pass over his dealings in whiskey and tobacco. When he returned to New York in 1886 the street railways of the metropolis were per­haps the most unprogressive in the United States. As soon as he took hold of the Broadway surface road he replaced the an­cient, ramshackle cars with cars of new and almost elegant design. He recognized from the beginning the common-sense principle that so many corporations and directors of corporations ignore, which is, that the bet­ter the service given to the public the heavier the dividends paid on the investment. But he did not stop here. He began to investi­gate the cable system of surface roads in other cities. He found that while it cost 18.98 cents per car mile to run horse cars, cable roads cost only 17.76 cents. He had no sooner reached this decision than he introduced cable traction. But he went right on investigating, for the impulse of Whitney is always to have an eye on the to­morrow of things. His cable cars were larger and of costlier fittings than any others in the country. Realizing that the only chance many people have to read news­papers is while they are in the cars, he put in the Pintsch system of lighting, which was as much of an improvement on the oil lamp as the lamp was on the original tallow dip. Then he inaugurated the transfer system by which a passenger can ride all around New York for five cents. Railway people laughed at him and made all kinds of prophecies about the folly of the innovation. But the transfer system proved to be the right thing and has since been adopted by other lines. Last year the Metropolitan Railway took in ninety-nine million transfers. His next dis­covery was that while his cable traction cost 17.76 cents per car mile, electric trac­tion would cost only 13.16 cents per car mile. Then he began to change the entire system to electric traction. The wisdom of Whitney's progressive methods is evidenced in the steady increase of the net earnings of the surface roads as compared with the de­clining receipts of the elevated railroads over a period of years. In his handling of the street railways, Whitney again showed his marvelous faculty for selecting men. The man he chose to carry out this enterprise was H. H. Vreeland.

Group of Mr. Whitney's Jockeys and Stable Boys

Vreeland's career is as dramatic as a play. He began as a section man on the Long Island Railroad, became a brakeman and then got employment on what is now known as the Putnam Road. One day Whitney was making a tour of inspection on this railroad with other directors. He began to question the officials of the Company on details of the road's business. To almost every ques­tion, they replied lamely, "Guess you'd bet­ter ask Vreeland about that."

"Who is Vreeland?" said Whitney.

"He's the conductor."

Vreeland was sent for, and Whitney found him a tall, raw-boned man with a square jaw and fine, regular white teeth, which showed continually while he answered a rapid fire of questions.

Whitney hadn't talked with him fifteen minutes when he had him marked. Sometime later Vreeland received a telegram from Whitney asking him to be at the office of the Broadway and Seventh Avenue Railroad that day at two o'clock. There was no train on the schedule which would get him into New York in time to make the appointment. But by this time he was Assistant General Manager and had pull enough to order a special train. He reached the office on time. He had been waiting for quite a while when a clerk came up to him and asked, "Are you Mr. Vreeland?"

"That's my name," said Vreeland. "Well, Mr. Whitney is waiting for you inside."

Vreeland was taken in and introduced to the Board of Directors of the West Hous­ton Street and Pavonia Ferry Railway, who had just elected him president to fill the vacancy caused by the resignation of John Crimmins. The street lines included in this road were all badly equipped and poorly handled. It was a question of reconstruc­tion that just appealed to Vreeland because, it was difficult. He grasped the situation at once and within a few months had the prop­erty moving in the right direction. In speaking to one of his associates at this time, he said: "I'd rather do this than make money." But the making of money was not far off.

Today Vreeland is president of the Metropolitan Street Railway and is consid­ered the highest authority on surface trac­tion in this country.

Mr. Whitney's Private Race Track, and Stables at Westbury.

Then there was George B. M. Harvey. Whitney had gained control of all the main arteries of surface traction excepting the Third Avenue line. He began maneuvers to secure that. Planning to beat the price of the stock down, be made a newspaper campaign and picked Harvey as his press agent. Harvey was then managing editor of The World on a small salary. Today he is worth probably half a million, and is owner of the North American Review, but strangely enough, has gone over to the Morgan camp. Meanwhile, Whitney had banged Third Ave­nue so effectively that the price of the stock had been cut in two. All this time Vreeland had been studying the property. When it was placed in the hands of a receiver, Vree­land secured access to the statements, which he ate up in short order. After a day or two of digestion he said to his chief:

"Now, Mr. Whitney, is the time to buy."

And "Buy" was the slogan for all insiders.

With characteristic finesse, the Whitney crowd worked the market both ways. Some of the shrewdest men in the street thought that the Whitney people were selling. But no one seemed to know what was going on.

It was a smooth deal. The Whitney people bought the road at a lower price than they had previously offered to the owners. They got in at about 55, and now the stock is quoted at 112. In testimony of their appreciation of Vreeland's work in this deal, the Whitney syndicate sent him a check for $100,000, which they could well afford to do.

As far as can be learned, Whitney's next deals will be Brooklyn Rapid Transit and the Manhattan Elevated. This is a natural and logical sequence to what the Whitney people have already done successfully in street railways. They have given a more satisfac­tory service to the public at a less price than was ever before attempted in the metropolis.

The Whitney people have been so much more progressive than the Manhattan Elevated people. Every improved facility on the Elevated has been wrung from those in author­ity either by legislative enactment or through a public expression of public opinion so strongly expressed as to convince a soulless corporation that that thing was the only thing to be done. Whitney, on the contrary, has anticipated public demands, and has more than met the public half way.

Mr. Harry Payne Whitney and His Four-in-hand
Whitney's motor carriage enterprise is the outcome of his studies in electrical transportation. He realized that surface railways could not cover all streets and that the motor vehicle, not requiring any track, must supply this deficiency. After consider­ation he reached out for the motor patents of the Pope Manufacturing Company of Hartford, Connecticut. He bought all their patents for motor carriages. While nego­tiating in Hartford he discovered George H. Day. Mr. Day had directed the experiments in developing the Pope motor carriage and was Vice-president of the Pope Manufact­uring Company. This affords another exam­ple of Whitney's unerring judgment of men. Mr. Day is the king-pin in Whit­ney's motor carriage en­terprise.

While carrying out his idea of the possibilities of electricity, Mr. Whitney, as owner of enormous power houses in New York City, had more of three commodities than he needed. These are electric power, electric heat and electric light; all three of which are used in moving, lighting and heating his surface cars. Naturally, he desired to sell any excess beyond his own needs for the purpose of public heat and public light. But at this point he crossed the path of the Standard Oil Company, for they also are in business to sell heat and to sell light. The result was a Cyclopean tussle for control of present lighting and heating companies, which brought on the big December fight of last year. Everyone remembers the mysterious Wall street panic of last Decem­ber, when call money shot up to 186 per cent, and J. Pierpont Morgan, to protect his own interests, made one of his infrequent but dramatic visits to the floor of the Stock Ex­change. This was when Mr. Morgan offered to loan $1,000,000 at six per cent, which broke the abnormally high rate for call money.

The inside story of last December has never been told, but it is believed that Whitney did not come out as the top­notcher. One from the opposition camp made the remark at dinner recently:

"Why, Mr. Whitney found himself in the position of Davy Crockett's coon, who said, `Don't shoot, Mr. Crockett, I'll come down.' "

A Wall Street magnate who ought to be in a position to know, when discussing the coon story, said, in a Pickwickian way:

"Why, that coon story can't be true, because Standard Oil did not prevent Mr. Whitney from going on the board of direc­tors with the gas people."

But this Wall Street magnate, sober as he is, has a few of the crowfoot lines around the eyes, which in most people indicate a sense of humor.

Since this fight Whitney seems to have pulled out from the thick of the scrimmage. One can almost imagine him saying to him­self:

"I am fifty-nine. I've fought hard all my life, and I've got a good deal of fun out of it—also a good deal of money. Now I'm going to take a rest and have some fun without fighting."

Today one of Mr. Whitney's offices is at his Fifth Avenue house and the other is a suite at the Waldorf-Astoria. He seldom goes down town.

William C. Whitney’s House,
 at Sixty-Eighth Street and Fifth Avenue.

Looking back on the life of William C. Whitney, two moral qualities stand salient: His willingness to divide in business and his humanity. He has never wanted the whole thing for himself. He has been steadfast to his friends. He has helped men of brains to the prosperity they deserved. In all his en­terprises he has arranged that the men who did the work got their full share of profits when profits came. With those who made money for Whitney he always saw to it that they made money for themselves. His human side is broad and profound. Whenever he could get others to do his work he paid them well to do it and spent the time gained in attention to the social side of living. He likes the opera. He has been prominent in society not for form's sake, but for the pleasure of intercourse with intelligent men and women. He is a good talker, democratic in his attitude, and he is known to be interested in people gen­erally. His new house at Sixty-eighth Street and Fifth Avenue is a museum of art. His house at Westbury, Long Island, is a unique example of scope and splendor in country life. Both places reflect the man's breadth of view. Big men want lots of room.

Next to society, his chief recreation is in horses. Of recent years, he has taken up the sport with increased ardor. He uses the same sweeping methods in his stables as in his business. He goes in to win, but is a cheerful loser. William C. Whitney and James R. Keene rival each other on the turf with all the intensity of their conflicts in finance. The competition is already be­queathed to their sons, Harry Payne Whit­ney and Foxhall Keene.

Mr. Whitney is known to have said so frequently in his life: "You fellows handle that and take the credit, too." In other words, he has always been a shedder, but his opulent open hand always seems to be a full hand. The more he sheds, the more he gets.

Each successive withdrawal from active participation in any enterprise has left some new lieutenant down town and given Mr. Whitney time up town to think and plan and work and play. His time now seems to be more taken with considerations of policy and personal gratifications. The most of his busi­ness hours are spent up town or in going to and from board meetings. Rogers, Morgan, Olcott and others who could be mentioned with them can generally be found at their offices in business hours. Whitney seems to feel that he can get a better perspective from Sixty-Eighth Street, his town head­quarters for business and pleasure.

From Ainslee’s Magazine, December 1900.