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The Millionaire Reformer
In the era of the Bull Moose, Progressivism became a party; the man behind Roosevelt was, of all things, a Morgan partner
February 1962 | Volume 13, Issue 2
Actually, Perkins was perfectly sincere in his Progressivism. As we shall see, he did have serious personal weaknesses as a political leader, but this suspicion of his motives reflects only the confusion, jealousy, fanaticism, and small-mindedness of other Progressive reformers. Fifty years old in 1912, he had begun his career at fifteen as a $25-a-month office boy in the vast corporate anthill of the New York Life Insurance Company. Although he lacked even the beginning of a high school education, he had demonstrated powers of salesmanship and management that won him a vice-presidency at thirty.
From insurance he moved on to corporate finance. So engaging and convincing was his personality that Pierpont Morgan offered him a partnership worth millions the first time they met. As right-hand man to Morgan, Perkins supervised the organization of the Northern Securities Company (the first great corporation attacked by Roosevelt under the Sherman Antitrust Act). He wrested control of the Louisville and Nashville Railroad from the grasp of John W. “Bet-you-a-million” Gates. He represented Morgan at the White House conference where the great coal strike of 1902 was settled. He was in the thick of the fight in which Morgan stopped the Wall Street panic of 1907, and he was Morgan’s man in U.S. Steel, where for years he was chairman of the all-powerful finance committee ( see “Charlie Schwab Breaks the Bank,” and “A Lion in the Street,” AMERICAN HERITAGE, April and June, 1957).
In 1902 Perkins also created the agricultural machinery “trust,” the International Harvester Company. In a brilliant maneuver he brought the principal owners of the four leading companies manufacturing farm machinery to New York. All of these men favored a merger, but personal rivalries in the intensely competitive harvester business had frustrated all their efforts to work out an agreement. Installing each group in a different hotel to discourage them from seeing one another, Perkins scurried back and forth settling the details of the new combination. Such was the eventual confidence of all parties in his fairness that when the final critical allotment of stock in the new corporation was made, the heads of the four companies simply signed their names to this statement addressed to Perkins: “We place in your hands the final determination of our appraisal values, special good will, scaling, etc., etc.” McCormicks and Deerings held the top offices, but Perkins was the real manager of the destinies of International Harvester for many years. It was prizes like this, the not unrewarded amenities of a partnership in the House of Morgan, that Perkins gave up when he set out as a crusader for reform.
Was it really so surprising? Perkins had always possessed, or, if you will, suffered from, a “do-good” streak. His father, an insurance man also, had been a social worker deeply involved in the management of boys’ reform schools. He developed in young George an interest in the Y.M.C.A. and in various religious organizations. To the Perkins family, selling insurance had been a way of performing a useful social service as well as making a good livelihood. Later, when Morgan first offered him the prospect of great wealth if he would enter the firm, Perkins actually turned him down. Only when the banker described the opportunities that the job would offer for dealing with the complex social and economic questions posed by the rise of giant corporations did Perkins lend a sympathetic ear.
Perkins’ experience in managing large businesses gave him a special interest in labor relations. At New York Life he had developed a pension and profit-sharing program for agency directors and salesmen. This program he greatly expanded in the steel and harvester companies. Recognizing long before the idea was common that the lack of contact and understanding between worker and employer was a prime cause of bad labor relations in big corporations, he tried to interest workers in buying stock in the companies that employed them. He developed a plan for U.S. Steel whereby a worker who invested $82.50 in a share of Steel Preferred cleared $125.0 in five years—and still owned the stock. Critics on the left charged that this was a subtle way of preventing the growth of unions. Perkins rejected the unions’ basic belief that there was a fundamental conflict of interest between capital and labor, but he was not unsympathetic to organized labor. At one point he suggested that a steelworker should be on the Board of Directors; it was all very advanced for the time.