Chapter 1: An American Family

Who were James P. Goodrich and his son, Pierre F. Goodrich? What about their family? No, they didn’t manufacture automobile tires. They were not related, at least not directly, to the B. F. Goodrich tire clan of Akron, Ohio. They were highly ambitious businessmen from Indiana, a breed emblematic of the American ideal that began with the Founding Fathers: men who possessed a vision of success and independence for themselves and their country and went out and worked hard to realize it.

It is understandable if you have never heard of them. Indeed, it would be surprising if you had. Both James and Pierre valued privacy. In James Goodrich’s case, this was highly unusual, because he had a public profile in politics during most of his life. As for Pierre, he eschewed attention even more than his father did. Just months before his death in 1973, Pierre told an interviewer, “I just never saw any need to have publicity. What good is publicity unless you plan to run for public office? And I never did.”1

Pierre was in many ways elusive, a person with a pattern of so little Edition: current; Page: [4] self-disclosure that even people who “knew him” were puzzled by the man. The late Henry Regnery, a longtime Chicago publisher, remarked, “I saw Mr. Goodrich on a good many occasions, traveled with him for several days in Europe, but I am beginning to wonder how well I really knew him.”2 Fred Young, a retired vice-president of Harris Bank in Chicago, responded in a similar manner:

Similarly, James Goodrich preferred accomplishment to recognition. His brother Percy wrote in 1948, several years after James’s death:

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James P. and Pierre F. Goodrich were members of a family that built a financial dynasty in Indiana that began with five Goodrich brothers in the 1880s and continued for nearly one hundred years. Both were attorneys and businessmen, and both were public-minded, but in different ways. Beyond being an entrepreneurial genius, James served as head of the Indiana Republican Party for nearly ten years (1901–10); as the twenty-eighth governor of Indiana (1917–21); and as an adviser to Presidents Warren G. Harding, Calvin Coolidge, and Herbert Hoover, and to the national Republican Party. Pierre’s achievements were more restricted to business and intellectual pursuits. He was chairman of the board of the Ayrshire Collieries Corporation (1946–69), president and CEO of the Indiana Telephone Corporation (1934–73), president and CEO of Peoples Loan and Trust Company (1940–73), and director of dozens of other companies. He also served as an officer and director of numerous educational foundations, including the one that he established himself, Liberty Fund, Inc., of Indianapolis, Indiana.

Both men were driven, ambitious, stubborn, and indefatigable. For both, twelve- and even fourteen-hour workdays were not uncommon. In later life, Pierre occasionally worked all night just to prove to himself that he could still do it.5 “Pierre was one of the hardest working people I ever knew,” said Richard Swallow, chief engineer at Ayrshire Collieries for thirty-seven years.6

“It was hard to live up to his expectations,” stated Gilbert Snider, an attorney in Goodrich’s law firm, adding: “Pierre was so brilliant. What most people thought was the norm was the bottom for him. You sometimes got dismayed that you worked like a dog and to find it just barely reached his minimum standard.”7

After James Goodrich’s death, the former Indiana Appellate Court judge Charles F. Remy recalled the former governor’s work habits:

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If the two men shared many similarities, they also possessed many differences: James Goodrich was a hard-hitting, decisive man, quick to analyze a situation and then to act.9 It was these qualities that made him such an imposing governor.10

The painstaking, almost soul-searching process by which Pierre made even the simplest of decisions revealed a man who, although essentially shy, desired to remain in control. A more charitable assessment of Pierre’s decision-making style suggests a conscious reason for his deliberateness. Professor Benjamin A. Rogge, who delivered the eulogy at Edition: current; Page: [7] Pierre’s funeral in 1973, stated at the memorial service, “[Mr. Goodrich] recognized that only when we were pressing him for a decision could he command our attention sufficiently to make us truly listen to and try to understand the philosophy behind all of his decision-making—a philosophy that he believed we, too, must understand and know how to apply if we were to be fully useful in our joint endeavors.”12 Alan Russell, who worked for Goodrich in the telephone industry and is now chairman of Liberty Fund, gave a slightly different response: “Pierre never made a decision. The proposer made the decision in the end. But you had a dialogue with Pierre until he knew you were going to reach the right answer.”13

In other words, Goodrich used the Socratic method of inquiry to induce the proposer to reach a conclusion. This approach could be maddening to traditional management types who simply wanted a yes or no answer. Pierre was no less enigmatic when it came to his demeanor. He could be taciturn or engage in a discussion for hours if the topic was about some business decision or, more likely, some philosophical insight that interested him. His father had little time for scholastic exercises. James Goodrich’s confident, aggressive, risk-taking nature would not tolerate such a roundabout approach. He looked for quick results. Thus, in terms of personality, the two men seemed, in many ways, to be opposites.

Their temperaments were also different. As a boy growing up in post–Civil War times, James Goodrich could be confrontational and a bit of a roughhouser. He was not afraid to get into neighborhood scraps when the need arose. Pierre, despite a tough-minded and businesslike exterior, was more sensitive and less prone to confrontation. He found it nearly impossible to fire an employee. Rather, he took a cautious approach when hiring employees, preferring to interview dozens of potential candidates for several hours each (sometimes for several days) in Edition: current; Page: [8] the hope that he could find just the right person for the position.14 Moreover, Pierre had an aesthetic appreciation far greater than that of his father. A close cousin of Pierre’s described his love of beauty as almost feminine.15 He knew all about cats, how they liked to be petted and nurtured. He had a love of music, art, and flowers, and was able to identify dozens of species of flowers by their botanical as well as common names. He became an aficionado of gemstones, coffees, and fine wines (despite being a teetotaler most of his life).16

James Goodrich was described by some as a peculiar man, balding, of medium height, bespectacled, and with searching eyes that seemed to hide what he was thinking. During the last twenty years of his life, he walked with the use of a cane as the result of an automobile accident that almost killed him while he was governor. James Goodrich was unquestionably driven, even up to the time of his death. In 1940, ill but having weathered the worst of the Great Depression, he was quoted as saying, “I know I am very sick and I know I am going to die. And I hate it terribly because I know there will be a lot of money made in the next few years.”17 The former governor was clearly aware of his money-making Edition: current; Page: [9] skills. In retirement, Goodrich once told an interviewer he had “to check on himself to keep from making too much.”18

Pierre was more distinguished and robust than his father. He had a mop of white hair, a rough complexion, somewhat cherubic cheeks, and a youthful disposition that lasted into his later years. He was generally serious, having what many described as a “strong personality” and a reserved, malcontent attitude. Yet Pierre would occasionally display a lighter side.19 Pierre, like his father, had a penchant for making money, but he was driven by other motives as well. Nobel Prize–winning economist Milton Friedman, now a senior fellow with the Hoover Institution, fondly remembers Pierre for his depth of thought and strongly held views:

The late Russell Kirk, prominent scholar and lecturer, remembered Pierre’s demeanor as noteworthy:

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Harold Rogers, a former history teacher at Winchester High School, Pierre’s alma mater, once remarked that a sign of Goodrich’s intelligence was that he knew his limitations and stayed within them.22 Rosanna Amos, a secretary to Goodrich, echoed Rogers’s observation: “Mr. Goodrich was not a speechmaker and he knew it.”23

Both James and Pierre had lilting voices that were not suited to public speaking. James abhorred making a speech and preferred the backroom maneuvering that made him such an effective businessman and political strategist.24 In this regard, father and son were alike. When Pierre did preside, he had the annoying habit of jumping from topic to topic in a stream-of-consciousness manner. It often made it nearly impossible for listeners to follow him. Jack Charles, a retired Wabash College history professor, recalls:

Fortunately, Goodrich learned, at least in business situations, to let others do the talking—men like his longtime law partners Albert Campbell and Claude Warren. “But as I quickly learned,” said Gilbert Snider, “Pierre Goodrich made all the decisions. In the meetings prior to the court or utility hearings it was very clear who had thought out what was to be said and the strategy that the presenting lawyer was to follow.”26

Despite this brief introduction, the questions remain: Why should we care about James and Pierre Goodrich and the Goodrich family? What about them should interest us to the point that it is worth our time to read a book about a family dynasty that is essentially gone? How does a study of them deepen our understanding beyond simple knowledge of the family itself?

I believe there are several answers to these questions. They are, however, not self-evident. They can be answered only after one has answered still other questions. First, how did five brothers raised as farm boys shortly after the Civil War create a financial dynasty that included various industries: agriculture, natural gas, coal, oil, telephones, banking, Edition: current; Page: [12] securities, newspapers, transportation? Second, to what degree did the circumstances and beliefs of the times—political, economic, ethical, and religious—contribute to these five brothers’ achievements? Third, what was James Goodrich’s role in leading the Republican Party in Indiana during the first twenty years of the twentieth century and the state generally during World War I, when he served as governor (1917–21)? Fourth, what essential role did James Goodrich play in the great Russian famine-relief program and in furthering diplomatic relations between the United States and the Soviet Union in the 1920s? Fifth, what tremendous social changes took place in the United States in the twentieth century that compelled Pierre Goodrich to establish Liberty Fund from the profits of the sale of the Goodrich companies? Sixth, why did Pierre Goodrich believe that the study of liberty is of central importance if our society is to withstand the growing political, economic, and social dependency that has earmarked the last half of the twentieth century?

An exploration of the above questions, I believe, enables us to gain greater insight into more than just the Goodriches. An exploration into these questions facilitates a greater appreciation for how the business, political, religious, and ethical values of a quintessentially American family were largely responsible for that family’s financial success, James Goodrich’s own political ambitions, and the belief systems of nineteenth- and early twentieth-century Americans in general. I believe that, for the Goodrich family, work in the business arena amounted to a calling. James’s and Pierre’s identities were largely shaped by what they did. The reader will also learn how family and physical location held a special place in the hearts of the Goodriches, helping to define their sense of identity both publicly and privately.

Chapter 2: Origins

James putnam goodrich was born on February 18, 1864, in Winchester, Indiana, toward the end of arguably the most significant event in American history: the Civil War. His middle name was taken from the name of his maternal grandmother, Jane Gray Putnam Edger, a common practice at the time. James’s delivery into the world occurred just two weeks before President Abraham Lincoln appointed a little-known general and former tanner, Ulysses S. Grant, commander in chief of the Union forces. The future Indiana governor was preceded by two older brothers: Ernest, who died shortly after birth in 1860; and Percy Edgar “P. E.,” who was born in 1861. Three younger Goodrich Edition: current; Page: [14] brothers followed: John Baldwin (1866), Edward Shields (1868), and William Wallace (1871).

The origins of the Goodrich family are worth noting. More than one hundred years earlier, in the mid 1700s, three Goodrich brothers crossed the Atlantic Ocean from England to the United States. The three men were descendants of an aristocratic clan that had sided with the Royalists and King Charles, fighting Oliver Cromwell at Goodrich Castle on the River Tyne in the mid 1600s. Ruins of Goodrich Castle exist even to this day.1 Regarding the origin of their family name, Calvin and Percy Goodrich wrote: “The meaning usually given to Goodrich is ‘rich in Godliness.’ Yet an early definition of ‘good’ was ‘gather.’ That which was gathered was ‘goods.’ So a Goodrich of the Saxon day in England may have been a notable accumulator of personal possessions rather than a man distinguished for sanctity and good works.”2 The possible dual origin of the name seems appropriate for a family who would build a financial dynasty in the midst of post-Reformation religious values.

The three Goodrich brothers arrived in Massachusetts, but one, Edmund B. Goodrich, eventually settled in Petersburg, Virginia. The sequence of generations from there is complicated because of the number of children who are named for a father or mother.

Edmund B. Goodrich had eight children, including a son, John Baldwin Goodrich. John Baldwin Goodrich, born in 1783, became a teacher, lawyer, and land conveyor. He practiced law with Baldwin Pearse, soon to be his father-in-law, beginning in approximately 1800. John B. Goodrich later became president of the Blacksburg Virginia Academy. Today, the successor of that institution is known as Virginia Polytechnic Institution (VPI). In 1802, Goodrich married Rebecca Pearse of Ambrose County, Virginia, the daughter of Baldwin Pearse. Rebecca was just thirteen when the couple married. Between 1803 and 1828, they had fourteen Edition: current; Page: [15] children, including Edmund Baldwin, who was born about 1805 and was named for his paternal grandfather.

John Baldwin Goodrich died from a fall from a horse in September 1828. His death left Rebecca, at age thirty-nine, a widow with fourteen children. The sale of John Baldwin’s assets occurred in February 1829. After his debts were paid off, Rebecca was left with only two hundred dollars. Two and a half years later, Rebecca decided to leave Blacksburg to join other family members near Fort Wayne, Indiana. Therefore, in December 1831, the Goodriches sold their one slave and packed up all the personal possessions they could load onto two horse-drawn wagons. Led by Rebecca, a willowy woman who never weighed more than ninety pounds, the Goodriches left Blacksburg and headed northwest by foot, destined for northeastern Indiana, a distance of almost four hundred miles. One of the grandchildren in the Goodrich clan was a three-month-old baby, John B. Goodrich, who would become James Goodrich’s father.3

The Goodriches had crossed the western tip of West Virginia, the frozen Ohio River, and much of southern Ohio before they entered eastern Indiana in January 1832. The “roads” were little more than muddy Indian trails and animal paths. As one Hoosier “poet” wrote about the poor traveling conditions in a local tavern registry:

• The Roads are impassable—
• Hardly jackassable;
• I think those that travel ’em
• Should turn out and gravel ’em.4

It was not a road, however, but a river that kept the Goodrich family in east-central Indiana. They were traveling northwest of Winchester, Edition: current; Page: [16] Indiana, on their way to Fort Wayne, when one of their wagons broke down as they attempted to ford the White River. Winchester served as the county seat of Randolph County, which, until 1823, stretched clear to the Michigan state line, some 120 miles northward. It was on the outskirts of Winchester that the family chose to settle, some seventy miles south of Fort Wayne. According to legend, when the broken wagon impeded the Goodriches’ journey north, the diminutive matriarch, Rebecca Goodrich, exclaimed to her family that she had had enough of the arduous journey and they would go no farther, “one swamp being as good as another.”5

The Goodrich family settled in Randolph County only sixteen years after Indiana had become a state. Thickly wooded and sparsely populated, the county had been occupied by Miami and Delaware Indians until the 1840s. In 1846, the federal government marched the tribes’ remaining members to Toledo, Ohio, to begin what was known as the Trail of Tears. They were subsequently loaded on rafts and floated down the canal system to Cincinnati, Ohio, and from there to St. Louis, Missouri, on the Ohio and Mississippi rivers. Many died along the way. Eventually, the Miamis were transported to Kansas and, later, to Oklahoma, where they ended up on reservations.6

In the early 1800s, the Goodriches were one of several hundred pioneer families that had come to eastern Indiana from the Carolinas and Virginia. Winchester was a deeply religious community. In February 1832, it was the site of the largest branch of the Church of Jesus Christ of Latter-Day Saints in Indiana. The founder of the Mormon Church, Joseph Smith, visited the Winchester branch of more than one hundred believers in July 1834. He performed several baptisms of converts in the Mississinewa River, north of Winchester. When several Edition: current; Page: [17] members of the Mormon congregation left for Missouri in the spring of 1832, the Goodrich family bought land northeast of Winchester from a departing Mormon farmer.7

One of the first written references to a Goodrich family member is contained in a history of Jay County, just north of Randolph County. The reference reads: “In 1834, the families scattered over the south part of the county began to think their settlement of sufficient importance to be under the restraint of law. Prior to this they had enjoyed unlimited freedom. When Mr. Goodrich, Collector of Randolph County, came to collect taxes, every man positively refused to pay. The collector laughed, said that any one who dared come out there to open a forest, ought not to pay tax, and returned.”8

Edmund B. Goodrich, who was James Goodrich’s grandfather, may well have been the tax collector referred to. He also studied law and served as judge of the Randolph County Probate Court. He is described by an early Randolph County history as “a strong temperance man, and a leading member of the Methodist Episcopal Church.”9 His son, John Baldwin Goodrich, who was just three months old when the Goodriches left Virginia for Indiana, also grew up to become a lawyer in Randolph County. In the 1850s, John Goodrich practiced law with his uncle, Carey Goodrich, and with Enos L. Watson. Enos Watson would become the father of James E. Watson, future United States Senate majority leader and lifelong friend of James P. Goodrich.

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In addition to practicing law, John B. Goodrich became politically active, serving as county Republican chairman and road commissioner. He was elected Randolph County clerk in 1861 and was reelected in 1865. In 1859, John B. Goodrich married Elizabeth Edger, who had grown up in nearby Deerfield, Indiana. They had both attended the Winchester Seminary in the 1850s. At that time, public schools for general education had not yet been established; in many communities, seminaries provided both basic secular and religious education. Before her marriage, Elizabeth Edger had also attended Liber College in Portland, Indiana, a small academy begun in 1853 by a zealous Presbyterian minister.10 She was a redheaded beauty whose Protestant father, Edward Edger, was born in county Derry, Ireland, before his family immigrated to the United States in 1807.11 Edger had married Jane Putnam in November 1833, and they had two sons and five daughters, including Elizabeth.12

James Goodrich’s maternal grandfather, Edward Edger, lived a remarkable pioneer life. In the 1820s, prior to locating in Indiana, he piloted steamboats down the Mississippi and Ohio rivers. In the 1830s, he drove hogs from Indiana to the Carolinas. And for many years he traded with local Indians in northern Randolph County, floating the goods he traded for down the Indiana river system by raft to the Ohio and Mississippi rivers and eventually to St. Louis. There he would sell the goods, pocket the gold payment, and walk hundreds of miles back to his home in Randolph County. Edward Edger also became a small-time banker. He even dabbled in politics, serving one term in the Indiana General Assembly (1843–45). In 1860, he started a grain operation Edition: current; Page: [19] on the very spot on which his grandsons would establish in 1898 the Goodrich Brothers Grain and Hay Company. His wife, Jane Putnam Edger, was a devoted member of the Presbyterian Church.13

James Goodrich’s father, John B. Goodrich, was a deeply religious Congregationalist who was the superintendent of his local church’s Sunday school. He was also the father of five surviving sons. In 1938, James Goodrich wrote about his father in his unpublished autobiography: “Often men would come to me in the early years of my life and say to me, ‘if you are half as good a man as your father was, you will be all right.’”14 Thus, the seeds of political involvement and religious heritage were planted early in the Goodrich family history. The significance of this religious heritage may be illustrated by a vignette. When James Goodrich was campaigning for governor in 1916, a local man by the name of John Callahan came to him and said that he owed his life to Goodrich’s father. Callahan told James Goodrich,

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Toward the end of 1871, John B. Goodrich became ill with tuberculosis. He finally left his family in October 1872 to travel south in the hope of regaining his health, but he died in Atlanta, Georgia, on November 2. John B. Goodrich, deceased at forty-one, left his widow, Elizabeth, thirty-two, with five sons: Percy Edgar, eleven; James Putnam, eight; John Baldwin, six; Edward Shields, four; and William Wallace, sixteen months.16

The Goodrich family owned approximately five hundred acres of Randolph County farm ground at the time of John Goodrich’s death. Nonetheless, the Goodriches were far from being a wealthy family. It was through the strength of Elizabeth Edger Goodrich, who never remarried but raised five rambunctious and strong-willed sons by herself, that the family slowly gained wealth and influence in Indiana. The Goodrich brothers were known throughout their lives as tough business competitors. They worked in concert for their mutual benefit. This sense of familial protection, of looking out for each other, had been instilled in the brothers from their childhood. James Goodrich recounts the stability his mother brought to these five fatherless boys:

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All the Goodrich brothers enjoyed successful business careers, but none of them had the financial acumen or ambition that James possessed. Even as a small boy, James Goodrich had learned to turn a profit through painstaking physical labor. He worked long, hard hours on the family’s farms in the 1870s and 1880s: He planted and harvested crops, ditched fields, sawed and piled wood for neighbors for fifty cents a cord, ran a threshing machine, and baled hay.18 Life on a farm in post–Civil War times was difficult, requiring unusual ingenuity and frugality. James Goodrich recalled:

Life was not all hard work and drudgery, however. In the Goodrich brothers’ free time, they managed to entertain themselves by playing cards and marbles, attending local dances, and attempting to play musical instruments. In July 1876, when James Goodrich was just twelve years old, he and his older brother Percy, who was just fourteen, traveled alone to Philadelphia to attend the country’s Centennial Exposition. They stayed for ten days, visited Liberty Hall and the Liberty Bell, and saw what was then considered a bawdy performance by a woman who appeared on stage “clad [only] in tights from head to foot.”20 Roughhousing was not uncommon for the boys either. James Goodrich recalled:

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James Goodrich’s boyhood seems to have been marked by hard work, study, and a desire to get ahead. In only a few years, he would be exposed to the most important activities of his successful life: business and politics.

Chapter 3: Youth and Experience

In the summer of 1880, between his junior and senior years at Winchester High School, James Goodrich worked to develop the Fountain Park Cemetery, located on the south edge of Winchester. The forty-acre site had recently been purchased and donated to the town by Asahel Stone, a former Civil War general. Stone had achieved recognition by serving as quartermaster general for Indiana during the war. His responsibilities included securing supplies, provisions, and medical attention for Hoosier soldiers in the field. He became a legend in his own right, building one of the largest mansions in east-central Indiana, at the south end of Meridian Street in Winchester. General Stone also served in Indiana’s General Assembly (1848–49, 1871–73) and was the third president of the Randolph County Bank.1

For all his hard manual labor in the cemetery, James Goodrich earned only slightly more than a dollar a day for ten hours of labor.2 Yet the future Indiana governor was able to save enough that summer not only to meet his own personal expenses but also to make small loans Edition: current; Page: [24] to “less industrious companions.”3 One such companion was James E. Watson, a classmate of Jim Goodrich’s from the time they were small children. Jim Goodrich was pleased to have the work and decided to ask James Watson if he would be interested in a job as well. Goodrich recorded the incident in his autobiography:

James Goodrich and James Watson attended the local Winchester schools together and graduated from Winchester High School in 1881. Their studies were rigorous and included geometry, trigonometry, higher algebra, Stoddard’s Mental Arithmetic, literature, history, and Virgil. Among the other seven graduating classmates were James Goodrich’s older brother Percy; John Commons, who later obtained a doctorate in economics and served as head of the economics department at the University of Wisconsin; and Cora J. Frist, whom James Goodrich would marry seven years later.5 The school had no library at the time and no visible means of raising funds to establish one. Therefore, in 1880, the students relied on their ingenuity and decided to establish a lecture series in order to raise money for a library. Joseph Farrand Tuttle, president of Wabash College in Crawfordsville, Indiana, delivered the first lecture. The second presenter was Indiana’s beloved poet James Whitcomb Riley. Riley returned to lecture in 1881, although neither Edition: current; Page: [25] time did the class raise enough money to pay the total amount of his fees.6

James Watson and James Goodrich remained lifelong friends, although their friendship was often marred by political rivalry and jealousy. For example, in his memoirs, written in 1936, Watson does not mention James Goodrich even once.7 Watson later served in the United States House of Representatives and Senate for nearly thirty years. In addition to being the United States Senate majority leader from 1929 to 1933, Watson held the position of majority whip under the well-known Speaker of the House Joseph Cannon from 1904 to 1908. Moreover, in 1908, eight years before James Goodrich would win the office himself, Watson was the Republican candidate for governor of Indiana.

Cora Frist, an attractive and bright young woman, had moved to Winchester in 1879 from Lynn, Indiana, a small town ten miles south of Winchester. Cora was born in Middleborough, in Wayne County, Indiana, in 1861. She was more than two years older than James Goodrich. Her parents were Jonas Frist, a native of Preble County, Ohio, and the former Amy Stidham, who had been reared in Philadelphia, Pennsylvania. Cora had a younger sister by the name of Toda (“Todie”). Her father had operated a tile company in Lynn before moving to Winchester. Cora would be courted by both James Goodrich and James Watson.8

In 1881, after graduating from Winchester High School, James Goodrich, James Watson, and Cora Frist took the Indiana state teacher’s licensing examination. At the time, neither a college degree nor course work was required in order to teach in Indiana. All three passed the Edition: current; Page: [26] examination and subsequently began teaching in Randolph County schools. James Watson, however, quit teaching after only a week to attend Asbury College in Greencastle, Indiana, which, within a year, was to be renamed DePauw University. Ironically, James Goodrich was asked by the local school superintendent to replace Watson. He took the position and began teaching twelve students in a one-room schoolhouse five miles southwest of Winchester. At the time, more than one hundred one-room schoolhouses dotted the Randolph County countryside.9

James Goodrich had planned to teach for only one year. From childhood, Goodrich had dreamed of a naval career. He had long been fascinated by the prospects of a life at sea, largely because of the stories of relatives, especially those of an uncle, Will Gilpatrick. Gilpatrick had become a rear admiral in the United States Navy shortly after the Civil War.10 In the autumn of 1881, James Goodrich received an appointment to the United States Naval Academy from Congressman Thomas M. Browne of Winchester. Browne had represented the Sixth Congressional District since 1876; he had served as a brigadier general in the Civil War and was the Republican gubernatorial candidate in the election of 1872. He was also a first cousin to James Watson’s mother.11

In 1881, James Goodrich had passed the written examination and was waiting for formal admission to the Naval Academy at Annapolis, Maryland. Sadly, the young man was forced to give up his dream. Just four weeks after he began teaching, a tree limb fell on him while he was shaking free hickory nuts. James was knocked temporarily unconscious, Edition: current; Page: [27] and his right hip was badly broken, which made it impossible for him to pass the Naval Academy’s rigorous physical examination.12

Goodrich farmed and taught another year at a schoolhouse of sixty students three miles east of Winchester. Then, in September 1883, after two years of teaching, James Goodrich followed his good friend James Watson to DePauw University. Because of his advanced studies in high school, Goodrich was admitted as a conditional sophomore. At DePauw, he joined the Phi Kappa Psi Fraternity and became the friend of another brilliant student and orator by the name of Albert Beveridge. Beveridge, like James Watson, would become a prominent United States senator from Indiana and a gubernatorial candidate.13 Goodrich noted an intense rivalry and jealousy between Watson and Beveridge that would last the rest of their lives. “Beveridge was tireless in his work,” Goodrich recalled, while “Watson was lazy but his great natural ability and amazing memory carried him through.”14

Goodrich and Watson left DePauw in 1885 before either obtained a degree. James Goodrich was forced to quit after only two years because he had exhausted his finances, and James Watson was expelled just days before he was scheduled to graduate, because he had written and published an obscene pamphlet about the male students of the sophomore class.15

Unsure of his future, Goodrich decided to pursue farming. He sought his fortune in the Red River Valley in a territory that was simply known as “Dakota.” It would not be until four years later that the territory became divided into the separate states of North Dakota and South Dakota. Edition: current; Page: [28] During the latter part of the summer of 1885, he and his uncle, John “Ches” Macy, worked on a farm about twenty miles southwest of Big Stone Lake in what is now South Dakota. The two men lived in a sod house and stayed long enough to harvest a wheat crop and plant five hundred acres of spring wheat. In the fall of 1885, Goodrich attempted to buy a wheat ranch from a Swedish farmer by the name of Johnny Gustason, but the deal fell through when they could not agree upon a price. Upon the advice of Ches Macy, James returned to Indiana and took up the study of law.16

Expelled from DePauw in May, James Watson had already returned to Winchester by this time. Goodrich joined him, and the two became students together again, this time studying law under the former Randolph circuit court judge John J. Cheney and Enos Watson, James Watson’s father. For fifteen months, James Watson and James Goodrich recited each morning from such great common-law writers as Blackstone, Chitty, and Kent, and then served their apprenticeships in the afternoons. They were admitted to Indiana’s bar on November 2, 1886.17

The two future politicians practiced law for the next seven years (1887–94) in offices above the old Randolph County Bank at the northeast corner of Washington and Meridian streets in Winchester. Watson first practiced with his father, while James Goodrich became a partner with his uncle Ches Macy and Ed Jaqua in the firm of Macy, Jaqua and Goodrich. Goodrich learned the rudiments of lawyering by drafting deeds, mortgages, and contracts, and by representing clients before the justice of the peace.18 In 1892, the small firm merged with that of Enos Edition: current; Page: [29] and James Watson and became known as Watson, Macy and Goodrich. In November 1892, Enos Watson became ill and was forced to retire. He passed away in January 1893. James Watson took his father’s position in the firm and practiced with Macy and Goodrich until the end of 1893.19

Through all these changes, John Winchester “Ches” Macy remained the constant figure in James Goodrich’s life. Macy was extremely important to the Goodrich family, and his ties extended back to James Goodrich’s father and mother. Macy’s wife, the former Sarah Edger, and James Goodrich’s mother, Elizabeth Edger, were sisters. At the age of nineteen, Macy had joined the Eighty-fourth Indiana Volunteer Infantry, and he fought and was wounded at the Battle of Chickamauga in Georgia. When he returned to Winchester after the Civil War, he first worked under James Goodrich’s father, John B. Goodrich, in the county clerk’s office. He later was elected clerk himself before being elected senator to the Indiana State Assembly for one term (1885–89). At one time or another, Macy held the positions of Randolph County Republican chairman, Republican chairman of the Eighth Congressional District, and Randolph Circuit Court judge (1902–8).20 He became the chief mentor and surrogate father to James Goodrich. The relationship between the two families continued into the next generation. Macy was the father of John Macy, Jr., who became Pierre Goodrich’s first law partner.

By 1885, James Goodrich had had Cora Frist on his mind for several years but had failed to act. The two had many mutual interests, including books, music, and art. Finally, after a whirlwind courtship, James proposed. Still, it would be three years before they would marry. As he wrote to Pierre in his autobiography: “I became engaged to your mother when I was twenty-one years old, and I am sure that the wish to consummate that engagement had much to do with my desire to get into Edition: current; Page: [30] something whereby I could earn an income sufficient to justify our marriage.” The couple married on March 15, 1888, in Cora’s hometown of Lynn. The other four Goodrich brothers would also take brides: Percy married Susan Engle, John married Charlotte Martin, Edward married Elizabeth Neff, and William Wallace married Charlotte Moore. The marriage of James and Cora would last until James Goodrich’s death more than fifty-two years later.21

Chapter 4: Initiation into Politics

In the early 1890s, James Goodrich was described in a Randolph County history as “a rising young lawyer of Winchester.”1 He had been appointed city attorney by the town council at the “huge” salary of $50 per year. In 1888, James’s share in his private legal practice with Macy and Jaqua amounted to $720; he wrote to Pierre that only “by the practice of the most rigid economy [were we] able to save a small portion of that.”2

Although James Goodrich was extremely busy practicing law, he also took an interest in a number of community and fraternal groups. The first was the Granger movement, which he had first joined locally in 1881. The National Grange of the Patrons of Husbandry was established in 1867 to broaden the educational awareness of America’s farmers and to further their interests. By 1875, the National Grange claimed more Edition: current; Page: [32] than 800,000 members in 20,000 local chapters.3 Goodrich also took part in the Knights of Labor, which he was a member of from 1882 until 1894. His association with the labor organization was significant. It gave him an appreciation for the common worker. Goodrich found that while the laborer might not be able to articulate why he thought as he did, he generally reached the right conclusion by instinct. Once a month, James Goodrich would join members of the local chapter on the third floor of the Knights of Labor building, located on the south side of the town square. There the local body debated the issues of the day: secret ballot, woman suffrage, child labor, prohibition, workmen’s compensation, and other matters.4 Goodrich was also a member, along with James Watson, of the Winchester chapter of the Knights of Pythias, a secret fraternal order that engaged in philanthropic activities. James Watson became even more active in this organization than Goodrich, rising to the position of grand chancellor of the order in Indiana in June 1893, the youngest head of the order up to that time. In 1892, Goodrich became a Mason, joining the Winchester Lodge, No. 56.5

In the late 1880s, James Goodrich became deeply involved with politics. Through his uncle Ches Macy, Goodrich learned the art of politicking. Besides serving in the Indiana General Assembly as the joint senator from Delaware and Randolph counties from 1885 to 1889, Macy served at the time as Randolph County Republican chairman. James Goodrich recalls his political indoctrination:

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Goodrich’s early participation in politics and law enabled him to associate with local men, mostly attorneys, of great talent and ambition. Besides Macy, these men included Thomas Browne, former general, Republican gubernatorial candidate, and Sixth District congressman; James Watson and his father, Enos Watson, who served in the Indiana General Assembly (1867–69, 1879–81); James S. Engle, who served in the Indiana General Assembly during the time that he was law mentor to Goodrich and James Watson (1885–87); Silas Canada, who served in the General Assembly during the four years in which James acted as Republican county chairman (1896–1900); Union B. Hunt, elected secretary of state (1899–1903); Leander J. Monks, who served as judge on the Indiana Supreme Court from 1895 to 1913; and Frederick S. Caldwell, who would serve as a judge on the Indiana Court of Appeals from 1913 to 1919. Moreover, Isaac P. Gray, who lived just ten miles east of Winchester in Union City, was a former Civil War general, state senator (1868–70), lieutenant governor of Indiana (1876–80), and governor (1880–81, 1885–89). Gray went on to become a Democratic presidential candidate in 1892 and 1896, and United States ambassador to Mexico from 1893 to 1895.7 All of these men from Randolph County were active in law or politics when James Goodrich was just getting his start.

In 1886, Goodrich began his own foray into politics. He was elected Edition: current; Page: [34] precinct councilman and practiced pragmatic politics as he had been taught. Clearly, it was a time before election laws and political ethics as we know them today. Goodrich writes:

By this time, James Goodrich had become intoxicated himself, not with alcohol, but with the “spirits” of politics. He followed national, state, and local elections with keen interest, but without any apparent desire to become a candidate himself. In 1890, Ches Macy was elected Republican chairman of Indiana’s Eighth Congressional District. As Macy had been Goodrich’s most important mentor in law, so he was in politics. During these early years, James Goodrich met such national political figures as Benjamin Harrison, who was elected president in 1888; William Jennings Bryan, Democratic presidential nominee in 1896, 1900, and 1908; Mark Hanna, a wealthy Ohio industrialist who became national Republican Party chairman; William McKinley, who was elected president in 1896; and Theodore Roosevelt, vice-president under McKinley and later the twenty-sixth president of the United States.9 Edition: current; Page: [35] Contact with these national figures would cause James Goodrich to think about his own political future.

There was another rising young attorney and political star of Winchester by the name of James who had his sights on statewide and national office. By the early 1890s, James Watson had already confided in James Goodrich that he wanted someday to become governor of Indiana and, later, president of the United States. Watson’s first two ventures in politics, however, were complete failures. He withdrew in 1892 as a candidate for joint senator of Randolph and Delaware counties when a Republican Party leader threatened to disclose an incriminating letter that Watson had written to him. Recognizing that he had made too many enemies in Randolph County to pursue a successful political career there, James Watson left his law practice with Macy and Goodrich at the end of 1893.

Watson moved to Rushville, Indiana, the county seat of Rush County, approximately sixty miles southeast of Winchester. He next sought election as Indiana’s secretary of state in 1894. His nomination, made by Goodrich, failed at the state Republican convention. Shortly after his attempt to gain the secretary of state’s post, Watson announced himself as a Republican candidate for Congress. Miraculously, Watson beat a popular thirty-year incumbent in the November 1894 election. Watson’s success was partially a result of his indefatigable campaigning: He had been speaking for the Indiana Republican Party since the age of twenty; in one year alone (1888), he had given more than one hundred political speeches in some forty-six Indiana counties. Watson also attributed his success partially to his ability to address in their native language the large German constituency of his new district. In support of his childhood chum, James Goodrich garnered the backing of the Republican National Committee, and he personally contributed five hundred dollars to Watson’s congressional campaign.10

Ironically, once Watson made it to Washington, D.C., he was none Edition: current; Page: [36] too pleased with the position he had campaigned so exhaustively to gain. In a typically humorous letter to Goodrich, Watson dispels the idea that any glamour was involved in the position.

Goodrich began to experience politics firsthand himself, making his maiden political speech in 1896. He addressed a crowd of some two thousand in Winchester. He spoke on the issue of whether the country should have two standards of monetary value—one gold, the other silver. The topic now seems archaic and of little consequence. Yet at the time, the “subject of the Gold Standard vs Free Silver at the ratio of 16 Edition: current; Page: [37] to 1 was discussed everywhere where two or more people were gathered together,” Goodrich claimed. He went on to state that the national debate was “the greatest educational campaign ever held in America.”12

James Goodrich’s exposure to local politicking would provide him with experience and lead to bigger opportunities in the realm of politics—leading the Indiana state Republican Party, serving on the national Republican Party’s executive committee, and gaining the governor’s office. He had thrust himself into what was then the great American pastime.

Chapter 5: The Early Years, 1894–1900

James and Cora Goodrich had been married for five years when they expected the birth of their first child. Their anticipation was, however, met with deep sadness. On May 16, 1893, the baby (a girl to whom the couple had already given the name Jean) was born dead. Less than sixteen months later, however, on September 10, 1894, a much happier event occurred when the Goodriches’ son Pierre was born at their East Franklin Street home in Winchester.

On the local scene in Winchester, Pierre’s birth coincided with the “Colossal” Lemen Brothers’ traveling circus. The circus featured Rajah, claimed to be the biggest “brute” (elephant) on earth (circuses, then, as today, were known to do a bit of puffing).1 On the national front, 1894 marked the year that President Grover Cleveland first gave civil servants Christmas Day off. It was also a time when a man was not a substantial Edition: current; Page: [39] member of society unless he wore a mustache. While upcoming years would justify the decade’s being remembered as the “gay nineties,” in September 1894 there was little to be happy about. The country was plunged into one of the worst depressions in its history.2

The causes of the disastrous economic times were many and complicated: The 1880s had been a boom period in which overexpansion and overinvestment in railroads and industry had occurred. Moreover, farmers were suffering greatly because of extremely depressed farm prices and decreased demand from Europe for their produce. Inflation had increased substantially as a result of the Sherman Silver Purchase Act, legislation that required the federal government to buy increased amounts of silver.3 President Cleveland was confronted with a failed economy and a disenchanted electorate. Within a six-month period, 156 railroads went into receivership, 400 banks suspended operations, and more than 8,000 businesses went bankrupt. As many as one million workers found themselves thrown out of jobs.4

Except for signs of modern culture at its edges (a strip of highway on the east end of town, complete with McDonald’s, Pizza Hut, Wal-Mart, and Taco Bell), the appearance of Winchester, Indiana, today differs little from what it was at the turn of the century. Its streets are lined with stately sycamores, elms, and hard maples. The town serves as the county seat of a rural community area. A community of approximately five thousand residents, Winchester is much like those small towns nostalgically described by the Indiana poet James Whitcomb Riley. In fact, three of Riley’s grandparents are buried in area cemeteries, and his parents were reared and later married in Randolph County.5 Riley himself Edition: current; Page: [40] worked in the county as a sign painter and printer for a year in the 1870s. In later life, he occasionally returned to Winchester to deliver his homespun verse. He also occasionally played in a medicine show on the town square. Riley would sing comic songs and draw pictures to entertain the crowds while his companion, a Dr. Sears, lectured and tried to sell a medicinal elixir that was commonly sold during those times to treat all kinds of ailments.6

At the turn of the century, Winchester still had a large number of Quakers as well as several hundred Civil War veterans. Randolph County sent nearly twenty-four hundred men to fight for the Northern cause, including fifty black soldiers. Despite the strong pacifist sentiments of the Quaker population, most of the county’s Quakers supported the war because of their even stronger abolitionist beliefs.7 For runaway slaves, Winchester was a stop along a major route leading from the deep South to Canada. Levi Coffin, chief engineer of this fabled Underground Railroad, lived just four miles south of Randolph County in Newport (now Fountain City), Indiana. He helped provide safe passage for more than three thousand black fugitives.8 Randolph County was also home to the Union Literary Institute, which was founded in 1845 to educate black children as well as students of other races. The importance of the Civil War to local people is still evident today: the tallest county Civil War monument in the state of Indiana, dedicated in July 1892, is located on the town’s square.9

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Even as a small boy, Pierre Goodrich always preferred to be called “Peer” rather than the French pronunciation of his name.10 He was born with a very weak right eye and wore glasses from a young age. The late Helen Engle Hart, who was 101 at the time she was interviewed, described the Winchester of the 1890s and early 1900s as an idyllic small town in which to grow up. She remembered Pierre as a shy, quiet, and studious boy. She further recalled that as children they used to visit each other’s homes, attend each other’s birthday parties, and exchange gifts. Their families also attended the same Presbyterian Church. Pierre and Mrs. Hart’s younger brother, Russell Engle, were childhood friends and remained close throughout their lives.11

In 1894, Emily Isabelle “Belle” Edger, James Goodrich’s aunt, returned to Winchester after having worked under Jane Addams at Hull House in Chicago. She persuaded Winchester’s school board, on which James Goodrich served, to start a public kindergarten for the town’s four- and five-year-old children. For the next fifty-five years, Aunt Belle taught kindergarten to hundreds of Winchester schoolchildren. From 1898 to 1900, Pierre attended public kindergarten, where his teacher was “Miss Belle”—his great aunt.12

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The following year further sadness struck the family: On September 10, 1901, Pierre’s seventh birthday, his first cousin, James, the son of John and Charlotte Goodrich, died at the age of four. Another tragedy struck the family soon after. William Wallace, the youngest of the five Goodrich brothers, suffered a terrible loss when his wife, also named Charlotte, died during childbirth.

Despite these losses, growing up in the Goodrich household at the turn of the twentieth century was, for the most part, warm and joyous. In a 1964 interview, Pierre recounted fond memories of his early childhood. “Growing up at Winchester meant a wonderful boyhood,” he recalled. “The first memory I have of my mother is of a dark enthusiastic woman sitting on the floor of our library with a friend of hers, both of them completely surrounded by books. . . . Saturday was a wonderful day in our house at Winchester. Mother assembled great hordes of relatives for Sunday dinner and Saturday was the day when pies, cakes, and bread were baked.

“Unless you have experienced it as a small boy, you can never know the wonderful baking aromas of Saturday at Winchester in the early 1900s,” Pierre added.13

It is revealing that Pierre’s first memory of his mother was associated with books. Cora was a passionate reader and was clearly the more intellectual of Pierre’s parents, but James Goodrich was interested in books all his life as well. As a student at DePauw University, James had studied literature, certainly not an obvious major for a man whose life was dominated by more practical disciplines, such as agriculture, business, banking, politics, and law. James and Cora Goodrich had one of the finest private libraries in east-central Indiana.

During Pierre’s boyhood, the family lived across from the First Presbyterian Church on Franklin Street. In 1913, after Pierre had left to study at Wabash College, James and Cora moved one block to South Edition: current; Page: [43] Street, where their newly built French Provincial mansion stood as a landmark in Winchester for the next sixty-five years.14 At both homes, James and Cora had libraries filled with books on economics, religion, history, music, and literature. The Goodriches’ new house reflected the interests of its occupants. A large reception hall was the first room that visitors entered from the front door. On the left was the library and to the right was the music room. On the ground level there were also a sunroom, a large dining area, a kitchen, and a back porch. The walls and fixtures were made of cherry, oak, or mahogany, and the wood of the dark walls came from trees south of Winchester owned by Cora’s parents.15 On the second floor were five bedrooms and two bathrooms; on the third floor was a ballroom where James and Cora did most of their entertaining.16

Pierre’s childhood was much like those of other boys in small midwestern towns, although his mother constantly hovered over him. The death of Cora’s firstborn may well explain her protective attitude toward Pierre. While he was still quite young, Cora Goodrich bought him a violin. Pierre took lessons and played occasionally throughout his life. He also had a pet cat by the name of Muggins and a pony named Bessie. Edition: current; Page: [44] His favorite pet, however, was a rooster. Pierre regularly placed his feathered pet in cockfights, which were fairly common at the time.17

Pierre was a member of a group of boys who called themselves the Six Jolly Urchins. The group was begun by Ida Kitselman McCamish, mother of Pierre’s closest childhood friend, Carl McCamish. The young troupe included Pierre, Tom Veech, Carl McCamish, Ralph Bales, and several other Winchester boys. The boys had their own outfits and later became known as simply the S.J.U. club. For several years they sponsored monthly dances in the community.18

As Pierre grew older, his father’s absence from the house grew more frequent because of his extensive political and business involvements. The traveling started even before Pierre’s birth. For instance, in April 1893, James Goodrich went to Independence, Missouri, for several days to inquire about investing in gas exploration. A rumor had gone around the town that Goodrich was a representative from the Standard Oil Company and that he was there for the express purpose of buying up all the leasing rights. He was amused by the tremendous interest his presence had created among the townspeople.19

Travels two years later took James Goodrich south. In March 1895, Goodrich made an extensive tour of several southern states, visiting Louisiana, Alabama, Tennessee, and North Carolina. While hiking in the Smoky Mountains, “jumping from rock to rock,” he fell forty feet down a mountainside, reinjuring the hip that he had broken in 1881. James later traveled down the Mississippi River on the steamship Paul Tulane and toured Baton Rouge and New Orleans. While he admired the architecture of New Orleans, the filth and odors of the southern city repulsed him. His southern exposure aroused in him a particular interest in the plight of the “Negro.” He predicted in a letter to his wife that it would not be long before southern “Negroes” would be relocating in Edition: current; Page: [45] northern cities because so few opportunities were available to them in the South.20

In June 1901, Cora and Pierre traveled to Colorado Springs, Colorado, to stay with cousins for several weeks while Pierre recovered from an illness. James remained in Indiana. In early August, after he had just been appointed chairman of the state Republican Party, James traveled to Colorado to be with his wife and son.21 The family visited Pikes Peak and toured the Pike National Forest in the Rocky Mountains by stagecoach. The experience left quite an impression on Pierre. In a letter he wrote some sixty years later to the great Austrian economist Friedrich Hayek, Pierre referred to the visit nostalgically. He was concerned that modern development and modes of travel were destroying the beautiful preserves he had seen as a child.22

Nothing in Pierre Goodrich’s childhood was remarkable except that he was perhaps more dedicated to study and devoted to family than most boys his age. Yet these early years were a critical time in the formation of Pierre’s character. They were years in which a strong sense of family, security, ingenuity, and other influences left lasting impressions. These influences helped to shape Pierre Goodrich’s entrepreneurial drive, intellectual curiosity, and, probably most directly, his deep libertarian beliefs.

Chapter 6: Entering the Business World

They were exciting times. By the end of 1888, thousands of people came daily from all over the state to east-central Indiana on excursion trains to see the wonder. There, in fields where the most notable sights had previously been shocks of wheat and corn, beautiful flaming torches of light poured forth. The countryside was ablaze with the burning of millions of cubic feet of the best fuel in the world. What limestone had done for such communities as Bedford, Bloomington, and Ellettsville in the 1880s and 1890s and coal had done, during the same period, for Vigo, Sullivan, Vermillion, Knox, and Greene counties, natural gas did for small Indiana towns such as Dunkirk, Elwood, Fairmount, Farmland, Hartford City, Jonesboro, Knightstown, Muncie, Redkey, Portland, Salem, and Winchester. Edition: current; Page: [47] In March 1892, one small town in Grant County, Harrisburg, took formal action in recognizing the transformation, renaming itself “Gas City.”1

In the years from 1886 to 1892, the “natural gas craze” occurred. It started on March 14, 1886, in Portland, Indiana, when a well struck gas at a depth of 990 feet. The boom was on, with a frenzy reminiscent of a gold rush. By the following April, a local well was producing 5 million cubic feet daily. By January 1891, another well’s daily output was nearly 15 million cubic feet. Wells by the hundreds were being drilled. By 1892, it was estimated that the gas fields of east-central Indiana were several times larger than the known combined size of all other gas fields in the United States. The fuel spouted from the ground with such ease that the state geologist estimated that by the latter half of 1887 there had been an average waste of one hundred million cubic feet of it a day.2

The cheap energy seemed unlimited. It brought to the area trainloads of newspaper reporters, capitalists, and the curious from such faraway places as Cincinnati, Buffalo, and New York City. In the late 1880s, three hundred members of the American Association for the Advancement of Science visited to witness the phenomenon. The find created unprecedented growth. By 1900, the population of Muncie, Indiana, just twenty-five miles west of the Goodriches’ hometown, had grown to more than twenty thousand, quadrupling in size since 1880. Real estate speculation was at its zenith. One man who shied away from buying an eight-acre plot in Delaware County in 1888 for $1,600 found that only Edition: current; Page: [48] sixty days later the property had changed hands five times and had doubled in price.3

The gas craze fueled nearly boundless growth in the Goodriches’ hometown of Winchester. Around the town square, a dozen or more two-, three-, and four-story buildings popped up that are still the mainstay of the town’s commercial center. Because of its cheap energy, the area attracted businesses in an unprecedented way. The result was an industrial explosion that was only slightly less dramatic than the natural gas find itself. The discovery of natural gas resulted in the relocation of dozens of industries, particularly foundries, that relied upon the cheap fuel to melt iron and other metals. The largest industry to exploit the gas resources was the glass industry, which relied upon the seemingly inexhaustible fuel to heat large demanding furnaces. In 1880, only 4 glass factories existed in Indiana; by 1900, there were 110, most of which were in east-central Indiana. The best-known, and ultimately the largest, glass company in the Midwest would be in Muncie. In 1887, five brothers, about the same ages as the five Goodrich brothers, had moved their company from Buffalo, New York, to Muncie to take advantage of the gas boom. They were the Ball family, and the corporation they founded is today a Fortune 500 company with more than thirteen thousand employees and $2 billion in annual sales.4

The Goodrich brothers were too savvy not to take advantage of the great gas boom. One of the first companies that the family held a substantial Edition: current; Page: [49] interest in was the Rock Oil Company, which was located in Winchester. The Rock Oil Company was formed on June 8, 1886, less than two months after gas was discovered in Jay County. It had thirty-three founding investors who issued a capital stock of $50,000. It was established to incorporate a gas, oil, and mining company. Although drilling for oil was done almost as aggressively in the area as for natural gas, the anticipated oil boom was never realized.5

Percy Goodrich was one of the original investors in the Rock Oil Company. Within a short time, Ed and James, along with Percy, became directors of the company. James also served as corporate secretary, becoming responsible for filing the company’s annual reports and maintaining records.6 Three of the remaining four directors and officers of the company were A. L. Kitselman, D. M. Kitselman, and E. F. Kitselman. These three brothers, along with a fourth Kitselman brother, were from Ridgeville, a small town in northwestern Randolph County. The Kitselman brothers began a company that manufactured, beginning in 1883, roller skates and, beginning in 1887, wire fences. The Kitselman brothers moved their operations to Muncie in 1900. In 1901, they formed what would become one of the largest wire-making companies in the country, the Indiana Steel and Wire Company.7

By 1886, the Goodriches had recognized the tremendous growth opportunities associated with the natural gas fields. As a result, they pooled the wealth they had garnered from farming and retail and entered into the utility business. At the turn of the century, it was not uncommon for the Goodrich brothers to help locate natural gas fields and actually Edition: current; Page: [50] do some of the legwork in drilling the wells.8 This was their start in the public utilities business.

On July 30, 1901, the Goodrich brothers formed, with a capital stock of $50,000, a second natural gas company known as the Union Heat, Light and Power Company of Union City, Indiana. James, Percy, John, and Edward were four of the six directors. Union Heat provided heat, light, and electricity to consumers in both eastern Randolph County and western Darke County, Ohio. It also operated for the purposes of drilling, buying, and selling natural gas and oil. James’s initial investment in the company was $12,400, which entitled him to 248 shares. By 1915, he owned 956 of the total of 3,000 shares. The other brothers owned a total of 760 shares between them, and the remaining investors were business associates of the Goodrich family: Jesse “Jett” Moorman, William E. Miller, and James W. McCamish. For several years, James Goodrich served as president of this company. In 1915, Union Heat purchased the Portland Gas Company.9

Besides the Rock Oil Company and Union Heat, the Goodrich brothers had controlling interest in the Lynn Gas Company and the Indiana-Ohio and the Western Ohio Public Services Companies (electric companies). These utilities also served communities in east-central Indiana and west-central Ohio, including Union City, Indiana; Union City, Ohio; and Greenville, Ohio.

During this time, the Goodrich brothers maintained their interest in their farm operations. After graduating from high school in 1881 with his brother James, Percy Goodrich began with the other brothers a farming operation called simply Goodrich Farms. Eight years later, in Edition: current; Page: [51] 1889, Percy quit farming to sell furniture and hardware. John and Ed Goodrich were also involved in this business known as the Goodrich Brothers. The three of them operated stores both in Winchester and Maxville, the latter a small town six miles west of Winchester that has disappeared. Nine years later, on January 5, 1898, the five brothers established the Goodrich Brothers Hay and Grain Company. It bought and sold grain, seed, and farm implements in the area. By 1917, the company (which had by then become the Goodrich Brothers Company) was the largest grain dealer in Indiana. A forerunner of the company had been established by the brothers’ maternal grandfather, Edward Edger, in 1860. The only stockholders of Goodrich Brothers were the five brothers and their wives. John was president. Percy, the oldest brother, became secretary and general manager of the hay and grain business. He later also assumed the title of chairman of the board.10

The Goodrich brothers also invested heavily in electric companies, such as Citizens Heat, Light and Power Company, based in Winchester. Reorganized on July 21, 1913, Citizens Heat was the successor to the Citizens Water and Light Company, which had been established on June 6, 1899. Citizens Heat provided electricity to approximately nine thousand Randolph County residents. Citizens Heat also owned the water company in Winchester. Edward Goodrich managed Citizens, while William Wallace served on the board of directors with Edward. Several other businessmen with whom the Goodrich brothers would form financial alliances in banking, coal, and other ventures served as directors, including Jesse Moorman, William E. Miller, and Thomas L. Ward, all of Winchester, and Edwin F. Kitselman of Muncie.11

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Around the turn of the century, a remarkable new invention, previously found only in large cities, became available in people’s homes—the telephone. The Goodrich brothers pooled their money and became directors of several local telephone companies: Investors Telephone Company, Interstate Telephone and Telegraph Company, and the Eastern Indiana Telephone Company. The latter company was one of the first the brothers invested in. The Eastern Indiana Telephone Company was also located in the family’s hometown of Winchester. James, Percy, and Edward were three of the original eighteen investors in Eastern Indiana Telephone when it was formed on January 5, 1899, with a capital stock of $150,000. Percy Goodrich was treasurer of the company.12 These three telephone companies served east-central Indiana and west-central Ohio. From the late 1800s to 1920, the Goodrich brothers established or bought into one small-town utility after another. These included the Washington Water, Light and Power Company in Washington (Daviess County, Indiana) and the Jeffersonville Water Company in Jeffersonville Edition: current; Page: [53] (Clark County, Indiana). James Goodrich obtained both companies through serving as receiver of the Cincinnati, Chicago and Louisville Railroad from 1908 to 1912.

At the turn of the century, there were no state or federal agencies regulating gas, electric, telephone, or other utilities. Anyone who could raise the funds to buy pipelines or put in telephone poles and wire could do business. This resulted in fierce competition. Often, several gas, electric, and telephone companies began to operate in the same area. It was not uncommon to have two or three gas lines running down the same city street; the same was true of telephone poles and lines. But, as with nearly any industry, only the efficient survive, and the Goodrich companies were efficient. In 1920, the Goodriches’ gas company put out of business the Monarch Gas Company in Winchester. Within a short time, the Goodriches held a monopoly in most basic utilities: coal, electric, water, natural gas, and telephones. Percy Goodrich ran the coal and grain operations of the various companies, Ed operated the electric and water, and William Wallace, the natural gas. The brothers all served as directors or officers of the various telephone companies.

James’s business interests far exceeded east-central Indiana. At one time or another over the next twenty years, he would assume several other positions: president of the Patoka Coal Company in Pike County, the Railway Service and Supply Company in Indianapolis, and the National City Bank of Indianapolis; secretary-treasurer of the Winona Railway Company in southern Indiana; treasurer of the Union Reduction Company; and director of dozens of other companies, including the Red River Refining Company, an oil refining company in Chicago, as well as the Goodrich brothers’ utility and grain companies in east-central Indiana.

Shortly after the turn of the century, the family became involved in the business that they would be most closely associated with in their home community—banking. On June 1, 1901, James founded, along with thirty-four other local stockholders, the Peoples Loan and Trust Company. James served as president of Peoples until his death in 1940. In 1901, the amount of the capital stock was set at $30,000. Within one Edition: current; Page: [54] year of opening, Peoples had total assets of $115,000. By 1907, the bank had outgrown its original location and moved to its present location at the corner of Meridian and Washington streets in Winchester. Early loans were made for everything from the purchase of local businesses to teams of horses for farmwork. Over the years, the Goodrich brothers bought interests in various other small-town Indiana banks, including banks in Eaton, Farmland, Modoc, Redkey, Ridgeville, and Tipton, and Citizens Bank in LaCrosse. The banks in Farmland and Modoc were converted into branches of Peoples Loan and Trust in 1931, as was the Ridgeville bank in 1939. Peoples Loan and Trust eventually eclipsed in assets the much older Randolph County Bank, which had been established in 1865. Peoples Loan and Trust became the flagship of the Goodrich family’s later business enterprises.13

Most, but not all, of the business ventures taken on by the Goodrich brothers became successful. Shortly after the turn of the century, James and Percy had become friends with a farmer and businessman in Huntington, Indiana, by the name of Edward Wasmuth. Wasmuth had been a political associate of James Goodrich’s, serving as state Republican chairman during the time that Goodrich was governor. He had earlier served as president of the National Hay Association, where Wasmuth became good friends with Percy. It was through these connections that the Goodrich brothers invested in Wasmuth’s business, a furniture company in Peru, Indiana. The Wasmuth-Goodrich Company came into being on July 16, 1919. It mostly made and sold kitchen cabinets. Percy Goodrich was vice-president of the company, while James and, later, Pierre, were directors. By the 1930s, however, the Depression had hit hard, making luxury items such as kitchen cabinets expendable. The company was dissolved in October 1936 by the Miami County Circuit Court.14

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On another occasion, the Goodrich brothers failed to capitalize on a golden opportunity to gain an even larger share of the midwestern agribusiness. Harold W. McMillen, a Fort Wayne native, had approached Percy in the early 1930s about merging the Goodriches’ grain business with his sugar-beet operation in Decatur, Indiana. McMillen proposed that he would purchase and store sugar beets and the Goodrich Brothers would expand their operations in grains: corn, wheat, soybeans, and oats. For some reason, the brothers rejected McMillen’s merger offer.15 McMillen decided to establish his own grain company and formed Central Soya, which has become one of the largest agribusinesses in the country.16 Instead of merging with McMillen, the Goodriches made one of their few poor business decisions when they merged many years later, in 1947, with the Acme-Evans Milling Company in Indianapolis. The merger would ultimately involve a lengthy court battle by Pierre in the 1960s and the demise of the Goodrich brothers’ grain operations. Still, the Goodrich brothers enjoyed phenomenal success in the business world. By the 1920s, their family’s financial dynasty was just beginning to be formed.

Chapter 7: The Early Years, 1901–1916

After having served on the Winchester School Board for thirteen years, James Goodrich was one of three local men appointed in July 1912 to the Winchester Library Board. In 1906, a group of nine women, including Elizabeth and Cora Goodrich, had established the Winchester Association for the purpose of raising funds to build a town library. They began soliciting subscriptions but fell far short of raising a sufficient amount. Finally, in 1916, the Andrew Carnegie Foundation contributed $12,000 to the local library board, and a library was built on East Street on the site of the old Winchester High School, which the five Goodrich brothers had attended. Today, a new addition to the library houses the James P. Goodrich Room, built with funds contributed by the Winchester Foundation, which Pierre established in 1945.1

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Pierre Goodrich was introduced to politics at a very early age. By the time he was five, his father had already served as Randolph County Republican chairman and had been appointed Republican chairman of Indiana’s Eighth Congressional District. In 1901, when Pierre was seven, James Goodrich was selected chairman of the Indiana Republican Party, a position he held for the next decade. During Pierre’s formative years, he was almost certainly exposed to dozens, if not hundreds, of local, state, and national political figures.

According to those who still remember Pierre when he was a teenager, he was not particularly athletic, and his mother was constantly fearful that he would take on some sort of dangerous activity. Cora Goodrich often admonished Pierre to safeguard himself from even the most benign activities. For instance, she was strongly opposed to her son’s swimming. She would relent to his pleas to go to a nearby pond only if he promised not to get wet,2 and she would grant permission for Pierre to play baseball only if he promised he would not run.3 Cora Goodrich could be gracious, but she was also a worrier when it came to the expenditure of money or anything to do with Pierre. It was Cora who directed Pierre into such safe activities as reading, music, and dancing.4

“Pierre’s mother would often call and ask, ‘Do you know where the boys are at?’” said the late Mrs. Francis (Mary) Simpson, a lifelong resident of Winchester. Simpson’s two older brothers, John and George Jaqua, were Pierre’s childhood friends. “Cora’s constant checking up on Pierre aggravated Jim Goodrich,” said Mrs. Simpson. “He would say to Cora, ‘Why don’t you just leave the boys alone?’”5 James Goodrich had Edition: current; Page: [58] experienced and survived all kinds of youthful bumps and bruises.6 He did not think that a little of the same thing would hurt his son.7

A comical account of Goodrich family relations was published in a local Winchester newspaper in 1911. According to the article, James Goodrich had presented his wife with a new car on her fiftieth birthday (June 26, 1911). Jim had invited Cora and Pierre to go touring in Indianapolis, where Jim Goodrich had set up a law practice in 1910 under the firm name of Robbins, Starr and Goodrich. After spending the afternoon riding and viewing urban Indianapolis, the three headed eastward toward Winchester, barely escaping disaster.

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James Goodrich later regained the driver’s seat only to wreck the new car in Anderson, Indiana. The elder Goodrich was a poor and impatient driver, obtaining countless speeding tickets in racing about the state: He would speed until caught, pay the fine, and then race off again until the next encounter with a patrolman. He also experienced several automobile accidents, the most serious being in 1918 when he collided with a streetcar in Indianapolis, which nearly cost him his life.9 One anecdote about James Goodrich’s driving habits may say it all. One weekday, he was returning from Indianapolis to Winchester when he picked up a hitchhiker. The following week, on his return to Winchester along the very same route, the same hitchhiker appeared beside the roadside. Goodrich stopped to give the man another ride, but the hitchhiker refused, stating that he would be crazy to ever get in a car again with James Goodrich behind the wheel.10

Pierre Goodrich had, from childhood, an almost insatiable curiosity about everything. During Pierre’s teenage years, his father once bought a used car. Pierre methodically took the vehicle apart to see how it was built and then put it back together.11 In this sense, father and son were Edition: current; Page: [60] much alike. James Goodrich once lit with a match gasoline that had spilled out over his automobile’s gas tank. After extinguishing the fire, the garage owner asked Goodrich why he would do such a stupid thing. Jim Goodrich’s response was that he was curious to see what would happen.12

As a youth, Pierre was a constant visitor to the town’s excellent bookstore. The store was operated by a succession of retired school superintendents who, Pierre remembered, were rather broadly educated.13 He traveled to Mexico during the Christmas holidays of his senior year in high school, and the southern adventure gave him an opportunity to play cowboy when he donned a “38-40 Winchester-Carbine rifle,” with which he shot down coconuts, and to explore by horseback Guadalajara and southwestern Mexico near Manzanillo.14

On the evening of June 3, 1912, Pierre received his diploma from Winchester High School as one of twenty-one graduating students. Goodrich, like his classmates, had to write a graduation composition based on an assigned topic. His friends Ralph Bales and Tom Veech were given the topics of, respectively, trade relations with South America and the 1857 Dred Scott Supreme Court decision. Carl McCamish and Pierre were assigned the more esoteric subjects of, respectively, the evolution of nations and universal peace.15 The commencement speaker was Dr. E. H. Lindley of Indiana University, whose address to the thirty-seventh Edition: current; Page: [61] graduating class of Winchester High School was “The Power of Man.”16

After graduation, Pierre’s close friend Carl McCamish went to Ohio State University to study medicine. Tom Veech journeyed with Pierre to Crawfordsville, Indiana, to matriculate at Wabash College. Pierre would be gone from his hometown to college, law school, and the military for the next eight years. At Wabash College in September 1912, Goodrich pledged with Phi Gamma Delta Fraternity, one of the few social organizations in which he took any long-term interest.17 The fraternity, then located at 217 College Street, housed approximately twenty young men from other small communities throughout the Midwest, including several close friends of Pierre’s: Phil Magner of Morris, Illinois; Howard Plummer of Kokomo, Indiana; and Fred Van Buskirk of Roann, Indiana. Goodrich was known as “Frisky” to his schoolmates, a group of young men with whom Pierre fit in well.

Wabash College would play an important part in the Goodrich family’s lives. James Goodrich served as a trustee of the college from 1904 to 1940 and held the position of chairman of the board from 1924 to 1940. John Goodrich, Pierre’s first cousin, attended Wabash briefly in 1912 before returning to Winchester. Perce G. Goodrich, Pierre’s youngest first cousin, graduated from Wabash in 1930. Others who later became associated with Pierre also had strong Wabash connections: John Macy, Jr., Goodrich’s first law partner (B.A., 1912); Dr. Russell Engle (1915–17), a lifelong friend and business partner; Bill Hunter, Pierre’s personal attorney in Winchester (B.A., 1937); and Albert Campbell, Pierre’s longtime law partner, who later became director of development at Wabash from 1962 to 1976 and was selected nonalumnus of the year in 1974.18

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Wabash left an indelible impression on Pierre. Published in a college pamphlet at about the time Pierre became a student, Wabash’s creed reflected the rigorous educational approach applied at the small liberal arts college: “[Wabash] believes that the best foundation for culture and for vocational pursuits is thorough training in a few studies rather than a smattering of many things. Habits of mind, rather than mere information, count largest in the long run. The foundation of the educational process is Discipline, and Discipline is not secured by superficial pursuit of many studies.”19

During Goodrich’s undergraduate days, he participated in several extracurricular activities. In addition to writing for the school’s newspaper, The Bachelor, he participated in the Shakespeare Club, Greek Chorus, the YMCA cabinet, and the Wabash Board (the school’s student government body). Goodrich was especially fond of Professor Jasper Asaph Cragwell, who taught mathematics and apparently was at his best during the time Pierre studied under him. Cragwell, a true individualist, often walked around campus in his bare feet.20

In May 1915, Goodrich was one of two juniors elected to Phi Beta Kappa, the national honorary fraternity. A year later, in May 1916, Pierre graduated at the top or near the top of his class (out of sixty-two graduating seniors) with a B.A. in Humanities.21 Receiving his degree was not Edition: current; Page: [63] the end of his relationship with Wabash. In 1940, Pierre assumed his father’s position on the board of trustees, a position he would hold for nearly thirty years. Wabash held a special place in Pierre’s heart, because it was there that he established close friendships with such people as the college’s eighth and ninth presidents, Frank Sparks and Byron Trippet, and dean and economics professor Benjamin A. Rogge.

At Wabash, Pierre was required to watch his money closely.22 Goodrich’s secretary Rosanna Amos recalls, “I remember Mr. Goodrich telling me that apparently his parents were not given to just letting him have money just because they had money. . . . They knew how hard the Edition: current; Page: [64] wealth came, and they didn’t just let him run free with it.” At Wabash and later at Harvard, Pierre had to keep a written ledger of literally every penny he spent.23 Cora Goodrich, who was primarily responsible for her son’s strict accounting of expenditures, was known for her extreme frugality. In fact, Cora Goodrich’s efforts to economize were renowned among her family and friends and were often humorous.24 Yet, interestingly, her parsimonious attitude centered mostly on her family’s personal expenditures. There were many other instances throughout her life in which Cora Goodrich was extremely generous.25 Emma Lieber, wife of the former Indiana conservation commissioner Richard Lieber, remembers Cora as a charming, self-confident, “very straight-laced lady” who was amazingly naïve at times.26

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Pierre’s own thrifty nature was an eccentricity that many early friends and associates recall. For instance, Pierre was notorious for wearing old scuffed shoes and rumpled suits,27 and in the early days, when the collars of his dress shirts became frayed, Goodrich would have them turned and resewn rather than buy new ones.28 John Thompson of Winchester remembers that Goodrich attended the opening of a branch office of the Peoples Loan and Trust Company on May 18, 1968, wearing pleated pants and suspenders. The suit had been out of style for more than a decade. “When Pierre was jokingly asked by Bob Oliver [a Winchester attorney] where he got his suit,” Thompson recalled, “Pierre told us that he had found it in the attic the night before.”29

On another occasion in the early 1920s, Goodrich asked Russell “Buss” Moorman, a Winchester dentist, to repair and clean a saxophone for him. It purportedly took Moorman a couple of days to tear apart, clean, and overhaul the instrument. When Moorman returned it to Goodrich, Pierre gave him twenty-five cents.30 But like his parents, Pierre could also be generous for a cause that he believed in. Goodrich’s underlying attitudes about wealth and its proper use reveal much about the influences on him as a youth and the things he thought truly important.

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Chapter 8: The Political Years

It was the most exciting day in Randolph County’s history. It was bigger than the day the Civil War Monument was dedicated in July 1892 or the day that the former president Benjamin Harrison addressed thousands from the courthouse lawn in 1888. It would be even more important than Republican presidential candidate William Howard Taft’s tour of Winchester in 1908 or former President Herbert Hoover’s visit to the Goodriches in 1939. The crowd was enormous—at least ten thousand people clustered around the train depot. Bands stirred up the people for two hours. Campaign posters and handbills were tacked to anything that did not move and some things that did. Boys were perched in trees and on telephone poles along the train tracks, straining their eyes to be the first to glimpse the smoke pouring from the Special. It was a political rally, but not just any political rally. It was October 11, 1900, the day Teddy Roosevelt came to town.1

It seemed that every Republican within a hundred miles was present, including United States Senator Charles W. Fairbanks, United States Congressman George W. Cromer, and the Republican candidate for Edition: current; Page: [70] governor, Winfield T. Durbin. The welcoming committee, composed of the Indiana Supreme Court justice Leander Monks (from Winchester), John W. Macy, Sr., and others, waited patiently. Then the Special was sighted, and within no more than a minute, the train stopped at the platform and the great man himself appeared. “As big as life,” one of the committee men said later, “and twice as natural!” The welcoming committee, gaining composure, suddenly sang out: “Welcome to our city, Governor Roosevelt.”2

“De-e-eelighted!” roared Teddy, and Randolph County’s greatest day had officially begun.

The governor of New York, who would become the nation’s twenty-sixth president within the year by virtue of a combination of talent and fate, was escorted to the courthouse square. After several enthusiastic introductions of dignitaries, the irrepressible Teddy Roosevelt rose from the platform to address the multitude. The governor first thanked the county for its devoted support of the Union cause in the Civil War. He then made reference to a matter of more topical importance—the 1900 national election. With only three weeks left until voting day, Teddy blasted the opposition for thirty minutes, deprecating the claims and accusations of the Democratic presidential candidate, William Jennings Bryan. It was said that Teddy became so enraged that he “beat to pieces” his new Stetson hat on the platform railing as he delivered his oration.3

Although Governor Roosevelt departed shortly after his vitriolic speech, the day’s events had barely begun: There was a parade lasting more than two hours in which military regiments and others marched before the speakers’ stand; Rafe Murray and George Bright led their “Deerfield Rough Riders” up “San Juan Hill” (actually, in pancake-flat Winchester, it was a small incline known as Kettle Hill); bands that had come from as far as fifty miles away played patriotic music; glee clubs sang; and spectacular floats, representing patriotic, temperance, and labor union themes, were pulled by horses throughout the town. The Edition: current; Page: [71] largest delegation, from nearby Portland, Indiana, had brought twelve hundred marchers. The day’s celebratory events ended when a Randolph County native, Congressman James Watson, delivered an eloquent speech to a packed house. At midnight, the “Old 44” cannon on the courthouse square was fired and the Artillery Company bugler sounded “taps.”4

As was typical, James P. Goodrich, now the Republican chairman of the Eighth Congressional District, was so busy organizing the whole affair that he took little part in the official activities of the day. Staying in the background was a habit of his. Nonetheless, his work for the Republican Party did not go unnoticed by such men as Senator Fairbanks and even the great Teddy Roosevelt himself. James Goodrich’s rise in the party had begun about four years earlier, when William W. Canada, a Winchester attorney, resigned his position as Randolph County Republican chairman to accept a position in Washington, D.C. Immediately John Macy put James Goodrich’s name forward as Canada’s successor. Despite objections by local senior Republicans that James Goodrich was too young, Goodrich was elected chairman by a unanimous vote of the committee in 1897. He was only thirty-three years old.5

Goodrich was reelected in 1898. Soon afterward, he headed the statewide campaign of Union B. Hunt, a Winchester lawyer who sought the position of Indiana’s secretary of state. Hunt was nominated by the Republican Party and was elected in November. Political debutant Goodrich quickly learned the game of patronage and was consulted regarding numerous unfilled federal and state positions. In early 1898, Goodrich was encouraged by United States Congressman George Cromer to seek the chairmanship of the Eighth Congressional District. Despite a plot Edition: current; Page: [72] to derail his bid, Goodrich prevailed by traveling throughout the district to meet with nearly every voting delegate. He received more than 90 percent of the delegate vote and assumed the chairmanship of Indiana’s Eighth Congressional District at the age of thirty-six.6

After James Goodrich’s election as Eighth District chairman in 1898, his political work increased substantially. John Macy agreed to take over much of James’s law practice so that the loss of income would not be substantial. As Eighth District chairman, Goodrich became intimately involved with state politics; he was wooed by the state’s two powerful Republican United States senators—Charles W. Fairbanks, who would become vice-president to Theodore Roosevelt in 1905, and Albert J. Beveridge, Goodrich’s former classmate at DePauw University. Fairbanks and Beveridge courted his support because their own political futures depended largely on the ability of the state, district, and county chairmen to deliver a Republican legislature: Until 1912, when Article XVII of the Constitution was ratified, United States senators were not elected directly by popular vote, but were selected by the state’s legislature. Goodrich worked tirelessly in the campaign of 1900 to obtain a Republican victory in the Eighth District. The hard work paid off. A Republican landslide occurred: William McKinley was elected president over William Jennings Bryan (only to be assassinated in September 1901 and succeeded by Theodore Roosevelt); Winfield T. Durbin was elected governor, and a Republican majority was maintained in the state’s General Assembly.7

In late July 1901, Fairbanks approached Goodrich with the idea that Goodrich should seek the chairmanship of the Republican state committee. Fairbanks was a political power not only within Indiana, but nationally as well. He had been offered the vice-presidential nomination by McKinley in 1900 and had refused it, but he accepted it when Roosevelt offered it to him again in the 1904 election. Goodrich returned Edition: current; Page: [73] to Winchester and consulted with Macy about Fairbanks’s desire to see him as state party chairman. Macy encouraged his nephew to accept the post. To show his support, Macy offered to divide the earnings of their law practice while James was working on party activities.8 Goodrich met with Fairbanks the following day. He agreed to take the position on condition that no contributions would be accepted by the party from corporations that had direct dealings with the state. Fairbanks acceded to the request. On the following day, August 1, a meeting was held in Indianapolis with the state committee members and Goodrich was elected unanimously.9

In his autobiography, James Goodrich appraised his political responsibilities in Indiana over the next twenty years: “I might say without egotism here that from that time on down until 1921, the general policy of the Republican party so far as the organization was concerned was directed by me.”10 Within thirty days of his election as the state’s Republican Party chief, Goodrich was offered a retainer of five thousand dollars a year to represent the J. P. Morgan interests in Indiana. The true intent of the company, Goodrich realized, was “to employ the Edition: current; Page: [74] Chairman of the State Committee and not a country lawyer from over at Winchester.” The new party chief declined the offer, thwarting the first of many corporate intents to use his new powerful position.11

In 1902, Goodrich was again elected state chairman by the Republican Party. Almost all higher state officeholders went Republican: Daniel E. Storms of Stockwell won election as secretary of state, Charles W. Miller of Goshen was elected attorney general, and David E. Sherrick of Noblesville was elected auditor.

In 1904, James Watson chaired the Republican State Convention. James Goodrich was again elected state Republican chairman, despite an attempt by Albert Beveridge to defeat him. During most of their political lives, Goodrich and Beveridge had a guarded relationship. Beveridge, a man of great abilities, served in the United States Senate from 1889 to 1911. He is still considered one of the greatest orators in the history of the Senate, in the company of Daniel Webster of New Hampshire and John C. Calhoun of South Carolina. He was also a writer of some repute, especially in the area of biography, having written the life histories of Abraham Lincoln and the former United States Supreme Court justice John Marshall. For his biography of Marshall, Beveridge received the Pulitzer Prize in 1920. Goodrich held Indiana’s young senator in some esteem:

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Goodrich had a difficult time stroking the egos of Fairbanks, Beveridge, and Watson while maintaining party unity. He wrote of the task: “There was a great deal of jealousy among the men prominent in Indiana politics during the period I was State Chairman. Fairbanks, Beveridge, [and] Watson all had their eyes on the presidency, each was jealous of the other and it was somewhat of a job for the organization to steer a course that would give the least possible offense to any one of the three and yet be fair to all.”13

It was shortly after the 1904 election that an embarrassing situation occurred for the Indiana Republican Party. A number of state Republican officeholders, most notably Daniel Storms, who was secretary of state after Hunt, and David Sherrick, state auditor, were accused of embezzling state funds. While neither Goodrich nor the Republican governor, Harold Hanley, was implicated in the misappropriations, it was during their watch that Storms, Sherrick, and the others were elected. The result of the fiasco was mixed: Storms and Sherrick were forced to resign, but a depository law was passed by the legislature that required the state to adopt modern auditing practices.14

In December 1905, James Watson was elected majority whip in Congress under the powerful Speaker of the House Joseph Cannon.15 Despite his rise in Congress, Watson still dreamed of running for governor of Indiana. James Goodrich was again elected state party chairman in 1906 and 1908. At that time, Indiana law limited a governor to one term. In 1907, toward the end of Governor Hanley’s term, Hanley became very interested in anointing a successor. Goodrich recalled that Hanley sought him out to run for governor for two reasons: first, Hanley believed that the Winchester lawyer and businessman was qualified, and, second, and perhaps more important, Hanley knew that if Goodrich ran, James Watson would not. When Goodrich refused to be a candidate, the expected happened: Watson threw his hat into the political ring, seeking the top state post as a stepping-stone to the presidency. Edition: current; Page: [76] Watson received the Republican nomination on April 2, 1908.16 Goodrich, who had persuaded Watson not to run for governor in 1904, again strongly discouraged his close friend from running in 1908. Goodrich’s reason was that Watson had shot himself in the foot by flip-flopping on the all-important issue of temperance. Goodrich recalled that Watson was not committed to either position and played each against the other. “The trouble was that while [Watson] would whoop it up for the dry cause when with the Epworth Leaguers [members of a temperance society] and Anti-Saloon League, when he got with the boys at Terre Haute, Evansville, Lake County and other places he would put in his time drinking beer with the boys and assuring them he would be all right in case he was elected. The result was that neither side trusted him.”17

Watson’s equivocation on the temperance issue was his downfall. In the November 1908 election, he lost to the Democratic candidate, attorney Thomas Marshall of Columbia City, by a meager eight thousand votes. Marshall, who would become vice-president in 1913 under Woodrow Wilson, was essentially handed the governor’s seat by Watson’s blunder. Interestingly, the 1908 governor’s race caused Goodrich and his wife Cora to start thinking about their own political future. After the 1908 state Republican convention, James Goodrich recorded in his diary that Cora was quite smitten by the political maneuvering she had witnessed. Edition: current; Page: [77] “What caused me to record this I do not remember,” he wrote to Pierre. “[I]n fact, I was astonished when I found it there [in my diary], at the conclusion of the record of the day’s [Convention] fight: ‘From the expression upon her face, I believe that Mrs. Goodrich wants to be “Mrs. Governor” some day.’”18

At the 1908 Republican National Convention, held in Chicago from June 16 to June 19, Goodrich was a delegate from Indiana serving on the Committee on Credentials.19 William Howard Taft of Ohio was nominated for president by the Republicans, and he easily defeated the Democratic nominee, William Jennings Bryan, in the November general election. In anticipation of the 1910 presidential election off year, Goodrich begged to be relieved of his duties as state Republican chairman to return full time to his legal practice and business interests. Fairbanks, Watson, and even Beveridge asked him to continue, but he declined. Deferring to his wishes, the three politicians in January 1910 honored Goodrich at a farewell dinner at the Claypool Hotel in Indianapolis.20

During the next several years, Goodrich had to bail Watson out of one scrape after another. In 1908, Watson had given up his seat in Congress to run for governor and had lost. Once William Howard Taft took office as president, he offered the defeated gubernatorial candidate the position of either ambassador to Cuba or governor of Puerto Rico.21 Watson wanted to return to politics, however, and he hoped to make some quick money by working as a lobbyist in Washington, D.C., before seeking political office again in Indiana. Watson turned down Taft’s offers, which paid only ten thousand dollars a year, in favor of the more lucrative prospect of lobbying his former colleagues in Congress.22

No sooner had Watson returned to Washington as a lobbyist in 1909 Edition: current; Page: [78] than he became embroiled in a scam for which he was nearly prosecuted. Two states—California and Louisiana—were fighting for the right to host the Panama Exposition (promoting the construction of the Panama Canal). Watson had taken five thousand dollars as a retainer from a California delegation to promote the exhibition’s being held there. Soon afterward, the California delegation learned that Watson had also taken ten thousand dollars from a New Orleans delegation that believed that he was promoting their city as the site. Goodrich received a telegram from the former United States senator James A. Hemenway of Indiana, who had opened a law office with Watson, begging Goodrich to come to Washington to the aid of their mutual friend. Once there, Goodrich relates, it “took everything that [Vice-President] Fairbanks, Joe Cannon [Speaker of the House of Representatives], Hemenway, McKinley of Illinois and myself could do to prevent publicity and prosecution.” According to Goodrich, “Watson finally refunded the money to California and the matter was quieted down.”23

In an equally serious controversy in 1913, Watson was alleged to have received during his 1908 run for governor personal funds that were purportedly raised for his campaign by a lobbyist for the National Association of Manufacturers. The investigation of the Mulhall Affair, named for the lobbyist, resulted in weeks of hearings before both the United States Senate and the House.24 Again, Goodrich had to make statements in defense of his friend, given that he was state Republican chairman when the alleged “slush fund” money had been raised. Time and again, Goodrich came to Watson’s defense, especially in financial matters.25 Edition: current; Page: [79] Watson was simply too caught up in politics to take the time necessary to make money without involving himself in scandals.26

It is clear that Goodrich’s involvement in Republican politics did not extinguish his business desires. Although he would not allow himself to be employed as a paid lobbyist while he was state chairman, he apparently saw nothing wrong with taking on other business that came to him as a result of his political position. In 1908, Albert Barnes Anderson, federal judge of the Southern District of Indiana, appointed Goodrich receiver of the Chicago, Cincinnati and Louisville Railroad (CC&L). Goodrich was still serving as state Republican Party chief at the time. Many of the New England bondholders of the railroad were none too impressed that the chairman of the state Republican Party, who had no experience running a railroad, had been appointed to such an important position. It was well known that appointments to receiverships were political plums generally reserved for the party in power.

Despite the criticisms, Goodrich pressed ahead. The position required him to spend considerable time in Chicago, where he had an office from 1908 to 1912. “I never worked harder in my life than I did in the four years when I was actively running the railroad,” Goodrich recalled.27 Over the next four years, Goodrich was able to turn the operations of the railroad around to the point that it was handling traffic at 90 percent of the gross income for operating expenses. Soon afterward, he opened negotiations to sell the CC&L to the Chesapeake and Ohio Railroad (C&O). The merger was finally consummated in 1912, with the bondholders of the C&O taking on the debts of the CC&L. When the bonds of the CC&L were finally sold, the first bondholders (now the C&O bondholders) received the payment of par value for their stock plus interest while the second bondholders received eighty cents on the dollar.28

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The bondholders of the Chesapeake and Ohio Railroad were so pleased with the early results of Goodrich’s work that they offered him another opportunity to expand his family’s interests in public utilities. These bondholders also owned the Jeffersonville Water Company and the Washington Water and Gas Company in Indiana. In 1908, both companies were in receivership. Goodrich could purchase the Washington Water and Gas Company if he would pay the price of the receivership certificates. He was also offered the opportunity to purchase the Jeffersonville Water Company if he would pay fifty cents on the dollar for the bonds. Goodrich accepted both offers. Goodrich purchased the Washington Water and Gas Company and filed a certificate of incorporation with the secretary of state’s office on June 30, 1908. The new company was named the Washington Water, Light and Power Company. Goodrich remained president of the company until 1919, when he stepped down and Jesse “Jett” Moorman, a business associate from Winchester, became head of the utility. At that same time, Pierre took his father’s position on the board. In 1913, the Washington Water, Light and Power Company purchased the Citizens Light and Fuel Company, thus expanding its area of service in Daviess County, Indiana.29

In January 1910, after resigning as state Republican chairman, Goodrich entered into a law partnership in Indianapolis with John Robbins and Henry Starr, both of whom were from Richmond, Indiana. In January 1913, Leander J. Monks resigned from the Indiana Supreme Court after serving for eighteen years and joined the firm, which came to be called Monks, Robbins, Starr and Goodrich. Its offices were located on the ninth floor of the Pythian Building in Indianapolis. Goodrich Edition: current; Page: [81] served as general counsel for the insurance department of the Knights of Pythias and performed other legal work. Goodrich practiced with the three attorneys until 1914, when he quit the practice of law to devote himself full time to his extensive business interests: banking, farming, mining, oil refining, railroads, public utilities, grain elevators, and bond houses.30

In 1912, as a result of his success in operating the Chicago, Cincinnati and Louisville Railroad while it was in receivership, Goodrich was appointed by a federal judge Renster, a Democrat, receiver of the Noelke-Richards Iron Works. Noelke-Richards had plants in both Indianapolis and Pittsburgh, Pennsylvania. The company had contracts to provide structural steel extending from Portland, Maine, to Seattle, Washington. Many of the creditors wanted to see Noelke-Richards go into bankruptcy. One of the company’s largest creditors was Bethlehem Steel Corporation of Pennsylvania. Goodrich met with the president of Bethlehem Steel, Charles Schwab. Schwab wanted bankruptcy, not an operating receivership. When Goodrich told Schwab that he thought that Noelke-Richards could pay fifty cents on the dollar if it were allowed to operate under a receivership arrangement, Schwab told Goodrich that the company would be fortunate to pay half that much. This prompted Goodrich to negotiate a deal with Schwab to accept twenty-five cents on the dollar. Only a year later, at the end of 1913, Goodrich disposed of all the assets of the company, paying creditors 87.5 cents on the dollar. Goodrich recalled, “Judge Renster did me the honor when the matter was closed up by stating publicly in open court that it was the most satisfactory trust that he had ever experienced either as a lawyer or judge.”31

Although James Goodrich had resigned from the chairmanship of the Indiana Republican Party in 1910, his political involvement continued. At the 1912 Republican National Convention in Chicago, he became a key Edition: current; Page: [82] player in an attempt to select a presidential nominee who could defeat the Democratic presidential candidate, Woodrow Wilson. In 1912, Goodrich had been appointed to the Republican National Committee as the Indiana delegate, succeeding Harry S. New of Indianapolis. New would become a United States senator in 1916 and postmaster general for President Warren G. Harding in 1923. Beginning in 1912, Goodrich was also selected to serve on the Republican National Executive Committee.

The Indiana Republican Party was in disarray at this time, and it looked to Goodrich for leadership. In an unprecedented situation, a former president, Theodore Roosevelt, was challenging the incumbent president, William Howard Taft, for the Republican nomination. Both desperately wanted to capture Indiana’s delegates at the national convention. Goodrich told Roosevelt that he would support Taft, because Taft was the incumbent. Goodrich knew, however, that the state strongly favored Roosevelt. When the vote was tallied at Indiana’s Eighth Congressional District Convention, Roosevelt won by a mere two votes. Taft personally asked Goodrich to contest the election, but Goodrich refused; instead, he made a motion that the selection of the Roosevelt delegates be unanimous, and that motion was carried. At the Indiana state convention in March, however, the Taft forces came out on top with a majority of 105.32

The fight between Taft and Roosevelt continued at the national convention in Chicago in June. James Watson, Charles Fairbanks, and Harry New served there as delegates-at-large from Indiana. Goodrich was a delegate by virtue of being a national committeeman. At that time, state party primaries did not precede the national convention. Therefore, at the convention, the selection of the party’s nominee for president was the primary task of the delegates. At the 1912 convention, however, the Republican National Committee, made up almost entirely of loyal Taft supporters, allowed Roosevelt only 19 out of 254 contested seats. The anomaly was that Roosevelt, in the minds of the American public, was by far the more popular figure of the two. Roosevelt let it be known in advance that he would not be bound by the convention Edition: current; Page: [83] results. It soon became evident to Goodrich that the fight between Taft and Roosevelt had become so acrimonious that the bloodbath would greatly decrease the chances of the eventual nominee’s defeating the Democrat presidential nominee, Woodrow Wilson. On June 22, Goodrich met with Roosevelt in the Florentine Room of the Congress Hotel and confronted the former president. Goodrich knew that Roosevelt would never step aside to allow Taft to be the nominee, but he believed that Roosevelt might accept the Missouri governor Herbert S. Hadley, a close friend of Roosevelt’s, as a compromise candidate. Goodrich was willing to nominate Hadley if Roosevelt conceded to the dealmaking. After waiting for two hours for Roosevelt to discuss the proposal with his top advisers, Goodrich was summoned into the former president’s suite: “I went to Roosevelt’s room on his invitation. He was alone. He told me the result of the conference. He said, ‘There can be no question but that I am the choice of the Republican party today. If Taft steals this nomination from me, the fight has only begun.’”33

Roosevelt overestimated his support among the delegates, who were bound to Taft. Taft prevailed as the Republican nominee after Roosevelt and his throng ultimately walked out of the convention. The irrepressible “Teddy,” however, was true to his word. He proceeded to form the Progressive Party (better known as the Bull Moose Party, because Roosevelt said that he was as fit as a bull moose when questions about his health were raised), and he fought Taft till the end. Just as Goodrich and the political pundits had predicted, the resulting bitter campaign between Roosevelt and Taft split the traditional Republican vote. This resulted in Wilson’s winning by a large electoral margin in the November election. Taft came in a distant third.34

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At that point, Goodrich turned his political attention to his home state, where the Democratic Party had also prevailed by electing two successive governors (Thomas P. Marshall in 1908 and Samuel M. Ralston in 1912) and two United States senators (Benjamin F. Shively and John W. Kern). In an attempt to restore the state Republican Party machinery to its previous dominance, Goodrich sought out a young, bright lawyer from Sullivan, Indiana, to serve as party chairman. His name was Will Hays. The two men had first become acquainted in 1902, when Hays had become Sullivan County Republican chairman. Goodrich was greatly impressed with Hays’s energy, his Presbyterian values, and his ability to “dramatize things.” He wrote years later that Hays was “the best publicity man that ever lived.”35

By 1906, Goodrich had appointed Hays head of the Republican Party State Speakers Bureau, responsible for organizing more than one hundred speakers in ninety-two counties and thirteen congressional districts.36 In 1912, Hays received the appointment of vice-chairman of the state Republican Central Committee. In 1914, he was finally elected, with Goodrich’s assistance, state Republican Party chairman. At age thirty-five, he was two years younger than Goodrich had been when Goodrich had assumed the position in 1901. Hays’s selection as state party chief was significant to Goodrich’s own personal political ambitions. It served as the first stepping-stone toward reuniting the Indiana Republican Party and paved the way for Goodrich’s run for the governor’s seat in 1916.

Chapter 9: The 1916 Campaign

As the new chairman of the Indiana Republican Party, William Harrison Hays had a tremendous challenge before him. In the election of 1912, the Republican Party had come in a distant third behind the Democrats and the Progressives (the Bull Moose Party) in Indiana as well as nationally. Only twice since 1860 had the Republican Party failed to place its candidate in the White House. Hays’s approach was to return traditional Republican voters to the GOP fold by inviting Progressive Party members from throughout the state to participate in Republican meetings. He also flooded state newspapers with columns and editorials on major issues, cleverly promoting the Republican point of view. He worked closely with James Goodrich and Harry S. New, a former Republican Party national chairman and United States Senate candidate in 1916, to meet with large numbers of precinct committee members in nearly every county in Indiana.1

Hays’s diligence and brilliance paid big dividends for Goodrich’s political aspirations. In the autumn of 1915, James Watson had approached Edition: current; Page: [86] James Goodrich to inquire whether his longtime friend was serious about running for governor in 1916. Watson encouraged Goodrich to seek the office. Watson let it be known that if Goodrich did not run he would. If Goodrich did run, Watson would challenge the incumbent United States senator from Indiana, Democrat John W. Kern, who was up for reelection. Watson began pressing his former schoolmate for an early decision.2

Never one to react to someone else’s timing, James Goodrich first decided to test the political waters to see what interest a candidacy might generate throughout the state. He had political friends from South Bend to Evansville mention his name as a prospective candidate. Goodrich initially had serious qualms about running for governor. “I had always had a pretty high regard for the office, and was inclined to think of it in terms of [Oliver P.] Morton, [Henry S.] Lane, and men of that type, and I had no exaggerated notions about my own ability to fill that office,” he wrote.3 When the response throughout the state was highly favorable, however, he reached the conclusion that “there was nothing for me to do but to make the race.”4

Goodrich pursued the state’s top governmental position with intense energy and work. The first thing Goodrich did was to write a personal check for $40,000 and give it to his campaign manager, John McCardla. Goodrich admonished McCardla not to accept any contributions from any other individuals or groups. Goodrich believed that by bankrolling his own campaign he could avoid obligations to political contributors.5

Despite his twenty years of devoted service to the Indiana Republican Party and his hefty campaign war chest, Goodrich’s nomination was by no means certain. He would have to defeat two formidable candidates in the first state Republican primary: Warren McCray, a wealthy farmer from Kentland and the Tenth Congressional District, and Quincy Myers, a former judge of the Indiana Supreme Court, from Logansport. Edition: current; Page: [87] Goodrich acknowledged that he was no speechmaker, but he did not allow this weakness to hinder his pursuit of the office. He opened his campaign by delivering an announcement address in Greencastle, Indiana, the home of his alma mater, DePauw University, on December 29, 1915.6 While McCray relied heavily on advertising in newspapers, Goodrich took his campaign directly to the people in cities, towns, and rural areas across the state. He wrote approximately twenty-five thousand precinct chairmen whom he had met during the five political campaigns in which he had headed the state Republican Party; furthermore, Goodrich traveled and campaigned in every precinct in the state except four counties in McCray’s own Tenth Congressional District. Goodrich’s approach worked. He took the primary on March 7, 1916, in a landslide, winning the popular vote in eighty-seven out of the state’s ninety-two counties.7

With Goodrich in the governor’s race, Watson was determined to dethrone Kern, who was finishing his first term as the junior senator from Indiana. Watson, considered a favorite for the senate seat, unexpectedly lost to Harry New by a few thousand votes in the Republican primary. Strangely, Goodrich claimed that it was well known that Watson had aligned himself with McCray in the primary. It was an odd alliance, given that it was Watson who had encouraged Goodrich to run for the Republican nomination in the first place. Goodrich was convinced that had Watson made the race on his own, he could have defeated Harry New by fifty thousand votes.8

Shocked by his defeat, Watson alleged voter fraud and urged Governor Samuel Ralston, a Democrat, to appoint a special grand jury to investigate the primary election results in Marion County. No sooner had this occurred than a fortuitous event happened that affected Watson’s political future: Indiana’s senior United States senator, Benjamin F. Shively, unexpectedly died of a heart attack on March 14. Shively’s death occurred Edition: current; Page: [88] just a week after the primary election but before the state Republican convention. Thus, the Republican Party had the task of nominating two senatorial candidates, not just one, at the state convention in May.

Goodrich met with Will Hays the day after Shively’s death. He let Hays know that, should he desire Shively’s senate seat, he would support him over Watson. The next day, March 16, Hays sent to Goodrich, who was in New York on a business trip, a telegram to inform him that he wanted to remain chairman of the Indiana Republican Party. Shively’s death and Hays’s decision renewed Watson’s senatorial hopes. Watson dropped the allegations of voter fraud and lobbied his Republican colleagues for the chance to become a United States senator after all. Watson and New were formally nominated as the Republican Party’s senate candidates at the state convention.9

At the national level, Charles Evans Hughes received the Republican Party’s presidential nomination at the Chicago convention on June 8. He won over Indiana’s Charles Fairbanks. Hughes, a former governor of New York, resigned as an associate justice of the United States Supreme Court to accept his party’s candidacy. James Goodrich would become quite familiar with Hughes when Goodrich served with the American Relief Administration in the Soviet Union in the 1920s. Hughes then held the position of United States secretary of state. The 1916 election in Indiana drew national attention. Both major parties’ vice-presidential candidates were from Indiana (Fairbanks on the Republican ticket with Hughes, and Thomas Marshall on the Democrat ticket with Woodrow Wilson). The Prohibition Party candidate for president, J. Frank Hanly, was also from Indiana.

With the Republican Party nomination for governor sewed up, Goodrich still had to defeat the Democratic gubernatorial nominee, John Adair, to reach the statehouse. Adair hailed from Portland, Indiana, the county seat of Jay County, just twenty miles north of Winchester. He had served in Congress for the previous ten years. One of the criticisms of Adair’s gubernatorial candidacy, brought by Republican Edition: current; Page: [89] critics such as Will Hays, was that Adair had lived in Washington, D.C., for so long that he no longer was familiar with the pressing issues in Indiana.10

James Goodrich had his own criticisms to overcome, however, because of a perceived conflict between his business interests and his political pursuits. Goodrich was president of Washington Heat, Power and Light Company in Daviess County, Indiana; Union Heat, Light and Power Company of Union City, Indiana; and Peoples Loan and Trust Company in Winchester. He also served as a director of Jeffersonville Heat and Water Company, Citizens Heat, Light and Power Company, and several other public utilities in east-central Indiana. Opponents of Goodrich’s candidacy argued that he aspired to the governor’s seat so that he could increase his public utility holdings and wealth even more. A Republican announcement in the Winchester Herald a week before the election attempted to summarize and deflect the argument:

In an adroit political maneuver, Goodrich intentionally limited his campaign to the prominent state issues of the day: revision of the tax laws, abolition or consolidation of state positions and departments, workmen’s compensation, and centralization of power in the governor’s Edition: current; Page: [90] office.12 He also supported a measure that went against his own interests as an investor in two coal companies. Goodrich favored the “shot-firers” bill (a safety provision for the mining of coal) and the adoption of workmen’s compensation. This pleasantly surprised many labor leaders and aroused the ire of corporate officers. Because of Goodrich’s position on these issues, John Hewitt, then president of the Indiana Coal Operators Association, wrote a scathing letter to association members stating that Goodrich was not a man to be trusted. Goodrich secured a copy of the letter from Hewitt’s son and used it to his political advantage. He released copies of it to various labor organizations throughout the state, thus obtaining the support of many voters who traditionally would have opposed a wealthy Republican candidate.13

Goodrich proceeded to turn another potential liability into an asset in his bid for the governorship. Early in the campaign, Adair learned that Goodrich had paid only thirteen dollars in personal income taxes the year before (1915). Adair complained that Goodrich was hypocritical to suggest that the tax laws should be changed when Goodrich had paid so little. Goodrich admitted that he had paid only thirteen dollars in personal taxes, but he argued that was why he supported legislation that would levy a tax on intangible property such as stocks, bonds, interest income—the source of his wealth. Under the existing system, it was primarily tangible property, real and personal, that bore the burden of taxation.14 In an even more sophisticated deflection of Adair’s criticism, Goodrich attempted to make Adair appear to be the wealthier of the two candidates, when clearly the Democrat was not. In a speech to a group of railway workers in Logansport, Goodrich stated:

James Goodrich claimed that Adair never raised the tax issue again after this pronouncement.16 But Goodrich continued to hit the inequitable taxation issue hard wherever he campaigned, as he did when he spoke before the LaGrange County Corn Growers Association on October 7, 1916, and before three thousand supporters in Anderson on November 3.17

A survey of Goodrich’s campaign record makes evident that he was not an inflexible purist on the issues, but a very practical politician. He was far more interested in obtaining results if the means were acceptable to him. For example, he claimed that he had never taken a drink of alcohol and had repeatedly supported local remonstrances against liquor establishments. Yet time and again throughout the campaign, Goodrich entered taverns and saloons to court votes, much to the chagrin of his temperance supporters.18 Interestingly, however, Goodrich avoided, when at all possible, commenting on two of the most controversial issues of the day: prohibition and the vote for women.

Adair did not stick strictly to state issues, but raised the biggest question Edition: current; Page: [92] on the minds of most Hoosiers: Should the United States enter the European war against Germany? “In his major speech of the campaign, Adair told his Fort Wayne audience that because the President [Wilson] had avoided war the German-Americans were not faced with the necessity of fighting their Fatherland.”19 Adair’s appeal to the German-American vote was not sufficient to offset a Democratic campaign that was seriously underfunded and woefully unorganized. In fact, Adair’s alignment with President Wilson apparently hurt him, since many German districts in the state were incensed by Wilson’s unwillingness to take a strong stance against Germany’s aggression.20 These occurrences, combined with Goodrich’s highly effective campaign strategy, resulted in a victory for the Republican candidate, but not by a large margin. On November 7, 1916, Goodrich captured the governor’s seat by garnering 337,831 votes, 14,609 more than Adair received. Goodrich led the Republican ticket, while New and Watson also won their senate seats by about 9,000 votes over their Democratic opponents. Moreover, the Republican Party in Indiana also carried both houses of the General Assembly and nine of thirteen congressional seats. In the presidential race, Hughes also carried the state, defeating Wilson by a plurality of 8,779 votes. Nationally, however, Wilson narrowly defeated Hughes in one of the closest presidential elections in the twentieth century, capturing just twenty-three more electoral college votes than Hughes.21

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James Goodrich remained in Winchester on November 6 and voted the following day. Pierre had returned from Massachusetts, where he was then a student at Harvard Law School, to be with his father on election day. On November 7, James and Cora left for Indianapolis to be present in the state capital for the election results. With victory achieved, on Saturday, November 11, James and Cora returned to Winchester on the Knickerbocker Express to be greeted at the train station by hundreds of well-wishers. A one-hundred-car caravan escorted the Goodriches around the town square and to their home on East South Street. There, the governor-elect, his wife, and his mother addressed the joyous crowd that had gathered around the home in freezing temperatures.22

Just a few days before Goodrich took office, another local gathering was held to honor the governor-to-be. On December 29, Goodrich’s men’s Sunday school class presented him with a chalice honoring him for his many years of service and wishing him well in his new position of leadership. It was a warm send-off that James Goodrich would greatly savor. As the new governor would quickly learn, colleagues and friends in the statehouse were not nearly so numerous or supportive.

Chapter 10: Years as Governor, 1917–1921

No sooner had he been elected governor in November 1916 than James Goodrich “was besieged upon every hand by persons who wished to receive appointments in [his] administration.”1 He put off filling most positions until after the General Assembly had met in the winter and early spring of 1917. Soon afterward, however, Goodrich made appointments that filled two of the most important offices in his administration: Fred Sims, state Republican chairman after Goodrich, was appointed chairman of the Board of Tax Commissioners; and Ernest Lewis, a reporter who had covered Goodrich’s campaign for the Indianapolis Star, was selected as chairman of the Public Service Commission. In almost all departments, Goodrich advocated a nonpartisan makeup of employees. He believed that many members of the previous administration—that of Democrat Samuel Ralston—had done a competent job, and he saw no need to replace them.2

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Goodrich took office on January 8, 1917. A special train from Winchester was chartered to Indianapolis. All of Goodrich’s family members, including his mother, his brothers and their wives, members of Goodrich’s Presbyterian Bible class, and hundreds of others were present for the swearing-in ceremony at the statehouse rotunda. Pierre briefly left his studies at Harvard to attend.3 James Watson, newly elected as a United States senator, wrote from Washington, D.C., congratulating Goodrich for achieving the political position he had longed for for himself.

At noon on January 8, James Goodrich was administered the oath of office by Moses B. Lairy, chief justice of the Supreme Court of Indiana. The new governor’s inaugural address immediately followed, and it reflected his no-nonsense approach to governing. He stated that the number-one goal of his four-year term would be “efficiency and economy” Edition: current; Page: [96] in the administration of the state’s duties. He proceeded to prove it by the brevity of his remarks: Goodrich’s entire inaugural address was not five minutes long.5 Moreover, in order to devote all of his energies to his new position, Goodrich had announced that he would not host an inaugural ball.6

On the afternoon of his inauguration, Goodrich did allow himself a longer time to address the General Assembly, a full thirty-six minutes. He outlined the plans of his administration: abolishing the oil inspection department, the state’s statistician department, and several minor departments; creating a highway commission, a conservation commission, and banking and insurance commissions; amending the workmen’s compensation laws and providing for absentee balloting; and making several offices, such as those of state geologist and superintendent of schools, appointive rather than elective. One of his most pressing concerns was to overhaul the unjust tax system, making it more equitable between real property owners and owners of nontangible property.7

While both parties generally favored the recommendations, some Democrats were afraid that all of the consolidations might result in giving the state’s top executive too much appointive power. These few Democrats had reason to be concerned. During his gubernatorial campaign speeches, Goodrich had repeatedly shouted the slogan, “You give me the power and I’ll be responsible for the results.”8 Goodrich recalled that Democratic-leaning newspapers were even more “venomous” in Edition: current; Page: [97] attacking his policies, referring to him as a “would-be Czar with a desire to centralize in the hands of the Governor complete control of the state’s affairs.”9

There was no official governor’s residence in Indianapolis when Goodrich took office. Therefore, James and Cora arranged somewhat makeshift accommodations. During their four years in the state’s capital, they lived in three different Indianapolis locations: 1828 North Meridian Street (1917); 2710 Sutherland Avenue (1918–19), and the Claypool Hotel (1920–21).10 Despite James’s hectic schedule, there was hardly a Sunday that he missed traveling back to Winchester, a distance of some eighty miles, to teach his men’s Sunday school class at the Presbyterian Church. He either took the Saturday evening train back to Winchester, during which time he would work on his lesson, or drove from Indianapolis on the poor roads between the capital and his hometown.

During the first session of the General Assembly, a prohibition bill had been passed and Goodrich had signed it. An excise tax on corporations promoted by Goodrich, however, was defeated in the senate by “men of small mind and narrow vision,” Goodrich claimed.11 Similarly, Democrats defeated Goodrich’s plan to abolish the oil inspector’s position, a position that employed sixty-seven inspectors around the state in what Goodrich considered totally useless government jobs. Since it was the Democratic members of the senate who defeated the bill, Goodrich did not hesitate to force the existing chief oil inspector to resign. Goodrich alleged that he had evidence of repeated graft by the chief oil inspector and threatened to see him prosecuted if he did not leave “voluntarily.” The governor replaced him with Carl Mote, a Randolph County native who had served as Goodrich’s press secretary during his Edition: current; Page: [98] gubernatorial campaign. Mote subsequently fired the remaining oil inspectors—all Democrats—and replaced them with Republicans.12

While the Democratic attacks against his legislative agenda were anticipated, Republican opposition was not. The newly elected governor never enjoyed a honeymoon period with the legislature. Instead, he encountered repeated and open opposition, mostly from members of his own party. This included criticism by his own lieutenant governor, Edward Bush, a Republican.13 “Goodrich could not, however, deny that he was himself responsible for having selected Bush, a dry, to run for lieutenant governor instead of John Lewis of Seymour, a wet. ‘As it turned out,’ recalled Goodrich, ‘I would have been better off with John Lewis drunk than Ed Bush sober.’”14

Goodrich wrote about difficulty he encountered in getting the General Assembly to approve his proposals: “It was a strange situation in which I found myself. The men who had been associated with party politics ever since 1900 complimented me during the campaign on the promises made and almost invariably said that it was ‘good stuff.’ But after my inauguration, they began to express grave doubts as to the wisdom and political expedience of so many new and unusual things.”15

James Goodrich took office just three months before the United States declared war against Germany. The European conflict indelibly marked his four years in the statehouse, as he would from that time thereafter be referred to as the “war governor.” Goodrich had been opposed to the United States’ entering the war, describing himself as initially “pro-German.”16 Indeed, the nation itself and Hoosiers in particular had Edition: current; Page: [99] been greatly divided regarding which side the United States should fight on if it did enter the conflict.17 By the end of March 1917, however, Goodrich had concluded that the United States’ entry on the side of the Allied powers was the moral thing to do. He proclaimed publicly that America “can not with honor stay out any longer.”18

On the evening of April 2, President Wilson delivered his war message to Congress. Knowing that a declaration of war was imminent, Goodrich held a conference on April 5 in Indianapolis with leading farmers, grain dealers, canners, and county agents from throughout the state. An increase in food production was the foremost topic. On the following day, April 6, Congress passed the War Declaration Act and Wilson signed it. Immediately, Goodrich’s office in the statehouse was besieged by eager young men who offered themselves for service in any capacity that was needed. By June, registration of available men was 100.6 percent of the census estimate for the state prepared by the United States Department of War. By July 1918, 88,500 men from Indiana had volunteered to serve in the army and navy, on the basis of percentage of population, more than from any other state.19 By the war’s conclusion, Indiana had supplied more than 130,000 troops, of which 3,354 Indiana soldiers and 15 nurses had been killed or had died of diseases, chiefly influenza and pneumonia.20 Hoosiers of all backgrounds supported the war effort. For instance, James A. Allison, owner of the Indianapolis Motor Speedway, declared in the spring of 1917 that there would be no more Indianapolis 500 races until Edition: current; Page: [100] the war was over; he further turned over his manufacturing companies to the army to be used to produce munitions.21

Hoosiers with more modest resources also contributed significantly to the war effort. At the request of Governor Goodrich and Indiana’s mayors, Hoosiers planted 500,000 home gardens in 1917 to produce necessary vegetables and crops. Senators Harry New and James Watson sent fifty thousand packages of seeds to Hoosiers, who spaded up every available backyard and vacant lot to produce food for the “boys overseas.” The next year, 640,000 gardens were planted.22 Goodrich also signed and promoted several “Liberty Loan Proclamations” whereby he challenged Hoosiers to lend money to the government to support the war effort.23 Perhaps most important, Goodrich established a State Council of Defense Committee to organize and direct the resources of the state for national use. On May 17, 1917, Goodrich placed his good friend, Will Hays, the state Republican Party chairman, in charge of the council. It proved to be one of the most successful statewide organizations of its kind in the country.24 Within months, Indiana Edition: current; Page: [101] led every other state in terms of production, conservation, volunteers, and service abroad. The state was so successful that Newton D. Baker, secretary of war in the Woodrow Wilson administration, requested that other state councils go to Indiana and study the Hoosier council’s methods.25

Despite the large percentage of people of German ancestry in the state and nation, American citizens of German blood were ridiculed, discriminated against, and even lynched.26 In Indianapolis, most street names that were German or even German sounding were anglicized. By the winter of 1919, the state legislature, with the encouragement of the Indiana State Teachers Association, banned the teaching of German in all Indiana grade and high schools.27 James Goodrich contested the legislation, but to no effect. As governor, he was limited to issuing a proclamation outlawing any conduct directed against any citizen because of his or her ancestry.28

In the face of general criticism of Hoosiers of German ancestry, Goodrich made one of his most difficult but most successful appointments. On March 17, 1917, Goodrich named German-born Richard Lieber secretary of the Forestry Board. Lieber was later appointed director of the Indiana State Parks Committee and chairman of the Department of Conservation. Additionally, just four days after the United States declared war against Germany, Goodrich extended to Lieber the Edition: current; Page: [102] position of military secretary to the governor.29 In addition to being a native of Germany, Lieber had three brothers who were colonels in the German army. James Goodrich bestowed upon Lieber the rank of colonel. Lieber went on to become the father of Indiana’s state parks system, serving three successive governors and helping to establish and preserve some of Indiana’s most scenic and historic land: Brown County State Park (1930), Clifty Falls State Park in Jefferson County (1920), Indiana Dunes in Porter County (1925), and Mounds State Park in Madison County (1930).30

Richard Lieber was a favorite of Cora Goodrich. For example, Lieber was the only man whom Cora would allow to smoke and drink alcohol in her home. Her fondness for the colonel is evident in the fact that she brought back from a trip to Cuba a box of cigars for him and always kept fresh cigars for whenever he visited the Goodriches’ Winchester home. Like James Goodrich, Lieber was an accomplished man with diverse interests. His greatest passion was conservation. In 1908, after attending a conservation conference at the White House called by President Theodore Roosevelt, Lieber became enamored of the preservation of natural resources. He returned to Indiana, and his official conservation Edition: current; Page: [103] efforts continued in the state for the next twenty-five years. After he resigned in July 1933 as chairman of the State Conservation Commission, he served on national ecology committees. The deep friendship between the Goodriches and Lieber and his wife Emma continued long after Goodrich left the governor’s office. After James’s and Cora’s deaths, Lieber advised Pierre in the early 1940s on conservation measures in association with the Ayrshire Collieries Corporation.31

Despite the numerous state issues that the new governor had to contend with, it was the European war that most concerned James Goodrich in the spring of 1917. He agonized over how best to support the boys overseas. Finally, knowing that the nation was experiencing an emergency, Goodrich made an appeal to all county commissioners, township trustees, school boards, merchants, and mayors to suspend building contracts until the war was over. In the meantime, however, the Wilson administration had advocated “business as usual.” Goodrich called the president to explain that he was “satisfied that the country could not carry on its business as usual [policy] and wage a war at the same time.”32

Goodrich added that the matter did not extend to construction contracts alone, but to the production of energy as well. Goodrich attempted to get the coal companies to commit to a fixed price for coal; demand had increased as much as 30 percent since the war had begun, and there was a fairly broad sentiment by coal operators, according to Goodrich, that this was a prime opportunity to maximize coal profits. Goodrich was in an embarrassing situation himself because he had, at the time, a large interest in two coal companies. He met with the coal operators of Indiana on June 15, 1917, asking them to make sacrifices. On July 9, he met in Bloomington, Indiana, with William Jennings Bryan, the former Democratic presidential candidate. He sought Bryan’s support to encourage President Wilson to fix a fair price for coal. Dissatisfied with his long-distance communications with the president, on Edition: current; Page: [104] July 16 Goodrich traveled to Washington, D.C. He first testified before the Interstate Commerce Commission and then held a private meeting with Wilson. He urged the president “to use his influence with the Congress . . . to pass a law regulating and reducing the price of coal.”33

On his return to Indiana at the end of July, Goodrich put all his efforts into governing the state and assisting the State Council of Defense in its efforts to raise resources for the war. Goodrich maintained a grueling schedule, and after he had been in office less than eight months, his health began to deteriorate. In August 1917, he contracted typhoid fever after visiting a northern Indiana prison.34 His condition was severely worsened when he contracted pneumonia. For several weeks, the governor was bedridden at Methodist-Episcopal Hospital in Indianapolis, at times bordering on death.35 He finally recovered after returning to Winchester in October and then spending a month in convalescence in Florida along the Gulf of Mexico.36

Back in the statehouse on November 26, Goodrich pursued his official duties. For the next several months, the state’s coal shortage occupied much of his time. On January 22, 1918, he again traveled to Washington, D.C., this time testifying before the Senate. There, Indiana’s governor claimed that the coal crisis was really a transportation crisis caused by the shortage of railroad cars and engines.37

Unfortunately, Goodrich’s attention to the state’s problems kept being diverted by personal crises. Three weeks earlier, on December 29, Edition: current; Page: [105] 1917, James’s mother, Elizabeth Edger Goodrich, died of heart failure in Winchester after a very brief illness. A little more than a year before her death, in October 1916, Mrs. Goodrich donated twenty acres of land to Winchester. In consideration of the gift, the town was to maintain the land as a park in the name of Mrs. Goodrich’s deceased husband, John B. Goodrich, and to impose a levy that generated at least nine hundred dollars annually for that purpose. The gift was bequeathed on the condition that alcohol would not be sold on the parkland and that no activities would be allowed on Sundays with the exception of religious, charitable, or educational entertainments.38

After his mother’s death, the governor’s own misfortunes continued as well. Almost exactly one year after his bout with typhoid, James Goodrich was in an automobile accident in Indianapolis. On the evening of August 28, 1918, Goodrich attended a dinner party, hosted by Dr. Amelia Keller, for a number of medical officers who were going abroad. Shortly after he left the party in his car, he was struck by a streetcar and critically injured. At the time of the mishap, Pierre was a second lieutenant stationed at the quartermaster depot in Jeffersonville, Indiana. He came immediately to Indianapolis to be with his father at St. Vincent’s Hospital. The governor had fractures of the hip, skull, ribs, and collarbone and experienced internal bleeding. Although Goodrich made a relatively quick recovery, his left leg was placed in a cast for several weeks. He had to walk with the aid of a cane for the rest of his life.39

The large victory of the Republican Party in Indiana in the 1916 election had given Will Hays a certain mystique in Republican circles throughout the country. Hays had achieved phenomenal success in returning Progressive Party supporters (Bull Moosers) to the Grand Old Party. Edition: current; Page: [106] For instance, whereas 162,000 Hoosiers had voted for the Bull Moose presidential candidate, Theodore Roosevelt, in the 1912 election, fewer than 4,000 voted for the Progressive Party candidate in 1916. Similarly, the Republican Party had garnered 190,000 more votes for presidential candidate Charles Evans Hughes in 1916 than it had for William Howard Taft in 1912. “Immediately there were calls for Hays to consult with national leaders to determine how the Indiana magic could be worked nationally.”40

Goodrich recognized that Hays had an excellent chance of gaining the national chairmanship of the Republican Party when the position became available at the end of 1917. Hays’s name had been mentioned for the position ever since the 1916 election. Goodrich personally lobbied every influential Republican he knew to support Hays’s candidacy.41 In November he traveled to New York and met with Theodore Roosevelt. According to Goodrich, Roosevelt agreed to support Hays. The former president started contacting “men by long distance all over the country, men who would respond to any request he made.”42 Over the years, Goodrich and Roosevelt had established a political and personal friendship. For instance, when Goodrich had met with President Wilson the preceding July in Washington, D.C., he traveled on to New York City at Roosevelt’s invitation. There, Goodrich met with the former president at the Harvard Club. At that time, Roosevelt discussed with Goodrich his plans to raise a military division and lead it into France. In a highly controversial and public decision, President Wilson rebuffed Roosevelt’s offer.43

With regard to Hays’s candidacy for chairmanship of the national Republican Party, Goodrich also lobbied Albert Beveridge. Beveridge had rejoined the Republican Party in June 1916 after having left it in 1911 Edition: current; Page: [107] to become a highly prominent leader of the Bull Moose Party. Beveridge was asked by Goodrich to solicit Roosevelt and others on behalf of Hays. Once Roosevelt’s support was obtained, the former president lobbied other influential Republicans across the country. Roosevelt’s efforts were not totally selfless. He had plans to seek the 1920 Republican presidential nomination. He knew that if he helped Hays, Hays could be counted on to return the favor.

The strong lobbying effort paid off. On February 13, 1918, Hays was elected to the top national Republican position. Hays, just thirty-eight, was the youngest Republican National Committee chairman up to that time. Hays resigned his position as chairman of the Indiana Council on Defense on February 21, and Goodrich was forced to name a successor. Concerned that the subsequent appointment not be seen as solely partisan, Goodrich appointed a top Democrat, Michael Foley.44

Within weeks, Goodrich had to contend with one of the most controversial issues ever to be debated and acted upon in the United States—prohibition. At midnight on March 30, 1918, the sale, transportation, and consumption of alcoholic beverages in Indiana were prohibited by state legislation. Immediately, 3,500 Indiana taverns and saloons were closed, 547 of them in Indianapolis alone. By January 1919, the Eighteenth Amendment to the Constitution, outlawing the sale and consumption of alcohol nationally, had been ratified. Fifteen years later, in 1933, the amendment was repealed, replaced by the Twenty-first Amendment.

Before his automobile accident, James Goodrich had been pressed by his brother Percy to ask Will Hays to be the keynote speaker at the National Hay Association’s annual convention in Chicago. Percy Goodrich was president of the national agricultural organization. Former Republican presidents William Howard Taft and Theodore Roosevelt had served as keynote speakers in previous years. Therefore, Percy believed that it was not too much to think that the new chairman of the national Republican Party might accept their invitation. Besides, Percy knew of Edition: current; Page: [108] the close friendship between his brother and Hays. He obviously believed that if James were to offer the invitation, the likelihood of a favorable response would be increased. In response to James Goodrich’s solicitation, Hays turned the tables. He wrote that the governor himself should address the large convention, since it would be “an opportunity to get into intimate personal touch with all of them.”45 Hays went on to encourage Goodrich to speak nationally and become known beyond Indiana’s borders. Hays wrote:

Hays’s suggestion stemmed from his desire to groom Goodrich for national office, but Indiana’s governor, if he was aware of Hays’s ulterior motive, did not take the bait. He responded to Hays:

Soon afterward, Goodrich’s term in office was disrupted by his automobile accident in August. Still another health crisis loomed, this one national—the great influenza epidemic of October 1918. Goodrich recalled that the disease “swept the country like wildfire,” killing many. On October 10, the governor issued a statewide prohibition against all public meetings, educational, political, and religious.48

The election of November 1918 preoccupied him next. The previous May, Goodrich had presided over the Republican state convention as the temporary chairman.49 In late October, still recovering from his automobile accident, Goodrich appealed to the voters in Indiana to support the Republican Party. He declared that it had been only Republican leaders who had made a “demand for an unconditional surrender and against peace [with Germany] through compromise and negotiation.”50 The appeal was well received. At the general election two weeks later, Republicans swept offices at the state and federal levels in an unprecedented fashion: eighty-nine out of one hundred Republicans were elected to the Indiana House, thirty-three out of fifty Republicans were elected in the Senate, and Republicans garnered all thirteen of Indiana’s United States congressional seats. On November 15, Goodrich called a special two-day meeting of all newly elected Republican members of the legislature. His purpose was to lay before them the proposals he would be submitting to the General Assembly in January 1919. At Goodrich’s invitation, United States senators Harry Edition: current; Page: [110] New and James Watson, along with Will Hays, met with the Republican majority in Indianapolis.51

On January 6, 1919, just before the General Assembly was to meet, news came that Theodore Roosevelt had died at the relatively young age of sixty. That sad fact “upset all the plans Will Hays and I had for nominating Roosevelt for the presidency [in 1920],” Goodrich recalled.52 Just four days later, on January 10, Goodrich addressed the General Assembly. He appealed to the legislature to support his platform, which, he believed, had been overwhelmingly endorsed by the voters, as the large Republican victory in November indicated. By January 14, the General Assembly had ratified the Eighteenth Amendment to the Constitution (Prohibition), which had been an accomplished fact in Indiana since the previous March. The General Assembly also passed a joint resolution on one of the other great national issues to be debated in this country’s history—woman suffrage. Although Goodrich admitted he was opposed to it, he signed the legislation, apparently submitting to legislative and public pressure.53

Through a hard fight, Goodrich next created a state highway commission. This placed control of the construction and maintenance of highways in the hands of the state. More than thirty-five hundred miles of roadway were taken over by the commission. Local contractors had been strongly opposed to the legislation.54 Moreover, during the waning days of the 1919 legislative session, Goodrich succeeded in getting passed a “shot-firers” bill, which compelled coal operators to hire experienced men to “shoot down” the coal as opposed to making miners do it themselves. Legislation was also approved that reduced the number of oil inspectors from sixty-seven to five, resulting in a net savings to the state, according to Goodrich, of $300,000 per annum. Finally, Edition: current; Page: [111] on March 10, the day before the legislative session ended, a tax bill was passed, although it did not contain all the reforms that the governor had offered.55

With the 1919 legislative session behind him, Goodrich could once again focus on the state’s efforts to support America’s war efforts overseas. As the war was winding down, Goodrich established a Reconstruction Committee to explore how best to manage the return of more than 130,000 Hoosier veterans. An early action of the committee was to send a letter to every employer of an enlisted soldier. The letter inquired whether the soldier’s previous job would be available upon his return; approximately 98 percent of the employers responded affirmatively.56

The end of World War I marked one of the highlights of James Goodrich’s administration. When the armistice was announced on November 11, 1918, Indianapolis was ablaze with fireworks. Anything that could make noise was employed to mark the occasion. The evening of November 11 found thousands crowded around Monument Circle in downtown Indianapolis singing “The Star-Spangled Banner,” “Nearer My God to Thee,” and other popular patriotic and religious songs.

The delays in transporting some two million men stateside from Europe were many.57 The following spring, on April 28, Goodrich traveled to New York City to welcome the first contingent of Indiana soldiers home. Ten days later, on May 7, 1919, a crowd estimated at 175,000 filled the sidewalks of downtown Indianapolis. Twenty thousand returned soldiers and others participated in the parade marching under a large Victory Arch and before Governor and Mrs. Goodrich in Edition: current; Page: [112] the stands.58 Goodrich later proclaimed September 22 as “Heroes Day” when the martyred were commemorated with a ceremony at Monument Circle.59

Just two weeks before, on September 4, President Woodrow Wilson had visited Indianapolis to seek support for his proposed League of Nations. Goodrich made it well known that he opposed the League, but he entertained the president while Wilson was in Indianapolis and introduced him at a packed rally at the state fairgrounds.60 In October, Goodrich had to contend with a serious coal strike in Lake County. On October 5, he declared martial law and ordered state troops to quell the labor uprisings.61 He met with John L. Lewis, the newly elected leader of the United Mine Workers of America. Negotiations between the two men failed because of their disagreement regarding guarantees to provide coal for state institutions and public utilities. The strike, which eventually became nationwide and continued through the months of November and December, resulted in price gouging. Goodrich met with governors from seven other coal-producing states in an attempt to resolve the problem, but the whole situation only grew more “chaotic.”62

In the fall and winter of 1919, Goodrich made two noteworthy speeches in New York state. Goodrich’s willingness to address gatherings so far Edition: current; Page: [113] from Indiana raises the question of whether he had, at that time, national political aspirations. On September 22, he addressed the National Security League in Albany, New York, and on December 21, he spoke in Brooklyn, New York, before the New England Society. To both, his advice was much the same: America should focus its attention on problems at home and not become involved in international entanglements. The addresses were in obvious response to President Wilson’s promotion of the entrance of the United States into the League of Nations.63 In Washington, D.C., at that time, James Watson was carrying water for the Republican Party against Senate ratification of both the League of Nations and the Versailles Treaty. Watson had been appointed to serve as floor whip by the minority leader, Senator Henry Cabot Lodge of Massachusetts, to manage the defeat of both measures.64

By the end of December, Goodrich had decided to call a special session of the General Assembly for the purpose of ratifying the constitutional amendment extending suffrage to women. Clearly, views on women’s rights at the time were archaic, and Goodrich’s own were hardly enlightened ones. He wrote years later: “I was never very strongly for [woman suffrage]; I did not believe it would accomplish a small percentage of the good claimed by the supporters of the movement. I maintained that it would increase the expense; that women when once engaged in politics would not in any way raise the morals of a campaign; women would adopt themselves to a political situation just the same as men.”65

The special session on the Nineteenth Amendment was held on January 17, 1920. Despite Goodrich’s lack of enthusiasm for the measure, it was ratified in the Indiana Senate by a vote of forty-three to three and in the House by a unanimous vote of ninety-three.

Soon afterward, a financial crisis confronted the state. State Auditor Edition: current; Page: [114] Otto K. Klaus reported in March that appropriations for state institutions would be exhausted within ninety days unless the General Assembly authorized money for the deficit. The war had placed an inordinate drain on the financial resources of these institutions. Ironically, the state had ample monies in the general fund, but these monies could not be transferred to pay for institutional debts without the General Assembly’s approval. Therefore, Goodrich called a special session, beginning July 12, 1920, to deal with the financial emergency.66

One of the final activities that Goodrich became involved in as governor involved a twenty-eight-acre memorial site that was constructed on a five-block area north of downtown Indianapolis. In 1919, the state legislature authorized $15 million (to be raised both publicly and privately) for the erection of the World War Memorial Plaza. The construction of the plaza first meant the razing or moving of some forty-five buildings. Goodrich was one of fifteen trustees appointed to oversee the raising of private money and the design of the plaza. The plaza ultimately included Memorial Hall; a fountain; Obelisk Square; and the statues of former presidents Abraham Lincoln and Benjamin Harrison, and a former vice-president from Indiana, Schuyler Colfax. The state’s decision to construct the plaza ultimately led to the relocation of the permanent national headquarters of the American Legion in Indianapolis. This seemed quite appropriate, since an earlier brotherhood of veterans, the Grand Army of the Republic (GAR), had had its birthplace in Indianapolis shortly after the Civil War.67

On December 30, 1919, Will Hays, James Watson, James Goodrich, and James Hemenway, the latter a former United States senator from Indiana, met at the Hotel Severin in Indianapolis for lunch. The meeting had been arranged by Hays to encourage Goodrich to submit his name on Indiana’s primary ballot for president in the 1920 national election. More than a year earlier, Hays, Watson, Goodrich, and United Edition: current; Page: [115] States senator Harry New of Indiana had made a private pact that none of them would seek a change in political office without first consulting the others.68 With former President Theodore Roosevelt deceased, there was no clear front-runner for president. Hays was convinced that Goodrich stood a good chance of gaining the 1920 Republican nomination. On April 25, 1919, the Indianapolis mayor, Charles W. Jewett, who was in New York City to welcome home Hoosier veterans in the Rainbow Division, announced that Goodrich would be the choice for the nomination for president from Indiana’s delegation.69 Several other political insiders encouraged Goodrich to run for president at the Republican National Convention in Chicago in June 1920. Moreover, on January 27, 1920, in Washington, D.C., Senators New and Watson held a meeting with members of Indiana’s congressional delegation in an attempt to get them to commit to a Goodrich presidency.70

James Goodrich certainly had the credentials to be a legitimate presidential candidate. He was a highly successful and wealthy lawyer and businessman. Moreover, he had been deeply involved in Republican politics for twenty-five years, being everything from the local county chairman to a senior and respected member of the National Republican Committee. He personally knew most top-level Republican leaders throughout the country. Moreover, Goodrich had the right connections. He could clearly count on Hays’s influential support as national chairman of the Republican Party. Furthermore, Harry New and James Watson, now highly influential United States senators in their own right, promoted a Goodrich run. In fact, Watson was chairman of the Committee on Resolutions; Senator Henry Cabot Lodge was chairman of the Republican convention. Watson had pledged his total support for a Goodrich presidential run. He announced that in deference to his childhood chum he would not seek the one office he had Edition: current; Page: [116] cherished all his life.71 With the illness of Woodrow Wilson and the general dissatisfaction with Wilson’s post–World War I policies, the Republican presidential nominee stood an excellent chance of gaining the White House.72

James Goodrich, however, never threw his hat into the presidential ring. On January 27, 1920, he publicly announced that he would not be a candidate for president.73 When he would not consider taking a run at the top post, there were attempts to make him a vice-presidential candidate. In fact, Theodore Roosevelt had asked Goodrich to be his running mate when Goodrich met with the former president in November 1917.74 When Roosevelt died, General Leonard Wood, former governor of the Philippines and a conservative nationalist, commanded most of Roosevelt’s following. Wood had also built up a huge campaign chest of nearly $2 million. General Wood let it be known that he desired a Wood-Goodrich ticket. In fact, when Goodrich went to New York on April 28 to welcome home the first contingent of returning Indiana soldiers, a number of leading newspapers, including the New York Times and the New York Tribune, were proposing Wood and Goodrich for the ticket.75

The selection of Goodrich would have upheld the Indiana tradition of being the nation’s number-one supplier of vice-presidents. As previously noted, Hoosiers Charles Fairbanks and Thomas Marshall had served as vice-presidents to Presidents Theodore Roosevelt and Woodrow Edition: current; Page: [117] Wilson, respectively. As early as July 1917, Goodrich was considered vice-presidential material:

At the time, Indiana was an important center for geopolitical reasons. This did not go unrecognized by those seeking the White House, such as Roosevelt, Wood, and another New York politician, United States senator James W. Wadsworth.77

Despite Goodrich’s successes as governor, the call to higher office fell on deaf ears. Goodrich had already decided by the spring of 1920 that he was through with politics. He wrote to Harry New in April: “I have no desire or ambition to do anything but finish my administration as best I can and then go back to my business. I am done with politics for ever and a day.”78 And in November, with only two months to go as governor, he wrote another close friend: “I will be the happiest man in Indiana when the tenth day of January [1921] comes and I can once more be free. Never again will I even think of rendering any service to the people in an official capacity.”79 Even if Goodrich had wished to stay in the governor’s office, the position was closed to him. Under Indiana’s constitution at the time, a governor was limited to one term.

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At the 1920 Republican National Convention in Chicago, none of the candidates, among whom were General Leonard Wood, Illinois governor Frank O. Lowden, and Senator Hiram Johnson of California (Goodrich’s pick), could muster enough support to gain the nomination for president in early balloting. James Watson was offered the nomination on the sixth ballot. In a moment he almost certainly regretted for the rest of his life, he turned down the chance. His wife, whom he telephoned back in Rushville, Indiana, about the offer, told him she had absolutely no desire to be first lady.80 Finally, on the tenth ballot, the convention nominated a former newspaper man and mediocre United States senator from Ohio, Warren G. Harding. The governor of Massachusetts, Calvin Coolidge, was slated as Harding’s running mate. Will Hays managed the national Republican team of Harding and Coolidge in a masterly fashion, but it was a lackluster ticket. The country was so opposed to the Democratic Party, however, that the pair easily defeated the Democratic ticket of James M. Cox and Franklin D. Roosevelt, winning by a margin of two to one.81

Goodrich returned to Indiana from the convention with the feeling of relief that the remaining few months of his gubernatorial term would soon be over. His frustrations with the job stemmed partly from the failure of his own Republican Party to support him in many of the reforms he had hoped to bring to state government. Perhaps Goodrich’s biggest disappointment was opposition by lobbyists and the General Assembly to his attempt to make the tax code more equitable. Goodrich believed that property owners were still bearing a disproportionate burden of state taxation. The tax package passed in 1919 addressed this inequity only partially.82 It was not until the 1930s that James Goodrich Edition: current; Page: [119] was praised for his attempts to revamp Indiana’s tax code. In 1931, the Indianapolis News won a Pulitzer Prize for advocating tax reforms, most of which Goodrich had pushed for during his years as governor. Finally, the Democratic governor Paul V. McNutt, during his four years in office (1933–37), succeeded in getting passed the tax reforms that James Goodrich had proposed some fifteen years before.83

Another apparent reason for Goodrich’s disappointment with the job had been his health problems. The fact that he spent several months during his tenure recovering from both typhoid and a nearly fatal automobile accident certainly did not bring back any fond memories for him. Finally, Goodrich’s approach to governing was seen by many to be high-handed. For example, he was attacked as the “Hoosier Caesar” by the editor of the Fort Wayne Journal-Gazette at the 1920 Democratic state convention.84 Goodrich knew that governing entails more consensus-building than does the arena of business, where decisions from the top are expected to be followed, yet he seemed to have difficulty making the transition from business executive to coalition-builder.

Despite these frustrations with the job, James Goodrich achieved a formidable record as Indiana’s twenty-eighth governor. He had established the State Highway Commission, the Department of Banking, and the Department of Conservation.85 Under the latter, many of Indiana’s existing state parks were created. James Goodrich had also directed through the state’s General Assembly legislation reorganizing the Public Service Commission, extending prohibition, improving workmen’s compensation, consolidating or eliminating several positions, consolidating most state publications into one annual yearbook, and providing for absentee voting. Moreover, his revamping of the tax law in 1919 incorporated Edition: current; Page: [120] the “Indiana Plan,” which controlled public expenditures and is estimated to have saved state taxpayers more than $100 million. Most important, during Goodrich’s tenure as governor, women won the right to vote, even though Goodrich was, at most, a lukewarm proponent of woman suffrage.86 On top of all of this, Goodrich had initiated the state’s Civil Defense Council, which was essential in the support of the European war effort, and had signed charters establishing two important state institutions of higher education: Indiana State Normal School—Eastern Division (later Ball State University) in 1918 and Evansville College (later Evansville University) in 1919. James Goodrich was known for being the first Indiana governor to introduce modern business principles and methods into state government. He was the epitome of the modern executive.87

Goodrich’s commitment as governor was admired by many. Thirty-five years after Goodrich’s tenure in office, Will Hays wrote in his memoirs: “The reader may already have gathered that Governor James P. Goodrich was one of my political ideals. He was a man of complete unselfishness and devotion to the service of our people.”88 Although James Goodrich would never again be a candidate for elective office, his accomplishments were far from over. Some of his most successful work in the business world and contributions in the public sphere were still to come.

Chapter 11: The Middle Years, 1916–1923

In september 1916, in the thick of James Goodrich’s gubernatorial campaign, Pierre matriculated at Harvard Law School. There, in Cambridge, Massachusetts, he was exposed to some of the best minds in American jurisprudence: the great scholar Roscoe Pound, who taught Pierre torts (noncontractual liabilities); Austin Wakeman Scott, a renowned professor of trusts, who taught him legal procedure; and Felix Frankfurter, who taught him public utility law. Frankfurter later became one of the most prominent United States Supreme Court justices of the twentieth century.1

At that time, Harvard required every student to participate in a sport. Although he did not possess the physical dexterity demanded by sports such as tennis, basketball, and golf, Pierre found rowing to be an activity in which he could excel.2 At Harvard, Pierre was extremely studious. His cousin Florence Goodrich Dunn, who was then a student at nearby Wellesley College, remembers Pierre as a “grisly grind,” seldom willing to take a break from his studies even for social outings.3 After only a Edition: current; Page: [122] year at Harvard, however, Pierre was forced to take a reprieve from his books at the behest of a summoner he could not refuse—the draft board. In the summer of 1917, he received notice that he would be a soldier in the United States Army, and later he learned that he would be commissioned to serve in the army’s Quartermaster Corps. Pierre was one of 1,345 men and women from Randolph County who served during World War I.4 While Pierre never served abroad, because of his defective eye, his cousin John Goodrich fought in France.5

While Pierre was at Harvard and in the military (1916–20), his father occupied the governorship of Indiana. By January 1919, Pierre was back at Harvard, having received an honorable discharge from the army. To meet the needs of returning soldiers, Roscoe Pound, by then dean of the law school, had devised a special course for the semester that began in February 1919. The course continued through the summer, fitting in with the regular courses that began that fall.6

At a ceremony in June 1919, Pierre and Tom Veech, who were both students at Harvard, and another close friend of theirs, Ralph Bales, who was a law student at the University of Michigan, returned to Winchester to be admitted into the local bar. The event was recorded locally:

In the summer of 1919, an event even more significant to Pierre occurred—he met Dorothy Dugan, who would become his first wife. Pierre was introduced to her by his cousin Florence Goodrich, who was then teaching French at Central High School in Fort Wayne, Indiana.8 Pierre and Florence had grown up only a block from each other in Winchester and were more like brother and sister than first cousins. Florence’s maternal grandparents were the Neffs, who lived in Decatur, Indiana. As a young girl, Florence would visit her grandparents for long periods. There, she became close to two girls, Winnifer Ellingham and Dorothy Dugan. Florence, Winnifer, and Dorothy had much in common: Their families were all stalwart members of the Presbyterian Church and were deeply involved in politics and business in Decatur and Winchester.9

Dorothy’s parents were Charles A. Dugan and the former Fanny B. Edition: current; Page: [124] Dorwin. Charles Dugan, like James Goodrich, was a banker by profession. He served as president of Decatur’s oldest bank, First State Bank, from 1922 until his death in 1935.10 Dugan had formerly been superintendent of the City Schools of Decatur and a professor of mathematics at Carlinville College in Illinois.11 The Dugan house on Monroe Street was a place of great joy, since the Dugans were known in the community for entertaining.12 When the house was completed in 1902, the local newspaper reported that it was probably the most costly home in the city.13 The Dugans also had a private library of approximately nine hundred books, reflecting the intellectual interests of its occupants. The house is now the home of the Adams County Historical Society.

Both the Goodriches and the Dugans valued education highly and sent their children to prestigious eastern schools. Dorothy had graduated from Vassar College in 1918; two of her sisters, Frances and Helen, also graduated from Vassar. Florence Goodrich had graduated from Wellesley College in the spring of 1919.14 Dorothy Dugan was an attractive young woman who especially enjoyed social gatherings and sports. She was known for her high spirit, stubbornness, and strong opinions. Edition: current; Page: [125] After graduating from Decatur High School in 1914, she received her bachelor of arts degree from Vassar. She then returned to teach at her hometown high school during the 1919–20 school year.15

Pierre and Dorothy had many things in common, especially a love of learning and books. Little is known of their courtship, but their wedding announcement was prominently placed in the Indianapolis News.16 Pierre was the Harvard Law–educated son of the governor of Indiana. Dorothy Dugan was the Vassar-educated daughter of one of the most prominent families in northeastern Indiana.

The two were married on Saturday afternoon, July 17, 1920. The wedding was a private affair, taking place in the large foyer of the Dugans’ home in Decatur. Carl McCamish, Pierre’s boyhood friend, served as best man. Dorothy’s sister Helen served as bridesmaid.17 After their wedding, Pierre and his bride went on a two-month honeymoon to the West coast. They camped in Yosemite Valley for two weeks and then took an ocean trip to the Canadian coast.18

Beginning in September 1920, they moved into their temporary home on East Street in Winchester. The back of their property abutted Salt Creek, the small stream that meanders through Winchester. On the east side of the creek directly behind Pierre and Dorothy’s house stood the imposing governor’s mansion of James and Cora Goodrich. Within the immediate neighborhood lived all four of Pierre’s uncles and their wives. By all accounts, Pierre and Dorothy lived a happy and quiet life Edition: current; Page: [126] in Winchester. Their only child, Frances “Nancy” Dorwin, was born in October 1921, in Dorothy’s parents’ home in Decatur.19 Back in Winchester, Pierre was able to reestablish childhood friendships and begin life as a small-town lawyer.

In January 1921, James Goodrich returned to Winchester to resume his duties as president of the Peoples Loan and Trust Company and pursue his many business interests. The previous September, Pierre had begun practicing law with his cousin John Macy, Jr. They maintained an office in Winchester above the old Randolph County Bank, in the same place that their fathers, James Goodrich and John Macy, Sr., had practiced law together for fifteen years around the turn of the century. John Macy, Jr., a man of substantial intellect, had graduated from Wabash College Phi Beta Kappa in 1908. He attended Columbia University Law School in New York City for one year before returning to Winchester.20

In Winchester, Pierre and Dorothy played in a local bridge club. Their closest friends included George and Evelyn Jaqua, John and Matilda Jaqua, Francis and Mary Simpson, Alice and Sarah Miller, and Marie Moorman. Pierre and Dorothy also went on long walks on Sunday Edition: current; Page: [127] afternoons.21 Just three blocks due north of their house was the town’s new library, which Pierre’s father, mother, and grandmother had helped to establish. Pierre and Dorothy attended the First Presbyterian Church, which was located only two blocks away from their home.

The members of the Goodrich family were and continue to this day to be pillars of the Presbyterian Church. Pierre’s grandmother, Elizabeth Goodrich, was a founding board member in 1882. Pierre’s uncle Percy served as superintendent of the Sunday school for a number of years, and his father, James Goodrich, served as an elder of the church for more than twenty-five years and, beginning in 1910, taught a men’s Sunday school class that met until the former governor’s death.22 Pierre’s mother, Cora, also active in the Presbyterian Church, founded the Madonna Class in 1914. Women who were members met both for regular Sunday school and socially at the Goodrich mansion, just a block from the church. Pierre taught an all-boys Sunday school class from 1920 until approximately 1922.

At that time, each of the churches of Winchester had a baseball team. Local contests served as one of the main forms of entertainment.23 Pierre once explained the reason he stopped attending church regularly. Edition: current; Page: [128] He and others on the Presbyterian team had gone to the congregation’s minister, the Reverend Gustav A. Papperman. They sought approval for the church baseball team to play in a Sunday afternoon league. Mr. Papperman refused the young men’s request on the grounds that the day was the Sabbath. Pierre thought the decision totally ridiculous and illogical. He did not think much of the viewpoint that adhered to such a rigid observance. After that, Pierre lost interest in organized religion and did not attend church regularly. He did, however, remain on his hometown church’s membership roll for the rest of his life, but he often called himself a “backslid Presbyterian.”24

By 1923, Pierre had tired of small-town practice in Winchester. He had larger ambitions, especially in the area of corporate law, than he thought his hometown could accommodate. Therefore, against his parents’ wishes, he and Dorothy moved to Indianapolis, where they lived on the affluent north side of the city.25 Pierre had tried to persuade his law partner, John Macy, Jr., to move to Indianapolis also so that they could establish a law practice together. Macy, however, had no desire to leave Winchester. Macy continued to practice law in Winchester until 1939, when he was elected Randolph Circuit Court judge, an office his father had also held. Macy was reelected to the position for the next twenty-eight years and retired in 1966 at the age of eighty.26

James and Cora were disappointed to see their only child, daughter-in-law, Edition: current; Page: [129] and granddaughter leave Winchester shortly after the couple had returned from four years in the governor’s office.27 Pierre’s decision to move to Indianapolis in 1923 was an astute one, however, at least professionally. It became pivotal in his becoming one of Indiana’s leading corporate lawyers.

Chapter 12: The Great Russian Famine, 1921–1923

In the midst of returning to his many business interests after serving as governor, James Goodrich experienced an interesting diversion. In mid August 1921, James and Cora were on vacation in New York State. They were staying at the upscale Hotel McAlpin in New York City when Goodrich received a letter from Will Hays. Hays was now United States postmaster general in President Warren G. Harding’s administration. Hays asked whether Goodrich would be interested in undertaking a special assignment to the Soviet Union. The purpose would be to investigate the terrible famine that plagued Russia’s central region.1 Goodrich was immediately excited about the prospect, especially Edition: current; Page: [131] since the invitation originated from Herbert Hoover, then secretary of the United States Department of Commerce and chairman of the American Relief Administration (ARA).

While awaiting further word about the possible mission, the Goodriches continued their vacation, arriving in Albany, New York, on August 24. There, Goodrich found waiting for him a telegram from Hoover that read simply: “Would be glad if you could conveniently come to Washington to discuss Russian situation.”2 Goodrich immediately abandoned his vacation and left for Washington, D.C. It would be the start of what the former governor later recalled as the most remarkable adventure of his life.3 As Goodrich records in his manuscript about his various trips to the Soviet Union:

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Arriving in Washington, D.C., on August 25, Goodrich met with Hoover and army colonel William N. Haskell. Haskell, a native of New Jersey, served as director of the Russian unit of the ARA. He had previously acted as a technical adviser to the Polish government in Warsaw and had supervised ARA operations in Romania and Armenia. He was considered an expert in food relief. Before the meeting, Goodrich knew little about the famine except that millions of Russians were near death from starvation. By the end of his meeting with Hoover and Haskell, however, it was decided that the former governor would leave as soon as possible “with an open mind to investigate the entire famine situation, learn the truth about Russia and return as soon as the preliminary investigation was completed.”5

Goodrich knew of Hoover by reputation, but he had never met the commerce secretary before the meeting of August 25. Goodrich’s name had been brought to the future president’s attention by Hays during a cabinet meeting. Hoover’s written response to Hays’s recommendation was positive: “I believe it would be of substantial benefit for this country to have a man of such experience as Governor Goodrich to obtain a real knowledge of what the real difficulties of this foolish economic system are.”6 From the tenor of the letter, it is obvious that Hoover was not familiar with Goodrich at the time Hays made the suggestion. This might seem odd, given Goodrich’s long-term national Republican Party Edition: current; Page: [133] ties. Considering Hoover’s background, however, it is understandable. Hoover was a political party neophyte. He had not even announced himself as a Republican until February 1920.7 Therefore, Goodrich’s upcoming trips to the Soviet Union not only gave the former governor an opportunity to participate in an extraordinary undertaking, but also resulted in the establishment of a close friendship between Hoover and Goodrich.

The facts confronting Hoover, Goodrich, Haskell, and the ARA relief effort were as follows: In the summer of 1921, millions of peasants in central Russia were suffering from what would become the worst famine in modern Russian history. Immediate foreign relief was critical if the famine situation was to be stemmed before the country entered into the long winter of 1921–22. An internal Soviet evaluation team estimated that the Russian government would be able to provide no more than 20 percent of the food that would be needed in the worst-off provinces—Samara and Saratov—in central Russia.8 Goodrich’s mission was to examine the accuracy of the internal Soviet evaluation team. He was then to report back to Hoover, Congress, and, ultimately, the American people in hopes of obtaining relief.

To some degree, Hoover was a self-appointed overseer of the project, but he clearly had the qualifications for the momentous task. He had headed the ARA, a private relief agency based in New York City, since 1918. Hoover had previously directed food-relief efforts for victims of the Boxer Rebellion in China in 1900 and for victims in Belgium (1915–19) through the United States Committee for Relief in Belgium. From 1917 to 1919, Hoover had served as the United States food administrator. In 1921, Hoover held the position of United States secretary of commerce.9

In retrospect, Hoover’s selection of James Goodrich to lead the ARA Edition: current; Page: [134] fact-finding mission was unorthodox but excellent. Although Goodrich had very little foreign policy knowledge and no firsthand experience of the Soviet Union, he did have a working understanding of some of the causes of the economic and political upheavals going on in the country: the roles of banking, railroads, commodities, infrastructure, utilities, and government, generally. It was, however, perhaps Goodrich’s earliest experiences as a farmer and his knowledge of human nature that were most useful to him in analyzing the immediate crisis. As Benjamin Rhodes observes in his book on Goodrich’s ARA trips: “At the age of fifty-seven, having achieved financial security and having attained all he desired in politics, Goodrich was at peace with himself and politically obligated to no one, Hoover included. He took literally Hoover’s request that he approach the subject with an open mind. And as a result of his observations he was soon to begin a campaign to enlighten the American mind, but not quite in the direction anticipated by Hoover.”10

After his meeting in Washington, D.C., with Hoover and Haskell, Goodrich returned to Winchester and got his affairs in order as quickly as possible so that he could begin his arduous journey. On September 15, 1921, Goodrich left New York City on the ship Kroonland to make the first of four trips to the Soviet Union. The transatlantic crossing took two weeks, and Goodrich made valuable use of his time. Armed with voluminous records from the British Parliamentary Commission, which had monitored the famine for several months, Goodrich studied about Russia as much as he could: its government, the revolution of 1917, the counterrevolution, and the causes of the famine.11 Goodrich well understood ahead of time, however, that his mission was to be strictly humanitarian in nature. When Hoover had negotiated with the Russian authorities to allow the ARA to enter the Soviet Union, Bolshevik Edition: current; Page: [135] leaders demanded that no ARA officials could become involved in political matters. The Bolsheviks feared that anticommunist propaganda, which was known to be widespread in the United States, would be attempted in Russia itself.

Goodrich arrived in England on September 30. He first visited Plymouth and then traveled to London to meet with ARA officials and to tour the British capital’s historic buildings, including Westminster Abbey. Cora remained with her husband until she left for Paris to allow James to begin his work. On October 3, he left for Moscow, traveling across the English Channel and then by train through France, Germany, and Lithuania to the Russian frontier. Along the way, Goodrich read that one British source estimated that as many as thirty-five million Russians were starving.12 He believed that to be an exaggerated figure, yet conditions in the Volga region, three hundred miles southwest of Moscow, were even worse than the reports he had received had indicated. In the heart of the Volga region, where drought had destroyed the crops, Goodrich observed that no dogs could be found. He was told on the train to Moscow that in the village of Saratov all the dogs had been butchered for sausage. When colts were foaled, the peasants killed and ate them immediately; the same was true of newborn calves and piglets.13 Peasants in the Samara region were eating grass, leaves, bark, and clay in an attempt to stave off starvation.14

On the way to Moscow, Goodrich and his small party, which included an interpreter and a courier, came across a small group of émigrés who described some of the horrific scenes Goodrich was yet to encounter. Because the Bolshevik government was reluctant to admit how bad things really were, physicians had been forced to certify Edition: current; Page: [136] Edition: current; Page: [137] peasant deaths as caused not by starvation, but by an epidemic of typhus and cholera. One of the refugee women told Goodrich how desperate the times had become: “Last year and the year before they [government workers] took our grain. They did not even leave our men enough to sow. If we tried to keep what we needed for our children or our next crop they threatened to kill our men if we did not give up all. So our people were discouraged and each year they planted less. This year when the sun burnt up everything, starvation and death came and we had to leave or die.”15

Goodrich was so moved by the refugees’ story that he gave them five American dollars and some chocolate bars for the children. The mother of the children said that the youngest two had never tasted candy. When Goodrich finally arrived in Moscow on the evening of October 5, no one was there to greet him at the train station, because the telegram announcing his arrival had never been received.16 When he finally arrived at the ARA headquarters on his own, he found a palace, “a veritable museum of art,” that was one of only three buildings in the entire city that were heated by steam. The room he was assigned had paintings that he estimated were worth no less than half a million dollars, including portraits and landscapes from some of the great masters: Rubens, Van Dyke, Raphael, Mignard, Bonheur, and other notables. Leon Trotsky’s wife had intervened to see that the palace was not destroyed during the Revolution, although the government had taken it from the original owner. The former owner was allowed to remain as the caretaker of the art collection.17

Goodrich spent two days in Moscow preparing for the demanding trip to the Volga region. During this time, he received a cholera vaccination, attended an opera, and visited an unofficial market. The sale of furs was not permitted, yet both men and women who had obviously seen better times paraded in the makeshift market area with their expensive Edition: current; Page: [138] fur coats, waiting to be propositioned for a quick sale. Measured in American money, Goodrich recalled that the items seemed ridiculously cheap.18 As he wrote in his diary, on that day he also exchanged “90 good American Dollars for 8,920,000 worthless Russian Rubles.”19 He also paid a taxi driver 5,000 rubles to give him a tour of Moscow. “To me it was only six cents but to him it seemed to mean almost a fortune,” he recorded.20

On Saturday, October 8, Goodrich was packing in anticipation of the train’s leaving at 6:00 p.m. At noon, however, he was advised that the government had decided that the train should leave at 1:30 p.m. Racing to the station, he boarded the train along with his traveling companion, Dr. Frank Golder, chairman of the history department of Stanford University. Golder proved to be an invaluable resource and friend to Goodrich. He was a native of Odessa, Russia, who held a Ph.D. from Harvard University. Golder’s fluency in Russian and practical traveling skills were put to good use by Goodrich. The Stanford professor was on leave from the university, serving as a special investigator for the ARA. Goodrich’s own title was lead special investigator.

The train’s early departure caused Goodrich’s interpreter, his courier, and all his belongings to be left behind. “As the train pulled out of Moscow I did not find the prospect a pleasing one,” Goodrich recalled. “Here I was going into a famine and disease stricken country, without an interpreter, dependent on what food I could forage along the way.”21

Goodrich and Golder managed to fend for themselves. They bought food and supplies from peasants at the various train stops. Even though it was only early October, the weather was already like that in December in the northern United States: Snow covered the ground, and the ditches were filled with ice.

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Goodrich had managed to take along a sleeping bag and two army blankets. Both he and Golder did not rise from sleep until late on Sunday, October 9. On the trip, Goodrich was able to make several observations about the lifestyle of the peasants: The cattle and land were held by the villagers communally, and schools were considered taboo, except for private institutions where the rich, under the old regime, provided their children with an education. Moreover, Goodrich was intrigued at the physical prominence of Greek Orthodox churches. Their golden domes and steeples appeared everywhere, it seemed.

He and Golder struck up a conversation with some young Communist sympathizers who criticized capitalism and the church. Goodrich countered that the Soviet government had itself adopted some capitalistic practices, such as authorizing rents and wages and allowing the opening of retail stores for profit. The “Reds,” as Goodrich called them, admitted that certain capitalistic concessions had been made. But capitalistic governments themselves, they declared, often made concessions to socialism, too.

After the heated discussion, Goodrich and Golder bundled up in their blankets and sang all the patriotic songs they could recall: “America,” “The Star-Spangled Banner,” and “Glory, Glory, Hallelujah.” Goodrich wrote in his diary how he thought of the notable contrast between “our blessed country” and the Russia of Lenin. Before going to sleep, Goodrich “prayed God to give us men and women with a vision big enough Edition: current; Page: [140] to measure up to the task of saving our country from the awful blight that has fallen on Russia.”23

Chapter 13: Emissary to Russia

In his last report to Herbert Hoover before he left the Soviet Union in November 1921, James Goodrich outlined the terrible suffering he had seen. He also wrote at length about the political turn of events he had discovered. Goodrich stressed to Hoover that the Russian peasant still had a friendliness toward the American people that had changed little from before the Russian civil war. He also offered an opinion that Lenin’s Bolshevik government was evolving into a regime that was less antagonistic to capitalism than had been previously thought. Moreover, Goodrich noted that he had talked to men of political affairs in the country and “found not one particle of sentiment for the old order (under the Czars) and the Russian people will have none of it.” He continued, “If Lenin can hold the majority of his party with him, and especially Trotsky and the army, this government will stand.”1

After learning about Goodrich’s account, President Warren G. Harding was convinced that direct aid from the United States government was the only way that relief could reach Russia in time to prevent Edition: current; Page: [153] the famine from becoming horrific in scope. Hoover encouraged this thinking. The ARA director was against the alternative, an appeal to the American public, for several reasons: First, it would take a relatively long time to mount because of the difficult logistics of such a campaign and because public sentiment was generally not in favor of helping the Bolsheviks; second, there would be private fund-raising groups that the ARA simply could not control; and third, a direct appeal to Congress had the best chance of maximizing a large return.

On December 6, President Harding made his first state of the union address to Congress. In that address, the president requested that Congress appropriate for Russian famine relief $10 million. This would be enough to purchase ten million bushels of corn and one million bushels of seed corn.2 On December 10, United States congressman Joseph W. Fordney of Michigan introduced legislation in the House of Representatives that would appropriate the $10 million that Harding was seeking. Meanwhile, the urgency of the situation was growing. On December 8, Colonel Haskell, director of ARA Russian operations, sent Hoover a sober forecast of what would occur if aid did not come immediately: “Somewhere between five million and seven million people in this area must die unless relieved from outside Russia. . . . As a Christian nation we must make greater effort to prevent this tragedy. Can you not ask those who have already assisted this organization to carry over eight million children through famine in other parts of Europe to again respond to the utmost of their ability?”3

By December 5, Goodrich had already returned to Indiana. Just five days later, he received Hoover’s telegram, summoning him back to Washington to appear before Congress. Instead of having hearings held before the Ways and Means Committee, Hoover had managed to have testimony heard before a more influential body, the House Foreign Affairs Edition: current; Page: [154] Committee. The hearings lasted two days, December 13 and 14. The first day was devoted entirely to the issue of famine relief. The second day’s testimony, about recent Soviet political developments, was offered in a closed executive session by Goodrich, Hoover, and others.

At the December 13 hearing, Goodrich was the first to testify. His testimony was the longest and most complete of any of the witnesses. Others who testified included Hoover; Samuel Gompers, president of the American Federation of Labor (AFL); Dr. Vernon Kellogg, secretary of the National Research Council; Carl Vroonman, former assistant secretary of the Department of Agriculture; and Ralph Snyder, executive board member of the American Farm Bureau Federation.4

In his opening statement, Goodrich first explained the conditions that led up to the great Soviet famine: the seven years of foreign and civil war that had disrupted normal agricultural cycles in the Volga region; the subsequent reduction in the amount of crops that had been planted; and the terrible drought of the preceding summer and the partial drought of 1920. Goodrich next recounted his nearly two-month tour of sixteen different communes in the famine regions.5

On reading Goodrich’s report and the exchange that took place between him and members of the committee, one is immediately struck by Goodrich’s decisiveness. When the former governor was asked during the hearing whether the proposed $10 million in relief was adequate, he answered unequivocally that it would take twice that—$20 million but no more—to successfully address the famine. He also attempted to allay any fear by the committee that American relief would not go directly to the starving peasants, but would be confiscated by authorities or pocketed by Communist bureaucrats. “I heard of one man caught stealing American food who was . . . shot by order of the Soviet authorities,” Goodrich said. Goodrich interspersed his very thorough statistical Edition: current; Page: [155] summary with sympathetic anecdotes: finding the two orphan girls in Markstadt half-naked and sobbing; meeting the distraught hospital administrator at Kazan; hearing the disturbing news from the farmers at Norga, who predicted that one-half of the commune’s population would be dead by the end of winter if foreign relief was not forthcoming.6

Hoover’s testimony primarily dealt with the anticipated criticisms of providing relief to a nonrecognized government that America feared. He emphasized the humanitarian nature of the undertaking. He also informed the committee that relief had been offered only after negotiations had resulted in the release of all American prisoners of war in Russia. The future president further made the observation that United States famine relief would not have the unintended result of propping up the Communist regime. This was so, Hoover argued, because the aid would be going to a region of Russia primarily outside the scope of socialist (communist) influence:

By these last remarks, it is obvious Hoover was trying to sensitize the committee into believing that the Volgarian peasants were really just Edition: current; Page: [156] destitute “blood cousins” who deserved American generosity. Hoover went on to explain that it would be impossible to provide sufficient relief funds privately, since the ARA had been able to raise from a skeptical American public only approximately $500,000 in contributions since August. Finally, Hoover appealed to the economics of the relief. He attempted to persuade the committee that famine aid through the direct provision of agricultural products would relieve a glutted American commodities market: “We are today feeding milk to our hogs; burning corn under our boilers. From an economic point of view there is no loss to America in exporting those foodstuffs for relief purposes. If it is undertaken by the Government it means, it is true, that we transfer the burden of the loss from the farmers to the taxpayer, but there is no economic loss to us as a Nation, and the farmer also bears part of the burden.”8

During the second day of testimony, held in closed session, Goodrich noted the concessions to capitalism that the Communist regime had sanctioned: farmers were now able to keep and sell for personal profit surplus crops; retail shops and banks were beginning to reappear; serious discussions regarding the role of private property and contracts were under way. All of this was very important to members of the committee because of the desire, on the part of many in Congress, to investigate whether recognition of Russia and the establishment of diplomatic relations could or should be pursued.

After the day’s hearing, United States senator Joseph I. France of Maryland announced to the press that Goodrich’s testimony would go far toward bringing about a marked alteration in American policy toward the Soviet Union. Senator France had initiated legislation that would create a seven-person commission to investigate the resumption of trade relations between the two countries as well as the issue of diplomatic recognition by the United States of the Soviet republic.9

A spirited debate about the proposed famine relief occurred on the Edition: current; Page: [157] House floor, during which time Goodrich’s testimony was often used as the reference point. Despite this rhetorical tussle, the House of Representatives passed the relief legislation by a vote of 181 to 71. In the Senate, however, approval was less trouble-free. Senator Tom Watson of Georgia made a number of arguments against the bill, including the fact that the Soviet Union still owed the United States nearly $200 million, as well as the spurious argument that “the Russians do not even know how to mill corn; they don’t like it, won’t eat it.”10

Despite these objections, the Senate passed the legislation in a very short time. By December 22 President Harding signed the relief measure into legislation. From the time of the relief bill’s introduction to its passage, exactly twelve days had passed. Considering the normally slow, grinding process of legislation, the quick passage was a miracle. Clearly Goodrich’s and Hoover’s testimonies had confirmed the seriousness of the famine and the urgency to act. By Christmas, news had reached the Russian peasants that America had come to their rescue.11

Goodrich’s knowledge of the situation was truly convincing. One Soviet expert claimed that Goodrich possessed “more intelligence of real human sympathy or understanding about Russia” than almost anyone he had ever met.12 The crucial role that Goodrich’s testimony played before Congress is perhaps best summarized in a letter that Edgar Rickard, director-general of the ARA, wrote to Walter L. Brown, ARA’s European director, shortly after enactment of the famine legislation:

When James Goodrich appeared before the House Foreign Affairs Committee in December 1921, he held no official position with the ARA. His earlier investigation in the Soviet Union had been simply as a private citizen, and only his travel expenses had been covered by the relief organization. On Christmas Eve, however, President Harding signed an executive order that appointed Hoover and Goodrich to the five-member Purchasing Commission for Russian Relief as chairman and vice-chairman, respectively.14 Just days before, Hoover had appointed Goodrich to the ARA Executive Committee. From January 4 to March 22, 1922, the Purchasing Committee met at least once a week to review bids by various agribusinesses. The committee reviewed hundreds of bids. When Hoover was unavailable to attend, Goodrich chaired the meetings until his second departure for the Soviet Union in mid February.15

By the end of January 1922, only one month after Congress had passed the legislation, $12 million had been spent for the following purchases: Edition: current; Page: [159] 6,945,000 bushels of corn, 1,370,652 bushels of seed wheat, 9,800 tons of corn grits, and 340,000 cases of condensed milk. By the end of January, three million bushels of grain had already been sent to the Soviet Union by thirteen steamships. Additional ships were in port loading in New York, Baltimore, Philadelphia, and New Orleans. By May 22, 1922, fifty-eight steamships had transported cargo to meet the needs of the starving Russians.16 It was perhaps the largest relief effort ever undertaken by the United States government.

Ironically, no sooner had Goodrich received his appointment to the ARA Executive Committee than it was decided that he should return to Russia, but, strangely enough, not under the official auspices of the ARA. Rather, President Harding had decided that Goodrich should serve as an unofficial emissary. Since Goodrich could not become involved in political matters and still be officially associated with the ARA, he wore a different hat when he returned to Russia in February 1922. An article by the Associated Press briefly described the former governor’s new position:

The United States and Russia had had no formal diplomatic relations since the Bolshevik revolution in October 1917. Thus, the Harding administration believed that Goodrich’s second trip could serve as an excellent opportunity for an unofficial representative to share America’s concerns over Soviet domestic and foreign policies. Also, since Goodrich had the ear of President Harding, Secretary of State Charles E. Hughes, and Hoover, Communist leaders could be assured that their views, conveyed to Goodrich, would be relayed in confidence to the highest United States political authorities.

On February 12, 1922, Goodrich left on his second tour. It was during this trip that he met with the Soviet president, Vladimir Lenin. Goodrich arrived in Moscow on March 9. In his manuscript about his trips to Russia, Goodrich describes the Moscow of March 1922 as totally different from the one he had left the preceding November: The streets were filled with activity, the people had a sense of cheerfulness, more stores were open, and people could purchase more than the necessities of life.18

At Tsaritsin, Goodrich learned that American corn had recently arrived and that some twenty thousand peasants from the region had come on sledges in one day to carry it away. By mid March, 135 trains were carrying fifty thousand tons of American corn to the furthermost corners of the famine region. Men were working around the clock to unload the grain.19

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Goodrich was forced to spend his first week in Moscow dealing with ARA personnel problems that were embarrassing to the relief organization: drunkenness by members of the local (Moscow) team, and an ARA officer in Petrograd who blatantly hired prostitutes.20 Moreover, Goodrich had hand-carried a letter from Hoover to Colonel Haskell that contained Hoover’s concern that most of the Russian ARA staff were Catholic. “I haven’t any prejudice in any religious matter as you know,” wrote Hoover to Haskell, “but if we are going to have peace in the United States we need to have a sprinkling of Protestants on the job somehow.”21

On March 18, Goodrich traveled to Samara to find further troubles: The Cheka had recently made two hundred arrests for illegal political activity. Five Russian ARA officials were on the list. In an unrelated matter, forty-nine members of an organization of bandits were on trial in Samara. They had killed about a dozen people in carrying out their thievery. Goodrich attended the last evening of the trial with the chief of the new Department of Justice of Samara, a Monsieur Zgakanoff. Nine of the bandits were sentenced to death, and the rest were sent off to serve sentences varying from three years to life imprisonment in Siberia.22

If the activities of the local ARA teams were not exactly encouraging, the success of food distribution was. Heavy snows and below freezing temperatures had allowed peasants from long distances, up to three days away, to travel by sledges to the distribution centers. They hauled away several hundred pounds of corn each. Still, death had been a common visitor in many of the communes. On March 19, Goodrich attempted to travel by train to Orenburg, only to have the train stopped: first, to avoid a gang of bandits, and, later, by a terrific snowstorm that blocked the tracks for several days. When it was learned how long it Edition: current; Page: [162] would take for the tracks to become cleared, Goodrich had his car attached to a freight train and attempted to return to Samara. The freight train became lodged in an “insurmountable snowdrift,” and Goodrich was stuck for another five days near the town of Bogotae. The misfortune did allow Goodrich to discuss with several local peasants the conditions that existed. What he learned was not pleasant:

The misery caused by the famine was not limited to within Russia’s borders. Rats and mice from the famine region were migrating by the hundreds of millions to Hungary, overrunning Budapest. In the Hungarian capital, market halls, food stores, and warehouses were swarming with the rodents. In some Hungarian villages, farmers gave up raising poultry and began breeding cats to try and stop the rat and mice plague.24

Meanwhile, Goodrich became livid because of the inefficiency of the Russian train system. He claimed that a good American worker could do the work of ten Soviet railroaders. Despite repeated delays on the return trip to Moscow, the common response of both railroad worker and passenger alike was “Nitchevo,” meaning “it doesn’t matter.”25 Edition: current; Page: [163] While Goodrich was delayed in returning to Moscow, he took the opportunity to write a lengthy letter to President Harding. The report dealt only briefly with the immense gratitude that the Russian people felt toward America for coming to their rescue. The remainder of Goodrich’s letter was concerned with Russia’s political conditions. Goodrich lobbied forcefully for recognition of the Bolshevik regime. In his opinion, whether the American public and officials liked it or not, the Bolsheviks were the only power in Russia capable of running the government.

The fervor with which Goodrich believed in United States recognition of the Bolshevik regime is easily seen in the concluding paragraphs of his letter to President Harding:

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Goodrich arrived back in Moscow on Thursday morning, March 30. In the Russian capital, he was invited on April 1 to a formal dinner with the president of the Russian banking system and the director of forestry. He discovered later that the two men’s interest in dining with him was to learn Washington’s attitude toward Russian recognition. Without United States diplomatic recognition, Russian businesses could not deal directly with their American counterparts. The terribly anemic performance of the post–civil war Russian economy was at least partially a result of the policy of the Harding administration. The high-level Russian officials could not understand why America, on the one hand, was willing to provide tremendous famine relief, but, on the other, refused to recognize the Communist government. Goodrich writes of the conundrum:

Goodrich subsequently met with the Russian commissar of railroads and the commissar of foreign affairs (comparable to the United States secretary of state). The latter also confronted Goodrich about recognition. That same week, Goodrich attended a meeting of the Communist Party held in the Imperial Theatre in Moscow and heard an address by Leon Trotsky, who then served as secretary of the Soviet army. Although Trotsky’s speech was generally well received by an audience that was “intensely patriotic and nationalistic in spirit,” he was openly criticized by one Russian. Goodrich believed that the fact that the dissenter was able to openly criticize one of the highest-ranking Soviet leaders was significant because it indicated a growing sense of freedom of speech.29

Goodrich left Moscow on April 4, 1922. He arrived in New York on April 18, having traveled from England on the ocean liner Olympic. Goodrich’s return, replete with a message purported to be direct from Lenin, prompted the Detroit Free Press to predict that the reestablishment of United States–Russian relations was just around the corner.

Goodrich had, in fact, met with Lenin only once during his second trip.31 On his return, Goodrich denied publicly that he carried any message from the Soviet leader to Harding. It is unlikely, however, that his meetings with Lenin, the Soviet foreign minister George Chitcherin, and other Russian leaders were limited to discussing the success of the relief work, as Goodrich claimed.32

At a breakfast meeting with Hoover in Washington on the morning of April 20, Goodrich reported on the success of the relief effort. Goodrich and Hoover then proceeded to discuss Russian developments at a luncheon that same day with President Harding at the White House.33 At these meetings, Goodrich’s reports tended to take on a political Edition: current; Page: [167] tone. Privately, Goodrich continued to press the issue of recognition to Harding, Secretary of State Hughes, and Hoover. It would be a matter that would preoccupy and frustrate the former governor for the next decade. Publicly, he still limited his discussion to the famine and the tremendous success the ARA had had in overcoming great obstacles to provide humanitarian relief.

On May 16, 1922, Goodrich met again with Hughes and Hoover in Washington, D.C., before embarking on his third tour of Russia on May 18. He stopped in both London and Paris to meet with top-level officials about the political situation in Russia. In London, Goodrich met on the morning of May 28 with the controversial United States ambassador to Great Britain, George Harvey. Harvey told Goodrich that the Soviets would soon meet the conditions set down by the American government in order to obtain recognition.34

Goodrich arrived in Moscow on June 7. A week later, he was invited to view some property in the government’s possession. Believing the property to be simply some furs, Goodrich was not particularly excited about the invitation. When he arrived at the storehouse, however, his attitude changed. Three large sealed chests were brought out and their locks were broken. There in front of him were the Russian Crown jewels in all their brilliance. Goodrich wrote: “The old Czar’s crown, the crown of the Czarina, and the various members of the royal family were there, brilliant with diamonds, varying from one to two hundred carats, all of purest water, and of wonderful color. There were crowns of diamonds, Edition: current; Page: [168] and pearls of emeralds, rubies, and amethysts; collars, bracelets, and necklaces of the precious stones. The scene beggared description.”35

Goodrich was shown the collection, purportedly worth $500 million at the time, for two reasons: first, to dispel the rumors that the crown jewels had been broken up and sold; and second, to inquire whether the jewels could be used as the basis for a loan in America to purchase agricultural implements and supplies.36 The first goal was accomplished, since Goodrich’s account of the incident was carried in newspapers by the Associated Press across the United States and Europe. Without formal recognition by the United States government, however, loans to the Soviet Republic, with or without the crown jewels as collateral, were out of the question.

It was during Goodrich’s third trip that he held a conference with Monsieur Rakovsky, the president of the Ukraine, whom Goodrich called “the clearest headed man I had met in Russia.” Rakovsky praised the work of the ARA. He also expressed his hope that it would continue its efforts in the Soviet Republic long after the immediate crisis had ended. The Ukrainian leader also pressed Goodrich on the issue of Soviet recognition. He probed Goodrich regarding whether America would take concessions for private property that had been confiscated by the national government after the civil war. Goodrich’s answer was much the same as before: Without a change in Soviet policy allowing for the private ownership of property and permitting American businesses to operate in Russia with limited governmental intrusion, the United States would not recognize or invest in the Soviet Republic.37 To be safe, Goodrich always combined this response with the caveat that he was speaking only as a private citizen. It was clear, however, that he was espousing the Harding administration’s views. Privately, Goodrich was much more sympathetic to Russia’s plea for recognition than he ever let on to the Russian leaders.

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After Goodrich’s meetings, he cabled a brief report to Secretary Hughes. The matter that Goodrich spent the most time discussing was Lenin’s health. If news reports were accurate, Lenin’s death was imminent. Who would succeed him, whether there would be an attempt by other factions to overthrow the Bolsheviks from power, and other related questions were of critical importance to the United States. Goodrich wrote to Hughes:

In the meantime, Goodrich resumed his investigations of famine conditions by traveling through the various provinces. In the Tatar village of Tahtalla, he met with the president of the commune and learned that conditions had improved only marginally since the autumn of 1921. “‘In last September we had 1177 souls in this commune,’ he said. ‘There are 522 people left. Nearly 300 starved and the rest emigrated or died of Edition: current; Page: [170] typhus. Only about 12 percent of our livestock is left. If it were not for America we would all be dead. We raised very little last year and are now getting 250 adult and 250 child rations for relief, so you see the Americans are practically feeding the whole commune.’”39

Lawlessness continued to be a problem as well. Bands of marauders who had previously fought with the anti-Communist White Army continued to raid the communes and steal from and kill the Communist leaders. The problem was that most of the peasants were sympathetic to and befriended these soldiers, hating the Communists also. As one commune leader told Goodrich, only about 5 percent of the peasants were Communists themselves.40

Despite these political problems, Goodrich noted on his return to Moscow from Samara that, as far as the eye could see, “the fields bore evidence of good husbandry.” The weather had been excellent, and all indications were that the countryside east of Moscow would bear a bumper crop of rye, wheat, and other grain. “It seemed [to me] that in a few short weeks the work of American relief in Russia would be over.”41

During Goodrich’s second week in Moscow, he received separate invitations to meet with Leon Trotsky, head of the Russian army; Lev B. Kamenev, chairman of the Soviet Relief Commission; Maxim Litvinoff, acting secretary of state in Chitcherin’s absence; and Leonid Krassin, commissar of foreign trade, to discuss political relations between the United States and Russia. President Harding and Secretary Hughes had suggested that Goodrich meet with the highest leaders of the Soviet Union in order that they might better understand America’s attitude toward Russia, but Goodrich was reluctant to show his eagerness to meet. Goodrich intentionally waited to receive these invitations, and then he turned down the separate invitations, agreeing to meet with the Soviet leaders only collectively. Kamenev arranged the meeting while Edition: current; Page: [171] Goodrich was away from Moscow surveying the success of famine relief in several of the outlying provinces.42

On Sunday, June 18, Goodrich returned to Moscow. On the following day, the meeting with the Soviet leaders was held at the Kremlin office of Kamenev. Present were Kamenev, Litvinoff, Krassin, and Grigori Sokolnikoff, commissar of finance. Also present was Aleksei Rykov, acting president of the Soviet Republic and president of the Soviet Council. Rykov held these positions because of Lenin’s stroke of May 26, which had left the Soviet premier paralyzed over a good part of his body. Trotsky missed the meeting. Dr. Golder served as Goodrich’s interpreter. The points that Goodrich raised were contained in a note that Secretary Hughes had sent on March 25 to Litvinoff, listing specific conditions that had to be met prior to recognition.43

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What ensued for the next three hours was a discussion covering the broadest range of issues integral to American-Russian relations. Time and again, Goodrich raised issues that concerned the Harding administration with regard to Soviet political, economic, and legal affairs: the lack of procedural due process in Russia, the lack of separation between the executive and judicial departments, the restrictions on the ownership of private property, the setting aside of contracts, the power and manipulation of labor unions, the Russian debt owed to the United States, the compensation due American companies that had been nationalized or whose property had been otherwise expropriated, and the reluctance of the United States to lend money to the Soviet Republic. On each issue, one or more of the five Soviet leaders—Rykov, Kamenev, Krassin, Litvinoff, and Sokolnikoff—responded to rebut or diffuse Goodrich’s arguments.44

With regard to the issue of debts owed to the United States, the Russian political leaders stood in unison in refusing to recognize and pay the foreign debts that had been incurred during the deposed czar’s reign. Rykov added: “You know that Russia cannot pay. It seems foolish to ask Russia to issue her obligations to pay when she knows that without financial help she cannot pay.” To this, Goodrich rejoined with his typical American “can do” attitude: “‘The difficulty with you gentlemen is that you yourselves have no faith in Russia,’ I replied. ‘Russia can pay, once her industrial and economic system is restored. You ought to show your faith in Russia by frankly saying that you recognize your Edition: current; Page: [173] debts, that they are valid obligations; that you will give us your undertaking to pay these debts, and will fix a definite time when interest and principal will be paid.’”45

Goodrich subsequently drafted a summary of the meeting and forwarded it to Hughes and Hoover. In Goodrich’s letter to Hughes, the former governor painted a gloomy picture of the deteriorating conditions in Russia:

On the next day, June 20, Goodrich attended a trial of the Socialist revolutionaries, this time with Dr. Sokolnikoff, minister of finance. Thirty-four prisoners who had denounced and killed many Communists were being tried for their political beliefs and activities. Goodrich left the trial in the late afternoon to attend a Moscow parade celebrating the Third Internationale. The day marked the anniversary of the slaughter of thousands of Communists by the “Whites,” and the Communist Party was attempting to make the most of it. All factories and offices had been closed, and tens of thousands of workers—not very enthusiastically, Goodrich noted—marched in step and weakly cried out “Comrades all together!” Goodrich observed that many banners denounced the political prisoners whose trial he had just left. By the end of the three-hour parade, a curious thing happened. Large crowds of marchers gathered before the Great Hall of the Nobles, demanding to be admitted to the trial of the revolutionaries. Against the defense’s objection, the court admitted the workers and permitted them to read a petition condemning the prisoners for “inciting a revolution in Russia, Edition: current; Page: [174] holding them responsible for the death of millions of Russian workers and peasants, and demanding the infliction of the death penalty.”47

The following day, Goodrich returned to the Volga valley to continue his inspection of ARA famine relief operations. On his return to Moscow, he began inquiring into the state of American business interests in Russia. He met with the managers of the Westinghouse Corporation, International Harvester, and the chairmen of the Soviet State Bank and the Commission on Concessions. From these meetings, Goodrich learned that the Soviet government rejected private ownership of property but was willing to enter into long lease agreements with foreign corporations. The major problem that plagued businesses was not the lack of private ownership or the lack of access to natural resources; rather, the major impediment was the liberal labor laws that at the time excessively burdened foreign businesses. It was far cheaper for American and German companies to manufacture goods in their own countries and ship them to Russia than it was to produce goods in the Soviet Union. For instance, under Soviet law, women workers who became pregnant were entitled to a full salary for seven months while on maternity leave. The managers of International Harvester told Goodrich that benefits of this kind made up nearly 25 percent of the company’s entire payroll.48

Goodrich next spent an afternoon touring the Kremlin, whose name means “fortress” in Russian. In his manuscript, he describes in detail the various historical sights he visited: the sixty-foot-high wall surrounding the towers, minarets, and gilded domes that adorn the churches and monasteries within the Kremlin; the twenty-six-foot-high, 185-ton bell that Empress Anna had cast in 1733; and the huge, elaborately decorated palaces of the czars. The Kremlin tour made quite an impression on him.49

On June 30, 1922, Goodrich left Moscow, completing his third trip to the Soviet Union. On his return train trip from Berlin to Riga, he found Edition: current; Page: [175] that Leonid Krassin, the Russian secretary of foreign trade, was a fellow passenger. The two spoke for several hours, with Krassin trying to convince Goodrich that American financial assistance and resumption of trade were justified. Goodrich told Krassin that before the United States would consider resuming trade relations with Russia, it would first want to know whether Russia was capable of succeeding in its own internal affairs: Could it balance its budget? Could its railroads make money? Could the natural resource trusts be operated efficiently? and so on. Goodrich further reminded Krassin that the Russian government had promised to submit a comprehensive plan of reconstruction at the Genoa, Italy, international economic conference in March 1922, but had failed to do so. Goodrich wanted to know what the plan was. He writes of Krassin’s response: “M. Krassin then proceeded for half an hour to talk about a perfectly foolish, impractical scheme involving railroad building, electrification, restoration of agriculture, purchase of thousands of tractors—all to be done by the Bolshevik government. Had this statement come from some young, enthusiastic communist I would not have been surprised, but coming from Krassin I was astounded.”50

On July 21, Goodrich returned from the trip along with Cora on the ocean liner Mauritania. Marie Moorman, the daughter of Goodrich’s business partner, Jesse Moorman of Winchester, had accompanied the Goodriches. After his third trip, Goodrich had intervened to arrange for four young Europeans to immigrate to the United States to begin new lives: Josephine Friedrich and Marie Kohlman from Bavaria, Peter Stuer from Latvia, and Hans Fredrichson from Denmark. Friedrich, who spoke no English and only a little French when she first arrived in Boston in September 1923, lived with the Goodriches as a companion to Cora from October 1923 to 1928, when she married.51

Upon Goodrich’s return in July 1922, he participated in a conference for officers of the ARA in New York. At this conference, the leadership Edition: current; Page: [176] of the ARA decided to cease feeding adults in Russia. They concluded, however, that they would continue feeding about one million children for another year.52 Goodrich and Hoover traveled to the White House on September 6, at which time Goodrich updated President Harding on the famine and the political discussions he had held with the Soviet leaders. Goodrich started to press privately for at least an open consideration of Russian recognition by the Harding administration. A brief newspaper excerpt captures the essence of Goodrich’s thinking:

Clearly, Secretary Hughes had a different opinion, and his strong will would not submit to Goodrich’s powers of persuasion. Hughes was a former governor of New York, an associate justice of the Supreme Court, and the Republican candidate for president in 1916, when he narrowly lost to Woodrow Wilson. He would also become the eleventh Edition: current; Page: [177] chief justice of the Supreme Court in 1930. The secretary of state believed that he should be the one sitting in the White House. At the very least, he was convinced that directing America’s foreign policy was his job. Hughes was adamantly opposed to any consideration of recognition without the radical changes dictated in his March 25 letter to Litvinoff.

Unable to shake Hughes from his position, Goodrich returned, discouraged, to Indiana and his neglected business interests. By mid September, negotiations to reestablish relations between the two countries had come to a complete halt. The Harding administration had decided, following Goodrich’s recommendation in June, to appoint a commission to examine the economic conditions in Russia. The Soviets refused to allow an American investigation team to enter Russia, however, unless the United States reciprocated by allowing a Soviet team to visit and examine America’s economic conditions. The demand by Moscow infuriated Hughes. It essentially ended communications between the two countries for a considerable time. In early September, the Times of London reported that it had recently learned that more than 1.7 million Russians had been executed by the Cheka during the Soviet civil war, more than had been killed during all of World War I. The horrific news, reported in United States newspapers, solidified America’s impression that the Communists were a brutal lot and were not to be trusted.54

Privately, Goodrich remained very interested in the reestablishment of United States–Russian relations. Haskell kept Goodrich informed of ongoing ARA activities as well as of political matters by writing him periodically from Moscow. Goodrich also kept a close eye on political developments in the Soviet Union through newspaper accounts and correspondence with Hoover and other ARA officials.55 In late November Edition: current; Page: [178] 1922, Goodrich tried to resurrect the idea of an American commission’s visiting the Soviet Union with the understanding that a Russian commission would be permitted to come to the United States at an undesignated later date. He floated the idea past Haskell in Moscow, who in turn discussed it with Karl Radek (chief of the Russian Propaganda Bureau), but apparently nothing came of the proposal.56

Back in Indiana, Goodrich attempted to stay involved in the Russian recognition issue. He had given up on converting Secretary Hughes to his way of thinking; instead, he focused on gaining the support of Hoover. “I would rather have them in the family circle where we can talk things over with them,” Goodrich wrote to Hoover. He added, “With the departure of the A.R.A. the last point of contact with Russia will be severed.”57 Goodrich was far from alone in seeking the establishment of diplomatic relations with the Soviets. On March 15, 1923, the Women’s Committee for Recognition of Russia met for its second annual conference in Washington, D.C. In a telegram to President Harding, the delegation demanded a change in United States policy, mentioning Goodrich’s position in the bargain:

Nonetheless, Hughes clearly had the upper hand in influencing Harding’s views. He periodically sent to the president letters from Americans who had lived in the Soviet Union and who supported the administration’s position of nonrecognition. Harding seemed content to believe that he and Hughes were right, despite protests to the contrary.59

Meanwhile, on June 16, 1923, a dinner was held in Moscow informally concluding the ARA’s work in Russia. Almost all of the top Soviet leaders were present, including Kamanev, who was now acting head of the Russian government as a result of Lenin’s medical relapse in March. In addition to Kamanev, Chitcherin, Litvinoff, Radek, and Sokolnikoff were there. Trotsky, absent from Moscow, wrote a glowing letter thanking the ARA for its relief efforts. He let it be known “that both people and the Government of Russia are ready to make every effort to re-establish normal relations with the great American people.”60

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Frustrated at the pace of negotiations, Goodrich attempted in June 1923 to press his views about recognition directly with President Harding. He wrote to Harding seeking an opportunity to meet with the president; however, before the meeting ever came about, Harding became ill and died in San Francisco on August 2.61 Harding’s death made it necessary for Goodrich to start all over, promoting a more moderate American policy toward Russia with Calvin Coolidge, Harding’s successor. Goodrich was totally discouraged by the attitude of Hughes and the lack of any interest on the part of the State Department to reexamine the situation. In an August 1923 letter to Edgar Rickard, the ARA’s executive director, Goodrich wrote:

Shortly afterward, Hoover tried to arrange a fourth trip for Goodrich, in which he would establish “at least a temporary contact in Russia.” The commerce secretary also suggested Goodrich’s name to the Rockefeller Foundation as a possible representative of the foundation in the Soviet Union. Goodrich had a “very pleasant” talk with the Rockefeller Foundation, but nothing came of this meeting or of Hoover’s hopes to use Goodrich to further United States trade possibilities with the Kremlin.63 Edition: current; Page: [181] Goodrich would wait for two more years before he would again visit the Soviet Union and attempt to influence Washington to view Russia differently.

Chapter 14: Return to Russia, 1925

At the end of August 1925, James Goodrich embarked upon his fourth and final trip to the Soviet Union.1 For five weeks, Goodrich and his wife Cora, Colonel William Haskell, and Frank Golder toured the Volga region and the cities that the former governor had first visited in 1921. What he found was “remarkable progress” in agriculture, railroads, banking, and manufacturing. At a personal level, the fourth trip was an opportunity for Goodrich to renew his own fondness for the Russian people. When he visited the commune of Schilling, Goodrich met a peasant woman who was selling vegetables and fruit. He told her who he was in his broken Russian, and the woman

Goodrich had returned with Golder to the Soviet Union at the invitation of the Russian Academy of Science, which was celebrating its twentieth anniversary. He held no official position and was simply attending as a representative of Indiana University. Golder represented Stanford University. The academy was holding an international conference for delegates from Europe as well as from the United States, China, India, and other countries. It was the first formal opportunity Russian intellectuals had had since 1914 to meet with their foreign counterparts. Goodrich and Golder were the only delegates from the United States.

Goodrich took every opportunity to learn about the progress the Soviet people had achieved since he had last visited in 1922. He met with a vast array of officials, both public and private. One of his first meetings was in Leningrad with Dr. Ivan Pavlov, the Nobel Prize–winning physiologist, who is perhaps best known in the West for his conditioned reflex experiments involving dogs. Pavlov was an outspoken critic of Communism. He constantly denounced Lenin to Goodrich and refused in 1922 to receive any special treatment during the famine. “These fellows have learned they cannot run a government according to their Marxian philosophy,” Pavlov told his visitor.3

On September 5, Goodrich met with Dr. Oldenburg, secretary of the Russian Academy of Science. Goodrich had first met Oldenburg in 1921. At that time, Goodrich and Golder had offered the eminent professor of modern Oriental languages, on behalf of the Rockefeller Foundation, $500,000 for the purpose of maintaining the operations of the Russian Academy of Science. Oldenburg had refused the generous offer because he was attempting to force the Russian government to support the academy. The maneuver had apparently worked, since the Communist government had contributed two million rubles (at that time about Edition: current; Page: [184] $1 million) in 1925 toward sustaining the academy. Oldenburg praised the Communist regime, and especially Lenin. He believed that the moderate faction of the Communist Party was gaining control and that the government would continue to move toward a fuller embrace of capitalism.4

Back in Moscow on September 7, Goodrich found the Russian capital abuzz with activity. Everywhere he went, Russians repeatedly asked him about the “Scopes Monkey Trial,” which was going on in Dayton, Tennessee, and about who or what was a “Ford”? Goodrich held two meetings with Maxim Litvinoff, who was still acting commissar of foreign affairs in the absence of Chitcherin. In a series of meetings with private citizens, Goodrich learned that there was a tremendous shortage of housing. Families of several members were forced to live in apartments of only two or three rooms. Because housing was first offered to workers at an artificially low rent (as little as three dollars a month) there was no incentive for investors to build any additional housing. The low rent was subsidized by the rest of the taxpayers.5 Goodrich subsequently met with the commissar of transportation, the head of the Textile Trust, and the assistant commissar of agriculture. From the latter, he learned that in 1925 Russia would have in excess of one billion poods (1.8 million tons) of foodstuffs, quite a different situation from the one that had existed in 1922.6

On the evening of Monday, September 14, Goodrich and Golder attended a meeting of the Moscow Soviet in the famous Bolshoi Theatre. While he claimed the meeting was pure “propaganda from start to finish,” he could not help but mention with pride the reception that the delegates attending the Academy of Science anniversary received from the thousands who attended the meeting. “When the names of the two American delegates [Goodrich and Golder] were read and we arose, the entire theatre stood up as one person and cheered again and again until Edition: current; Page: [185] we too were compelled to go to the front and cries of ‘America’ arose from all over the great building.”7

The following day, Goodrich attended a meeting of the economic research section of the Academy of Science, accompanied by the Soviet minister of finance Grigori Sokolnikoff. The featured speaker was the noted British economist John Maynard Keynes. According to Goodrich, Keynes’s address was not well received. It is little wonder, given that throughout the talk Keynes criticized Lenin and Leninism, attacked the gold standard, and advocated instead a monetary standard based upon the average value of certain basic products.8

A meeting the next day with a young Russian reinforced Goodrich’s belief that the Soviet Union under the Communists was on its way to economic prosperity.

On Friday, September 18, Goodrich, with a young interpreter, left for Saratov to retrace his previous journeys while on the famine relief missions in 1921 and 1922. Although the crop conditions were generally much improved, Goodrich found the appearance and plight of the Russian peasants little different. As he stated, “Men and women while Edition: current; Page: [186] strong and rugged physically are miserably dressed and have a pathetic, sad appearance as they stand along the railway in the little Communes through which we passed.”10 On September 20, Goodrich took the steamboat Leon Trotsky down the Volga River. He and his interpreter traveled to Tsaritzin, whose name had recently been changed to Stalingrad in honor of Joseph Stalin.11

While in the Ukraine, Goodrich met with President Petrofsky of the Ukraine Republic, who was one of six chairmen of the Central Executive Committee of the Soviet of Russian Republics. Petrofsky also asked about the Scopes trial and the question of recognition. Goodrich recounted again the conditions necessary for the Communist government to be recognized by America: recognition and payment of the debts contracted by the Kerensky government; restoration of American property in Russia nationalized by the Soviet government; and cessation of propaganda by sympathizers associated with the Third International Communist Party.12

On his return to Moscow, Goodrich met with the general manager of Amtorg, the Russian agency that conducted export and import business in America. Goodrich also had a lengthy discussion with Litvinoff on the afternoon of September 25 about Russian-American relations.13 Two days later, Litvinoff invited Goodrich to dinner to continue the discussions. Present at Litvinoff’s home opposite the Kremlin, besides Litvinoff, were Nikolay Bukharin, the editor of Pravda, and Karl Radek, director of propaganda. During the two-hour discussion, Litvinoff, Radek, and Bukharin emphatically denied that the government had any connection with the Third Internationale. On the issue of recognition, the Soviet leaders conveyed a sense of befuddlement. It was well known that the Weimar Republic of Germany had extended diplomatic recognition in April 1922 and Great Britain had in 1924. By 1925, the United States remained the major holdout.

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On the afternoon of Tuesday, September 29, Goodrich met with Joseph Stalin. At the time, Stalin held the positions of secretary of the Politburo as well as secretary of the Communist Party. During a two-hour meeting, Stalin, who would become the most important and powerful figure in modern Russian history, covered much of the same ground with Goodrich as had been covered by Litvinoff, Radek, Krassin, Kamenev, and other Soviet leaders. Goodrich raised with Stalin the matter of the inflammatory anti-American speech he had heard Kamenev give before the Moscow Soviet on September 14. Stalin expressed disappointment over Kamenev’s remarks as well as those of Zinoviev, who espoused support for the Third Internationale. Stalin concluded the meeting by repeating “what was so often said to me in Russia,” wrote Goodrich, “that the Russian people liked the Americans and preferred closer cooperation with them than to any other country in the world.”14 Goodrich’s brief appraisal of the stolid Georgian was that he was “a man of rare good common sense, sound judgment, and in my opinion is easily the most powerful factor in Russia.”15

The following day, Goodrich met with Leon Trotsky in Trotsky’s Kremlin office. Trotsky tried to convince Goodrich that the Soviet Union deserved recognition. He detailed the government’s plan to attract foreign capital, reduce the costs of production in agriculture, and be competitive in the world markets. As for Trotsky’s proposal to continue the heavy subsidizing of workers’ rents, Goodrich called the plan “rotten economics.”16

When Goodrich departed Russia on October 7, his work was not finished. In Berlin, he met with Chitcherin, the Soviet foreign minister, at the Russian embassy. Chitcherin expressed outrage over the note he had received from the United States secretary of state C. E. Hughes in December 1923. Hughes’s note had followed President Coolidge’s speech to Congress, in which Coolidge had given a strong indication that Edition: current; Page: [188] American policy toward the Communists was softening. Given the capacity in which he was visiting the Soviet Union, Goodrich was clearly not in the position to speak for either Hughes or the president.17

Goodrich’s impressions on his fourth trip confirmed what he had begun to believe when he had visited in 1922: that Russia under the Communists was making great progress and that conditions, despite severe internal problems, were generally much better than they had been under the czars. The items he specifically mentioned in support of this assessment included the extension of voting rights to intellectuals, scientists, and technicians; the decentralization of power from Moscow in favor of local governments; the amendment of marriage laws to recognize church marriages and of the inheritance laws to remove the prohibition against inheritances of more than five thousand dollars; the reinstatement of private traders; the defeat of Zinoviev, Kamenev, and Sokolnikoff, who opposed addressing the issue of international debts on any terms; and the rise in power of Stalin and the movement toward the right. From his perspective, the government’s adoption of “State capitalism” was a step in the right direction, a step that would ultimately lead to the eradication of the last vestiges of Communism.18

When Goodrich returned to the United States in October 1925, he was more certain than ever that Russian recognition would be of benefit to both countries. In an attempt to convince President Coolidge of the changes he had seen, he traveled to Washington and met with both the secretary of state, Frank B. Kellogg, and Coolidge. Hoover had arranged the meetings. Kellogg was even more dogmatic than his predecessor had been in opposing recognition, while Coolidge, true to his cautious nature, “made no commitments and urged Goodrich to summarize his views on paper.”19

Disheartened by the tepid response, Goodrich nonetheless returned to Winchester and wrote to the president in November 1925: “It is safe to say today that the working classes of Russia are in better condition Edition: current; Page: [189] and better satisfied than they were under the Tsar.” He went on to state that recognition would promote world stability, renew American business ties with Russia, and “accelerate rather than retard the march now going on from communism to capitalism.”20

After spending five years stewing about the problem, Goodrich finally gave up lobbying for United States recognition of the Communists. It was not until eight years later, on November 16, 1933, that President Franklin D. Roosevelt finally granted recognition to the Soviet Union through an exchange of letters with Litvinoff.21 Goodrich believed that the many years of nonrecognition not only hurt the Soviet people but delayed a grand opportunity for American businesses to prosper in a vast country that could have benefited from American goods.

Goodrich’s opportunity to participate in the ARA famine-relief efforts in Russia is significant for several reasons. First, his investigations into the famine and his subsequent testimony before Congress gave credibility to earlier reports of the famine that the media had tended to sensationalize. Goodrich was a highly respected former governor. He had long served as a member of the Republican National Committee and was generally well known and highly regarded in Washington’s political circles. His firsthand experience of the famine, coupled with his business and political background, gave credibility to his testimony. In fact, during debate about famine-relief legislation on the House and Senate floors, members of Congress made repeated references to Goodrich’s testimony before the House Foreign Affairs Committee. Their faith in Goodrich’s views was summarized in an Associated Press article written in February 1922: “Goodrich is a man known to be, as one commentator expressed it, ‘a hard-boiled Republican, who thinks as the President does.’ Goodrich is a wealthy Indiana public utilities owner, long in politics, Edition: current; Page: [190] and high in his party’s counsel. When he came back from Russia, and made his report on Russia, the President believed it. The same was true of senators and representatives with whom the former governor has spoken.”22

Second, James Goodrich’s testimony made it clear that only immediate relief would prevent one of the worst famines in history. The ARA was not in a position to raise funds privately because of the general skepticism among the American people toward Communist Russia. Goodrich and Hoover, however, convinced Congress that public relief would not result in propping up the Bolshevik government. It would merely address starvation among the peasant class.

Third, Goodrich told the story of Communist Russia and, in a very real way, assisted in providing a more realistic perception of the Soviet Republic and its people to the American public. Goodrich addressed groups in large and small cities alike and gave interviews to many national newspapers.23 Major articles about his various trips were reported by the Independent, the New York Times, the New York Sun, the New York Herald, the Detroit Free Press, the Pittsburgh Times, the St. Louis Post-Dispatch, the Indianapolis Star, and other leading papers in the United States. Even the China Press of Shanghai reported on Goodrich’s investigation.24 Goodrich himself wrote articles in Outlook and Century Edition: current; Page: [191] magazines as well as a major article, “The True Communists of Russia,” for Current History.25

Fourth, Goodrich served as an important conduit for initiating relations between the United States and the new Soviet government. Formal diplomatic relations between the two countries had come to an abrupt halt in 1917 when the Bolsheviks took control of the government. Between 1917 and 1933, Goodrich was probably the highest-ranking American emissary to have direct and repeated contact with the Soviet leadership.

Goodrich’s analysis of the causes of Russia’s pathetic conditions and what it would take for Russia to become a self-sufficient and profitable nation were right on the mark. He correctly attributed Russia’s decline during the post–civil war era of the early 1920s to a totally inexperienced and idealistic group of radicals, among whom were Lenin, Trotsky, Rykov, and Krassin. He wrote in the last chapter of his manuscript about his trips to Russia:

Despite these pitfalls, Goodrich was optimistic that Russia’s leadership was gradually recognizing the foolishness of its earlier policies and would successfully transform modern Russia into greatness. He wrote:

If Goodrich was on target in diagnosing Russia’s illness and cure, he was significantly off the mark in predicting the timing of recovery and health. Not even to this day, more than seventy years after Goodrich’s last visit, can Russia lay claim to being the economic and world power that the former Indiana governor predicted it would become. In defense of Goodrich’s optimism, it must be remembered that when he completed his fourth and final trip, the Soviet government’s adoption of a new comprehensive economic-political policy had been in effect for more than four years. The New Economic Policy (NEP) was announced in March 1921 by Lenin. Its purpose was to retreat temporarily from the unattainable goal of Communism to state capitalism. Under the NEP, the monetary system and the market economy were restored. Peasants were allowed to dispose of their products for personal gain after meeting Edition: current; Page: [193] their tax obligations; most small-scale industries were denationalized to allow the rise of a new class of small-business owners. Many outside and inexperienced followers of Soviet policy, such as Goodrich, believed that the NEP was a sign of a broader acceptance of capitalism and not simply the aberration from Communism that it turned out to be.28

Part of Goodrich’s miscalculations may be explained by his understandable fondness for the Russian people and his deep desire to see the Soviet nation prosper. Goodrich knew the Russian people and their leaders personally. They were not faceless bureaucrats uniformly and fervently devoted to full-fledged Marxist Communism. They convinced him that they generally liked Americans and simply wanted to be treated as equals, which necessitated mutual recognition. Furthermore, unlike Washington’s “three H’s” (Harding, Hughes, and Hoover), who knew the Russian political leadership only by reputation, Goodrich had met with the highest echelon of the Communist leadership: Lenin, Stalin, Trotsky, Rykov, Kamenev, Chitcherin, Bukharin, Litvinoff, Radek, Sokolnikoff, and Krassin. He believed that he understood the fractious elements in the Communist Party, and he was convinced that the moderate-conservative wing would ultimately prevail. He believed that this powerful faction would be concerned with improving living conditions and would toss aside the leftists’ utopian dream of Marxist Communism.

In hindsight, however, it is clear that Goodrich did not fully appreciate the zealotry and ruthlessness that many of these same leaders would adopt in creating a totalitarian communist organization. Contrary to Goodrich’s appraisal, communist political ideology, not pragmatism, Edition: current; Page: [194] prevailed in the next several decades. The NEP, which was in full force when Goodrich visited the Soviet Union, was an aberrational concession. It was viewed by Lenin and later by Trotsky and Stalin as necessary to prevent a complete overthrow of the Bolsheviks, not as a long-term policy goal. Moreover, Stalin’s own calculating mind and personal ambitions caused him in 1928 to move away from the NEP in order to rid himself of rivals such as Kamenev, Trotsky, Zinoviev, and Bukharin. In a series of adroit political maneuvers, Stalin shifted to leftist policies that these rivals opposed. He, thus, was able to condemn them for creating factionalism and deviation from the Communist line. Stalin then either demoted them or eliminated them altogether. The playing out of this sort of personal ambition would have been nearly impossible for Goodrich to forecast.

Despite the political turn of events that Goodrich failed to foresee accurately, the first and primary purpose of his travels to Russia—to assist in famine relief—was a complete success. A total of 381 Americans served with the ARA in Russia at one time or other during the twenty-two months that the relief organization had a presence in the Soviet Union. A handful of this number were regular army officers; the majority were volunteers, like Goodrich, who saw an opportunity to play an important role in relieving suffering.29 Despite its small numbers, this group was responsible for feeding as many as ten million starving Russians. The ARA efforts undoubtedly prevented millions from dying. The ARA’s campaign is considered one of the greatest humanitarian undertakings in history. It is little wonder that James Goodrich considered it his greatest personal adventure.

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Chapter 15: The 1920s

The 1920s marked both the best and worst of times in Indiana. On the one hand, soldiers from the war had returned to their families, the nonfarm economy was booming, and prosperity and “speakeasies” reigned, prompting the decade to become popularly known as the “Roaring Twenties.” On the other hand, the same type of intolerance that had resulted in blatant discrimination against Americans of German heritage during the “European War” once again returned, clad in white hoods and sheets, to menace Catholics, Jews, and African Americans. By 1923, the Ku Klux Klan (KKK), which had originated in the South, took hold in a serious way in Indiana. By that year, the KKK claimed a membership of three hundred thousand in Indiana, and the Hoosier state was the home of the Grand Dragon of the Klan, David Curtis Stephenson. Many municipal, county, state, and federal politicians were members. Klan endorsement was seen by many as a necessary prerequisite for public office. The Klan allegedly helped to elect two Indiana governors and two senators, including Edward L. Jackson, who was governor from 1925 to 1929. In his reelection bid for the Senate in 1926, James Watson was even accused of seeking Klan endorsement.1

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Shortly after leaving office as governor in January 1921, James Goodrich was appointed president of the National City Bank of Indianapolis. He had been associated with the bank as a client since his early days in the statehouse. Because of the bank’s poor financial health, which made either reorganization or merger inevitable, the directors sought out Goodrich for his managerial abilities, and he became a major stockholder. In 1923, Goodrich arranged for the National City Bank to be merged with another longtime Indianapolis financial institution, American Fletcher Bank.2 In the early 1920s, the former governor also managed to purchase a controlling interest in the Aetna Trust and Savings Company in Indianapolis. These commercial ties would continue to keep him and his family involved with Indianapolis businesses. They would lead to larger commercial opportunities in the 1930s.

By the early 1920s, Indianapolis had become an important midwestern business and cultural center. Several publishing houses had located in Indianapolis, and some important authors, most notably James Whitcomb Riley and Booth Tarkington, did their best work there. The city, which was the state’s capital, had grown to a population of 320,000 residents. At the same time, Indianapolis retained a certain small-town atmosphere, no doubt in part because so many of its inhabitants were, in fact, recent migrants from Hoosier farms and small towns in search of opportunity.

By 1923, Pierre and Dorothy had made the move from Winchester to an affluent and scenic neighborhood in Indianapolis at 1529 Park Avenue.3 In Indianapolis, Pierre practiced law as a junior partner with the firm of Haynes, Mote and Goodrich in the Hume-Mansur Building. Pierre knew both Haynes and Mote because they had served in his father’s Edition: current; Page: [199] administration. Paul H. Haynes died shortly after Pierre joined the firm. Mote was a Randolph County native and had been a top campaign adviser to James Goodrich in his 1916 race for governor. For Mote’s efforts, in 1917 James Goodrich appointed him secretary of the Indiana Public Service Commission, chairman of the governor’s Legislative Council, and chief oil inspector until the position was abolished in 1920. Mote later became president of the Northern Indiana Telephone Company and ran unsuccessfully for the United States Senate in 1944. Pierre and Mote, who advertised themselves as public utility counselors, severed their partnership in the fall of 1926 after a falling out.4

Pierre practiced alone for the next year and a half, taking offices on the seventh floor of the Continental Bank Building. In 1928, he and John Raab Emison formed a partnership. James Goodrich served in the position of counsel to the firm. Emison, a native of Vincennes, Indiana, was a graduate of DePauw University (1919) and Harvard Law School (1922), where he and Goodrich first met in 1920. Before going into partnership with Pierre, Emison had served as assistant United States attorney for the Southern District of Indiana and as judge of the Superior Court of Knox County.5

The two attorneys, under the firm name of Goodrich and Emison, remained in Goodrich’s Continental Bank Building offices. The building, now called the Electric Building, faced Indianapolis’s Monument Circle. Both Pierre and Emison had a penchant for corporate law and seldom took on legal work that involved the writing of briefs or practice before courts. In 1929, Goodrich and Emison hired a young associate lawyer, Albert Campbell. Campbell, also a DePauw and Harvard Law graduate, became a partner in the 1930s. His professional relationship with Pierre was one of the longest Goodrich ever had.6

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At the same time that Pierre was developing a successful corporate practice with his small law firm, he was also seizing upon business opportunities with his father through Engineers Incorporated, the family investment company. Engineers Incorporated was originally organized as a company that owned gas, water, and electric companies and provided financial, and some managerial, services for them.7 Formed on November 20, 1925, Engineers Incorporated purchased a number of struggling companies in the 1930s. Pierre later (with the aid of family members) turned these companies into highly profitable business operations and sold them at huge profits in the 1960s and 1970s. Over the years, a number of close family members or friends were made directors of Engineers Incorporated: Perce G. Goodrich (1952); Russell Martin of Tipton, Indiana (1953); Benjamin Rogge (1960); and J. Dwight Peterson (1961).8 Even before the Depression, Pierre had established himself as a leading corporate lawyer. Until 1927, he was president of the Indiana-Ohio and the Western Ohio Public Services companies, and by 1929, at the age of thirty-five, he was the president of Engineers Incorporated, the Interstate Telephone and Telegraph Company, and the P. F. Goodrich Corporation (a personal holding-investment company).

Pierre was also a director of the Union Insurance Company, the Continental National Bank of Indianapolis, the Aetna Trust and Savings Company, the Equitable Securities Company of Indianapolis, the Peoples Loan and Trust Company, and the Peoples Investment Company Edition: current; Page: [201] of Winchester.9 In addition, he was secretary, treasurer, and a director of the Patoka Coal Company, located near Winslow, Indiana.10 Over the course of his lifetime, the number of companies Pierre would control through his family’s fortune expanded even more, numbering in the dozens.

If the natural gas boom marked the decade of the 1890s, the 1920s can be most closely identified with the automobile revolution. Almost overnight, the horse and buggy disappeared. In 1910, there were only a few hundred cars in east-central Indiana, but by 1923, several thousand loud and strange-looking motorized vehicles could be seen scurrying about, operated by inexperienced and erratic drivers. Driving standards were lax at the time. There was no driver’s training, licensing of drivers involved no test of skill or equipment, and traffic was largely unregulated. This resulted in a high rate of accidents, as James Goodrich could attest. Those who were not affluent enough to travel in their own vehicles hitched rides or used another growing type of transportation—the interurban.11

At the end of his term as governor, James Goodrich vowed that he would never seek elective office again. While he remained true to this personal pledge, he did not quit undertaking acts of public service. His most noteworthy work, documented in the preceding chapters, was in the former Soviet Union on behalf of the American Relief Administration and the Warren G. Harding administration. Over the course of the next two decades, however, James Goodrich held several other important positions in the administration of public and private affairs.

In 1923, James Goodrich was appointed to the Indiana Deep Waterways Commission to investigate the possibility of securing a deep-water channel between the Great Lakes and the Atlantic Ocean via the St. Lawrence Edition: current; Page: [202] River. At the same time, the former governor was also appointed to the Great Lakes–St. Lawrence Tide Water Commission. This latter commission was established by eighteen states that combined their efforts to investigate the opening of the Great Lakes to oceangoing vessels through the St. Lawrence River. The commission found that deepening the St. Lawrence Seaway to thirty feet would allow up to 88 percent of all ships entering American ports to travel, through a series of locks, nearly the complete distance of the Great Lakes.

Ultimately, the need to take action was seen as so great as to compel the creation of a commission at the federal level. Therefore, on March 14, 1924, President Coolidge established the International St. Lawrence Waterways Commission, and Coolidge appointed James Goodrich to serve on this commission. Herbert Hoover, still United States secretary of commerce, chaired the commission. The commission was charged to advise the president on the development of shipping from the Great Lakes to the Atlantic Ocean. The commission was established because of the need for a number of upper-Midwest and Northeast states—Ohio, Indiana, Kentucky, Illinois, Iowa, Missouri, Kansas, Nebraska, North and South Dakota, Wisconsin, Minnesota, Pennsylvania, and New York—to have a natural transportation link to the rest of the trading world. The completion of the Panama Canal in 1914 had put these states—which collectively had more than forty million inhabitants who gained their livelihood from basic industries—at a distinct economic disadvantage to other regions of the country when it came to the transportation of goods.12

From the summer of 1924 until December 1926, the commission studied the benefits and costs of making the St. Lawrence Seaway navigable Edition: current; Page: [203] for oceangoing vessels.13 On December 27, 1926, the commission issued its report to President Coolidge.14 After James Goodrich’s work on the commission was completed, the issue had a long debate before resolution occurred. The Senate in 1932 rejected the proposed seaway treaty between the United States and Canada; a second treaty, signed by President Franklin D. Roosevelt in 1941, remained unratified by the Senate for the next eight years. Finally, the Senate approved a treaty with Canada in 1954 when it became apparent that Canada would proceed on its own with the seaway project if the United States did not cooperate.15

Although it was nearly thirty years after the St. Lawrence Seaway Commission’s report was completed that the project was finally attempted, the commission’s study laid the groundwork for the ultimate success of the seaway. When the project was finally begun in May 1954, it followed many of the recommendations that were contained in the Hoover Commission’s report of December 1926. More than twenty-two Edition: current; Page: [204] thousand workers were employed on the project over the next five years. They deepened channels, constructed locks and channels, and created a thirty-mile-long Lake St. Lawrence. When the project was completed in April 1959, the St. Lawrence Seaway provided 9,500 miles of navigable waterways, allowing some forty million tons of cargo to move through the system annually. It was one of the largest civil engineering feats ever undertaken.16

Another event occurred in 1923 that preoccupied Goodrich for several months. Warren T. McCray, who had succeeded Goodrich as governor, became embroiled in a personal financial crisis and had to plead for relief from creditors. McCray and Goodrich, who had previously run against each other for governor in the Republican primary of 1916, were not friends. Thus, when Goodrich came to McCray’s rescue, it was not out of any sense of fondness or loyalty he had for McCray, but an attempt to mitigate the embarrassment that disclosure of McCray’s financial situation would bring to the Republican Party. Goodrich claimed that he helped raise $350,000 to save McCray. Apparently, the effort was all for naught, because shortly thereafter the Bank of Kentland, to which McCray owed the money, failed. McCray was subsequently charged with and convicted of mail fraud. He resigned the governorship in April 1924 and received a ten-year prison sentence.17

At about this time, Goodrich began to raise money for a more worthwhile cause. In 1924, at the age of sixty, Goodrich became chairman of the board of trustees at Wabash College.

The 1928 presidential election was another event that greatly preoccupied James Goodrich during the 1920s. While Goodrich himself was no longer considered for the top national post, he was a close friend to the two Republican candidates who were: Herbert Hoover and James Watson. Watson had been a leading candidate for vice-president in the 1924 election before Calvin Coolidge selected a little-known Chicago banker, Charles Gates Dawes, as his running mate. Watson, who had allowed the 1920 Republican presidential nomination to slip through his fingers, was determined to garner the 1928 nomination. On February 8, 1928, he announced his intention to run for the office he had desired from the time he and James Goodrich were high school classmates in the 1870s. On April 14, Watson returned to Winchester to proclaim his candidacy before his hometown well-wishers.19 A packed crowd of two thousand attended the ceremony at the new Winchester High School gymnasium. A parade made up of marching bands, local Girl Scout and Boy Scout troops, and others marched from downtown under a large banner that crossed South Street and which read “Our Jim for President.” The south pole anchoring the banner was planted in James Goodrich’s front yard.20 Edition: current; Page: [206] Ironically, Goodrich did not support his childhood friend. He opposed Watson’s entry into the presidential race, believing it would destroy party unity, and supported Hoover. Goodrich’s disappointment in Watson’s candidacy is evident in a letter he wrote to the United States congressman Will Wood:

Watson ended up defeating Hoover by twenty-five thousand votes in the Indiana primary election, but Hoover captured all other states and easily won the presidential nomination at the Kansas City national convention. Much to the chagrin of Goodrich, he was asked by Hoover’s Indiana state campaign manager to remain in the background and not to publicly support Hoover during the national campaign.22

On November 4, Hoover defeated Democratic candidate Alfred E. Smith of New York, receiving the electoral-college vote of forty of the forty-eight states. With the conservative Hoover in the White House, most Americans were convinced that prosperous times would continue. Indeed, the “Great Engineer” and humanitarian, as Hoover was known, had repeatedly pronounced that an indefinite continuation of a businessman’s government would result in unfettered growth. Only months before his overwhelming victory over Smith, Hoover proclaimed, “We in America today are nearer to the final triumph over poverty than ever before in the history of any land.”23 Of course, less than fourteen Edition: current; Page: [207] months later, with the occurrence of “Black Friday” in October 1929, all such rosy projections changed.

While James Watson would never realize his dream of being president, he would be almost as near in power to the top position as any elected official could be. In January 1929, Watson was elected majority leader of the United States Senate, a position he would hold throughout the duration of the Hoover administration. James Goodrich would often travel to Washington to see Watson, now an important spoke in the inner circle of Washington power. Will Hays, Goodrich’s other longtime political colleague who had Washington connections, had resigned his position as President Harding’s postmaster general in 1922 to become the first president of the Motion Picture Producers and Distributors of America, at the princely salary of $100,000 a year.24

Goodrich’s other close friends in the nation’s capital included President and Mrs. Hoover. If anything, the friendship between the Hoovers and the Goodriches grew closer while Hoover occupied the presidency. At the age of sixty-five, Goodrich was not interested in obtaining a post in Hoover’s administration, but he regularly offered advice to the president. For instance, while staying at the White House (in the Lincoln suite) in February 1932, Goodrich again approached Hoover about recognizing the Soviet Union. Preoccupied with the prolongation of the Depression and only months away from undertaking a presidential campaign, Hoover had no interest in taking on the thorny issue. “No occasion to recognize Russia, no sentiment in [the] country for it,” he told his good friend.25

The Goodriches also arranged for several groups of Indiana friends to be received by the Hoovers.26 One such occasion was described by Edition: current; Page: [208] Emma Lieber in a humorous vignette about Cora Goodrich that was recorded in Lieber’s biography about her husband, Richard Lieber. Mrs. Lieber wrote:

At a professional level, James Goodrich only once served as a formal adviser to Hoover. On October 18, 1929, the president appointed Goodrich to an important commission on conservation. Hoover did this at a news conference at the White House in which he announced the formation of the Commission on the Conservation and Administration of Public Domain (commonly known as the Public Lands Commission).28 The commission was composed of one representative from each of the eleven western states in which public land existed. J. R. Garfield, secretary of the interior under President Theodore Roosevelt, Edition: current; Page: [209] chaired the committee. Hoover appointed James Goodrich as a general representative. Hoover’s previous work with Goodrich, as well as the former governor’s own reputation in establishing Indiana’s conservation program and state park system, were factors that led to Goodrich’s appointment.29

The commission first met in June 1930. During that summer, members traveled approximately nine thousand miles by automobile throughout the western states, gathering data. At that time, approximately 179 million acres of land remained in public domain (owned neither by states nor by individuals). The commission was charged with evaluating how best to preserve and make use of the land. The commission initially examined how to dispose of the surface rights of the land; at that time up to 50 percent of all sheep and 15 percent of all cattle in the United States grazed on public land. The commission later investigated a host of ancillary issues: land reclamation; national forests; flood control; power sites; reservations for Native Americans; the extraction of minerals, including oil and gas; national parks; bird refuges; and game reserves.30 Finally, on January 16, 1931, the commission issued its final report to President Hoover.31

The commission’s far-ranging report has implications even to this day. For instance, the commission’s recommendations for water conservation Edition: current; Page: [210] and flood control led to the building of hundreds of dams and irrigation projects that made millions of acres tillable and suitable for grazing. The commission’s recommendations with regard to the appropriation of public lands to the states caused many states to create and develop conservation programs, nature preserves, and state parks.32

Goodrich disagreed with much of the report and signed it reluctantly. He insisted that the states could administer public lands better than Washington could and that the commission had recommended the relinquishment of too little federal control. “My position is so diametrically opposite to that of the rest of the Commission that I wonder why I was put on it,” he wrote to Garfield. “I should have resigned when the report first came in.”33

Previously, in March 1927, James Goodrich had begun serving on the board of directors of the American-Russian Chamber of Commerce, located on West Fifty-seventh Street in New York City. In this capacity, he was able to renew his acquaintance with Maxim Litvinoff, the Soviet foreign minister, with whom he worked closely. Most of the American directors were heads of large corporations doing business in the Soviet Union, such as the Westinghouse Corporation, United States Steel, Chase National Bank, General Electric, and the Remington Typewriter Company. The Chamber of Commerce published a series of reports promoting a “how-to” guide for companies trading in the Soviet Union and sponsored informal trade delegations between the two countries. Goodrich’s inability to influence American foreign policy toward Russia through the Harding and Coolidge administrations was apparently why he sought to encourage trade between the two powers through private channels.34

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Because of his close affiliation with Teddy Roosevelt, Goodrich was appointed in 1920 as a member of the Theodore Roosevelt Memorial Trust, a commission charged with honoring the twenty-sixth president of the United States. In the private sphere, Goodrich, in addition to being chairman of the Wabash College Board of Trustees, also served as a trustee of the Presbyterian Theological Seminary in Chicago (from 1919 to 1940), as a trustee of the American Child Welfare Association, and as vice-president and member of the executive committee of the Civil Legion of America.35 Occasionally, he spoke at such occasions as the dedication of the World War I monument in his hometown of Winchester on November 11, 1928. The monument, the statue of a doughboy, had been donated by the Goodrich family in recognition of the thirty-six men from Randolph County who died during the war.36 And although he would not seek elective office again, James Goodrich was still sought by the Republican Party for his leadership. From the time he stepped down as governor in 1920, he attended until his death nearly every Republican national and state convention as a delegate from Indiana.

During the 1920s, Pierre was enjoying great success in the business world. In his private life, however, the situation was not the same, at least in the latter half of the decade. On September 16, 1926, his boyhood friend and the best man at his wedding, Carl McCamish, traveled to Cincinnati and committed suicide by shooting himself through the chest. In the early 1920s, after the death of his sister, Carl McCamish had moved back to Winchester from Indianapolis to work in the family business, a highly successful burial-supply company. Carl had given up being a doctor to assist his parents with the family company. He also served on the town council. According to newspaper accounts, poor Edition: current; Page: [212] health and overcommitment both at work and in the community led McCamish to take his own life.37

In 1927, Pierre began experiencing excruciating back pain. The condition worsened to the point that in late September he sought medical attention at the Mayo Clinic in Rochester, Minnesota. He had back surgery in Indianapolis the following year. Another blow, emotionally more agonizing than any physical pain he would suffer, struck Pierre shortly after.38 In August 1928, after eight years of marriage, Dorothy divorced him. Their only child, Frances (whom they called “Nancy”), was not quite seven years old.39

Family members and close friends suggested a number of reasons for the marriage’s breakup. First, Dorothy was a socialite and conversationalist who enjoyed parties and outings with friends. She was also a consummate storyteller who needed a willing audience of listeners.40 As for Pierre, cocktail parties and social gatherings completely bored him. To his way of thinking, these occasions provided little opportunity to engage in meaningful (philosophical) conversations. Moreover, they Edition: current; Page: [213] kept him away from his business and intellectual pursuits.41 Pierre was known to work extremely long hours, which did not accommodate Dorothy’s desire to be more social.

Second, during the early years of his marriage, Pierre was quite frugal. Despite enjoying early financial success from his legal practice and businesses, he was ever mindful, almost as if he were still at college, of unnecessary expenditures. His parsimony did not suit Dorothy, who had grown up in comfortable environs as the daughter of a wealthy Indiana banker.42 Finally, there may have been another love interest. Pierre’s parents were heartbroken over the divorce.

Pierre remained single for the next twelve years, while Dorothy, on Christmas Day in 1933, married Louis Haerle, an Indianapolis businessman.43 Dorothy’s second marriage appeared to be a happy one. She became active in Indianapolis social circles and, for a time, worked as an occupational therapist for the Riley Hospital for Children.44 In 1965, she and Haerle moved to La Jolla, California, to retire. Dorothy passed away in February 1987.45

For many years after their divorce, Pierre and Dorothy remained in contact over the upbringing of their daughter. Nancy had gone to school at Shortridge High School in Indianapolis but graduated from Edition: current; Page: [214] Tudor Hall School in 1939. She then matriculated at Vassar College in Poughkeepsie, New York, her mother’s alma mater. After only two years, however, she ran away from the campus, causing substantial distress to both of her parents. She later traveled extensively in Europe, and she enrolled at Oxford and the Sorbonne but failed to earn a degree.46

James Goodrich’s work on various federal and state commissions enabled him to continue his long-term interest in public affairs. Financially secure, James was able to devote much time to serving on these commissions and on the boards of several private organizations. The bulk of his time, however, was still spent in increasing his own and his family’s fortunes.

President Coolidge’s philosophy that “the business of America is business” was taken to heart by the Goodriches: In June 1920, while James was still governor, his family founded the Railway Service and Supply Company in Indianapolis, which primarily repaired freight cars and constructed or repaired railway equipment.47 In 1923, James became a major investor in and treasurer of the Patoka Coal Company, a strip mine in Pike County, Indiana.48 In November 1925, James established Engineers Incorporated, and in April 1926, the Goodriches formed the Interstate Telephone and Telegraph Company, which provided telephone Edition: current; Page: [215] service to communities in both Indiana and Ohio.49 In May 1926, Pierre was one of three incorporators who founded the Muncie Theatre Realty Company, a holding company for movie theaters in Muncie, Indiana.50

Despite forming and acquiring interests in these companies in the mid 1920s, James Goodrich detected something wrong in the economy. The former Indiana governor was a master at seeing a business opportunity and capitalizing on it. He was especially keen when it came to anticipating economic cycles and the profitability of various enterprises. His most far-reaching and important business decision came approximately two years before the Great Depression. James Goodrich’s nephew and cousin to Pierre, Perce “Bud” Goodrich, tells the story:

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Obviously, James Goodrich’s experience as governor and in banking gave him a certain advantage in foretelling the onset of the Great Depression. It is equally evident, however, that thousands of other politicians, businessmen, and bankers either totally misread or disregarded the signs that foretold the horrific economic times to come. James’s brothers followed the former governor’s directions precisely. The five businessmen soon liquidated their interests in most of the small-town utility companies, such as Citizens Heat, Power and Light Company in Winchester; Washington Heat, Light and Power Company in Daviess County; Jeffersonville Water, Light and Power Company in Clark County; Union Power, Heat and Light Company of Union City, Indiana; and the Indiana-Ohio and the Western Ohio Public Services companies. The sales generated huge profits for the family. For instance, the sales of the Washington Heat, Light and Power Company and the Jeffersonville Water, Light and Power Company, according to James Goodrich, amounted to half a million dollars.52

The brothers continued to maintain controlling ownership or a large interest, however, in the Goodrich Brothers Hay and Grain Company, Peoples Loan and Trust Company, Patoka Coal, and a handful of utilities, such as the Eastern Indiana Telephone Company. As Percy recalled years later, the grain and feed business was “recession proof,” whereas Edition: current; Page: [217] many of the family’s other holdings were not.53 The money they received from selling their interests in the utilities was invested in short-term certificates of deposit by Engineers Incorporated. The year was 1927. That move would make it possible for the family to increase its fortune tenfold in the 1930s and 1940s.

Chapter 16: The 1930s

In september 1937, James Goodrich lay in a Baltimore bed at Johns Hopkins Hospital suffering from an irregular heartbeat. The condition was so serious that he would be bedridden for the next several weeks. He had suffered a heart attack in June, causing him to cancel a planned extensive tour of the Soviet Union that summer. He had hoped to study the industrial progress the Great Bear had made under Stalin since his last trip in 1925. After his release, he began giving more time to his philanthropic interests, particularly educational and religious institutions. Two of his larger gifts were to Wabash College: $150,000 for the construction of a much-needed science hall and Edition: current; Page: [219] $113,000 to establish scholarships for advanced studies in honor of a former president of the college. He also contributed more than $90,000 to Hanover College, part of which was to help endow a chair in musical education.1

Goodrich’s illness brought him face-to-face with his own mortality and also resulted in a de facto change in the chain of command. Pierre was now in control of the family’s financial empire. Pierre did, however, receive weekly letters from his father while James was recuperating at Johns Hopkins. The letters offered Pierre advice and encouragement regarding many of the decisions he had to make: when to sell what stocks, what loans should be made and for how much and under what conditions, recommendations on how to cut operating expenses, and so forth.2

At the time, there were many successful family-run businesses in central Indiana: the five Ball brothers (glass) and the Kitselmans (wire and steel) in Muncie; the Irwin and Miller families (diesel engines and banking) of Columbus; and, of course, the Lilly family of Indianapolis (pharmaceuticals). But Pierre Goodrich had no need to look beyond the mentoring of his own father and four uncles to obtain most of the knowledge and cunning that would make him a highly successful businessman. Other family-run companies might have been larger, but few, if any, families in the Midwest had their fingers in so many corporate pies. By the late 1930s, the Goodriches had already established themselves as a financial powerhouse in banking and securities, commodities, newspapers, transportation, and public utilities. They would add others.

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Everyone in the family was a partner in the dynasty. William Wallace, the youngest Goodrich brother, graduated from Winchester High School in 1889. He then attended Wabash College briefly before studying electrical engineering at the Armour Institute in Chicago. In the early 1890s, he returned to Indiana and got his start in the hay and grain business in New Castle, where he stayed and operated a gas company. He returned to Winchester and operated the Rock Oil Company and, for a time, the Union Heat, Light and Power Company, the utility that provided Union City and Portland with natural gas. When Union Heat was sold in the 1920s, William became the manager of the Indiana-Ohio Public Service Company, an electric utility, until it was sold in 1927. He then became associated with the Peoples Loan and Trust Company in Winchester, where he remained until he retired. William passed away in November 1948.3

With his second wife, Louise Gordon, William Wallace had two children: Elizabeth and Perce. Elizabeth “Betty” Goodrich Terry was born in 1906. She married Phillip Terry in September 1939. The couple lived in Indianapolis for twenty-five years until Phillip’s death in 1967, at which time Elizabeth returned to her hometown. Elizabeth had no children. She continues to reside in Winchester.

Perce Gordon “Bud” Goodrich grew up in Winchester and graduated from Wabash College in 1930. He was successful in the business world in his own right, serving as president and director of the Indiana Telephone Corporation; the Public Telephone Corporation in Greensburg, Indiana; and the Peoples Loan and Trust Company. Perce would serve as an officer and director of several of the Goodrich company boards over the years, including that of Engineers Incorporated. Perce was also president of his own companies in Portland, Indiana—the Portland Service Company, Inc., and the Portland Insurance Company—as well as a co-owner of several other businesses.

From his first marriage to Gaynel Graber, Perce had a daughter, Elizabeth Edition: current; Page: [221] Putnam Orrill, who lives in Madison, Indiana. From his second marriage to Frances Ann Hawkins in December 1939, Perce had two other children: Janice Gordon Goodrich Gerson, who resides in Zionsville, Indiana, and John Baldwin Goodrich, who owns and manages a plating company in Portland, Indiana. John Baldwin also serves as a director of the Peoples Loan and Trust Bank and is on the Portland school board. Perce Goodrich passed away in September 1996.4

John “Jay” Goodrich, the middle brother, oversaw the operation of seven large farms in Randolph and Jay counties. He had started out in 1884 buying and shipping hay, but in 1888 he went into partnership with Percy in the hardware and furniture business. In 1891, he sold his interest in the business to his brother Ed and again became involved in the hay business. He became president of the Goodrich Brothers Hay and Grain Company in January 1898, when the company was formed. By the time of Jay’s death, Goodrich Brothers owned approximately twenty-four grain elevators throughout central and northern Indiana. At times, there were as many as 150 railroad cars waiting to be loaded at the Goodrich Brothers’ huge grain elevator on the north edge of Winchester. Although he was a very successful farmer, a costly hobby nearly caused Jay to be alienated from the family. Shortly after the turn of the century, Jay became active breeding, training, and racing trotting and pacing horses. He eventually became destitute from the wealthy-man’s sport, since his horses were perennial bridesmaids. Finally, the other four Goodrich brothers paid off Jay’s debts on the condition that he forgo any further association with the sport.5

Jay’s marriage to Charlotte Martin resulted in the birth of two sons: Edition: current; Page: [222] John Baldwin, who was born in the same year as Pierre, 1894; and James, who was born in 1897 but died four years later. After attending Wabash College for one year (1912), John Baldwin worked for Peoples Loan and Trust Company. He then served in the United States military, fighting in France during World War I. On his return, he became secretary and later manager of the insurance department of the Peoples Investment and Guaranty Company. He later obtained the sole interest in the Peoples Investment and Guaranty Company and changed its name to Standard Securities. John’s only marriage was to Helen C. Cummins in 1964, when he was nearly seventy years old. The couple had no children together. John B. Goodrich is perhaps best remembered as a generous benefactor to Wabash College, the First Presbyterian Church of Winchester, Goodrich Park, and the American Legion Post in Winchester.6

Edward Goodrich, the second-youngest of the original five Goodrich brothers, was born the day that Ulysses Grant was elected president for the second time in 1871. In January 1911, he became a director of the Randolph County Bank, the local competitor of his brother James’s Peoples Loan and Trust Company. Two years later, he was named vice-president, and in 1918 he ascended to the presidency of the financial institution. Ed would remain president of the Randolph County Bank until his death in 1953. Beginning in 1912, he also managed the local electrical and water company, Citizens Heat, Light and Power. Ed Goodrich held this position until 1926, when Citizens was sold. In 1922, Ed became chairman of the board of the Railway Service and Supply Company in Indianapolis. Ed was perhaps the most competitive of all the Goodrich brothers. Moreover, he was the one most likely to disagree with James on business decisions.

If James was impulsive and quick to react, Ed was just the opposite—cautious, guarded, refusing to make a decision until he absolutely had to. Handsome and big, Ed was known as “King Ed” because of his imposing Edition: current; Page: [223] presence. He was so conservative that legend has it that he would refuse to tell someone the time when asked for fear of getting it wrong.7 Ed’s marriage to Elizabeth Neff resulted in one child, Florence, who was born on May 12, 1897. She married Francis Dunn, originally from Marion, Indiana, in November 1921. Florence and Francis Dunn had two sons: Wesley, a retired psychologist, lives in Florida; Edward, once a jewelry manufacturer in Elwood, Indiana, is now retired and resides in Indianapolis. Before her death in 1994, Florence contributed approximately $1 million to the Indianapolis Symphony Orchestra and another $1 million to Butler University in Indianapolis.8

Percy, the oldest brother, was born in 1861. He operated the coal business in Winchester and worked as secretary and manager of the Goodrich Brothers Hay and Grain Company. The power for the electric company was generated locally by burning coal and fuel oil. Percy had been president of the National Hay and Grain Association in the 1920s and 1930s; vice-president and director of the family investment company, Engineers Incorporated; and a founding investor of the Eastern Indiana Telephone Company, the Rock Oil Company, and several other early family businesses. Percy was also a director of the Grain Dealers National Mutual Fire Insurance Company in Indianapolis for thirty-three years, serving as vice-president of the company from 1929 to 1935 and chairman of the board from 1947 to 1951. During the early years of the twentieth century, operators of country grain elevators had difficulty obtaining insurance coverage, because of the high incidence of explosions caused by grain dust. The only insurance they were able to obtain was from East Coast insurers at extremely high premiums. Therefore, a group of Hoosier grain owners formed the Grain Dealers National Mutual Fire Insurance Company. The company eventually wrote policies Edition: current; Page: [224] in states throughout the country.9 Despite two marriages, Percy had no children.

Thus, by the 1930s the family held a substantial interest in many of the core businesses in east-central Indiana:

James Goodrich’s business interests extended into coal, railroads, and oil refining. The family also owned a water company and an ice-delivery Edition: current; Page: [225] business, and sold farm machinery.10 Thus, it is evident that the Goodrich financial dynasty was truly a family empire, built by the hard work of all five original brothers.

Besides their varied business interests, the Goodriches were active in other endeavors throughout the community. They seemed to be omnipresent in their hometown. Ed served as president of the Winchester school board, and James had been a board member in the 1890s and early 1900s. Ed was also a leader and benefactor of the local Masonic lodge. John and William Wallace took on leadership positions in the Presbyterian Church, and William was a charter and lifelong member of the Elks Lodge of New Castle, Indiana. Cora and the brothers’ mother, Elizabeth, were active in the local library association and stalwart members of the Presbyterian Church. Percy and James were charter members of the Winchester Rotary Club in 1919, and James was a founding library board member. It seemed to some people that there was not much that went on in the local community that the Goodriches were not involved with in some way.

Their influence also extended beyond their local community. Percy Goodrich, for instance, was a family historian and a generous philanthropist. Percy’s foremost interest, like James’s, was education. What James Goodrich was to Wabash College as a valued trustee and benefactor, Percy was to Hanover College of Indiana. Although he never attended college, Percy was a member of the Hanover College Board of Trustees from 1921 until his death in 1951. During that time, he served for eighteen years as president of the board (1930 to 1948). When he passed away, his widow, Ethyl, served on the board of trustees until her retirement in 1967. The beautiful southern Indiana campus, nestled on a mountainside overlooking the Ohio River, held a certain charm for Percy. Percy’s first wife, Susan, died in 1932. In February 1940, when he married Ethyl Jones Kuhner, he insisted that the small, simple ceremony be held in the Hanover chapel, officiated by Hanover’s president. Percy devoted much of his free time and most of his resources to Hanover: Edition: current; Page: [226] He endowed chairs in speech and business administration (the Elizabeth Edger Goodrich Chair of Public Speaking and the Goodrich Professorship of Business Administration) and four student scholarships. The Goodrich Science Building on campus is named for Percy. He contributed nearly $500,000 to Hanover during his lifetime, and on the death of Ethyl in 1970, the remainder of his estate, in excess of $1,500,000, devolved to Hanover.11

From 1947 to 1950, Percy wrote a weekly newsletter entitled Down in Indiana. Mailed to a select group of thirty members of the National Grain Dealers Association, the newsletter contained ramblings and reminiscences about family, friends, and events that Percy had experienced during his nearly ninety years of life.12 A year before Percy’s death, Percy and Calvin Goodrich, a first cousin to the five Goodrich brothers, wrote a history of the Goodrich family’s early years.13 James had traveled with Percy to Virginia in the late 1930s to complete some of the research for the family history. Percy, like his brother James, was an ardent Republican. He greatly admired Abraham Lincoln, co-founding and serving as president of the Randolph County Lincoln Club in 1932. For the next twenty-five years, the Lincoln Club held annual meetings in Winchester, where speakers included United States senators and representatives, governors, and other political and military Edition: current; Page: [227] leaders. Percy also gathered an impressive collection of books and articles about Lincoln during his lifetime, which was donated to the Winchester Public Library at his death.14

In temperament and personality, Pierre was probably more like his uncles Percy and Ed than like his own father. Percy and Ed were also shrewd businessmen, not least because they had ability to keep their employees’ noses to the grindstone. Gene Comer, a Winchester resident, worked for Percy Goodrich as a young man fresh out of high school. His employer’s attitude prompted Comer to write the following poem when he was just eighteen years old and give it to his boss:

• ELEVATOR

• • I remember the times that we have sat
  • And listened to the boss.
  • About the ways of management,
  • About profit and loss.
  • “And if you want your bonus,”
  • He would always say,
  • “See that the lights above your desk
  • Are off throughout the day.”
• • We come to work at half-past seven,
  • So early in the morn.
  • We work and slave throughout the day
  • Hauling in the corn.
  • He says, “Do this,” he says, “Do that,”
  • At least nine hours a day.
  • And we pray for five o’clock,
  • For then he goes away.
• Edition: current; Page: [228]
• • They tell us life is pleasant.
  • They tell us life is great.
  • Some day perhaps we’ll find this out,
  • But how long do we have to wait?
  • Down with the tyrant, down with the boss,
  • Down with the Goodrich Feed,
  • And to hell with his “Profit and Loss.”
  • I hope it goes to seed.15

“A lot of people were down on the Goodriches as businessmen,” said Ivan Barr, who worked for the Goodrich Brothers Company and its successor from 1946 to 1968. “I think a lot of it was because of their success. They were considered crooked. That’s very unfair and very unjust, because they were honest,” Barr stated. “If you were found as an employee cheating on the scales [weighing grain or coal] in the Goodriches’ favor, you were fired immediately,” Barr stated. “They wouldn’t tolerate that. So I found they were criticized very unjustly because of the fact, I think, that they were so successful.”16

Not every local resident that remembers the Goodrich family in the 1930s and 1940s is as charitable as Barr. In east-central Indiana, the Goodrich brothers were often viewed as predators, ravenous in seizing every opportunity to gobble up utilities, banks, grain elevators, and farms whenever such businesses became available at low prices. Moreover, many disgruntled workers complained about the low wages the Goodriches paid.17 It was well and good, many complained, that the Goodriches gave away tremendous sums to educational institutions such as Wabash and Hanover. If you were the breadwinner responsible for raising a family, however, that knowledge little compensated for low pay.

Another reason for grumblings about the Goodrich brothers’ business prowess was the timing of their success. Their prosperity as a family Edition: current; Page: [229] became particularly conspicuous during the late 1920s and 1930s, when other families were struggling for their very survival. The Great Depression was especially tough on the farm community. Many farm families were losing their properties and their way of living. From 1921 to 1928, the United States agricultural population decreased by three million farmers. Nearly every family had to contend with unemployment and meager times. In 1927, the annual income of all 6.3 million farmers in the country averaged only $548. It only became worse when the Great Depression hit two years later. By 1932, twelve million Americans were unemployed and five thousand banks had failed.18

Moreover, the perception (and to a large degree the reality) was that the Goodrich family had a monopoly in many area businesses. Winchester resident Ralph Owens rented a farm from John “Jay” Goodrich in the 1920s. He believes that the Goodrich brothers could drive a hard bargain with the local farmers because they owned all the grain elevators within the geographical area. They were by far the largest grain dealers in Indiana. “You were forced to buy and sell from the Goodrich brothers,” said Owens. “There were no other elevators [under different ownership] doing business.”19

But some stories about the Goodrich brothers’ supposed exploitations bordered on the ridiculous. For instance, one longtime Winchester attorney remembers a childhood rumor about James Goodrich’s alleged exploitation of the Russian famine relief effort for his own private gain. The story held that the former governor successfully raised $10 million from private sources, contributed only $2 million to the starving Russian children, and pocketed the rest.20 Another rumor was that the Goodrich brothers had intentionally decreased the gas pressure on a wellhead. They then allegedly bought the gas well for a pittance when the owner believed it was going dry.21 It is true that the Goodrich brothers bought almost all their businesses at extremely depressed prices, but there is no Edition: current; Page: [230] evidence that they did anything illegal. The Depression had brought about many bankruptcies and receiverships. Invariably, almost every corporation the Goodriches took over in the 1930s, as will be seen, was bought for well below previous market prices.22

During the 1930s, James Goodrich strongly opposed President Franklin Delano Roosevelt’s economic remedies for the sorry state of the country. He believed that Roosevelt’s New Deal programs of intervention in business would make matters only worse. In 1936, Goodrich wrote to Frank Litschert, his longtime secretary: “This whole New Deal is about to go to smash. . . . Roosevelt and the whole outfit are mad, charging everyone who fails to agree with them, with bad faith.”23

Goodrich especially ridiculed the high salaries that he saw postal workers receive and the subsidies extended to the farm community. He believed that cutting federal spending, not increasing it, was the only way to restore the nation to prosperity. He had written in 1933 to Herbert Hoover, who had been out of the White House for nine months: “Had we been permitted to go on without Government interference, while we might have had the wage increase that follows every recovery, yet with increasing employment and accelerated demand for goods and a gradual improvement in farm prices already under way, our situation would have been vastly better, in my opinion, than it is at this time.”24

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Interestingly, less than two months after he had written to Hoover condemning Roosevelt’s domestic policies, Goodrich wrote to Roosevelt, praising him for his foreign policy in granting recognition to the Soviet Union:

Roosevelt acknowledged Goodrich’s letter, thanking him for his support and advice. It would seem that that was the only issue on which Goodrich ever agreed with the longtime president.25

In June 1936, Goodrich attended the Republican National Convention in Cleveland, Ohio, serving as a member of the platform committee. At the time, he still had hopes of drafting Hoover for the party nomination. When Hoover refused to seek the position, Goodrich willingly endorsed Governor Alf Landon of Kansas for the nomination. Goodrich was not surprised, however, by Roosevelt’s landslide victory over Landon in November.26 The times were desperate, and the American people had little interest in changing the path toward recovery that the charismatic incumbent promised.

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In the spring of 1940, James Goodrich contracted pneumonia and was briefly hospitalized in March and April. He had remained intermittently ill since his hospitalization in Baltimore in the fall of 1937 and had been hospitalized several times since, including a stint at a well-known Battle Creek, Michigan, sanitarium in the spring of 1938.27 Since then, he and Cora had spent the winters in Fort Lauderdale, Florida. Finally, in May 1940, Goodrich recovered sufficiently to attend the Republican State Convention, where presidential hopeful Wendell Willkie spoke. In June, James Goodrich felt well enough to attend the Republican National Convention in Philadelphia. He went to the convention as a delegate from Indiana’s Tenth Congressional District. Goodrich had hoped to see the New York district attorney Thomas E. Dewey (who was just thirty-eight years old) or Ohio Senator Robert Taft receive the Republican presidential nomination. Instead, Willkie won the race.

Goodrich, James Watson, and other Hoosiers were Willkie’s breakfast guests on the day that Willkie garnered the nomination. Watson was also an Indiana delegate to the convention, as he had been to every Republican National Convention since 1912. Willkie and Watson had made up after Watson had criticized Willkie for his previous Democratic Party membership. As Watson had told Willkie when he first learned that Willkie was seeking the Republican presidential nomination, he was glad to have a reformed prostitute (Willkie) in his church (the Republican Party), but he didn’t want him leading the choir the next Sunday.28

The meeting of Watson and Goodrich in Philadelphia marked the last time the two longtime chums and politicians would be together. Although marked by jealousy and often strained, the friendship of these two men had endured a lifetime, no doubt largely because of their mutual passion for Republican politics, conservative values, and public service. Edition: current; Page: [233] Together, Goodrich and Watson had dominated Indiana Republican politics during the first thirty years of the century. “Sunny Jim” Watson, the humorous, backslapping, and scandal-ridden politician, had lost his United States Senate seat in the 1932 Democratic landslide after being considered one of the most powerful and colorful figures on the national political scene. He remained in Washington, D.C., and practiced law until his death in 1948.29

When James Goodrich returned to his hometown after the 1940 Republican National Convention, he experienced a recurrence of “nervous heart.” In late July, he suffered a stroke and became bedridden again. His last political act was to write Willkie on August 10 to offer him encouragement in his national race against Roosevelt. “I do not believe any President has ever, on his inauguration, faced as serious a situation as you will confront next January.”30 On the following day, Goodrich suffered another stroke. Four days later, James Goodrich died, at the age of seventy-six, at the Randolph County Hospital in Winchester, of a cerebral hemorrhage. Cora and Pierre, as well as other family members, were at the former governor’s bedside at the time of his death.

On August 18, James Goodrich’s funeral was held in Winchester. The Edition: current; Page: [234] service was marred by a torrential rainstorm that had traffic in a logjam throughout the streets of the small community. Several hundred people came to pay their final respects: politicians, businessmen, religious leaders, and townspeople who had been the governor’s longtime friends. Some of the most noteworthy were James Watson; Will Hays; the Reverend John F. O’Hara from New York; Will Irwin from Columbus, Indiana; Glen R. Hillis, the 1940 Republican nominee for governor; Archibald Bobbitt, Republican state chairman; and the presidents of Wabash and Hanover colleges. Herbert Hoover and Thomas Dewey sent telegrams conveying their condolences. The Reverend Gustav Papperman, the former minister of the Winchester Presbyterian Church who then served as pastor of the Irving Park Presbyterian Church in Chicago, performed the services. The statehouse flags were lowered to half-staff in remembrance of the state’s twenty-eighth governor.31

With the death of James Goodrich, Pierre lost the most significant person in his life, a father and mentor of exceptional influence. James Goodrich was one of the most accomplished men in modern Indiana history. In public life, his contributions and range of interests are both numerous and laudable: He was Indiana’s highly successful World War I governor (1917–21); Indiana state Republican chairman for nearly a decade (1901–10); Republican national committeeman (1912–16); chairman and member, respectively, of the Indiana and International St. Lawrence Waterways commissions, appointed by President Coolidge (1923–27); lead American Relief Administration investigator of the Soviet Union Famine Relief Commission and special United States envoy to Russia (1921–23), appointed by President Harding; member of the National Public Lands Committee, appointed by President Hoover (1929–30); and trustee of the Theodore Roosevelt Memorial Committee.

His civic, educational, and religious contributions were nearly as impressive: trustee of Wabash College (1904–40) and board chairman Edition: current; Page: [235] for sixteen years (1924–40); leadership positions in the Knights of Pythias (a fraternal and charitable society), Knights of Labor, and the National Grange; founding member of the Winchester Volunteer Fire Department (1897) and Winchester Rotary Club (1919);32 trustee of the McCormick Theological Seminary and the Presbyterian Theological Seminary in Chicago; Winchester School Board member for fourteen years and founding member of the Winchester Library Board; elder and Sunday school teacher of the Winchester Presbyterian Church for twenty-five years; a thirty-second-degree Mason; and member of numerous other organizations.

As a philanthropist, he had contributed approximately $1 million to charitable causes, particularly favoring private higher education: nearly $400,000 to Wabash College, where he received an honorary master’s degree in 1915 and an honorary doctorate in 1917; large sums to Oakland City College, the Presbyterian Theological Seminary in Chicago, Hanover College, where he was awarded an honorary Doctor of Science degree in 1938, and the University of Notre Dame, where he received an honorary LL.D. in 1917 (he had been a very close friend of Notre Dame’s eighth president, Father John W. Cavanaugh). In June 1937, James Goodrich gave twenty-eight acres of parkland to the town of Winchester. This acreage was added to eighty acres that the Goodrich family had previously donated to their hometown. Also in June 1937, James gave $50,000 to beautify the park.33

It was in the business arena that James Goodrich left his greatest legacy to his family. Jim Goodrich’s life was one which Horatio Alger himself would have admired. James and his four brothers had started as Edition: current; Page: [236] youths with little, working as farmhands for pennies an hour. By the end of his life, James had amassed millions and had laid the groundwork for his son to achieve far greater wealth. Pierre would be the biggest beneficiary of his father’s amazing entrepreneurship. He would step into the leadership position of several companies left to him at his father’s death.

The deaths of the original five Goodrich brothers happened over a period of sixteen years: John on November 7, 1937; James on August 15, 1940; William Wallace on November 22, 1948; Percy on August 11, 1951; and Ed on November 21, 1953. The remaining family members—the wives and children of the original five Goodrich brothers—subsequently pooled their individual shares of the various family businesses into a voting trust. They allowed Pierre to exercise virtual control over the trust, delegating to him the authority to make the day-to-day corporate decisions.34 The family members were content to allow Pierre to Edition: current; Page: [237] have such discretionary control because he and his father had a tremendous record of making the right corporate decisions. Moreover, Pierre’s two male cousins—John and Perce—were engaged in successful businesses of their own. They had little time to contribute to the daily decisions of the Indianapolis-based corporations, although they served as board members of many of the companies.

How Pierre operated as a businessman is illuminated by an account given by E. F. Gallahue in his autobiography, Edward’s Odyssey.35 Gallahue became a highly successful entrepreneur in his own right as president of American States Insurance, based in Indianapolis. He shared with Pierre not only the ability to build a business, but also a great yearning to understand human nature. A reader of Sigmund Freud and the Swiss psychiatrist Carl Jung, Gallahue had a lifelong interest in literature, religion, and, especially, matters involving mental health. No doubt this background prevented Gallahue from becoming discouraged when negotiations between Goodrich and him for the sale of the Union Insurance Company continued without result for several months in 1941. Even after several meetings between the two men, a deal had not been struck. Gallahue’s attorneys told their boss that it was foolish for him to pursue the matter with Goodrich any further. But Gallahue did not give up.36 Gallahue recalled how his patience paid off:

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Pierre’s methodical, painstaking style of negotiation was totally unlike his father’s. Despite its nontraditional nature, it was a style that almost always proved financially fruitful. The sale of the Union Insurance Company was the first of many successful business deals that Pierre would execute on his own.

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 Edition: current; Page: [240] 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 Edition: current; Page: [241] 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 Edition: current; Page: [242] 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

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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 Edition: current; Page: [244] 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, Edition: current; Page: [245] 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 Edition: current; Page: [246] 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 Edition: current; Page: [247] 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 Edition: current; Page: [248] 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

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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 Edition: current; Page: [250] 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 Edition: current; Page: [251] 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

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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.

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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

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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 Edition: current; Page: [255] 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.

Chapter 18: Ayrshire Collieries Corporation

In 1923, James Goodrich obtained a large interest in a small coal company named Patoka Coal in southwestern Indiana. Within twenty-five years, Pierre Goodrich went on to become chairman of the board of a company that merged with Patoka Coal, the Ayrshire Collieries Corporation. It became the Goodrich family’s largest business holding. Interestingly, two other extremely important entities spun off from the coal company: first, Meadowlark Farms, a subsidiary company dealing with land reclamation and ecology; and, second, Liberty Fund, Inc., whose primary endowment devolved from the personal proceeds Pierre Goodrich realized when he sold Ayrshire in 1969 (see chapter 29).

The coal mines that made up the Ayrshire Collieries Corporation are located in Illinois, southwestern Indiana, Kentucky, and Wyoming. They are now owned by the Cyprus-Amax Minerals Company, a large conglomerate. Pierre’s association with Ayrshire went all the way back Edition: current; Page: [257] to his father’s business dealings immediately after James Goodrich had served as governor.

James Goodrich became treasurer of the Patoka Coal Company in 1923 through association with Jesse Moorman of Winchester, Indiana, then president of Patoka Coal.1 Moorman and James Goodrich were longtime friends and business partners. (In 1912, for instance, James Goodrich had assisted Moorman in obtaining the contract for citywide garbage disposal in Indianapolis.)2 At the time, Patoka Coal was a small colliery that operated from a single strip mine in Pike County, Indiana.3 James Goodrich had gained considerable knowledge about the coal industry from attempting to manage a coal crisis during his time as governor.4

Pierre Goodrich became secretary and treasurer of Patoka Coal in 1929. In 1937, he was appointed executive vice-president. After this time, another coal company, the Electric Shovel Coal Corporation, had gone Edition: current; Page: [258] into receivership. At the public hearing in Chicago, Pierre Goodrich had become acquainted with Electric Shovel’s top management: Tommy Hitchcock, Jr., Robert P. Koenig, and James Melville. Subsequently, Patoka Coal Company transferred its operating properties to Patoka Coal Company of Delaware, which was then merged with Electric Shovel Coal Corporation in 1939. The original name of the resulting company was Ayrshire Patoka Collieries Corporation, later to become simply Ayrshire Collieries Corporation. The consolidated company had eight directors. Pierre and his law partner at the time, Albert M. Campbell, represented Patoka Coal’s interests on the board. Even after the merger, Patoka Coal continued to exist as a separate legal entity, as a holding company for stock in the Ayrshire Patoka Collieries Corporation.5

On the board of directors, Goodrich was outnumbered by the five Ayrshire directors, based in New York, who held all the major offices of the company.6 Over the next seven years, however, Goodrich managed to increase his family’s interest in the consolidated company so that by 1946 he was elected chairman of the board of directors. How did he do it? Apparently, the major cause was beyond Goodrich’s control—the onset of World War II. In the early 1940s, Hitchcock and Koenig were Edition: current; Page: [259] chairman of the board and president of Ayrshire, respectively. Hitchcock was also a partner in Lehman Brothers, an investment company in New York. He had married Margaret Mellon of the extremely wealthy Pittsburgh banking family. Koenig, a brilliant corporate strategist, was a mining engineer by training and had served as president of the Electric Shovel Coal Corporation before it merged with Ayrshire and Patoka. Both Hitchcock and Koenig served in World War II, leaving Ayrshire.7

In addition to being a successful banker, Hitchcock may well have been the greatest polo player that the United States has ever produced. In April 1944, Hitchcock was killed in England while flying a training mission, ending what the New York Times called “one of the most gallant and one of the most spectacular careers in modern American life.”8 His death left his widow, Margaret, with large estate taxes. She decided to sell Hitchcock’s shares to help pay off the death taxes, and Goodrich bought a large percentage of the available stock.9

Koenig, who had been gone from Ayrshire for nearly three and a half years while serving in Europe, did not return to his position until Edition: current; Page: [260] October 1945.10 During that time, Goodrich had purchased enough stock so that by 1946 he had a controlling interest in the company. He subsequently replaced a sufficient number of directors to be elected chairman.11 By 1949, only two New York directors remained on the Ayrshire board, neither of whom was an original member.12

During the years of Goodrich’s management, Ayrshire’s growth, both in terms of coal production and in terms of sales, increased at an impressive rate. In 1940, Ayrshire’s sales had been $2.27 million; by 1968, the company’s sales had climbed to almost $60 million, some twenty-six times 1940 sales. Also, by 1968, income had increased to a lofty $5.45 per share from just 15¢ per share in 1940. Moreover, the number of Ayrshire employees had grown from 484 in 1940 to 1,064 in 1968. This increase had occurred in spite of advanced technology that had eliminated hundreds of positions.13

By the time Goodrich sought to sell Ayrshire in 1968, the company was the eleventh-largest producer of bituminous coal in the country. Ayrshire had some of its strongest years just before Goodrich sought a merger with potential purchasers. At the age of seventy-four, however, Goodrich recognized that his own mortality would not allow him and the company’s other aging managers (Ayrshire’s president, Norman Edition: current; Page: [261] Kelb, was seventy-five years old) to continue Ayrshire’s growth without the infusion of new management and additional capital.

Goodrich was forced to either bring in younger management or sell Ayrshire outright. In the company’s 1968 Annual Report, Goodrich reported that Lovett C. Peters had been hired “as agent of the company, looking toward the sale of the company’s assets or merger into another company.”14 Pierre had first become acquainted with Peters in 1955 when they both served on the board of the Foundation for Economic Education in Irvington-on-Hudson, New York. In 1968, Peters had left top-level management at the Continental Oil Company, and Goodrich offered him the position of president at Ayrshire. Although Peters turned down the position, he did suggest to Goodrich that an added incentive made the timing right for the sale of Ayrshire.15

Peters and others in the oil and coal industries had successfully lobbied Congress to adopt legislation that had the net effect of increasing the worth of oil and coal companies by as much as 50 percent. The legislation, known as Reserve Production Payment, allowed a purchasing company to borrow money on the basis of the value of the reserves of an oil or coal company and then pay off the loan with pretax, instead of aftertax, dollars.16

Goodrich took Peters’s advice and invited five companies to discuss the possibility of a sale or merger.17 The two leading contenders were the Ashland Oil and Refining Company of Ashland, Kentucky, and Edition: current; Page: [262] American Metal Climax (AMAX) of Greenwich, Connecticut. A deal was struck between Ashland and Ayrshire in January 1969. At that time, Goodrich and the president of Ashland made a joint announcement that both boards of directors had approved the purchase of Ayrshire. In a complex financial arrangement, Ayrshire stockholders were to receive approximately $125 million.18

The deal between Ayrshire and Ashland fell through in early April 1969, however, because of an escape clause in the agreement of which Ashland was able to take advantage.19 The winter of 1968 had been particularly harsh in the Midwest. The amount of coal that was mined was subsequently reduced, and Ayrshire’s profits plummeted. This prompted Ashland’s management to exercise its escape clause.20 Kerr-McGee, an oil exploration company out of Oklahoma, tried to take over Ayrshire by offering less than half what Ashland did. Goodrich became extremely upset with Kerr-McGee’s proposed takeover plan and immediately contacted AMAX to arrange a sale.21

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In less than three weeks from the time that the Ayrshire-Ashland deal fell through, Goodrich had reached a tentative agreement with American Metal Climax, subject to approval by the directors and stockholders of both companies.22 This agreement culminated with the sale of Ayrshire to American Metal Climax in October 1969. At the time, American Metal Climax owned no coal mines. Although it was a large minerals conglomerate, its primary business operations involved mining molybdenum, lead, and copper in the upper Midwest.23

Goodrich and his family were by far the largest owners of Ayrshire, controlling 334,000 of the total 790,891 shares in the company, or about 44 percent. The second-largest owner of Ayrshire stock was Henry Crown of Chicago, who held a 17.7 percent interest. Crown was also the major stockholder in General Dynamics, one of the largest military defense companies in the world. For some reason, Goodrich would not talk to Crown. As a result, Lovett Peters had to serve as the negotiator between the two men, shuttling back and forth between Indianapolis and Chicago in an attempt to strike a deal that was acceptable to both Edition: current; Page: [264] men. Finally, in October 1969, Crown was satisfied that Goodrich had obtained what was believed at the time to be top dollar for the coal company.24 The sale of Ayrshire was reported in the Wall Street Journal to be valued in excess of $100 million.25 The actual amount of Goodrich’s personal interest in the sale is purported to have been between $25 and $30 million.26 Lovett Peters received a handsome fee for negotiating the deal, purportedly $750,000.27

Much of the constant profitability of Ayrshire under Goodrich’s control can be attributed to his ability to capitalize on emerging markets and to hire extremely capable personnel. When it came to selling Ayrshire, however, Goodrich and Peters may well have underestimated the company’s true worth because of their inability to foresee the future desirability of low-sulfur coal, the growing political hostility toward nuclear generated power, and the Arab oil embargo of 1973.

During Pierre Goodrich’s forty years of association with the coal industry, a dramatic shift had occurred in markets. When James and Pierre first began with Patoka Coal in the 1920s, the demand for coal came primarily from railroads and domestic consumers. By the 1960s, most of Ayrshire’s sales were to electric utility companies and industrial customers. Ayrshire weathered the transitional period of the 1950s extremely well, whereas other coal companies underwent considerable retrenchment in both production and employment. Ayrshire accomplished Edition: current; Page: [265] this through the efforts of its sales subsidiary, Republic Coal and Coke Company. Goodrich had purchased the Chicago-based coal sales company in 1944. Republic Coal and Coke Company achieved growth for Ayrshire primarily by developing long-term contracts with utility companies.28

According to Richard H. Swallow, who worked for Ayrshire and its predecessors for thirty-seven years, Goodrich’s most important decision was to have Ayrshire obtain as many options for coal reserves as possible.29 Goodrich had as many as nine drill crews exploring potential coal reserves throughout a large portion of the country, including Tennessee, Pennsylvania, Kentucky, Alabama, and Wyoming. Through aggressive leasing practices, Ayrshire’s coal reserves had increased from 52 million tons in 1940 to 2.35 billion tons in 1968. At its peak, Ayrshire owned outright more than 165,000 acres, 50,000 of them in Wyoming alone.30

Therefore, when Ayrshire was purchased in 1969, the real benefit that Edition: current; Page: [266] the Indiana-based company offered was the ownership of huge coal reserves. It was estimated that Ayrshire (or its successor) had enough reserves to sustain production rates at its 1969 levels for two hundred years.31 With AMAX aggressively pumping in millions of dollars in new capital investment into the former Ayrshire holdings, Ayrshire was able to increase production and market share dramatically. AMAX became the third-largest coal company in the United States by 1975 (Ayrshire was the eleventh-largest when Goodrich sold Ayrshire in 1969).

Goodrich and his advisers may have miscalculated in selling Ayrshire by underestimating the worth of the coal-lease reserves Ayrshire had obtained in the Gillette, Wyoming, area (later the Belle Ayr mine). Before the sale to AMAX, Ayrshire put a very low value on these reserves of low-sulfur coal, but they alone are probably worth in excess of $1 billion.32 Coal output from the Belle Ayr mine went from 900,000 tons in 1973 to well over 7 million tons by 1976. By the early 1980s, the combined capacity of the Belle Ayr and Eagle Butte mines (Eagle Butte is north of Belle Ayr in Wyoming) exceeded 30 million tons annually.33

In addition to the size of the Wyoming mines was an additional attraction—they contained low-sulfur coal. Although burning low-sulfur coal produces less energy than does high-sulfur coal, it also produces less air pollution. With the added attention that acid rain and other pollution problems received in the 1970s and 1980s, low-sulfur coal became increasingly more valuable. Therefore, the worth of the Wyoming mines substantially increased.

“There was a lot of doubt whether the western mines were going to amount to much,” said George Martin, retired manager of Ayrshire’s Sun Spot Mine in Illinois. “But these mines became a major factor and carried AMAX coal economically through the late seventies and early eighties.”34

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The reasons Goodrich was not more aggressive in the 1950s and 1960s in having Ayrshire exploit its vast coal reserves appear to be twofold: first, to have exercised the coal-field options would have required a considerable infusion of capital. Goodrich was not interested in having the company go into any further debt in order to achieve this large and immediate expansion. At the time of the merger in October 1969, American Metal Climax assumed $40 million of Ayrshire debt as part of the $100 million transaction.35

Goodrich also purportedly thought that atomic energy was eventually going to put the coal industry out of business. Thus, Goodrich’s overestimation of the technical capability and political acceptance of nuclear energy may have prompted him to believe that he had received top dollar for Ayrshire’s holdings.36 Apparently, Goodrich even believed that the use of nuclear “fusion” (as opposed to nuclear “fission”) might become Edition: current; Page: [268] feasible in the near future, so that there would be an overabundance of cheap energy.37

Goodrich’s concern about the widespread use of atomic energy was not unique. Many in the coal industry had been led to believe that atomic energy might produce up to 50 percent of the electric-utility market by the end of the twentieth century.38 Finally, Goodrich and Peters could not have foreseen the 1973 Arab oil crisis and how that would increase the value of energy companies, especially domestic ones.

Goodrich was extremely pleased when a Chicago financial analyst told him, unaware of his Ayrshire connections, that he (the analyst) believed that American Metal Climax (AMAX) had paid too much for Ayrshire in 1969.39 With the benefit of more than twenty-five Edition: current; Page: [269] years of hindsight, it is clear that AMAX received the better end of the deal.40

Chapter 19: The Ecologist

During the first twenty years of the twentieth century, many Americans began to be aware of ecology. President Theodore Roosevelt was one of the first national leaders to take an interest in preserving much of America’s most scenic and pristine lands. Local chapters of such conservation organizations as the Sierra Club were also being established across the country, furthering environmental awareness. At the state level, in 1917, James P. Goodrich had been instrumental in creating the Indiana Department of Conservation, which greatly expanded the fledgling Indiana state parks system. At the federal level, in 1930, the former governor served on the Public Lands Commission, which examined land reclamation, wildlife reserves, and other environmental issues. Generally, ecological and wildlife practices became popular and were used as themes in books and movies. One of the best-known naturalist authors in the country was Indiana’s own Geneva “Gene” Stratton-Porter, from nearby Geneva, Indiana. During the Edition: current; Page: [271] early part of the century, Stratton-Porter’s books, such as Freckles (1904), A Girl of the Limberlost (1909), The Harvester (1911), and A Daughter of the Land (1918) were very well received. At the height of Stratton-Porter’s popularity, publishers estimated that she had a following of fifty million readers, making her one of the five most popular American authors of the 1920s. Several of her books were made into popular movies. Pierre Goodrich was related to Stratton-Porter through his first wife, Dorothy Dugan.1

As previously noted, Pierre’s values regarding personal, business, and public conservation can be at least partially attributed to his upbringing. His mother went to extremes to economize. Moreover, James Goodrich was ever watchful as well, constantly questioning how business and government could be conducted more efficiently. For example, in early 1920, while James Goodrich was still governor, he traveled to New York by railcar. When he disembarked at one large train depot, he noticed that railroad workers were extracting used wool packing from casings that covered the old passenger and freight-car axles. James observed that the men were simply throwing the used wool away. He realized that there was a market for recycling the wool. In June 1920, James Goodrich had two employees of the Goodrich Brothers Hay and Grain Company, Claude Barnes and Merl Chenoweth, form the Railway Service and Supply Corporation. Goodrich money was used to finance the new company, which became quite profitable. This episode demonstrates James Goodrich’s shrewd business eye.2

Pierre hated waste of any kind and thought that it was one of man’s Edition: current; Page: [272] greatest sins.3 As a businessman, he took extraordinary measures to preserve his family’s assets, increasing the worth of existing capital through steady, often innovative practices. Pierre Goodrich was not prone to go after quick profits, especially if extravagant expenditures or exploitation of natural resources was involved. He took a tight-fisted approach to investment and relished squeezing more out of less. It was that philosophy that made him, in every sense, a true ecologist.4

Goodrich detested public waste. During World War I, he had served in the Quartermaster Corps, that branch of the army concerned with furnishing war supplies. He often related to employees and friends the story of how the government took over the railroads for the purpose of shipping supplies. The custom at the time was to “featherbed,” a union practice that demanded extra workers by contract in order to provide more jobs and prevent unemployment. Goodrich denounced the practice, especially during a period of national crisis.5

From a business perspective, the operations of the Ayrshire and Patoka collieries provided Pierre Goodrich with one of his greatest challenges: to practice savings and ecology simultaneously. At their height, the collieries owned or leased more than 165,000 acres of land in Kentucky, Illinois, southwestern Indiana, West Virginia, and Wyoming.6 Strip mining had occurred both in the United States and abroad for hundreds Edition: current; Page: [273] of years, and the mined lands often resembled moon craters. At the time, strip-mine operators took the view that there was little or no economic reason to reclaim land. The free market simply did not factor into the cost of mining coal any negative effect on the environment. Pierre Goodrich challenged this view, not only because of potential profits but also because of his belief in responsible land husbandry.7

A singular event occurred in the early 1940s that was a significant factor in Goodrich’s deepening interest in conservation. In the summer of 1942, Richard Lieber, longtime chairman of the Indiana Commission on Conservation, found himself without a job or office. Lieber had previously resigned as chairman of the commission in 1933 after having served under three governors (James P. Goodrich, Warren T. McCray, and Edward L. Jackson). Lieber then served for the next nine years as a paid consultant to the National Park Service. He had an office in Washington, D.C., to which he would commute regularly from Indianapolis. When appropriations for the National Park Service were cut, Lieber had nothing to do.

At that time, in August 1942, Pierre provided Lieber an office, free of charge, in his legal suite on the seventh floor of the Electric Building in downtown Indianapolis. Lieber was very grateful for Goodrich’s generosity. The two, despite a significant age difference, became exceptionally close friends. In December 1942, Lieber’s book America’s Natural Wealth was published by Harper and Brothers in New York. Lieber dedicated the book to James P. Goodrich, who had given him the opportunity to apply his love of nature to the preservation of Indiana’s most pristine land. When Lieber died in April 1944, the normally reserved Pierre took Edition: current; Page: [274] the conservationist’s death extremely hard, telling Lieber’s wife that he felt as though he had lost a second father.8

After Lieber’s death but on his recommendation, Pierre Goodrich established in November 1945 a subsidiary corporation of the Ayrshire Collieries that he called Meadowlark Farms.9 Earlier, Goodrich had contacted the College of Agriculture at the University of Illinois and met with Charles Stewart and Laurence Norton, both professors of agricultural economics. Goodrich explained to the two professors his desire to reclaim the mined coal lands owned by Ayrshire. Professor Stewart initially did not believe Goodrich. He thought that the coal executive was simply attempting to promote public relations in order to improve the bad image that strip-mine operators had because of the way they stripped coal fields. Ultimately, however, Goodrich was able to convince the two academics of his sincerity. Stewart and Norton ultimately put Goodrich in touch with Irwin H. Reiss. Reiss did not immediately take a position with Goodrich. He first served in Burma during World War II and then worked in an avocado business in southern California. In November 1948, Reiss finally returned to Indiana to manage Meadowlark Farms. Goodrich placed the subsidiary’s headquarters in Sullivan, Indiana, which was in proximity to Ayrshire’s coal fields in the southwestern part of the state.10

According to Reiss, who served as general manager and later as president Edition: current; Page: [275] of Meadowlark Farms (1948–83), “[In the mid 1940s], the college courses or even the reference books on reclamation were not available, but Mr. Goodrich felt that with a commonsense application of technology, management and capital, something constructive could be done with surface-mined coal lands.”11

Owners were reluctant to take any measures to restore the land to its prestripped appearance because the cost of reclamation was generally greater than the land’s profitable use; that is, the land could not be easily converted into valuable farm or commercial ground. For ecological reasons, that was especially unfortunate, because stripped land created vast scenic and soil erosion problems.12 As chairman of the Ayrshire Collieries, Goodrich could not tolerate seeing thousands of acres, stripped of coal, lying ruined and useless. The purposes of Meadowlark Farms were twofold: first, to make productive use of the land before strip mining; and, second, after the coal had been removed, to make the stripped land suitable for some profitable use, preferably agricultural or recreational. Today, this is common practice and is, in fact, mandated by federal and state laws. When Goodrich began the reclamation process in the 1940s, however, he was one of the first in the nation to practice reclamation on a large scale. The problem was not that there was insufficient technology available to reclaim the land, but that the job had to be accomplished on the basis of very thin profit margins.

Meadowlark Farms also came about because of the demands of the coal industry. To be in the coal business, a colliery had to enter into long-term contracts (twenty to thirty years). To have sufficient reserves to deliver on those long-term contracts, coal companies had to buy the Edition: current; Page: [276] reserves and the surface land rights to guarantee delivery. Thus, farming Ayrshire’s land was natural, both before and after mining.13

To accomplish reclamation successfully, Goodrich sought out soil specialists and applied practical business methods. “He would buy grass seed by the truck loads,” said Roy Barnes, who worked at the Goodrich Brothers Hay and Grain Company in Winchester.14 Goodrich had soil specialists analyze the soil to see what would be the best use of the land once the coal had been removed. Options included agricultural use, such as the planting of crops or the grazing of livestock; reforestation; and recreational use. In the 1960s, after Ayrshire strip mined forty acres near Fairview, Illinois, Meadowlark Farms created a lake on the land on the town’s outskirts.15 By the early 1970s, a million bushels of corn a year were being grown on land controlled by Meadowlark Farms, and five hundred head of cattle and two thousand hogs per year were being produced on Meadowlark land.16 At its height, Meadowlark Farms was farming and managing approximately fifty thousand acres of land owned by Ayrshire Collieries.17

For the first three years of Meadowlark’s existence (1945–48), it became involved in farming by establishing six corporate farms. A resident manager supervised the farm and the farmhands who lived there. All the livestock and farm machinery were owned by Ayrshire. Goodrich and Reiss soon realized that that type of operation was not necessary. In fact, they found that the practice was counterproductive in that the employees had no vested interest in what was being produced or in turning a profit. Soon after, an arrangement was instituted whereby farmers could stay on their land. Leases were adopted that encouraged farming both before and after coal was removed. Approximately two hundred tenant farmers were cultivating Meadowlark land by the early 1980s.18

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By the early 1970s, AMAX (the successor to Ayrshire) owned land and held options to mine coal in twenty counties in Illinois, Indiana, Kentucky, Wyoming, and Montana. At that time in Indiana alone, Meadowlark Farms had leased approximately twenty-five hundred acres to the Department of Conservation for public fishing, camping, boating, swimming, and hiking. Other lands were resown with clover and other seed, which turned wasteland into valuable farm ground. Ayrshire and AMAX, through Meadowlark Farms, were able to accomplish this while turning a profit.

When Goodrich sold the Ayrshire Collieries Corporation to American Metal Climax (AMAX) in 1969, part of the agreement was that American Metal Climax had to maintain Meadowlark Farms’ reclamation operations. So successful were Meadowlark Farms’ practices that they were adopted by AMAX and other strip-mining operations throughout the country. As a result, wheat, corn, and other crops are now raised over played-out coal seams. Other uses of the land, such as the grazing of livestock, continue to this day.19

Another reason for Goodrich’s concern about reclamation came from L. E. “Buck” Sawyer. Sawyer served as director of forestry and reclamation for the Indiana Coal Producers from 1944 to 1969. In that position, Sawyer encouraged corporate owners such as Goodrich to practice sound reclamation and assisted them in doing so, especially with the planting of trees.20 Thus, the efforts of Goodrich, Lieber, Reiss, and Sawyer had a significant influence in making Indiana a state leader in reclamation practices long before state and federal governments passed legislation mandating such actions. Probably the most important and comprehensive federal legislation regulating reclamation did not occur until 1977, when Congress passed the Surface Mining and Control Reclamation Act. That was more than thirty years after Goodrich had established Meadowlark Farms.

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Anne C. Lawrason, who worked for Goodrich, recalls how important the work of Meadowlark Farms was to her employer: “I believe [Mr. Goodrich’s] greatest accomplishment, in his own eyes, was creating the beautiful Meadowlark Farms out of an ugly, scarred former strip-mining project. He never tired of telling how he used the same machinery that did the mining to renovate the land and make it productive.”21

Goodrich’s ecological efforts have not gone unnoticed. Over the past fifteen years, John A. Baden, chairman of the Foundation for Research on Economics and the Environment (FREE) in Bozeman, Montana, has conducted more than two dozen Liberty Fund conferences linking the ideas of liberty and ecology. In the early 1980s, Baden established the Pierre F. Goodrich Conservation Award. To date, two individuals have received the honor: Arthur Temple, Jr., of Diboll and Lufkin, Texas; and David True of Casper, Wyoming. Temple, a third-generation owner of a large east Texas timber company, has been instrumental in reintroducing nearly extinct native species into more than twenty thousand acres of woodland in Texas and Louisiana. True, formerly an independent oil driller and chairman of the board of regents at the University of Wyoming, has managed and cared for indigenous wildlife on two large ranches in Wyoming.22

Chapter 20: The Later Years, 1940–1960

As the rumblings of World War II began in the late 1930s, Pierre Goodrich opposed the United States’ entering into another European conflict just as he had opposed America’s “unnecessary” involvement in World War I. He supported the isolationist views espoused by the America First campaign and conservatives such as Senator Robert Taft of Ohio.1 Goodrich also opposed conscription. He Edition: current; Page: [280] believed that mandating the draft should never precede a large-scale voluntary appeal to participate in armed conflict.2

Moreover, Pierre, like his father, was no friend of Franklin Roosevelt’s New Deal policies, which, among other things, promoted governmental expansion into business and individual affairs. The acts of Congress and the regulations of agencies and commissions in the 1930s added a new federal level to what had been previously governed by state law. One day in the late 1930s, Pierre attended a weekly roundtable luncheon of local Harvard Law School graduates at the Athenaeum Club in Indianapolis. During the luncheon, Goodrich blasted President Roosevelt. He stated that the New Deal “was destroying the country in general and lawyers in particular.”3 It was a belief he would hold for the rest of his life. At a more personal level, Goodrich passionately opposed Roosevelt’s decision to intern American citizens of Japanese descent during World War II. He hired several persons of Japanese heritage to work for him during the war, a practice that was apparently not well received in his northern Indianapolis neighborhood.4

At about this time, Goodrich became interested in a small newsletter known as Human Events. Frank Hanighen and Felix Morley were the two founders of Human Events. Early on in the newsletter’s formation, Henry Regnery, a young and upcoming Chicago publisher, was a financial backer of the enterprise, along with Joseph N. Pew, Jr., the vice-president of Sun Oil Company. Morley, a former Rhodes Scholar and Pulitzer Prize–winning newspaper columnist, had been editor of the Washington Post in the 1930s and early 1940s. He was president of Edition: current; Page: [281] Haverford College when Hanighen approached him in 1944 about beginning the publishing venture. The purpose of Human Events, according to Morley, was to promote ideas that advocated means to a “durable peace” and involved “the reporting of facts which newspapers overlook.”5

Though the magazine’s circulation amounted to only a few thousand in the months immediately after World War II, its influence was far greater than its numbers would indicate.6 Goodrich met Morley in the early years of Morley’s involvement with Human Events. Pierre thought highly of the conservative publication and its attempt to deal with the problems that the end of World War II brought to the world. Morley aptly described the magazine’s approach of addressing the centralization of power, a concern Goodrich obviously shared:

Goodrich often sent subscriptions to Human Events to family members, employees, and acquaintances.8 In May 1947, Goodrich invited Morley to lecture at Wabash College. Morley’s three lectures at Wabash were later published as part of a book, The Power in the People. In 1981, Edition: current; Page: [282] Liberty Fund republished Morley’s Freedom and Federalism.9 Goodrich and Morley’s friendship deepened through meetings of the Mont Pelerin Society and personal visits.10 Goodrich also funded scholarships through the Winchester Foundation for an elementary school that Morley was associated with in Gibson Island, Maryland, Morley’s retirement home.11

In the spring of 1949, Goodrich became interested in another publishing venture. While on a trip to New York City, he visited the Liberal Arts Press, located on Seventy-second Street. Goodrich took an immediate interest in the small publishing company and its owner, Oskar Piest. Piest was a German native and a former economics adviser to a large Berlin bank. In 1935, he fled Germany because of the political turmoil that existed during Hitler’s rise to power. Once in the United States, Piest became involved in publishing, serving as editor in chief to the Hafner Press and publisher of the Library of Liberal Arts.12

The Library of Liberal Arts published a series of inexpensive, paper-bound reprints of shorter classics in the fields of philosophy, religion, political science, education, and literature. Among the authors published by the press were Plato, Aristotle, Augustine, Thomas Aquinas, Edition: current; Page: [283] and Thomas Hobbes. Goodrich entered into what eventually became a twenty-thousand-dollar loan agreement with Piest, which enabled Piest to expand the offerings of inexpensive classic texts. As a result, between 1950 and 1960, the Library of Liberal Arts was able to increase publication from a few titles to hundreds. At the publishing company’s height, its books were used in approximately eight hundred colleges and universities. Goodrich was so pleased with the outcome of this loan to Piest that he wrote about the transaction in Liberty Fund’s Basic Memorandum. Goodrich used the success story as an example of a time when the Liberty Fund directors should be willing to consider extending loans to further a cause consistent with the foundation’s philosophy.13

In 1939, James and Cora Goodrich donated $11,000 to Cora’s hometown of Lynn, Indiana, for the construction of a community library in memory of her parents.14 The donation was matched by $11,800 from the Federal Work Projects Administration (WPA). On July 4, 1941, 150 Lynn citizens began razing an old building on the site where the new Frist Memorial Library would be built.15 Cora did not live to see the completion of the library named in her family’s honor. She passed away on October 31, 1941, slightly more than a year after her husband’s death.16 While most of Cora’s life had been spent as a supporter of James Goodrich’s Edition: current; Page: [284] amazing range of accomplishments, she had assumed leadership positions in her own right in a number of state and local organizations: In 1909, she became district president of the Indiana Federation of Clubs; in 1914, she began the Madonna Class, a women’s Bible study at the Presbyterian Church; from 1925 to 1926, she served as local chapter president of the Daughters of the American Revolution.17 Moreover, in rearing Pierre, the diminutive woman had perhaps as much influence on him as his powerful father.

Pierre and his second wife, Enid, attended the library’s dedication on Sunday, June 13, 1943.18 The ceremony included the unveiling of a large portrait of Cora’s family, the Frists, which still hangs in the library.19 Also in 1943, the unveiling of another portrait of interest to Pierre took place. Goodrich had hired Wayman Adams, one of America’s great portrait painters, to rework a portrait of his father. Adams had originally begun the portrait of James P. Goodrich when the latter was still in the governor’s office, in December 1920. The portrait was hung in the Indiana statehouse, where it remains to this day.20

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On February 3, 1941, in Chicago, between the deaths of his parents, Pierre had married Enid Smith of Indianapolis. Pierre had first become acquainted with Enid in 1928, when she was his nurse at St. Vincent Hospital in Indianapolis, where he had back surgery. Enid was born in Enid, Oklahoma, on May 17, 1903. Her family moved to Indianapolis shortly after her birth. She attended Shortridge High School and received a resident nursing degree from St. Vincent Hospital and a bachelor’s degree from Case Western Reserve University in Cleveland, Ohio.

Enid was one of six children. She did not come from a wealthy, well-known family, as had Pierre’s first wife. The couple’s long courtship was strained by circumstances largely beyond their control. James and Cora Goodrich had never totally understood or gotten over their son’s divorce. As a result, Pierre was placed in a delicate position: He wanted very much to remain on good terms with his parents yet retain the close relationship he had developed with Enid. It was a troubled situation that only partially resolved itself in the autumn of 1941, after the passing of both of his parents.21

Throughout her life with Pierre, Enid showed great tolerance and understanding of her husband’s time-consuming interests. As for Pierre, he had considerable confidence in Enid and valued her advice. Although Enid never had the scholarly interests that her husband had, she possessed a great deal of common sense. When Pierre established Liberty Fund in 1960, he kept Enid well advised of the details, and she was made a founding lifetime board member. Enid attended Liberty Fund board meetings regularly for more than twenty-five years. She was also a director of Pierre’s other foundations: Thirty Five Twenty, Inc., based in Indianapolis, and the Winchester Foundation. After Pierre’s death, Enid continued to be active in philanthropic circles in the Indianapolis area: she was a trustee of the Indianapolis Museum of Art; a member of the President’s Council at Conner Prairie, a restored pioneer village; and a 1994 recipient of the Individual Philanthropist Award by the Indiana chapter of the National Society of Fund Raising Executives. In 1994 she Edition: current; Page: [286] was named by Indiana’s former governor Evan Bayh as a Sagamore of the Wabash, the state’s highest civilian honor. Enid passed away in November 1996 at the age of ninety-three.22

After they were married, Pierre and Enid went to Hawaii on their honeymoon. While in Hawaii, the newlyweds visited Admiral Husband Kimmel, the officer in charge of the soon to be infamous naval base at Pearl Harbor.23 Pierre took along on his honeymoon a suitcase full of books. Albert Campbell, Pierre’s longtime law partner, joked that one of the first things Enid would have to get used to in married life was Pierre’s preoccupation with reading. Goodrich could become so immersed in a book that he became oblivious to anything else going on around him, even a honeymoon.24

Several years later, another marriage took place in Goodrich’s immediate family. In May 1952, his daughter, Nancy, married a Polish prince, Edmond Poniatowski, at the Vincent Astor estate in Rhinebeck, New York. Pierre was concerned that whoever married his daughter might find his wealth the primary attraction. The couple later lived in Paris for several years, during which time father and daughter seldom saw each other. It was the beginning of a strained relationship.25

In May 1946, Pierre and Enid moved to 4220 Central Avenue in northern Indianapolis, where they would live during the remainder of Pierre’s life. Set in a lovely neighborhood across from the St. Joan of Arc Edition: current; Page: [287] Catholic Church, the home is a beautiful example of Georgian architecture. In the late 1960s, Goodrich had extensive renovation done to the home, including surrounding it with an iron fence and building a carriage house.26

Despite his father’s longtime involvement in politics, particularly partisan Republican politics, Pierre himself was pretty much a bystander in the political arena. During his fifty years of residence in Indianapolis, however, many a Republican candidate came knocking at Goodrich’s door seeking his support. In February 1972, Dr. Otis Bowen, then a Republican candidate for governor, visited Goodrich, looking for a campaign contribution and endorsement. Bowen was treated no differently from any other visitor. Goodrich proceeded to engage Bowen in a lengthy discussion, challenging Bowen on what he believed were the candidate’s less than conservative beliefs. After a fairly virulent exchange, Bowen left, disgruntled. The future two-time Indiana governor was not the first candidate who left Goodrich’s office shaking his head. Bowen left with empty hands, not receiving the campaign contribution he had sought. Instead, Goodrich sent him literature, including Lord Acton’s letter containing the admonition that “power tends to corrupt and absolute power corrupts absolutely.” As Bowen recalls, “Those who knew of my appointment were very interested in the outcome. [My campaign manager] asked if I thought a follow-up appointment would be productive. I advised that I had no desire to face [Mr. Goodrich] again.”27

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The 1952 Republican National Convention in Chicago marked an exception to Pierre Goodrich’s tendency not to become directly involved in politics. In this contest, the stakes were high. Goodrich had been a longtime supporter of the United States senator Robert Taft, who was challenging Dwight D. Eisenhower for the Republican presidential nomination. Goodrich, like most supporters of the conservative wing of the Republican Party, was suspicious of Eisenhower’s “internationalist” views and believed that he would do little to roll back Franklin Roosevelt’s New Deal policies. Almost all political insiders and columnists believed that the race between Taft and Eisenhower would be extremely close. Therefore, every delegate was deemed critical. A hotly contested battle for control of Indiana’s delegates to the convention ensued. What added fuel to the controversy was the power play that had developed between Goodrich’s business partner Eugene C. Pulliam, an Eisenhower backer, and Indiana’s two Republican United States senators, Homer Capehart and William Jenner, both strong Taft supporters.

As publisher of Indiana’s two largest newspapers, Pulliam was not content to report on the bruising tug of war in Chicago. He had finagled Edition: current; Page: [289] to get himself “elected” as a delegate to the convention in a deal with Senator Jenner that many considered highly suspicious. “We decided it’d be better to make him a delegate than have him hounding us all the time,” explained Lisle Wallace, chairman of the Taft campaign in Indiana.28 Nonetheless, Jenner and the other Taft supporters wanted a delegation that was 100 percent loyal to Taft. This is where Goodrich came in.

The controversy began with the issue of whether the Indiana state Republican convention could force Pulliam or any other delegate to vote for Taft. Pulliam took his fight straight to the readers of his newspapers, threatening to sue the Republican Party if he was not allowed to vote as a delegate for Eisenhower.29 After Pulliam won a minor victory that allowed him free rein to vote for whomever he wanted, the challenge was to hold onto Indiana’s other delegates who had earlier committed to Taft.30 Goodrich, in an uncharacteristic role, worked the Indiana delegation both on and off the convention floor. He tried to persuade them not to defect to Pulliam’s (and therefore Eisenhower’s) camp.31

As an interesting side note, at the July convention, Goodrich was introduced to William Casey by Henry Regnery. At the time, Casey was Edition: current; Page: [290] a New York City tax attorney and a strong Taft supporter.32 While Goodrich met with most of Indiana’s thirty-two delegates to the convention privately, Casey campaigned for Taft in a tenacious manner similar to Pulliam’s. Casey had set up an underground newspaper. Each morning on the doorstep of every delegate and alternate, a paper appeared with headlines that read, “We All Like Ike, but Ike Can’t Win” and “Ike’s a Me-Too Republican—Let’s Nominate a Real Republican.”33

The significance of Goodrich’s meeting with Casey is not that the two men ultimately succeeded in helping Taft garner the nomination. They did not. Eisenhower won on the first ballot in an unexpected landslide. The important thing about their meeting is that Goodrich had made contact with a man who would later play a very important role in Goodrich’s establishment of Liberty Fund. Casey did much of the legal and tax preparation work involved in forming the foundation between 1960 and 1962. He would later hold high public office, becoming chairman of the United States Securities and Exchange Commission (SEC), director of the Central Intelligence Agency (CIA), and chairman of Ronald Reagan’s 1980 presidential campaign.

As Goodrich came to know Casey, he saw a man much like himself: unflappable and impatient, a voracious reader and lover of ideas, a lawyer with such tremendous energy that he often kept three secretaries busy at once. Casey’s shambling manner totally belied his considerable intellect and scholarly erudition. Moreover, like Goodrich, Casey possessed the ability to absorb new information and new ideas like a sponge yet relentlessly held to the moral traditions of his middle-class Catholic upbringing in Queens.34 Because he met Casey there, Goodrich’s work Edition: current; Page: [291] at the Chicago convention proved to be not totally fruitless, despite Taft’s landslide defeat.

Goodrich’s numerous businesses generally enjoyed a string of years of strong success. In the late 1950s, however, his fortune turned when a business deal went sour. In December 1947, Pierre’s uncle, Percy Goodrich, had struck a deal with Indianapolis businessman and attorney Samuel Harrell. The purchase arrangement involved the sale of the Goodrich family’s twenty-four grain elevators in central and northern Indiana to Acme-Evans, a large grain and milling company in Indianapolis. The resulting company became known as Acme-Goodrich. Harrell took over the presidency of Acme-Goodrich while Percy Goodrich, at the age of eighty-six, became chairman of the board. The Goodrich family received $1.8 million plus preferred stock in Acme-Goodrich. Moreover, approximately one hundred other stockholders received preferred stock in Acme-Goodrich.

After Percy Goodrich died in 1951, Pierre was the largest minority shareholder and the second major force, behind Harrell, in the company. By that time, the company was the dominant grain business in Indiana, owning thirty-seven grain elevators across the state.

In Harrell, a hard-nosed and successful businessman, Goodrich had met his match. Harrell was a large, imposing man who was also bright, ambitious, and polished. He had grown up in Noblesville, Indiana, and had served as a World War I navy pilot before graduating from the University of Pennsylvania and Yale Law School. In the mid 1920s, Harrell returned to practice law in Indianapolis and became involved in the grain and milling business. He later served as chairman of the board of directors of the Indianapolis Board of Trade, founded Indiana’s honorary order the Sagamore of the Wabash, and ran unsuccessfully for governor in 1952 and lieutenant governor in 1956.35

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In the mid 1950s, Harrell had the idea of creating a grain company that would be structurally similar to General Motors, having five independent divisions, and he established General Grain. In 1958, Harrell’s plan was to make General Grain the umbrella company for the five divisions, which were Acme-Goodrich (rural Indiana grain elevators), Acme-Evans (a milling company based in Indianapolis), Early and Daniels (Cincinnati), Cleveland Grain (Cleveland, Ohio), and the Tidewater Grain Company (a Philadelphia grain export company).36

From the start, Goodrich and the other minority stockholders in Acme-Goodrich were against the merger. They believed that the preferred shares, which they owned, were considerably undervalued by Harrell. At the August 10, 1958, stockholders’ meeting, the minority shareholders formally voted against the consolidation plan.37 Under Indiana law, any stockholder who opposes a merger has the right to have his or her shares purchased by the new or surviving company at the price of the shares on the effective date of the merger. Harrell proposed such a purchase price and the Indiana Securities Exchange Commission found the merger fair and equitable, but the minority stockholders objected to the appraised value of the stock. Goodrich and a Winchester dentist by the name of John Beals (Pierre’s second cousin) subsequently brought a legal action on behalf of all 104 minority stockholders.38

At a lengthy trial before the Boone Circuit Court in Lebanon, Indiana, in July 1962, Beals and Goodrich succeeded in winning a jury verdict for the minority shareholders that increased their preferred stock value almost twenty dollars per share. Harrell appealed the verdict. Finally, in December 1966, the Indiana Court of Appeals ruled in General Edition: current; Page: [293] Grain, Inc. v. Pierre F. Goodrich in favor of Harrell.39 Goodrich appealed the decision to the Indiana Supreme Court. In June 1967, the state’s highest court affirmed the decision of the court of appeals in favor of Harrell.40

The lengthy legal contest between Goodrich and Harrell is interesting for two reasons. First, it was probably the first large dissenting shareholder case in Indiana, therefore setting an important precedent for later case law.41 Second, it is an instance in which a conflict of personalities came back to haunt Pierre. Goodrich was accustomed to being able to control events that involved his business interests. In this situation, however, he did not have the votes to control the direction of Acme-Goodrich, and he could not move Harrell to oppose the consolidation plan. As a result, the two men had a falling out, and the legal battle that ensued was inevitable.42

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After the Indiana Supreme Court decision, settlement negotiations resulted in Harrell’s returning six elevators to the preferred (minority) stockholders in exchange for their releasing all claims against General Grain. With six elevators, the minority stockholders formed a company called Indiana Elevators. The company was based in Winchester, the original location of the Goodrich Hay and Grain Company seventy years before. Unfortunately, the lengthy legal battle had taken its toll on the grain elevators’ business. The substantial legal costs, combined with Harrell’s failure to maintain the grain operations, resulted in a substantial loss of business for Indiana Elevator. It folded in 1968, less than a year from start-up. It was one of the few business deals in which the Goodrich family came out on the losing end.43

Chapter 21: The Later Years, 1960–1973

In the early 1960s, Goodrich decided that he had outgrown his office space on the seventh floor of the Electric Building, where he had been since 1935. He began to examine other business offices in downtown Indianapolis. Not finding any office quarters suitable, he decided to build his own office building. He purchased property at 3520 Washington Boulevard, which was owned and occupied by Mrs. Bertha Caldwell, Richard Lugar’s mother, and had been the United States senator’s childhood home.1 In 1962, Goodrich had the house demolished and the land rezoned, and replaced the home with a modern office building. The building, which still stands, is now occupied by an architectural firm.

The building served as the nerve center for Goodrich’s many corporate operations. But probably more important to Pierre, it was also the location for the early work of Liberty Fund. The care with which Edition: current; Page: [296] Goodrich oversaw the building’s construction is indicative of the time and thought he could put into a project once he became interested in it. Goodrich spared no expense. In landscaping the grounds, he had shrubs and trees transported from southern Indiana at a cost of thirty-five thousand dollars.2 Moreover, he duplexed the utilities of the building so that it could function in times of emergency. In addition to having the building connected to city water, he had a deep well dug. He also had both gas and oil boiler systems put in place for heat. An air-handling system regulated the air moisture content so that the office always had fifty percent humidity, and an electric generator was installed to serve in case of a power outage. Goodrich even had double ceilings and extra-thick walls constructed to add to the building’s sturdiness and soundproofing. He had a large oval conference table designed for Liberty Fund conferences and special chairs made to order.3

“He was a man of great thought,” said Robert Longardner, who purchased the building in the mid 1970s and still occupies it today. Goodrich obviously believed “the work of the [Liberty Fund] was very important and it had to be physically protected in case there was ever a catastrophe,” added Longardner.4

Goodrich’s partnership with John Raab Emison terminated in 1939. Emison returned to his hometown of Vincennes to practice with his family’s Edition: current; Page: [297] law firm, the oldest firm west of the Allegheny Mountains.5 Goodrich’s partnership with Albert Campbell continued intact, however, and in 1941 a young attorney by the name of Claude Warren joined the firm of Goodrich and Campbell. This relationship proved very fruitful, and the three attorneys practiced law together for the next twenty-one years. After Campbell left in 1962, Warren remained with Goodrich as a partner until Pierre passed away.

By the early 1960s, the Goodrich family companies were enjoying tremendous success. The country’s economy had flourished during the decades of the 1940s and 1950s, and so had Ayrshire Collieries Corporation, the Indiana Telephone Corporation, City Securities, Central Newspapers, and the many other smaller companies in which the Goodrich family held a large interest. Most of Goodrich’s legal work involved companies in which he had a financial stake, but the firm of Goodrich, Campbell, and Warren also took on a few outside clients, such as public utility companies. Warren became an expert in public utility law and was sought after for his expertise. While Albert Campbell and Claude Warren practiced with Goodrich at different times for the better part of three decades, a number of younger attorneys also practiced with the firm as associates, including John M. Kitchen, Carter W. Eltzroth, and Gilbert Snider.6

In March 1957, Goodrich hired a young woman by the name of Helen Schultz. Miss Schultz, as Pierre would always refer to her, became his top assistant. She had graduated from Culver-Stockton College in Missouri and had worked for Illinois Bell before beginning her apprenticeship under Goodrich. Schultz was an extremely capable person, and over the course of several years, her boss and mentor began to trust her Edition: current; Page: [298] more and more with the handling of top administrative duties. Schultz’s competency was evident to others as well. Martha Wharton, who met Goodrich and Helen Schultz only once, in 1966 for a job interview, recalled thirty years later that “Miss Helen Schultz ran that [office] and, indeed, gave orders to Mr. Goodrich! I may not have been in awe of him, but I was agape at her competence and commanding presence!”7 Indeed, after Goodrich’s death in 1973, Schultz replaced him as president of both the Indiana Telephone Corporation and Liberty Fund.

The 1960s marked a relatively stable period in Goodrich’s life. With the exception of the Acme-Goodrich failure, his businesses were doing well, and he enjoyed considerable satisfaction in his involvement with several educational organizations. Goodrich initiated a number of policy changes for his companies that only years later would be adopted by competing businesses. Because of his concern over inflation, he restricted the Peoples Loan and Trust Company’s ability to lend money at a fixed interest rate to five years. Goodrich believed that to predict what interest rates would be beyond that would be pure speculation. In essence, that had the effect of creating variable-rate mortgages, because borrowers had to renegotiate the interest rate of their mortgages every five years or seek financing elsewhere. Although variable-rate mortgages are now extremely common, they were unheard of in the 1960s. Of course, that conservative decision put Peoples Loan and Trust Company at a distinct disadvantage in competition with other banks, which made fixed-rate home loans for periods as long as thirty years. But the policy helped to save Peoples from the dire situation that many banks found themselves in during the late 1970s and early 1980s, when banks were holding long-term loans that yielded 6 to 8 percent interest but had to Edition: current; Page: [299] pay depositors interest at 15 to 16 percent.8 Goodrich also initiated fee-based services long before they became common in other banks. This reflected his belief, which he stated often in his memorandums to employees, that those who benefit from a service should pay for it, and that costs should not be passed on to all ratepayers or depositors.9

In the telephone industry, Goodrich advanced policies that reflected his awareness of how quickly the industry was changing. For example, he depreciated the expense of new equipment at a far faster rate than was allowed under the depreciation schedules of state and federal tax laws. This had the effect of enabling his telephone companies to deduct the expense of the new equipment from income sooner rather than later, therefore reducing annual corporate income and dividends to shareholders. Goodrich’s belief in the faster depreciation rates reflected his views about the true rate at which new equipment would become obsolete and need replacing. He used this logic (along with the argument about how inflation increased the expense of new equipment at a cost higher than was generally calculated) to justify higher rate increases before the Indiana Public Service Commission.10

At the same time, Goodrich also negotiated long-term contracts with telephone-equipment suppliers. Most generally, he required from these suppliers contractual commitments of up to twenty years. The normal commitment was less than half that time. In other words, if a company wanted to sell telephone equipment to the Indiana Telephone Corporation or the Public Telephone Corporation at Greensburg, then that supplier would have to agree to provide parts for that equipment for up to twenty years after the sale. Goodrich justified this “apparent conflict between our twenty year provision for parts and a nine year obsolescence plan” based on the ability of larger telephone companies (such as AT&T and Western Electric) to have “captive manufacturing companies” Edition: current; Page: [300] (meaning they, not the suppliers, could dictate the terms and price of new and repaired equipment).11

Throughout the 1950s and 1960s, the issue of labor unions continually was one that Goodrich had to confront. Goodrich strongly opposed unions: He believed that they protect poor employees at the expense of good employees and unnecessarily handcuff management in adopting work changes. He further believed that the call to unionize would succeed only if employees were not being treated right by the employing company. The Ayrshire Collieries Corporation was unionized by one or more of the miners’ unions, and the Indiana Telephone Corporation (ITC) was temporarily unionized for about two years before Goodrich’s death. The ITC employees later decertified the union. The existence and the threat of organized labor forced the boards of the various Goodrich companies to change their compensation packages. In the 1950s, ITC employees started to receive pension benefits after the threat of unionization was repeatedly made. Generally, Goodrich saw to it that his employees received a compensation package, complete with benefits as good as those of competing companies that were unionized. He believed that if he did that, there would be little chance for union efforts to succeed.12

The business practice that Goodrich took the greatest long-term interest in was the accounting of inflation. As a business executive overseeing companies that were constantly replacing expensive equipment, Goodrich was greatly concerned about inflation. He took on the analysis of the problem much as he took on anything that had stirred his curiosity, with almost obsessive attention. Goodrich recognized that inflation erodes profits because the replacement rate of equipment in today’s dollars does not accurately reflect the true cost when inflation is factored in.13 Goodrich was greatly concerned about the practical effects Edition: current; Page: [301] of inflation. In the late 1960s and early 1970s, inflation was high. On the basis of what he had observed in several South American countries, he knew that inflation could wreak havoc, not only on individual businesses, but on whole economies as well.14 Goodrich was so convinced in the 1940s that the United States was going to experience a period of substantial inflation that he refinanced the whole of the Indiana Telephone Corporation’s debt on a long-term basis at low fixed interest rates.15

In support of his warnings about inflation, Goodrich hosted Ludwig Erhard, chancellor of West Germany from 1963 to 1966, in Indianapolis on February 19, 1968. Erhard is credited with performing the “German economic miracle” when he was the German minister of economics. In that position, on Sunday, June 20, 1948, he abolished all wage and price controls and introduced a new German currency, the deutsche mark. These bold initiatives resulted in Germany’s having one of the strongest economies in Europe within a decade. Erhard and Goodrich had become friends through their mutual association with the Mont Pelerin Society. The former chancellor spoke at the Columbia Club about the evils of inflation and countries’ engaging in deficit financing to support ballooning budgets.16

Goodrich became an expert on inflation and spoke often about the need to control and properly account for it to anyone who would listen. Edition: current; Page: [302] He believed that most people (including many economists) simply did not understand how inflation could lead to political and social upheaval. Goodrich often discussed, with an economic historian’s knowledge, how past national crises such as the French Revolution and the rise in power of Napoleon in France and of Hitler in Germany had been brought about by the manipulation of money.17 A 1979 article in the Indianapolis Star paid a late tribute to Pierre for his recognition of the importance of accounting for the effect of inflation in a business context:18

Goodrich knew that there is a built-in pressure for company officials not to report the effects of inflation: inflated figures look good to shareholders and mitigate the chance that financial analysts will spot a firm’s poor performance.20 Goodrich’s method of accounting (price-level accounting) eventually attracted national and even international attention. He corresponded with businessmen and academics from all over Edition: current; Page: [303] the country.21 Stanford University, the University of Pittsburgh, and the University of Michigan used Indiana Telephone Corporation’s annual reports in their graduate business courses. England’s largest news magazine, The Economist, favorably discussed ITC’s accounting methods in a January 1971 article. In 1978, the Shell Oil Company, a Dutch corporation, became the first major company to record inflationary dollars in its annual reports.22

In support of his theories, Goodrich employed top accountants and economists to appear before the Indiana Public Service Commission on behalf of the ITC. Experts such as Dr. William A. Paton, a professor of accounting at the University of Michigan; Dr. John K. Langum, former vice-president of the Federal Reserve Bank of Chicago; and Dr. Benjamin A. Rogge, Distinguished Professor of Political Economy from Wabash College, often represented Goodrich before rate hearings. Of course, Goodrich was attempting to justify rate increases. But it was just as important to him to enlist the testimony of these experts to educate the commission and orient them to his way of thinking.

“One of [Goodrich’s] pet projects was to devise an accounting system Edition: current; Page: [304] that would prevent the government from taxing away the so-called capital gains of business through the ravages of inflation,” wrote Paul L. Poirot, who knew Goodrich from their mutual involvement with the Foundation for Economic Education. “What [Goodrich] did not seem to realize is that there is no way to prevent inflation if the government is in charge of the monetary system,” Poirot added.23

It would seem inconceivable that Goodrich was not aware of the Federal Reserve’s role in controlling inflation through monetary policy, especially given Goodrich’s familiarity with the writings of Milton Friedman and other monetarists. Goodrich probably believed that it was only by educating others regarding the havoc that inflation could create that monetary policy would eventually be reviewed. Goodrich did not believe that a person had to be an elected official, a Washington, D.C., lobbyist, or an academic to influence governmental decisions. Ultimately, Goodrich’s unwavering attack against inflationary policies may have had a significant influence. On his periodic trips to Chicago in the late 1960s and early 1970s, Goodrich often visited Harris Bank and talked with the bank’s top economist, Dr. Beryl Sprinkel. The two men discussed a wide range of issues, and especially the pitfalls of inflation. Some years later, Sprinkel became a high-level official at the United States Treasury Department. Toward the end of Ronald Reagan’s first term, Sprinkel was named chairman of the Council of Economic Advisers. In this role, he had considerable influence in helping further anti-inflationary policies both with the administration and through discussions with Federal Reserve officials.

“Mr. Goodrich believed that preaching the correct doctrine about inflation might well have an effect on policy,” said Sprinkel. “He saw in me a kindred soul. We might each learn something from a discussion of these issues,” Sprinkel added.24

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Pierre Goodrich was as much interested in the capital growth of the companies he and his family held controlling interests in as he was in their dividend income. One reason was that he hated paying taxes. He loathed the thought that the government would profit from his and his employees’ hard work, only to spend the money on boondoggles of one kind or another. Under United States tax law, the paying of corporate dividends amounts to double taxation. First, the company pays tax on the income as corporate tax. Second, whenever there is a distribution of dividends, the individual shareholder must report the dividend as personal income and pay tax on it. The top accounting firm of Arthur Andersen and Company, based in Chicago, established a branch office in Indianapolis in 1960, at first to advise Goodrich’s companies. William Fletcher, the managing partner of Arthur Andersen’s branch office, became a close adviser to Goodrich, spending hundreds of hours annually consulting him on business matters. Fletcher later served on the board of the Indiana Telephone Corporation and as an executive with the Peoples Loan and Trust Company. Goodrich went to extraordinary efforts to see that Uncle Sam’s share was as minuscule as possible, all within the confines of the law.25

Toward the end of each fiscal year, Goodrich would hire extra accountants and require existing employees to work overtime figuring out the maximum amount of charitable deduction vis-à-vis dividends that would result in the least tax liability.26 Goodrich would often contribute stock in one of his companies to Wabash College or to other charitable institutions. By contributing stock rather than cash, Goodrich was able to deduct the market value of the stock at the time it was given, not when it was purchased. By doing this, he avoided any capital gains taxes and was able to deduct the value of the stock from current income. At the same time, the educational institutions enjoyed the appreciated value of the stock. Goodrich used this to tremendous advantage in both Edition: current; Page: [306] reducing his tax liability and benefiting the charitable organizations he supported.27

Goodrich’s insistence on paying low dividends and investing profits back into his companies was not popular. Other directors in his companies were constantly informing Goodrich that shareholder interest would diminish if the policy of paying low dividends continued; moreover, those investors who needed the income from the shares in order to live were also extremely upset. Despite this opposition, Goodrich generally prevailed in maintaining the paying out of low dividends. Of course, those investors who did hold on to the stock until the time the company was sold enjoyed extremely handsome profits as a result of the huge capital appreciation of the stock.28

Toward the end of his life, the central and overriding business concern that Goodrich confronted was liquidating his many corporate interests and laying the foundation for the work of Liberty Fund, Inc. In 1968, Indiana Elevators, the successor to the Goodrich Brothers Hay and Grain Company, went into bankruptcy. On May 8 and May 9, 1969, respectively, Goodrich held shareholders meetings in Indianapolis to dissolve the holding companies of Engineers Incorporated and the Patoka Coal Company. Engineers Incorporated was the family company that was responsible for most of the corporate purchases in the 1930s and 1940s. Patoka Coal had merged with Ayrshire Collieries in 1939 but had technically remained a holding company of Ayrshire stock until its liquidation. Another holding company, the P. F. Goodrich Corporation, was also dissolved in the mid 1960s, dispensing the stock it held directly to investors, who were mostly Goodrich family members.29 In October 1969, Goodrich sold Ayrshire Collieries to American Metal Climax. Less than a year later, in August 1970, he sold the Goodrich family’s 51 percent ownership in City Securities to Dwight Peterson, who was Edition: current; Page: [307] already president.30 The Goodrich family, under Pierre’s management, continued to hold either a controlling or a large interest in the Indiana Telephone Corporation, Central Shares (the holding company for Central Newspapers stock), the Peoples Loan and Trust Company, and the Eastern Indiana Telephone Company in Winchester.

To what degree Goodrich had plans of selling off these other corporate interests before his death is unknown, but he acknowledged in Liberty Fund’s Basic Memorandum that the securities of a utility company (undoubtedly his own) would be one of the main assets of the foundation.31 He had hoped that Liberty Fund might be able to operate the businesses he still owned and apply the profits toward the purposes of the Liberty Fund.32 The tax problems that arose from this plan proved formidable, however, and were not totally resolved even at the time of his death (see chapter 29).33Nonetheless, Goodrich’s desire to see Liberty Fund come to fruition under his guidance became an overriding concern.

In addition to liquidating the Goodrich holding companies, Goodrich stepped down from a number of foundation boards: the Great Books Foundation (1957), the Indianapolis Symphony Orchestra (late 1950s), the China Institute of America (1965), the Intercollegiate Studies Institute (1965), the Institute for Humane Studies (1963), and Wabash College (1969). Although only a handful of Liberty Fund conferences had been held by the early 1970s, Goodrich had laid the groundwork for his greatest contribution to society.

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Chapter 22: Associations and Causes

The swiss psychiatrist Carl Jung observed that most people experience two halves of life. The first half, ending sometime near middle age, is when an individual is concerned with choosing a career, finding a mate, establishing a family, and becoming financially secure. The second half is when a person begins to grow more aware of his or her own mortality. Later life is often occupied in the pursuit of previously undeveloped interests in religion, relationships, social causes, and matters beyond strictly self-interested concerns.1

It appears that Pierre Goodrich experienced such a transformation in middle age. Up until that time, Goodrich had been focused on his numerous business interests, working hard to build his family’s companies into profitable enterprises. Work was his consuming passion, and he worked with an emotional drive that far exceeded what was necessary to obtain any personal comforts.

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Sometime in the mid 1940s (and after the death of his father), Pierre’s interests turned decidedly intellectual and associational. While he had always been an avid reader and discussant of ideas, he began to devote large blocks of time to probing those ideas that are at the heart of a society. Thus, the years after James Goodrich’s death marked a definite turning point in Pierre’s priorities. Pierre was still a force to be reckoned with when any major decision was made pertaining to his family’s business empire. Yet, beginning in the mid 1940s, he had the luxury of spending hours reading and thinking about intellectual matters.

From a practical perspective, he was able to devote so much time and energy to these interests because he had surrounded himself with extremely capable business partners and operating lieutenants: Robert Koenig and, later, Norman Kelb at the Ayrshire Collieries Corporation; Irwin H. Reiss at Meadowlark Farms; E. S. Welch and William Scheidler at the Indiana Telephone Corporation; Dwight Peterson and Noble Biddinger at City Securities; Eugene C. Pulliam and his son Eugene S. Pulliam, at Central Newspapers; Don Welch at Peoples Loan and Trust Company; William H. Fletcher of Arthur Andersen and Company; and Albert Campbell, Claude Warren, and, in later life, Helen Schultz at his law offices.

While Goodrich was not a typical businessman-Rotarian type, he did not oppose membership in organizations altogether. Over the course of his life he took on the quiet support and occasional leadership of many organizations, associations whose missions he supported through substantial contributions of time and money. Membership in these associations were deep and lasting commitments for Goodrich. They also provided him with a forum in which to vent his strong opinions and to communicate with others who had basically the same ideological beliefs.

As Tocqueville would have agreed, the idea of “getting involved” is a “peculiarly American notion of the relationship between self and society.”2 It was one that Goodrich took a much greater interest in as he Edition: current; Page: [313] sought to look outside himself, to have a greater understanding of the public good, and to influence others’ understanding of the freedoms and obligations of responsible citizenship.

One of the first educational organizations that Goodrich became active with was the Great Books Foundation, based in Chicago, Illinois. Pierre served on its national board from the time of its founding in April 1947 until November 1955.3 The Great Books Foundation is an independent, nonprofit educational corporation whose stated mission is to provide people of all ages with the opportunity to read, discuss, and learn from outstanding works of literature.4

The Great Books Foundation was established in 1947 by Dr. Robert M. Hutchins, then chancellor of the University of Chicago and previously the university’s president, and Mortimer Adler, at the time a professor of philosophy of law at the University of Chicago. The original board of directors was made up of a blue-ribbon panel of national educators, librarians, publishers, and businessmen such as Pierre Goodrich and Lynn A. Williams. Williams was a friend of Goodrich and had been vice-president of Stewart-Warner Corporation in Chicago. In the early years, Henry Regnery’s publishing company published the shortened paperback editions of classics of which the Great Books reading list was composed. These works included Plato’s Republic, Sophocles’ Antigone, Marx’s Communist Manifesto, Adam Smith’s Wealth of Nations, and dozens of other classic works.5 By mid 1948, the Great Books Foundation Edition: current; Page: [314] had thirty thousand readers in two hundred American cities. Today, its basic program still consists of twice-monthly meetings at which participants discuss the works of Plato, Aristophanes, Aristotle, Marx, Kant, Freud, Shakespeare, and dozens of other influential writers and thinkers of Western culture.

Goodrich took a special interest in promoting the Great Books Foundation in Indiana. In 1947, he formed the Indiana State Temporary Committee of the Great Books Foundation in which he served as chairman.6 The presidents or deans of several Indiana colleges, including Butler, Wabash, Earlham, Hanover, DePauw, and Notre Dame, served on the committee. Before Goodrich established the temporary committee, only Indianapolis, South Bend, and Goodrich’s hometown of Winchester had Great Books programs in the state,7 but Goodrich undertook to establish dozens of chapters in Indiana. There may have been more than thirty such chapters established throughout the state at Goodrich’s instigation.8 He advertised in newspapers throughout Indiana seeking qualified Great Books leaders to head chapters in small towns. He also contacted friends and acquaintances, especially friends in smaller communities such as Anderson, Crawfordsville, Columbus, Huntington, Liberty, Lawrenceville, Lynn, Richmond, and Sullivan. Goodrich apparently thought that citizens from these smaller towns might benefit most by having a forum to discuss great literary works.9 Edition: current; Page: [315] Moreover, Goodrich partially underwrote the cost of training conferences for discussion leaders—at Wabash College in August 1948 and September 1949, and one at Earlham College in Richmond, Indiana.10

During the summer of 1947, Goodrich hired Dale Braun, then principal of Winchester High School and later superintendent of schools, to meet with community and business leaders. Braun’s task was to attempt to create an interest in establishing Great Books chapters in other towns and cities throughout the state.11 “Pierre saw in the Great Books program and the Socratic method the opportunity to get people to think,” said Braun. Goodrich also employed Professor Jack Charles of Wabash College to lead discussion groups.12

Another friend of Goodrich’s, D. Elton Trueblood, also helped Pierre start several chapters. Dr. Trueblood was then professor of religion at Earlham College and a nationally known speaker and author. He had become acquainted with Goodrich when Trueblood had taught briefly at Wabash College in 1946.13

One of the most successful, if short-lived, Indiana Great Books chapters was in Goodrich’s hometown of Winchester. It was funded anonymously by Goodrich through the Winchester Foundation, which Goodrich Edition: current; Page: [316] had established in 1945. The foundation purchased the books for the chapter. At the chapter’s height, approximately fifty adults and two dozen teenagers met in three subgroups every Monday night at the old Winchester High School gymnasium. Goodrich would often attend, driving from Indianapolis especially for the meetings or extending one of his frequent weekend visits to Winchester.

Elton Trueblood often led the discussions, and John Barden, an assistant dean at the University of Chicago, was also an invited discussion leader. Later, members of the Winchester group led their own discussions. The success of the chapter, in a small blue-collar midwestern town reminiscent of communities in Sinclair Lewis’s and Sherwood Anderson’s novels, was featured in the Indianapolis Star Magazine in 1947. In August 1948, it even caught the attention of Parade magazine, meriting a feature article in the national publication.14

By the mid 1950s, Goodrich had become somewhat impatient with the Great Books program. He also questioned the convictions of many of his fellow promoters of the Great Books concept. Goodrich saw in the Great Books program the thinking that “[a]ny idea is as good as another,” said William C. Dennis, a senior program officer of Liberty Fund. “That wasn’t Goodrich’s way of looking at the world. He thought some ideas were better than others and [he thought] he understood why.”15

Goodrich finally resigned from the Great Books national board in November 1955; he did, however, continue to support the foundation through gifts from the Winchester Foundation and Liberty Fund. Although Goodrich ceased to be a board member, he did take from the Edition: current; Page: [317] Great Books Foundation two important concepts he would later incorporate into his establishment of Liberty Fund seminars: readings from original texts and the Socratic discussion seminar.

No other organization that Goodrich was affiliated with was as closely aligned with his philosophical beliefs about individual liberty as the Foundation for Economic Education (FEE). FEE, based in Irvington-on-Hudson, New York, about thirty miles north of New York City, was established in 1946 by Leonard E. Read, who had the idea of an organization set up to proclaim the ideals of liberty. Read had been employed in city chamber of commerce work for most of his working life before establishing FEE. In 1939, he was appointed director of the Los Angeles Chamber of Commerce. Both before and during his tenure there, he traveled widely around the country speaking passionately about the virtues of liberty, free enterprise, and entrepreneurship.

Read eventually tired of chamber of commerce work because he was always at the beck and call of its business members.16 He decided to begin a small organization that would research and discuss the ideals of liberty, one that would be beholden to no other individual institution or interest group.17

Read bought the building that FEE still occupies for forty thousand dollars in 1946 and sought out several scholars to read, research, write, and speak.18 An amazing range of talent passed through FEE’s doors during its early years of existence: Fred Fairchild, former economist at Yale University, and economist Henry Hazlitt served as founding trustees; Ludwig von Mises was on FEE’s payroll as an adviser; Friedrich Hayek lectured on occasion; and F. A. “Baldy” Harper, who would later Edition: current; Page: [318] establish and serve as president of the Institute for Humane Studies, served on FEE’s staff.

FEE’s early success in publishing also helped establish it as an institution of far-ranging influence. FEE promoted and later republished Hazlitt’s Economics in One Lesson, subsidized the first printing of Mises’s Human Action, republished a new translation of Frederic Bastiat’s The Law, and published a revised edition of Henry Grady Weaver’s The Mainspring of Human Progress. The three books by Hazlitt, Bastiat, and Weaver have, together, sold more than two million copies.19

Read, like Goodrich, possessed an incredible breadth of interests and talents. He wrote twenty-seven books during his life, lectured to thousands of audiences, corresponded widely, and was a lifetime learner.20 Goodrich was on FEE’s board of trustees for more than twenty years (1952–73). As a trustee, he served with dozens of other distinguished businessmen and academics.21 Goodrich would often bring to FEE board meetings an array of gourmet cheeses and a selection of fine wines.22 In addition to making direct financial contributions to FEE, Goodrich sent dozens of employees from his coal company, farming operations, bank, and other businesses to various FEE seminars.23

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In Leonard Read, Goodrich found a man who was as devoted to the causes of liberty and free enterprise as he was. Read’s book, Government—An Ideal Concept, made a tremendous impression on Pierre. The two men would often talk for hours about ideas, and Read was the recipient of many of Goodrich’s infamous late-night telephone calls.24 Goodrich had a great fondness for Read and hosted a dinner in Read’s honor in Indianapolis at the Woodstock Country Club. Goodrich was also responsible for Read’s speaking at Wabash College and in Winchester. Next to Benjamin Rogge, Leonard Read probably had the greatest intellectual influence on Goodrich of any contemporary mind. Goodrich remained a lifelong supporter of FEE initiatives. Even today, the Winchester Foundation and Liberty Fund, established by Goodrich, contribute financially to FEE operations.25

From 1949 until the mid 1960s, Goodrich served as a trustee of the China Institute of America in New York City.26 The China Institute, whose predecessor was the China Foundation, was founded in 1926 by American educators John Dewey and Paul Monroe of Columbia University. The China Foundation’s primary objective had been to dispense monies that had been set aside for the United States out of the Boxer Indemnity Fund as a result of the Boxer Rebellion.27

The China Institute’s purposes were primarily fourfold: to disseminate information concerning Chinese and American education, to promote a closer relationship between Chinese and American educational institutions through the exchange of professors and students, to assist Edition: current; Page: [320] Chinese students in America in their education, and to stimulate interest in America in the study of Chinese culture.28

Goodrich first became involved with the China Institute in 1948 as a contributor.29 The following year, he was not only elected as a trustee but served as one of three vice-presidents of the China Institute. Another of the vice-presidents was Thomas J. Watson, Jr., then president of International Business Machines (IBM). Henry R. Luce, founder of Time, Life, and Fortune magazines, served as president during that time. Children of Christian missionaries, Luce and his sister, Elisabeth Luce Moore, were reared in China, and Moore remains a trustee even today.30

Beginning in 1949, Goodrich served on the institute’s finance committee. Charles Edison—son of the inventor Thomas A. Edison and former secretary of the navy and governor of New Jersey—was chairman of the committee in the late 1940s and early 1950s. The years from 1949 to 1953 were critical for the very survival of the China Institute. Chinese-American relations had deteriorated during the late 1940s. Until 1945, the Chinese government, banks, and private Chinese individuals had contributed substantial sums toward educating Chinese students in America. The political upheaval in China after 1945, however, culminating in the Communist Revolution in 1949, cut off practically all funds from China. Soon after that, the Korean War complicated and strained relations between America and China even more.

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By the end of 1949, more than 12,000 Chinese academics, scientists, and writers had managed to escape to the United States. As of October 1952, 5,406 Chinese students or teachers were stranded in America. The United States Congress had passed legislation prohibiting from leaving America any Chinese who had scientific or technical skills that could be useful to an enemy of the United Nations. This was meant to apply to Communist China, which was then not a member of the United Nations. Therefore, many recent Chinese graduates with M.D.’s and Ph.D.’s were forced to take unsuitable positions merely to survive. They became perfect targets for Communist promises of utopia in Red China.31

At that time, the China Institute, and specifically the Finance Committee on which Goodrich served, took on the monumental task of raising money to help these Chinese students and recent graduates find employment. By the end of 1949, some 1,500 Chinese had registered with the China Institute’s job placement bureau. Within a few months, some 2,000 had been referred to employers and 250 had received jobs.32

During the years in which Goodrich served as trustee, the institute played host to dozens of American and foreign dignitaries, including Eleanor Roosevelt, Nobel Prize–winning novelist Pearl Buck (author of The Good Earth), Mrs. Wendell Willkie, former United States secretary of state George C. Marshall, and Chinese Nationalist leader Chiang Kai-shek. In the mid 1950s, Pierre arranged for Roscoe Pound, his former law professor at Harvard, to address the institute. Pound had become an expert in Chinese constitutional law after spending three years as an adviser both on the Mainland before the 1949 revolution and in Formosa (Taiwan) after the revolution.

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Goodrich was known as a generous contributor to the institute, full of ideas and an innovative thinker.33 “There are so many members on boards who don’t want to rock the boat,” said Mrs. Elisabeth Luce Moore, “but Pierre rocked!”34

Goodrich and Chih Meng, China Institute director from 1927 to 1967, corresponded and talked regularly. They were both stubborn men and often strongly disagreed about institute policy.35 Shortly before Meng retired as director, he and Goodrich apparently had a falling out that resulted in Pierre’s resignation from the board in the mid 1960s. But he did not leave before he had contributed significantly to the institute’s mission.36

Goodrich passionately loved music, as both an amateur violinist and a listener. He had been exposed to church and choir music as a boy in the Presbyterian Church and played in community orchestras as a youth. His father had supported the talents of young Winchester musicians by providing scholarship money and loans for college music instruction.

Pierre also financially supported young musicians, especially at Wabash College. No doubt Goodrich’s intense feeling for music was encouraged by his parents at a very early age. He began playing the violin as a youth. When he was a young man, his mother bought him a Stradivarius violin, which was valued at forty thousand dollars at the time of Pierre’s death.37 Goodrich loved opera, and most business trips to New Edition: current; Page: [323] York were not complete unless Goodrich and his guests went to the Metropolitan Opera.38 In Indianapolis, he faithfully attended the Starlight Musical programs on Butler University’s campus and was a leading supporter of the Indianapolis Symphony Orchestra and of the Indianapolis Choral Society.39

Goodrich served on the board of directors of the Indiana State Symphony Society from 1939 to 1954. The society was the organization responsible for establishing and maintaining the operations of the Indianapolis Symphony Orchestra (ISO).40 These were fifteen critical years in the life of the young Indianapolis Symphony. From 1940 to 1951, the violin virtuoso Jascha Heifetz performed with the ISO on five occasions.41 On at least one of these visits to Indianapolis, Heifetz visited Goodrich’s home at 4220 Central Avenue to play Pierre’s Stradivarius.42

The institutions and causes that Goodrich was involved with numbered in the dozens. Some of the more important ones were the Intercollegiate Studies Institute, now based in Wilmington, Delaware; the Institute for Humane Studies, formerly located at Menlo Park, California (now located at George Mason University in Fairfax, Virginia); the Committee for Monetary Research and Education at Harriman, New York; the Philadelphia Society; the Foundation for Foreign Affairs; the National Foundation for Education in American Citizenship; the Institute of Paper Chemistry at Appleton, Wisconsin; and Phi Beta Kappa and Phi Edition: current; Page: [324] Gamma Delta, educational honor and fraternal societies, respectively. Goodrich either served as a trustee of or was a contributor to each of these organizations. His scholarship contributions to the Institute for Humane Studies, for example, made it possible for several students to work toward graduate degrees.43

Goodrich created educational and grant-making organizations of his own. The first was the Winchester Foundation, established in 1945 for “the encouragement and stimulation of interest in and study of the arts, music, philosophy and religion.” Another was a foundation he named simply Thirty Five Twenty, which was the street address of his business offices on Washington Boulevard in Indianapolis. The most important institutions to Goodrich, however, were Wabash College, the Mont Pelerin Society, and his own foundation, Liberty Fund.

Chapter 23: Wabash College

A small college in west-central Indiana has played an extremely important role in the lives of the Goodrich family since their first association with the institution nearly one hundred years ago. Wabash College is located in Crawfordsville, Indiana, a conservative small town of about fifteen thousand, approximately forty-five miles northwest of Indianapolis. Crawfordsville is perhaps best known for being the home of Lew Wallace, a Wabash alumnus who was a Civil War general, United States ambassador to Turkey, and author of the novel Ben Hur, the most popular novel of the nineteenth century, which was later made into one of the most popular movies of all time.

Although it views itself as a private independent college, Wabash has ties with the Presbyterian Church: It was founded by five Presbyterian ministers in 1832, and its first six presidents were ordained Presbyterian clergymen. It is a top-notch academic institution that achieved in the Edition: current; Page: [326] 1950s the academic reputation that James Goodrich had hoped for when he was one of the college’s most enthusiastic supporters as chairman of the board of trustees in the 1920s and 1930s. Wabash has served as the undergraduate college of several Rhodes scholars, and many of its graduates have achieved considerable success in business, law, politics, medicine, academia, and the arts.1 Since its establishment, Wabash has been an all-male college. No doubt that fact is indicative of the college’s inclination to maintain traditions and loyalty to the institution. An interesting story that reveals Wabash’s conservative nature involves an incident that occurred just a few years after James Goodrich first became a member of the board of trustees in 1904.

The young Ezra Pound, America’s enigmatic poet of the early and mid twentieth century, had been hired to teach modern foreign languages at Wabash in the fall of 1907. From the beginning, Pound was obviously less than enamored of his new provincial midwestern home. After only six weeks at the college, Pound wrote to his parents, mocking his adopted state and the popular verse style of Indiana’s poet laureate, James Whitcomb Riley: “There seems to be plenty to be done here. Of course if you can find . . . as good a job for me somewhere in the effete Edition: current; Page: [327] east I would be very likely to abandon my ’igh callin’ and skidoo to paats more plush-lined than Hoosier.”2

Pound did not have to wait long to move on, although it was the decision of the Wabash College administration rather than his own. He had been at the college less than six months when a cleaning lady disclosed to Wabash’s president that she had found a young woman in Pound’s bed one morning. According to Pound, he had met the penniless young girl the night before. She had been stranded in a blizzard after a burlesque show, and he had offered her his accommodations while he slept in his study. Once the “affair” had become known, the trustees were contacted and only one outcome was possible.3

The Goodrich family’s experiences with the small college proved to be far more successful and long-standing. At the May 1915 graduation ceremony, James Goodrich received an honorary master of arts degree from Wabash for his tireless work on the board of trustees. Two years later, during his first year as governor, he had bestowed upon him an honorary doctorate of laws. Pierre graduated from Wabash in 1916 and in 1940 assumed his father’s position on the board of trustees, a position he held until 1969.4 At the 1949 commencement, Pierre, too, was awarded—along with Goodrich’s business associate Eugene Pulliam, Sr.—the special degree of Doctor of Laws.5 In 1955, Pierre received the college’s Alumni Award of Merit. From 1959 to 1969, Pierre served as vice-chairman of the board.6 After Pierre stepped down from the board, he Edition: current; Page: [328] was designated trustee emeritus, the first such honor bestowed on a former trustee in the college’s history.

Throughout most of the twentieth century, the Goodrich family has supported Wabash College. For instance, John Goodrich, Pierre’s first cousin, established a trust fund that has contributed several million dollars to the college since his death in 1971.7 In addition to being chairman of the board of trustees for sixteen years (1924–40), James Goodrich often came personally to the financial rescue of Wabash.8 In December 1918, he pledged to give up to one-tenth of any sum raised up to $500,000 to increase the college’s endowment. In 1927, the former governor contributed toward the building of a new chapel and gave the dedication speech at that facility on January 10, 1929. In 1928, he contributed $50,000, making it possible for the college to build its first gymnasium. In November 1937, he contributed $150,000, completely financing the building of the college’s science hall, now called Goodrich Hall. The significance of these contributions may be better appreciated when it is considered that in 1927 a semester’s tuition at Wabash was eighty-five dollars per student.9

Pierre, too, contributed much financially to Wabash, but his greatest contribution was his role in furthering the school’s academic programs. Edition: current; Page: [329] According to the former Wabash president Byron Trippet, Goodrich “exerted a profound influence on the intellectual life of Wabash in the post–World War II era.”10 At the time, Pierre was very involved in the Great Books movement. In the mid 1940s, he worked closely with Wabash president Frank Sparks and with Byron Trippet, who then served as dean of the college. He and Trippet traveled to the University of Chicago and later to St. John’s College in Annapolis, Maryland, to investigate the Great Books programs at both schools. At Chicago, they met with Robert Hutchins and Mortimer Adler, and at St. John’s they met with the school’s president, the poet Stringfellow Barr. They analyzed the success of St. John’s decision to adopt the Great Books program as its total curriculum.

As a result of these and other inquiries, the Colloquium on Important Books for juniors and seniors at Wabash in 1946 was born. The colloquium stressed the Socratic method of book discussion and deemphasized the use and importance of textbooks and professorial lectures. Trippet recounts that being around Pierre during these years was an important chapter in his own education.11

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Pierre also furthered the college’s intellectual life by bringing to campus such prominent scholars as Russell Kirk, the Austrian intellectual Erik von Kuehnelt-Leddihn, and Roscoe Pound, former dean of Harvard Law School. During the fall semester of 1962, Goodrich underwrote the costs of having F. A. “Baldy” Harper from the Institute of Humane Studies teach at Wabash.13 In the late 1950s and 1960s, Goodrich also funded lectures by William Buckley, newspaper columnist and founder of the National Review;14 Friedrich Hayek, internationally known economist; Felix Morley, former president of Haverford College and former editor of the Washington Post; Dr. Bruno Suviranta of Finland; Archduke Otto von Hapsburg, heir to the Hapsburg throne; Bruno R. Shenoy, director of economics of the Research Center, New Delhi, India; and Ludwig Erhard, chancellor of West Germany from 1963 to 1966.15 The lectures by Pound and Morley were published in Edition: current; Page: [331] book form.16 All the lectures were financed by gifts to Wabash from Goodrich.

In March 1957, Pierre undertook a major project at Wabash, seeing to the design and completion of the Goodrich Seminar Room in the Lilly Library. The Goodrich Room is a large conference room (approximately sixty feet long, forty feet wide, and twenty feet high) located in the center of the school’s library. The library was named for Eli Lilly, whose contributions were mostly responsible for its construction.

The concept behind the layout of the room is a chronology of the great civilizations of mankind. The names of the great writings and thinkers of each epoch are carved into the room’s limestone walls, from the ancient cultures of Egypt, Babylon, China, Greece, and the Roman Empire to the expression of civilization by northern European powers, the Renaissance and the Reformation. The chronological carvings end with the Declaration of Independence, encompassing the tremendous outpouring of thought and development of individual liberty.

Pierre wanted the seminar room to serve as the location for Socratic discussions on the ideals written about by the great thinkers whose names are on the surrounding walls. At the time, some Wabash faculty members called the seminar room Goodrich’s Folly, but Byron Trippet, who had worked hard with Pierre to see to the room’s completion, defended its worth. The seminar room was dedicated on June 4, 1959.17 Goodrich donated two thousand books from his own library to be placed in the room, many by authors whose names are carved on Edition: current; Page: [332] the walls, such as Homer, Hesiod, Socrates, Virgil, Paul the Apostle, Thomas Aquinas, Chaucer, Martin Luther, John Locke, David Hume, and Immanuel Kant. The books encompass a variety of fields: music, poetry, science, history, drama, philosophy, theology, and political theory.18 True to his independent streak and much to the chagrin of the college’s librarian, Goodrich devised his own catalogue identification system for the donated books.19

Goodrich made many other contributions to his alma mater, but seldom without strings attached. The tight control Goodrich held over his gifts was explained by Richard O. Ristine, who served on the board of trustees with Goodrich and is a former Indiana lieutenant governor. “If [Pierre] was going to spend money on the college, he saw no reason why there shouldn’t be strings attached to it as if he was investing in the capital of the Greensburg Telephone Company,” said Ristine.20

Therefore, Goodrich gave blocks of stock and monetary gifts to the school, but usually with the proviso that the money could not be used or the stocks sold without his approval.21 Between 1941 and 1962, Goodrich made a total of 133 individual contributions (generally stock in one of his corporations) totaling nearly $333,000.22 Pierre was particularly Edition: current; Page: [333] generous in his support of music programs. His contributions brought to the campus several outstanding musicians and choirs such as the Westminster Choir of England. Furthermore, his gifts allowed the Wabash Glee Club (thirty-five male students) to travel and perform in Europe during the summer of 1967, and the choir’s director, R. Robert Mitchum, to study choir music in Europe in 1965.23

Despite these contributions, many at Wabash thought Pierre Goodrich to be a stingy giver when they took into account his vast financial holdings. This is especially so because of the difference between Pierre and his father, who was the college’s financial guardian angel during the 1920s and 1930s. An even more frequent comparison was made of Pierre and fellow Wabash trustee Eli Lilly. A nonalumnus, Lilly served on the board from 1946 until his death in 1977 and is Wabash’s largest single benefactor. Throughout his lifetime, Lilly contributed stock to the college worth nearly $40 million.24 Goodrich was not inclined to be so generous. He doubted that a liberal arts college, even his Dear alma mater, could responsibly spend his hard-earned money. On his death, Goodrich left $155,000 to Wabash College. College officials had hoped for much more.

Although for most of his life Goodrich was extremely proud of Wabash, in his later years he was disappointed that the college had not differentiated itself more from other small liberal arts institutions.25 Edition: current; Page: [334] “Mr. Goodrich thought that Wabash College might become his ideal college institution and he was always interested in eventually giving it a lot of money,” said Stephen J. Tonsor, emeritus professor at the University of Michigan. “But Wabash didn’t pan out and Pierre found more and more things that were unsatisfactory about Wabash.”26

As will be seen, Goodrich’s notion of the “ideal college” was clearly radical. It is little wonder that Wabash did not uniformly embrace Pierre’s beliefs. Nonetheless, it is true that Goodrich had a significant influence in the direction the college did pursue.

If anyone understood the mind and had the ear of Pierre F. Goodrich, it was Benjamin Arnold Rogge. Through their mutual attachments to Wabash College, Rogge and Goodrich established a close intellectual and personal friendship that lasted nearly thirty years. Rogge was a Nebraska farm boy who had taken economics degrees from Hastings College (A.B., 1940), the University of Nebraska (M.A., 1946), and Northwestern University (Ph.D., 1953). In the late 1940s, Rogge was one of more than a dozen sterling academics that Wabash president Frank Sparks enticed to Wabash from other top colleges and universities. This was part of an effort to upgrade both the prestige and the true academic caliber of the college.27

Rogge and Goodrich became particularly close after Rogge was appointed Edition: current; Page: [335] academic dean in 1956.28 Despite a twenty-six-year age difference between them (Rogge was born in 1920), Rogge became Goodrich’s closest intellectual colleague and perhaps his closest personal friend as well. In some ways, however, the two were qualified to be free enterprise’s “odd couple,” so different were they in temperament and demeanor. Goodrich was reserved, Victorian, private, and even stoic, whereas Rogge had an outgoing, gregarious, and jovial personality. The thread that tied them together was the passion they shared for free-market ideas and their desire to see those ideas spread at Wabash and beyond.

Goodrich funded many of Rogge’s trips to Mont Pelerin Society meetings and to other conferences. The two men often traveled together and engaged in long and heated exchanges about economics, education, human nature, and almost everything else. In September 1964, Rogge stepped down as dean and was appointed Distinguished Professor of Political Economy by an agreement among Rogge, Trippet (then Wabash’s president), and Goodrich. Under the arrangement, Goodrich’s contributions to Wabash partially paid Rogge’s salary and travel expenses. This provided Rogge with the opportunity to accept off-campus speaking and teaching invitations.29

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As a consequence, Rogge began to accept speaking engagements throughout the Midwest and beyond. He became the darling of businessmen’s groups and was a much-sought-after speaker before utility, banking, and other professional organizations. Moreover, he became widely known by lecturing at summer business conferences at the universities of Michigan and Wisconsin. Beginning in 1966 and until his death in 1980, Rogge also successfully directed the Wabash Institute for Personal Development, a summer program for business executives.30 In 1960, Rogge had been named a founding board member of Liberty Fund. In 1971, Goodrich had Rogge appointed as a director of the Indiana Telephone Corporation.31

Rogge was popular among business executives because he was able to articulate and confirm their existing beliefs in the free enterprise system. Rogge did not, however, feign support to attract an audience; he believed Edition: current; Page: [337] as deeply as any free-marketeer in the virtues of a market economy and shared these convictions with great persuasion, wit, and enthusiasm. His was a friendship that Goodrich greatly cherished.

In the last decade of his life, Pierre Goodrich’s disappointment in his alma mater became widely known among Wabash’s administration and trustees. He began to attend campus events less frequently and said little at board meetings.32 Apparently, Goodrich had hoped that Rogge would become president in 1965, succeeding Trippet as Trippet had succeeded Frank Sparks in 1956.33 But it is probable that Rogge did not want to return to administration, having just left the position of dean so that he could teach and lecture more freely. Moreover, Rogge’s fundamental economic and philosophical beliefs were no doubt incongruous with the times. Thus, it is questionable whether he would have been appointed to the presidency even if he had sought the position.

Goodrich was displeased with both the manner in which the college was being run and the liberal beliefs that he believed many of the faculty members and administrators held.34 Finally, in the spring of 1969, Goodrich resigned from the board of trustees. Ironically, Byron Trippet, who had left as president of Wabash four years earlier and was then Edition: current; Page: [338] serving as vice-president of La Universidad de Las Americas in Mexico City, was appointed to complete Pierre’s term.35

The 1960s presented difficult and disturbing times for many college trustees and administrators. Not even a small conservative college like Wabash was immune to the radical influences and troubled times that were sweeping over the nation’s campuses: the Vietnam War was raging; long hair, experimentation with drugs, demonstrations, and faddish music and dress had become common; and respect for and adherence to authority and tradition were at their lowest ebb.36 What probably galled Goodrich most was his belief that what was being taught at Wabash was openly hostile to free enterprise and other fundamental principles in which he believed so fervently. Also, the faculty was continually pressing to have Wabash become coeducational, despite the fact that almost all of the alumni and a large percentage of the student body wanted the college to remain an all-male institution.37

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Still another factor in Goodrich’s general disenchantment with Wabash was that important personalities had changed at the college. The two presidents whose ideas most closely resembled his own—Frank Sparks and Byron Trippet—were now gone. Pierre’s association with Sparks developed during the first fifteen years that he served on the board (1940–55). Sparks’s association with the Goodrich family and his tremendous rags-to-riches story, however, dated back to the 1920s. At that time, James Goodrich had come to Sparks’s financial rescue by providing a business loan that enabled Sparks to fulfill a major contract as a supplier to the Ford Motor Company. Sparks went on to become a millionaire before he was forty, then went to college at Butler University, obtained his Ph.D. at the University of Southern California, and became Wabash’s eighth president.38 During his long tenure as president (1941–56), Sparks had been extremely supportive of Pierre, especially in terms of trying to accommodate Goodrich’s intellectual interests in the college.39

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Byron Trippet, the next president, was a close friend of Goodrich’s. He had shown Pierre great patience, respect, and deference for some twenty-five years. Trippet presided over Wabash during what has become known as the Golden Age in the college’s history. It was during these years (1956–65) that Wabash enjoyed its strongest academic reputation. Goodrich had great affection for Trippet not only because of his self-effacing attitude, but also because Trippet was a very admirable man and had an excellent mind. Trippet had been a Rhodes scholar after graduating from Wabash in the 1930s.40

Into Trippet’s place stepped Paul W. Cook, a former Harvard Business School professor. Cook and Goodrich did not see eye-to-eye philosophically. The strained relations that developed between Goodrich and Cook (and thus Wabash) can be seen clearly in one of Cook’s letters to Goodrich: “Possibly you had forgotten that the principal purpose of our meeting was to enable you to inform me of the fact that you disavowed your college and had disinherited it. Since I had just made a commitment to it as the best hope for the attainment of ideals which I am sure we share, I suppose our views on almost any issue were bound to appear Edition: current; Page: [341] to be in conflict. If nothing else, conflict confirms for you the wisdom of a decision you have already made.”41

As Richard Ristine distinctly remembers, Goodrich was not particularly appreciated on the board during the 1960s. “Pierre always wanted to interfere with the academic life of the college,” said Ristine. It was mainly because of this that other trustees did not want Goodrich to become chairman of the board.42 Steps were taken to ensure that that did not happen. In the mid 1960s, Ivan Wiles, the Wabash board chairman as well as president of General Motors’ Buick Division, was compelled to resign because of the ill health of his wife. Goodrich was vice-chairman at the time. In anticipation of Wiles’s resignation, several members of the board nominated a co–vice-chairman, John Collett, thus preventing Goodrich from automatically ascending to the top position. Collett went on to succeed Wiles in 1965 and remained chairman until 1975.43

Goodrich attempted to influence what was taught on campus by endowing a chair in free-market economics. Ben Rogge drafted an extensive proposal for the establishment of the P. F. Goodrich Chair in Political Economy. Rogge’s proposal provided that the occupant of the endowed chair would be allowed to hold the position only if his thinking was consistent with the principles set forth in the Liberty Fund Basic Memorandum and his reappointment was satisfactory to Liberty Fund.44

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In 1964 Rogge stepped down as dean of the college to become Distinguished Professor of Political Economy. There were no official strings attached to the endowed professorship, and Goodrich’s name was not formally associated with the position. Goodrich’s preference for anonymity may well partially explain the distancing that took place. Another likely reason, however, is that Rogge’s intellectual credibility had been called into question by some of his fellow faculty members. Ristine remembers the minor controversy that arose: “Rogge was resented on the faculty somewhat, because he was the only person getting funds from Goodrich,” recalled Ristine, adding, “People thought that he had changed his own economic philosophy to accommodate Pierre. Of course, he hadn’t. Total belief in the free-enterprise system was Rogge.”45

Ristine’s memory is supported by a reference in a letter that Wabash president Paul Cook wrote to Goodrich in January 1967:

Cook’s tenure as president was brief, lasting only two years (1966–68), but Goodrich was not impressed by Cook’s successor, Thaddeus Seymour. Goodrich had lobbied for Dick Ristine to succeed Cook. The board, however, although divided, finally supported in 1968 the selection of Seymour, who came to Wabash having just served as dean of Dartmouth College.47 Goodrich believed that Seymour was much too cavalier in demeanor to do honor to the position that Sparks and Trippet had occupied with considerable grace and distinction.48 Ben Rogge tried to encourage closer relations between the two men, but there is no evidence that it worked.49

Although in his later years Goodrich lost some of the strong positive feelings he had held for Wabash, he still continued to support his alma mater, at least nominally. Goodrich continued to contribute to the John Van Sickle Club, a conservative campus organization named for a free-market economics professor. Van Sickle was partially responsible for introducing Goodrich to the Mont Pelerin Society. He had also co-written Edition: current; Page: [344] a college economics textbook with Rogge.50 Moreover, Goodrich established a competition named in honor of his father in which any member of Phi Kappa Psi Fraternity at Wabash or DePauw University could take part. (James P. Goodrich was a Phi Kappa Psi member as a student at DePauw in addition to being a long-standing trustee of Wabash.) The competition entailed the writing and submission of an essay “concerning a society of free individuals.”51

After Ben Rogge’s death, the remaining Goodrich monies designated for Rogge’s salary were funneled into Goodrich funds that support music programs and a lecture series. The lecture series continues today, bringing many prominent academics to Wabash each year. These lecturers have included William B. Allen, former dean of James Madison College at Michigan State University; Alasdair MacIntyre of the University of Notre Dame; J. Rufus Fears, academic chair at the University of Oklahoma; George B. Martin, formerly of Wofford College and now president of Liberty Fund; John Gray, chair at the University of London; Tim Fuller, dean of Colorado College; and George Carey, professor of government at Georgetown University.52 Many of the lectures of these scholars are being published by the Intercollegiate Studies Institute in a multivolume series. The first volume, Derailing the Constitution: The Undermining of American Federalism, was published in 1995.53

Chapter 24: The Mont Pelerin Society

Communism and fascism in general, and the writings of Marxists, Leninists, and Hitlerites in particular, formed the intellectual foundation for much of the greatest suffering that mankind has ever known. Yet it was not just the idealism of communism and fascism that attracted their widespread adoption in the first half of the twentieth century. As Paul Johnson suggests in his book Modern Times, the failure of Western intellectual leaders to argue persuasively that democratic-capitalist principles are worth defending allowed both left-wing and right-wing authoritarian ideologies to be uncritically accepted.

In the spring of 1947, a group of classical liberal scholars came together at Mont Pelerin, Switzerland, to address this failure. They met at a time when the fascist Axis powers had just been defeated in a cataclysmic world war and the sphere of influence (political, military, and intellectual) of the communist Soviet state was rapidly expanding.

These liberal scholars, political leaders, and journalists recognized that unless a proper intellectual framework could be established in support of the “free society,” including the virtues of the market economy, there was no reason that totalitarian ideologies such as fascism and communism could not continue to prosper. Moreover, this group of Edition: current; Page: [346] thinkers also realized that another threat—not as violent as that of authoritarian regimes but potentially as oppressive of individual liberty—existed in the false doctrines taught by proponents of the socialist (welfare) state. This made even democratically elected governments, classical liberal scholars warned, the breeding ground for “collectivist ideas” that would result in the denial of individual freedom.

Pierre Goodrich considered the Mont Pelerin Society one of the most important associations to which he ever belonged. The society is not noteworthy because of Goodrich’s influence on it (Goodrich was more a student than a teacher at the conferences and meetings he attended). Rather, the significance of the Mont Pelerin Society lies in the way this relatively small group of thinkers influenced Goodrich and reinforced his own beliefs that ideas could have a transforming effect on individual behavior as well as on public policies.

From April 1 to April 10, 1947, thirty-nine participants from ten countries met at the Hotel du Parc on Mont Pelerin sur Vevey, in Switzerland, to discuss classical “liberalism and its decline, the possibility of a liberal revival, and the desirability of forming an association of people who held certain common convictions about the nature of a free society.”1 The conference was the brainchild of the eminent Austrian economist Friedrich A. Hayek, who was then teaching at the London School of Economics, but other leading liberal scholars, such as Wilhelm Röpke, Albert Hunold, John Jewkes, Karl Popper, Walter Eucken, Ludwig von Mises, Frank Knight, Aaron Director, Milton Friedman, and Fritz Machlup, were also important in sustaining the society in its early years.2

The group of thinkers who attended the founding meeting of the Edition: current; Page: [347] Mont Pelerin Society realized that the war of recent ideas had been dictated by a long series of distinguished intellectuals dating back at least one hundred years to the time and writings of Marx and Engels. Among these thinkers were such notable scholars as John Maynard Keynes, Arnold Toynbee, Bertrand Russell, Oswald Spengler, T. S. Eliot, and J. A. Schumpeter. They argued collectively that capitalism was a flawed economic and social system for several reasons: It was immoral because it allowed a great inequality of incomes between rich and poor; because its short-sighted principles had led to two great depressions (beginning in 1894 and 1929); and because capitalism contained a corrupting influence and could be blamed for everything from environmental pollution to disregard for human dignity in search of profits.3

Coupled with the widespread criticism of capitalism was the equally broad belief that governmental intervention could serve to mitigate the pitfalls of capitalist principles. It was these beliefs, combined with a defeated Europe that was still smoldering after World War II, that confronted the founding members. The members of the society

In furthering their objectives, this small group of a few dozen leading scholars set out to discuss what they believed were the critical questions that challenged the “free society”:

The Mont Pelerin Society is not a think tank in the traditional sense in which that term is understood in the United States, because it has no permanent headquarters or staff. More important, it has no unified policy objectives. As R. M. Hartwell, author of A History of the Mont Pelerin Society, states, by holding regular conferences and meetings, the society “sets out to educate the intellectuals, . . . and to lay the intellectual foundation of a liberal society and economy. This is not to say it has not influenced governments, only that it has not tried to do so directly, and that any influence it has had has been through the ideas it generated, not through political action.”6

Pierre Goodrich’s first contact with the Mont Pelerin Society occurred in September 1951, when he attended the fourth annual conference in Beauvallon, France, as a guest.7 Goodrich’s trip to the southern Edition: current; Page: [349] French coastal city started a close association with the society that lasted the rest of his life. The 1951 invitation had been extended by Friedrich Hayek and Albert Hunold, Mont Pelerin Society president and secretary, respectively, through John Van Sickle, a conservative economics professor at Wabash College.8 Goodrich had first become acquainted with Van Sickle when Pierre began serving as a trustee of the college. In fact, it was Goodrich who had provided funds enabling Van Sickle to attend, besides the Beauvallon conference, earlier Mont Pelerin Society meetings at Seelisberg, Switzerland (1949), and Bloemendaal, The Netherlands (1950).9

The meeting at Beauvallon brought together a truly impressive list of thinkers, including Ludwig von Mises and Frank Knight, with both of whom Goodrich later established friendships. It was at Beauvallon that Rebecca West presented a detailed discussion of the source of the pro-Soviet bias outside Russia. The topic that captured the most interest among the participants, however, was the treatment of capitalism by the historians. The resulting series of papers was later published in book form as Capitalism and the Historians.10

By the time Goodrich was invited to join the society, its membership had grown from the original 39 participants in 1947 to 167 members in 1951. The early members were an imposing group that included three future Nobel Prize winners in economics (Hayek, Friedman, and George Stigler); prominent businessmen such as Jasper E. Crane of the DuPont Corporation; politicians such as Ludwig Erhard (the future chancellor of West Germany), Luigi Einaudi (president of the Italian Republic), and the prime minister of Morocco; and top economic advisers from most western European countries. Also among the members were well-known American journalists such as Walter Lippmann, Edition: current; Page: [350] Max Eastman (Reader’s Digest), Henry Hazlitt (Newsweek), and Felix Morley (editor of the Washington Post).11

In the following years, Goodrich attended many of the Mont Pelerin Society’s annual conferences: Seelisberg, Switzerland, 1953; Berlin, Germany, 1956; St. Moritz, Switzerland, 1957; Princeton, New Jersey, 1958; Kassel, Germany, 1960; and Aviemore, Scotland, 1968. To those that Goodrich could not attend, he sent his dutiful secretary Helen Schultz. After each conference, she wrote lengthy summary reports for Goodrich on the papers and discussions held. Nominated by Goodrich, Schultz became a member of the society in 1970.12

In an embarrassing situation, Goodrich was indirectly (and apparently unwittingly) involved in an incident that threatened the society’s very existence. It is an example of how individuals, even highly intelligent and distinguished persons, can jeopardize a larger cause in pursuit of their own personal agendas. The gravity of the incident is suggested by the fact that Hartwell, in his history of the Mont Pelerin Society, devotes an entire chapter to the matter.13

In April 1959, society secretary Albert Hunold used the small surplus of funds from the 1958 Princeton, New Jersey, meeting of the society to publish the first issue of the Mont Pelerin Quarterly. This was followed by publication of the journal in July and October 1959. Hunold then secured funding for the quarterly for another year by obtaining a grant Edition: current; Page: [351] from the Winchester Foundation through Goodrich (a Hunold admirer). Goodrich served as president and sole benefactor of the small foundation.14

Problems arose because Hunold had failed to obtain the approval of the society president, Wilhelm Röpke, before continuing the publication of the quarterly. Hunold, who despite contributing a large amount of time, energy, and funds in service to the society, had become a very unpopular figure in the society because of his dictatorial manner and his desire to see the society become more politically active. There were several members who defended Hunold, however, and Goodrich was foremost among them. During the controversy, Goodrich wrote Hunold such a gushing letter of support that the Swiss economist sought Pierre’s permission to publish the letter openly in the Mont Pelerin Quarterly.15

The crisis came to a head in August 1962, when Hunold released the quarterly’s last publication, “How the Mont Pelerin Society Lost Its Soul.” The sixty-page journal was little more than a propaganda piece designed to inflate the importance of Hunold’s work to the society and to publicize the “vendetta” that Hunold claimed Hayek and Machlup were conducting against him. Earlier, in April 1962, Goodrich received a tersely worded letter from the normally urbane Hayek castigating him for providing funds for the quarterly.

The real issue was not so much the “illegal” publication, but the matter of who had ultimate control over the operations and direction of the society. A perusal of the letters that circulated among Goodrich, Hayek, Van Sickle, F. A. Harper, and Röpke over the Hunold affair makes it evident that Goodrich gained firsthand knowledge about the ruinous aspects of power. The bitter tone of Röpke’s letter to Goodrich captures the disappointment that the scuffle for domination created:

The society survived the struggle between the pro- and anti-Hunold forces. It was not, however, without casualties: Röpke resigned in December 1961, and Hunold resigned nine months later, taking several members with him.18 Goodrich withstood the ordeal and kept his membership Edition: current; Page: [353] intact. Moreover, he continued to attend conferences and meetings when his business commitments allowed him to do so. Goodrich, true to his nature, kept up a regular correspondence with many of the members, especially foreign scholars.19

The significance of Goodrich’s association with the Mont Pelerin Society is twofold: first, association with like-minded thinkers reinforced his own belief that without a proper intellectual understanding of the dynamics that sustain a society, any society will be continually susceptible to the promises of false ideologies, to the detriment of individual liberty. Goodrich undoubtedly saw how important it was to have a proper setting in which this understanding could be pursued.

Second, the Mont Pelerin Society provided Goodrich with the opportunity to associate with leading scholars, statesmen, and journalists to the extent that his own learning and breadth of experience were greatly enlarged. The importance of many of these intellectual friendships will be discussed in chapter 25. Goodrich’s long association with the Mont Pelerin Society clearly provided him with an education of the first rank and helped him to formulate his plan to establish Liberty Fund.

Chapter 25: A Scholar’s Life

As a result of his friendships with Friedrich Hayek, Roscoe Pound, Ludwig von Mises, Milton Friedman, and other great modern-day thinkers, Pierre Goodrich was influenced by some of the greatest scholars of the twentieth century. Although Hayek was slightly younger than Goodrich, the Austrian economist served as an important mentor to the Hoosier businessman. Pound had been one of Goodrich’s professors at Harvard. Their earlier student-teacher relationship developed into a personal friendship. The many other influential scholars that befriended Goodrich numbered in the dozens.

Friedrich A. Hayek was probably the most prodigious classical liberal scholar of the twentieth century. Hayek’s writings were overwhelming not only in sheer number (he published some 18 books, 15 pamphlets, and 142 articles), but in breadth of subject matter as well. Although he began his career as a technical economist, his lectures and writings in later life extended to political philosophy, legal anthropology, the philosophy of science, and the history of ideas. Hayek was clearly one of the greatest and most wide-ranging scholars of the human sciences in modern times. For his considerable contributions, Hayek was awarded the Nobel Prize for Economics in 1974.1

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Hayek had a tremendous influence on Goodrich, and Goodrich highly valued their intellectual exchanges and friendship. Hayek also respected Goodrich’s erudition. Pierre not only showed a deep interest in the Austrian’s ideas, but also provided Hayek with both an American’s and a businessman’s perspective that grew out of a long working familiarity with economic, business, and political concerns from a nonacademic background.

The two men first met when Goodrich was invited to attend the September 1951 meeting of the Mont Pelerin Society at Beauvallon, France.2 At that time, Hayek had left the London School of Economics to teach at the University of Chicago’s Committee on Social Thought. By the late 1950s, Goodrich had become an important member of the Mont Pelerin Society. Goodrich also knew Hayek from their mutual association with the Foundation for Economic Education (FEE). Goodrich had become a trustee in 1952, and Hayek lectured occasionally at trustee meetings. Also, in 1955 and 1960, Hayek lectured at Wabash College on the relationship of economic institutions to the problem of Edition: current; Page: [356] human freedom. Another personal meeting of note occurred when Hayek attended a March 1968 meeting of Liberty Fund, where he addressed the board on the concept of power. Goodrich also funded Hayek’s lecture before the Philadelphia Society later that month.3

Goodrich and Hayek met occasionally in the 1950s and 1960s in Chicago and at Mont Pelerin Society meetings, but Goodrich’s intellectual exchange with the noted scholar developed primarily through frequent correspondence that took place between them during a span of twenty years. Goodrich’s letters to Hayek tended to be lengthy, rambling, and didactic. But Hayek seemed favorably inclined toward Goodrich’s thoughts and historical discussions about law, business practices, politics, ethics, and other subjects. The Austrian also shared with Goodrich some of his writings at the draft stage, encouraging and appreciating Goodrich’s observations.4

Before the publication of Hayek’s The Constitution of Liberty in 1960, Goodrich read the entire manuscript, took voluminous notes, and responded to particular draft chapters by writing several lengthy letters to Hayek. The Constitution of Liberty is considered to be one of Hayek’s two masterpieces, along with his better-known book The Road to Serfdom.5 Milton Friedman’s observation that Goodrich “loved to get into Edition: current; Page: [357] a vigorous intellectual argument, especially with people who were fundamentally in agreement with his basic philosophy,” seems especially accurate with regard to Goodrich’s communications with Hayek.6 Clearly, Goodrich and Hayek were kindred spirits in terms of philosophical outlook, yet Pierre seemed to relish the opportunity to analyze, dispute, and embellish Hayek’s ideas. In response to Hayek’s draft of The Constitution of Liberty, Goodrich made the following comments:

Hayek’s importance to the classical liberal cause and to the American conservative movement can hardly be overestimated. George Nash, in his book The Conservative Intellectual Movement: Since 1945, credits Hayek’s The Road to Serfdom (1944) with being the single most important factor in furthering conservatism after World War II.8 The Road to Serfdom and Hayek’s other writings provided the intellectual arsenal to combat the still-popular appeal of central planning that academics, particularly American ones, had adopted. The intellectual currency that the book generated for the conservative cause, along with Hayek’s own stature on the world intellectual scene, gave great impetus to the conservative movement.

Subsequently, a number of conservative organizations and magazines appeared that classical liberal thinkers such as Goodrich supported: Human Events (1944), the Foundation for Economic Education (1946), The Freeman (1950), the Intercollegiate Studies Institute (1953), William Buckley’s National Review (1955), and the Institute for Humane Studies (1960). These organizations and periodicals gave conservatives intellectual Edition: current; Page: [359] respectability and affirmed that their beliefs could withstand the criticisms of modern liberal and socialist attacks.9 Thus, it is understandable, given Goodrich’s growing preoccupation with the idea of liberty, that he sought out Hayek more than any other leading thinker with whom to exchange ideas and to further his own education.

Goodrich’s associations with eminent scholars spanned at least the last three decades of his life. In his desire to have a greater understanding of myriad subjects, he sought these intellectual trysts and nurtured the resulting relationships with great care. His friendship with Roscoe Pound, America’s most prominent modern legal scholar, is one example.

Pound’s importance as a legal scholar has long been recognized. His Harvard colleague, Samuel Williston, remarked that Pound’s proposition that law should be treated as a social science was “probably the greatest contribution that has been made in the twentieth century to American legal thought.”10 Pound taught law for fifty-four years (mostly at Harvard), wrote dozens of books and articles on jurisprudence, and became a scholar of Chinese law. Moreover, Pound also had a distinguished career as a botanist, holding a Ph.D. in botany and publishing widely on botanical subjects.11

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Goodrich was Pound’s student at Harvard during the 1916–17 school year. Pound had been on the Harvard faculty for six years, but 1916 marked the first year that he also served as dean of the law school, an influential position that he would hold for the next twenty years. His appointment gave him a preeminence unrivaled in American legal education at the time. During Pound’s brilliant career, he was a Nebraska appellate court judge at the age of thirty, dean of the Nebraska College of Law at the age of thirty-three, and president of the Académie Internationale de Droit Comparé (International Academy of Comparative Law).12

There is no indication that Goodrich and Pound crossed paths from the time Pierre graduated from Harvard in 1920 until the mid 1940s, when both men attended a breakfast meeting at Indianapolis attorney Clair McTurnan’s residence on North Meridian Street.13 McTurnan, also a Wabash and Harvard Law School graduate, had been a longtime trustee of Wabash College. At that meeting, Pound discussed with Goodrich an interest he had in exploring the history of the legal and constitutional guarantees of freedom. Goodrich immediately proposed that his former law school professor give a series of lectures on the topic at Wabash College.14 Pound subsequently delivered four extensive lectures at Wabash, on February 26, 27, and 28, and March 1, 1945.

Pound’s lectures traced the history of the protection of individual liberty from the time of medieval England, through the era of the Tudors and Stuarts (1485–1714), up to the time of the founding of the American colonies and the adoption of the United States Constitution and the Bill of Rights.15 Goodrich maintained regular contact with Pound after Pound spoke at Wabash. In fact, in the fall of 1945, Goodrich, Edition: current; Page: [361] Frank Sparks (then Wabash College’s president), and several other Wabash graduates unsuccessfully tried to persuade Pound to come to Wabash to head the proposed Roscoe Pound Institute of Government.16 Moreover, from 1946 to 1956, Goodrich and Pound exchanged more than thirty letters, and Goodrich visited Pound on at least three occasions in Boston and Cambridge, Massachusetts.17 During this extended time, Goodrich sought Pound’s insights on a variety of topics.18

In 1946, the Chinese Ministry of Justice and several of Pound’s former Chinese students at Harvard sought Pound’s input as an adviser on drafting a new Chinese constitution.19 In the summer of 1946, Pound traveled to China for that purpose, and within a short time he learned the rudiments of the Chinese language. Pound returned to Harvard Edition: current; Page: [362] in the fall of 1946. In January 1947, Goodrich met with Pound in Boston. Goodrich had already expressed a deep interest in Chinese philosophy. Apparently, the meeting between the two men sparked in Goodrich an interest in Chinese law. Goodrich subsequently obtained an English translation of the newly adopted Chinese constitution. In February 1947, Goodrich wrote to Pound offering unsolicited and detailed comments on what he believed were the strengths and weaknesses of the new Constitution and how it might be improved.20

It is pure speculation that Goodrich’s interest in serving as a trustee of the China Institute of America may have derived from his association with Pound, but it was in 1948 that Pierre first contributed financially to the China Institute. One year later, Goodrich became a trustee. In May 1949, Goodrich made arrangements for Pound to address members of the China Institute.21

After Pound retired from Harvard in 1947, he spent the next three years in China as an adviser to the Ministry of Justice. In that position, Pound helped establish a court system and reestablish law schools that had been disbanded as a result of eight years of Japanese occupation. When the Communists took over the Chinese government in 1949, Pound returned to the United States to teach and to help establish the law school at the University of California at Los Angeles. He remained there until 1953, when he left to teach in India.22

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In 1954, at the age of eighty-four, Pound returned to Boston, where he worked for the West Publishing Company as an editor until June 1955. As Pound explained to Goodrich in a letter, he was forced to take teaching and editing positions because it was impossible for him to live on a retired Harvard professor’s salary.23 Goodrich visited Pound in May 1955 during the thirty-fifth reunion of Goodrich’s graduating class. At that time, Goodrich proposed that the four lectures that Pound had given more than a decade earlier at Wabash be published. Pound eagerly accepted the offer. Goodrich subsequently arranged for the Yale University Press to publish the lectures in book form on behalf of Wabash College.

Goodrich took a tremendous interest in arranging the publication of The Development of Constitutional Guarantees of Liberty. He did everything from commenting on the galley proofs to handling the negotiations between Pound and the Yale University Press for the publication. Goodrich even traveled to Boston in 1956 to meet with Pound to ensure that his former professor was pleased with the final product.24 The book was successfully received in academic circles. By 1979, The Development of Constitutional Guarantees of Liberty had been translated into several foreign languages, including Portuguese, Vietnamese, Arabic, Spanish, and Hindi.25

Despite Pound’s international prominence as a legal scholar and teacher, he was forced to work at editing.26 In certain academic circles, Edition: current; Page: [364] his reputation had been slightly tarnished because of his outspoken support for the Nationalist Party in China. It was a political view that was not widely shared by his Harvard faculty colleagues.27 Although the Harvard Law School provided Pound with an office when he returned to Cambridge in June 1955, the arrangement did not provide any extra stipend.

Goodrich saw that Pound was well compensated for the publication of the Constitutional Guarantees of Liberty.28 Moreover, Goodrich helped support Pound financially in the mid and late 1950s so that Pound was able to finish in 1959 his long-awaited work Jurisprudence. Pound had begun Edition: current; Page: [365] the monumental five-volume treatise nearly a half century before. Characteristically, all this was done by Goodrich anonymously.29

Throughout his lifetime, Goodrich established friendships with many other great scholars. He was a great admirer of Ludwig von Mises, the Austrian economist who spent the last thirty years of his long and productive life in the United States, much of it teaching at New York University. Mises and Hayek were integral proponents of the Austrian School of economics. The Austrian School is composed of economists who believe that individual behavior in a free market, not class interest or governmental monetary policy, is the appropriate baseline for economic analysis.30 Goodrich became familiar with Mises through the Foundation for Economic Education and the Mont Pelerin Society. From 1946 to 1973, Mises was closely associated with FEE as an adviser and gave regular seminars to the trustees.

After Mises’s magnum opus Human Action was published in 1949, Goodrich attempted several times to read this monumental work. He became bogged down, however, because of Mises’s eclectic vocabulary. After a dictionary of Mises’s terminology was produced, one autumn in the mid 1960s Goodrich traveled with his wife Enid and his top assistant Helen Schultz to Montauk, Long Island. There, the three spent nearly a month reading the book in an apartment overlooking the Atlantic Ocean.31 Goodrich was extremely impressed with Human Action, gave it as a gift, and quoted from it widely both in everyday conversation and in letters and other writings. The 890-page book attempts to explain economic and social processes and the need for reform.32 At a time Edition: current; Page: [366] when economic analysis was becoming increasingly fragmented, analyzing only one aspect of economic life at a time (business cycles, role of inflation, monetary policy, and so forth), Human Action was a serious attempt to provide a general praxeology of human behavior from an economic perspective.33

In June 1954, Wabash College hosted Mises for a conference on economics and freedom at French Lick, Indiana.34 Moreover, on March 7, 1956, and October 17, 1961, Goodrich attended dinners in New York City honoring Mises for, respectively, the fiftieth anniversary of Mises’s earning his doctorate degree and his eightieth birthday.35 Pierre and Enid developed a personal friendship with Mises and his wife Margit. In the late 1950s, Goodrich also briefly employed Mises to advise the board of directors of the Ayrshire Collieries Corporation on the dangers of inflation to the coal industry.36 Goodrich and Mises corresponded sporadically Edition: current; Page: [367] because Mises was much less charitable with his time than Hayek was. Nonetheless, Goodrich was a willing devotee of Mises, constantly championing the great scholar’s views.37

Another great German-speaking thinker that Goodrich admired was Ludwig Erhard. In general, Goodrich loved everything German, from philosophy and economics to wines, colognes, and automobiles (he often drove a Mercedes-Benz). Goodrich also believed that German technology was superior to any other.38 No doubt his great admiration for Germany made Pierre especially proud to host Ludwig Erhard, a former West German chancellor, on two separate occasions in Indiana. Goodrich had become acquainted with Erhard at an annual Mont Pelerin Society meeting in St. Moritz, Switzerland, in September 1957. Shortly afterward, he invited the then German vice-chancellor and minister of economic affairs to speak at Wabash College.39 After more than a year of negotiating a date and a topic, Erhard traveled to the United States and gave two lectures at Wabash on the European Common Market.40

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Erhard attended Wabash’s 1959 commencement, at which time he received his first honorary degree from an American college or university.41 During the same visit, Erhard addressed more than a thousand members of the Indiana Academy of Social Sciences at Wabash. He stressed, at the height of the Cold War, the importance of a free economy in establishing and maintaining a free society.42 At Goodrich’s invitation and expense, Erhard returned nine years later, in 1968, to speak at the Columbia Club in Indianapolis on the evils of inflation.43

Goodrich established friendships with other scholars. These included Bertrand de Jouvenel of France and Henry Hazlitt, a former New York Times and Newsweek economics reporter and a founding member of FEE, as well as other top minds already mentioned: Milton Friedman, Edition: current; Page: [369] Russell Kirk, Leonard Read, D. Elton Trueblood, Benjamin Rogge, and F. A. Harper of the Institute for Humane Studies. A younger group of academics also established friendships with Goodrich, including Stephen Tonsor, an emeritus professor of history at the University of Michigan; George Roche, former staff member of FEE and a longtime president of Hillsdale College; Henry Manne, former dean of the George Mason University School of Law in Virginia; and Gottfried Dietze, an emeritus professor of political science at Johns Hopkins University. In 1968, Dietze dedicated his book America’s Political Dilemma to Goodrich.44 Pierre Goodrich continued to learn by exchanging ideas with these top minds.

Chapter 26: Education in a Free Society

In recent years, no topic, with the possible exception of health care, has been discussed in the United States with greater interest and intensity than educational reform. City and community school boards are hotbeds of virulent debates about educational change; politicians at the local, state, and national levels have joined the fray in suggesting various policy changes. Few proposals, however, have seriously challenged the radical vision of Pierre Goodrich, the recommendations he began making more than forty years ago. Probably Goodrich’s most important contribution in this area is his understanding of the important role that education plays in shaping character and citizenship.

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Goodrich’s private passion for learning evolved into a public involvement with the educational process beginning in the mid 1940s. By that time, he had already served as a trustee of Wabash College for several years. These years of experience had convinced him that the traditional liberal arts college was sorely in need of a deeper understanding of its role in influencing society. Moreover, Goodrich recognized the necessity for greater participation and direction on the part of the college’s governing body, a direction he was eager to provide.

Goodrich also saw the need to create greater adult educational opportunities. He believed that education must extend beyond the classroom and into the homes of average citizens. Because of that belief, he took on the quiet leadership of such organizations as the Great Books Foundation, the China Institute of America, the Foundation for Economic Education, and the Institute for Humane Studies, which have been discussed in earlier chapters. His association with these organizations, as well as his friendships with scholars, reactivated his own education.

During the last thirty years of his life, Goodrich gave substantial thought to educational questions. From a philosophical perspective, his thinking culminated into the drafts of two documents: the “Education Memorandum,” and a paper he wrote jointly with Benjamin A. Rogge, “Education in a Free Society.”1

If it is true that human liberty is becoming more encroached upon by government, Goodrich asserted, then “it is worth looking at what Edition: current; Page: [372] part education may or may not play” in this process.2 Goodrich saw education as part of a broader political, economic, philosophical, and religious framework. According to Goodrich, understanding education’s proper role in this overarching framework is imperative in achieving and maintaining a society of free individuals. In his writings, he attempted to prove his point through a series of propositions about human nature that were, in his mind at least, indisputable.

First, because human society is made up of ignorant and imperfect individuals, man is prevented from fully understanding the universe or the “infinite creator.” Since man possesses powers of observation and reason, however, he can assume that there is order in the universe and an infinite creator. Using these limited attributes, man is able to discern other human qualities, such as the capacity to reason, the ability to learn through the senses, and the possession of emotions and will.3

Second, man must accept that he was created fallible and with limitations. Such fallibility and shortcomings tend to mitigate the good and accentuate the bad; at the very least, imperfect man is incapable of creating a perfect society, “and the choice is not between good and bad, or perfect and imperfect, . . . but between two or more imperfections.”4

Goodrich next explains that, given man’s imperfections, it would be oppressive, “utterly illogical,” and sheer folly to believe that giving even the most able men power over less able men would produce a better situation.5 All men are ignorant, proclaimed Goodrich. The fact that some are marginally less ignorant than others does not mean that they should decide for others. Rather, each man can be educated to decide for himself what is best for him, given his own knowledge of his desires and corresponding obligations.

Therefore, education is essential in eliminating the need to have some make decisions for others. It plays the important role of helping “the individual develop the capacity to think in the realm of ideals and make Edition: current; Page: [373] choices of imperfections with relation to [these] ideals.”6 In short, education should make man more adept at reasoning about the imperfect choices he has. In this sense, man is more free because he is basing decisions more on reason and less on ignorance and emotion.7

Goodrich proceeds to state what he believes are the limitations of education: “Even the best of all possible [educational] arrangements cannot make man into God or into a saint—or even into a good, decent human being. To be educated in the sense we have in mind here is something, perhaps a very important something, but it is not the alpha and the omega of human existence.”8

Thus, instead of elevating education as the be all and end all of humanity, Goodrich believed that the purpose of education is much less lofty. In fact, he did not believe education has any one purpose. The state’s attempt to impose one on the individual negates the very freedoms that proper education should embrace: “Whether the individual pursues an education for the sheer delight in learning or to acquire knowledge for personal decision-making and action or to better serve his God—or even to do no more than flaunt his learning before others—the choice of purpose (as well as means) is his and not society’s.”9

Goodrich recognized that the importance of knowledge in making decisions about the desirability of freedom creates an apparent paradox: “How will a citizenry not deliberately educated in the ways of freedom be able to withstand the constant temptations and pressures to abandon freedom in the hope of some transient advantage? In other words, does Edition: current; Page: [374] the survival of the free society require that its citizens be unfree in at least one area, the area of education?”10

To these questions, Goodrich and Rogge’s answer is that the best way to ensure that the student is educated in the virtues of freedom is to have society as a political unit have nothing to do with education: society should not provide education with subsidies (including tax relief), or operate any education programs, or coerce participation in such programs. Agents paid by the state are least likely to promote individual freedom, because of the “temptation to turn education to the purposes of expanding state power (and, hence, their own power), rather than of restricting and limiting that power.”11

Chapter 27: Moral, Political, and Metaphysical Beliefs

While Pierre Goodrich was no friend of John Maynard Keynes’s economic or political views, he no doubt embraced the British economist’s insight that ideas ultimately control much of human behavior. Thus, the ideas that a person studies and discusses are critical. As former Wabash president Byron Trippet recalls, Goodrich “saw no reason why a college needed a library of more than about 5,000 books, provided they were the right books,” meaning that they contain the right ideas.1

Goodrich’s own thought, as reflected in such writings as the Basic Edition: current; Page: [384] Memorandum, “Education Memorandum,” “Why Liberty?” and his letters, is not particularly noteworthy for its originality or cogent expression. His thinking is important, however, in its attempt to examine critically both human understanding and the forces that compel human action; moreover, his philosophical perspective also reveals a strong influence by many great thinkers of Western civilization. Goodrich’s voracious appetite for books enabled him to become extremely knowledgeable about both the literature of his time and, more important, works that have influenced ideas for centuries.2 While it is not possible to trace Goodrich’s thinking to any particular writer, it is clear that many of his beliefs were shaped by classical thinkers. The core ideas of these scholars of ethics, political theory, epistemology, and metaphysics deserve a brief exploration.

Early on in the Basic Memorandum, Goodrich takes up a philosophical matter that the Greek moralist and political philosopher Plato (427–347 bc) is particularly known for—the nature, origin, scope, and limits of human knowledge (epistemology). Plato believed that man often goes astray because he is ignorant of what the right action is. Therefore, doing right is a matter of proper education and, ultimately, knowledge. Similarly, Goodrich recognized that “all individuals have an imperfect knowledge of man, his origin and his destiny, and the universe in which he exists.”3

Man’s imperfection, his imperfectibility, and his inability to obtain perfect knowledge are common themes that run throughout Goodrich’s writings. This is why proper education is so important to Goodrich’s worldview. Goodrich believed that whenever man becomes unshackled from perceiving the world primarily through sense experience and begins Edition: current; Page: [385] the difficult journey toward using reason to apprehend reality, it is possible for him to acquire at least a partial understanding of the world. He denies, however, the possibility that man can ever obtain perfect knowledge or escape the influence of sense experiences. Furthermore, Goodrich recognized that doing wrong may not be merely a matter of lack of knowledge, but also a result of “weakness of the will” (lacking the fortitude to do what one already knows is the right thing) or even of heredity.4

Goodrich departs from Platonic thinking regarding who should exercise Edition: current; Page: [386] decision-making powers. He denies outright Plato’s notion of the philosopher-king as the proper decision-maker for a society. Plato believed that those who have the greatest aptitude for ruling should be placed in absolute authority. Goodrich refutes the whole notion of Plato’s philosopher-king by means of a two-pronged attack. First, “the very nature of a society of imperfect human beings excludes the possibility of a perfect choice”;5 therefore, it is not necessarily true that the philosopher-king is capable of making better decisions for others than those others, who have greater knowledge of their own abilities and desires, can make for themselves.

Second, “it is self evident that man’s faculties (for example, physical, reason, integrity . . . ) decline or improve by lack of use or use thereof, and the nature of that use.”6 In other words, the individual loses something important if he continually delegates the responsibility for making decisions in his life to a ruler. Soon, he will not be able to make the critical decisions nor undertake the actions necessary to keep himself free and able to make use of his potential. If this continues, man will ultimately degenerate, becoming dependent upon others for his welfare. According to Goodrich, a society preferable to Plato’s would allow all men sufficient freedom that “some men, less fallible than others, may move closer to man’s ultimate destiny than other men, and in so doing help all men.”7

British empirical thinker John Locke (1632–1704) is probably the theoretical architect most responsible for democracy as it exists in the Western world today. Locke’s Treatise of Civil Government contains many of Edition: current; Page: [387] the ideas that formed the basis for the political philosophy of the founders of the American and French republics. Moreover, the Treatise also contains the primary framework for many of Goodrich’s own beliefs about the nature of private property, the existence of natural rights, the origins and scope of government, and the separation of governmental powers.8

Goodrich believed that the primary purpose of government is to ensure that no person or group can coerce another into doing something he or she does not want to do. This belief in minimal government is grounded in Lockean theory. Locke’s “law of nature” espouses that “no one ought to harm another in his life, health, liberty or possessions.” Moreover, Goodrich, like Locke, believed that the state exists to prevent coercion at the hands of others and to address disputes that arise when individuals form organized societies for mutual benefit under a social contract. Obviously, then, a mechanism must be established to resolve these disputes in an efficient, orderly, and fair way. Such a mechanism is a judiciary system based upon integrity and law.9

Goodrich believed that law, not force, should be the basis upon which government operates to prevent coercion of the individual by others. Moreover, perhaps even more important to Goodrich, adherence to law is necessary to prevent those cloaked with governmental power from ruling tyrannically. Adherence to the rule of law, then, by elected officials as well as by the populace is absolutely necessary in an orderly society where free and voluntary exchanges are possible.

Locke opposed monarchy and dictatorship for the very reason that a true monarch or dictator is above the law; in fact, a monarch or dictator Edition: current; Page: [388] is the law. Such a government operates solely at the caprice of the authoritarian ruler, and the society he or she controls is correspondingly unstable.10 Locke’s rationale for opposing a monarchy is logically consistent with the reasons Goodrich opposed absolute power held by any one person or group: (1) as a practical matter, no correctional force exists to curb the power monger’s abuses; and (2) morally, absolute power is opposed to the idea of the “rule of law” and the universality of action (for example, Kant’s categorical imperative). Goodrich’s constant warning about the abuses of power is evident in his repeated references to Lord Acton’s admonition that “power tends to corrupt and absolute power corrupts absolutely.”

Locke’s theory of rights was important to Goodrich as well. As to property rights, Goodrich believed deeply in the Lockean notion that such rights arise from man’s “mixing his labor” with things originally given to mankind in common.11 An example of how seriously Goodrich believed in property rights occurred in the early 1970s. The incident arose when a presenter at an early Liberty Fund seminar on education gave a paper that had actually been written by Dorothy L. Sayers. Sayers, a distinguished English writer, had been deceased for more than a decade at the time. The presenter gave the paper without making any reference to the true author of the work. It was two weeks later that the plagiarism incident became known. Goodrich was livid that such a violation had occurred at a Liberty Fund seminar where the primary purpose of bringing the conferees together was to examine education’s role in furthering freedom and virtue.12

Locke’s other views about individual rights also heavily influenced Edition: current; Page: [389] Goodrich. For instance, Goodrich embraced Locke’s theory about when and to what extent governmental intervention is appropriate in curbing such rights. Goodrich, like Locke, believed that all men are equal in the sense that they have rights that are anterior to those given them by society. Since these natural rights are not given to them by society, society cannot take them away.13 There is no definitive list of these natural rights, but Goodrich no doubt believed that they include at least the rights recognized in the United States Constitution; for example, private property, free speech, freedom of assembly, and freedom of association and religious expression.

What Locke and Goodrich did not believe is that somehow government could create rights; Goodrich did not believe, for instance, that there is such a thing as a right to housing, to an education, to a job, or to health care. These may be benefits, but they are not rights. Thus, they are not entitled to the same protections as, for example, the rights to property and freedom of speech. Therefore, Goodrich would have been totally opposed to a 1970 United States Supreme Court decision that held that “welfare entitlements [are] more like ‘property’ than a ‘gratuity.’ Much of the existing wealth in this country takes the form of rights that do not fall within traditional common-law concepts of property. It has been aptly noted that ‘[s]ociety today is built around entitlement.’”14

Goodrich believed that the confusion in distinguishing between rights and benefits (so-called entitlements) actually results in the violation of others’ rights. That is why he was so adamantly opposed to what he considered were simply the “man made rights” (and therefore not really rights at all) of academic freedom and tenured faculty protection. Also, Goodrich did not believe that any definition of equality should extend beyond “equality before the law.” The principle that “all men are created equal” is only applicable to this limited meaning, Goodrich contended. Otherwise, it is silly to suggest that individuals are born equal Edition: current; Page: [390] in terms of talent, intelligence, family wealth, physical appearance, prowess, and so forth. Any attempt to extend equality to these other areas means that government must constantly intervene to remake a level playing field.

Goodrich departed from Locke’s thinking concerning the virtues of majoritarian government (democracy). Locke believed that authority lies with the people who elect government. Government is merely the means of carrying out the people’s will. But Locke did not seem to realize or appreciate, Goodrich would contend, that the majority can become a tyranny; the majority, like any monarch, can become a despot by suppressing the desires of the minority. Therefore, Goodrich was very skeptical of trusting the will of a majority: “In a large corporation the stockholders, who operate as a majority, are a kind of democracy (I am afraid of democracies; for example, I cannot select the necessary element of a good common law judge by a majority vote . . . ) and they have no right to dispose of the assets of the minority stockholders.”15

The German philosopher Immanuel Kant (1724–1805) was an original thinker who had a tremendous influence on shaping Goodrich’s views of ethics and morality. In Kant, Goodrich found a philosopher who had systematically examined the ethical underpinnings of a morally responsible society. Kant’s categorical imperative was the center of Goodrich’s ethical life.16 Kant’s appeal to Goodrich lay primarily in three fundamental premises upon which the philosopher built his overarching moral framework: rationality, universality, and freedom of will.

Kant contended that, to the degree we are rational, morality is simply the expression of our own free will. We can establish a moral law of conduct simply by being obedient to our conscience. Therefore, our behavior is guided by both reference to and reverence for our “higher selves.” The need for an external influence such as government to coerce Edition: current; Page: [391] us to do the right thing should be unnecessary or, at the very least, minimal. Goodrich believed that Kant’s maxim of the categorical imperative, if strictly followed, rendered government largely superfluous. Goodrich writes in the Basic Memorandum:

Thus, how do we know whether our conduct is ethical or not? Like Kant, Goodrich believed that if a person can will an act that should be “universalized” (meaning that the act should be permissible for everyone to do), then that act is morally allowable. Therefore, lying is not an act that is ethically permissible, because it would be disastrous if falsehoods were universalized (it would destroy the important institution of trust).18 Nonetheless, in Kantian thinking, the intent, not the utility, of a law or principle is what creates moral worth. Similarly, the actor’s intent, not the result of the act, is what gives an act its ethical character. For instance, a passerby who attempts to save a drowning person but who ends up drowning himself is a morally good person despite the fact that the result is disastrous.

According to Kant, the principle’s intent should be based on a sense of duty. Duty is to be performed entirely for its own sake, not in order to promote human happiness or fulfillment.19 Goodrich suggested, however, that ethical behavior produces both of these human qualities, although they are not the overriding reasons why a person should be ethical. Goodrich wrote: “It seems observable that the nature of ethical capacity is such that it has its own reward. The greater an individual Edition: current; Page: [392] exercises his ethical capacity the greater is his self and the greater are the happiness and health of the inner peace which exists.”20

The German theologian Martin Luther (1483–1546) and the French Protestant reformer John Calvin (1509–64) also significantly influenced Goodrich’s moral, ethical, and political beliefs. Pierre was raised in the Presbyterian Church, in which Calvin is historically considered the single most important figure. Luther and John Knox (1505–72), the latter of whom led the Protestant Reformation movement in Scotland, closely followed. Goodrich knew these theologians’ teachings intimately. In the Basic Memorandum, both Luther’s and Calvin’s writings are prominently listed, and the Basic Memorandum has a strong Calvinist strain.

Luther’s and Calvin’s writings are responsible for much of modern society’s conceptions of sin and salvation as well as for the virtues of capitalism, political liberty, and obedience to state authority. Their writings also helped to form common spiritual, social, political, and cultural beliefs that we have failed to associate with these two towering sixteenth-century figures simply out of ignorance of their historical importance. Goodrich knew that as founders of the Reformation, Luther and Calvin were so powerful that even popes and emperors were intimidated by them. Why? The two theologians were not supported by great armies; on the contrary, both men were opposed to force and violence. Their power lay in the widespread acceptance of their teachings. These teachings boldly challenged the authority of the Catholic Church and, to a lesser degree, the political hierarchy of the time.

Luther struggled with the amount of legitimacy to give to secular government. He recognized that the state played an important role in maintaining minimal order in a violent, sinful (non-Christian) world. But he also believed that such authority was limited, did not extend into matters of faith, and must be exercised justly.21 Luther’s teachings about Edition: current; Page: [393] freedom in an ethical and spiritual context were more edifying to Goodrich.22

Politically, Calvin is a more important historic figure than Luther. “Calvin rendered incalculable service to modern liberty by showing how political tyranny could be constitutionally checked, and by cultivating the qualities necessary to revolution and self-government.”23 Before Luther and Calvin, Christians were generally not involved in the affairs of state, for two reasons: First, the devout follower believed that his business did not involve the material world, but God’s Kingdom; and second, the feudal subject had been raised to believe that kings and feudal lords were the natural holders of authority, sanctioned by God, and the caretakers of the peasant and his family. But Luther and Calvin, especially Calvin, helped to change these beliefs.24

Luther’s and Calvin’s teachings formed the basis for protest (the root of the word Protestant) against what they believed to be abuses by the established Church. Moreover, this protest grew to include political protest. It was based on the idea that every person—including ordinary men and women—had a duty to be politically active in order to realize a God-fearing world here on earth. Thus, the idea of the citizen came to the fore. The Christian was not to divorce himself from this Edition: current; Page: [394] world in anticipation of a greater and holier life to come. This “Calvinist conscience” formed the basis for an “extraordinary view of politics as work and of work as a permanent effort and an endless struggle with the devil.”25 The roots of James Goodrich’s political and business prowess may be partially explained by these prevailing Protestant beliefs.

Pierre was fascinated with the ways in which Luther’s and Calvin’s teachings influenced the English and American Puritans. Calvin’s political theory, with its clear democratic tendencies, helped to pave the way for the American Revolution and the United States Constitution.26 Both Luther’s and Calvin’s teachings, therefore, commanded political participation by the believer. Their teachings also emphasized the importance of work, revolution, and warfare as means of resisting temptation, instilling discipline, and overcoming misguided, concentrated, or tyrannical forces.27

Goodrich’s beliefs were also shaped by dozens, perhaps hundreds, of other great scholars and theologians. Many of them and their works are memorialized in the Liberty Fund Basic Memorandum book list (see appendix B). These great thinkers were included in the list because Goodrich believed that their works had helped to lay the cultural and intellectual foundation for Western democratic society in general and the beliefs of the Founding Fathers in particular.28 Some of the most important thinkers, in addition to those discussed above, were Aristotle, Edmund Burke, David Hume, Adam Smith, William Blackstone, Edition: current; Page: [395] Alexander Hamilton, James Madison, John Jay, John Stuart Mill, and Lord Acton.29

Because this chapter began by mentioning the British economist John Maynard Keynes, perhaps it is fitting to close with a brief comparison of Goodrich’s and Keynes’s beliefs. The two men had similar backgrounds: They lived during approximately the same period, they were the offspring of upper-middle-class parents who were raised during Victorian times, and they shared similar educational and religious upbringings. There, however, the similarity ends.

John Maynard Keynes (1883–1946) is one of the most significant economists of the twentieth century because his views on state planning have been so broadly adopted by Western democratic governments. Keynes believed that inequality came about because of “risk, uncertainty, and ignorance” and that society could be advanced by the elimination, or at least a considerable reduction, of all three.30 His prognosis for the problem, as far as this goes, is not unlike Goodrich’s.

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Keynes’s prescription for removing these obstacles, however, was for “the state to act as the director of investment to smooth the flow of investment so as to reduce uncertainty and increase the capital stock and the level of output.”31 How exactly does the state act, and at whose direction? Keynes believed that the state should be guided by an intellectual elite that would place social progress ahead of its own class interests. In short, an intellectual elite acting under the notion of “noblesse oblige” (privilege entails responsibility) should properly make the choices in a democratic society.32 The principal challenge was to make the intellectual elite understand and accept its responsibility. In responding to Friedrich Hayek’s The Road to Serfdom, Keynes wrote to Hayek, summarizing his views on this point:

Keynes rejected Adam Smith’s theory of the “invisible hand,” and he wrote in 1938 “that self-reliant individuals acting in their own interest cannot reach a maximum for society.” Therefore, what self-interest cannot achieve, Keynes argued, an intellectual elite could—namely, an optimum society—by directing society toward worthy ends.34

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Goodrich rejected the very heart of Keynes’s philosophy. He did not believe that the intellectual elite for which Keynes had such high hopes could carry out the task that Keynes expected it to accomplish. Goodrich believed that ignorance was far too pervasive to enable even an elite body to make decisions in the best interests of others. Moreover, Goodrich believed that Keynes failed to “ponder why society would delegate so much authority to a small, non-elected group.”35 In Goodrich’s judgment, Keynes’s proposal would sacrifice specific individual freedoms in order to obtain a higher social standard. As will be seen in the next chapter, this was a notion that Pierre Goodrich was unwilling to accept.

Chapter 28: Why Liberty?

At the invitation of Friedrich Hayek, Pierre Goodrich delivered his paper “Why Liberty?” at the September 1958 annual meeting of the Mont Pelerin Society at Princeton University.1 Why, of all the ideals, problems, and issues that confront mankind, was liberty Edition: current; Page: [399] Goodrich’s lifelong preoccupation? There were times during his life when he seemed to think about little else.2 An examination of the importance Edition: current; Page: [400] liberty had for Goodrich will serve to render a greater understanding of his overall philosophical beliefs.

In the September 1958 paper, Goodrich quoted two very different views about both the nature and efficacy of power:

Goodrich thought that the view of power one accepts must be determined by one’s belief about the nature of man. He explained why he believed Lord Acton’s observation is clearly the more accurate one. As a basic premise, Goodrich submits—and it would seem foolhardy to suggest otherwise—man is imperfect and therefore fallible. Man has some capacity to reason, however, and some persons have a greater facility for rational thought than others. It is partially under this pretext that some claim the authority to determine what is best for others.3 Goodrich believed, however, that human impulses other than reason often guide and influence decision making: love, compassion, fortitude, envy, hate, fear, lust, greed, and so forth. Goodrich was convinced that imperfect man is often led astray in his exercise of power by these other impulses and by his proclivity, once he gains power, to believe in his own infallibility.

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Goodrich believed that even if the occasional wise and benevolent dictator appears (such as Plato’s philosopher-king), it is highly improvident for any person to be given power over others. Why? Because the state is no better than the imperfect human beings who hold the power of the state. When a man is elevated to a higher position of power, his imperfections become magnified, and he is more likely to make errors in judgment about what is in others’ best interests.4 One man simply cannot make better decisions for others than they can make for themselves, for every man has a greater knowledge of his own individual needs and desires than anyone else can possibly have. Any argument to the contrary, Goodrich believed, was merely based on expediency; for example, to enable officeholders to do the popular thing at the moment to gain votes rather than to allow individuals to work out their own destinies.

Moreover, Goodrich believed that those who occupy a seat of governmental power often become corrupted, seeking more and more power. The examples in history that support Goodrich’s position are so numerous that only some of the most egregious need be mentioned: from the Egyptian pharaohs to Roman emperors such as Caligula (“Would that the Roman people had a single neck [to cut off their head]”);5 from Cesare Borgia and Robespierre to modern dictators such as Stalin, Hitler, and Mao.

Goodrich was convinced that even democratically elected officeholders are prone to succumb to the lure of power. Thus, Goodrich did not Edition: current; Page: [402] think that to be dangerous a person with power had to have a sinister side; rather, he believed that the possession of authority was a corrupting influence to the powerholder and would result in the negation of freedom to individuals over whom authority is employed. Power exercised for the general good was the most dangerous because it was disarming and, therefore, least resisted.6

Furthermore, while Goodrich believed that the most dangerous power was that of government, his suspicions about powerholders extended well beyond those who exercise it by the authority of the state; he believed that power was dangerous wherever there was a consolidation of authority with the sanction of force.7 Lord Acton’s admonition to Bishop Creighton was, after all, directly in response to what Acton perceived as the corruption of the papacy of the late nineteenth century.8

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Goodrich’s perceptive observations about the potential abuses associated with power are not merely abstract insights. They are supported by studies that have noted the change in behavior experienced by persons who obtain power.

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Moreover, Goodrich identified a specific characteristic of the person in a position of power—the reluctance to accept negative feedback, because such criticism interferes with the pleasure associated with “calling the shots.” Subordinates soon realize that flattery serves them better than constructive criticism.10 Since the powerholder receives no negative information, he or she believes that there are no problems and comes to feel infallible.

Goodrich did his best to avoid falling into that trap. He often circumvented his field managers at both the Ayrshire Collieries Corporation and the Indiana Telephone Corporation. Goodrich would visit miners in the coalfields and telephone operators at their work stations. He questioned workers about improvements, cost reductions, production, and customer satisfaction. He knew from experience and common sense that managers are tempted to tell the boss what they believe he wants to hear.11

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Goodrich’s remedy for the consolidation of power was to decentralize decision making, holding each individual responsible for his or her success or failure:

Goodrich believed that education alone could enlighten individuals and persuade them to take correct action and accept moral responsibility. Therefore, coercion by the state is not only unnecessary but counterproductive. “Pierre believed that the scholar or great teacher would have influence over the person but would not have power over him,” said the Reverend Edmund Opitz, a staff member at the Foundation for Economic Education who knew Goodrich for the better part of twenty years.13

Therefore, Goodrich believed that there are many ways to influence Edition: current; Page: [406] properly individuals, but all these methods entail moral persuasion through some form of educational process (for example, pamphlets, books, debates, individual study, and discussion). Power by the state, to the degree it need exist at all, should be limited to ensuring that no person’s freedom is infringed upon by others.

Chapter 29: Liberty Fund, Inc.

What do men and women who have much more money than they could possibly ever spend on themselves do? They form a foundation. Where a man’s treasure is, there is also his heart.1 Through the Lilly Endowment, Pierre Goodrich’s contemporary Eli Lilly made tremendous contributions to historical research, education, and other causes throughout the state of Indiana and beyond; Harrison Eiteljorg, another Indianapolis businessman who made his fortune in the coal industry, built a fabulous museum of original American Indian and western art; Hoosier industrialist Irwin Miller’s love of architecture has resulted in prize-winning and aesthetically beautiful churches, libraries, and schools in his hometown of Columbus, Indiana.

Pierre F. Goodrich wanted to be an architect of the mind. His vision was Liberty Fund, Inc. He left his fortune—an endowment now valued Edition: current; Page: [415] well in excess of $360 million—to encourage a deeper understanding of what it takes to achieve and maintain a free society.2 He did not want his money to be spent for the construction of a football stadium or a gymnasium. In fact, the only capital building project to which he is known to have contributed was the Goodrich Seminar Room at Wabash College’s Lilly Library. He gave money for that undertaking only because he hoped the seminar room would serve as the venue for frequent philosophical discussions. Goodrich thought money should be spent on developing minds and culture, not on “things.”3 He felt appreciated most not when he received honorary degrees or certificates of merit, but when people accepted his ideas.

Irwin H. Reiss, a founding board member of Liberty Fund, believes he has at least a partial understanding of why Goodrich established this unique foundation. “Mr. Goodrich saw liberty and freedom for the individual slipping through our hands and if he could leave a legacy to future generations and halt that loss of freedom, I think he, in his own Edition: current; Page: [416] opinion, would feel like he was really accomplishing something. And he surrounded himself with people who felt like that and could help him implement this concept.”4

One reason Goodrich formed Liberty Fund is that he did not think that the kind of continual learning he believed was important could be facilitated by donations to an existing college, university, or foundation.5 Goodrich believed that the traditional liberal arts college, let alone the large university or technical school, was sorely in need of reform. Rather than risk contributing his millions to a particular educational institution in hopes that it might embrace his vision (his years of association with Wabash College made him highly doubtful that such an institution existed), Goodrich decided to create his own foundation. Goodrich’s establishment of Liberty Fund can be seen as the culmination, the magnum opus, of his life.

Liberty Fund was incorporated in the state of Indiana on August 18, 1960. It was also on that date that the founding board of directors first met.6 Goodrich’s vision for Liberty Fund existed for several years before 1960, however, as is evident from his years of writing the Basic Memorandum, the document that is the foundation’s bible. The first board of directors of Liberty Fund included Goodrich and his wife Enid (who were elected lifetime directors), Benjamin A. Rogge (then dean of Wabash College), Irwin H. Reiss (then president of Meadowlark Farms in Sullivan, Indiana), and Don E. Welch (then vice-president of Peoples Loan and Trust Company in Winchester, Indiana). Helen Schultz Edition: current; Page: [417] served as secretary and treasurer (she was named a Founder Member in June 1967).7

In his creation of Liberty Fund, Goodrich was assisted by the late William Casey, as well as by Goodrich’s personal attorney, William Hunter. Casey was a top-notch tax lawyer who later became director of the Securities and Exchange Commission, director of the Central Intelligence Agency, and chairman of Ronald Reagan’s 1980 presidential campaign. Another individual who assisted in the early formation of Liberty Fund is William Fletcher, who at the time was a partner with Arthur Andersen, the large accounting firm based in Chicago. Fletcher was managing partner of Arthur Andersen’s Indianapolis office from 1960 to 1972. Goodrich consulted with these men extensively about the establishment of Liberty Fund and the need to have it exist as a tax-exempt private foundation.

In August 1962, the Internal Revenue Service (IRS) denied Liberty Fund’s initial application for tax-exempt status. The formal basis for the denial was that Liberty Fund was “not organized exclusively for educational purposes within the intention of section 501(c)(3).”8 Apparently, Edition: current; Page: [418] the real basis of the IRS’s denial was that it believed that the goal of the foundation was to promote political (legislative) change. After Casey, Fletcher, Hunter, and Goodrich redrafted the articles of incorporation, however, the IRS granted Liberty Fund tax-exempt status in December 1962.9

An indicator that Goodrich had designs for establishing Liberty Fund in the 1950s is his plan for endowing the foundation. In 1945, Goodrich had formed the Winchester Foundation. Goodrich made monetary contributions to the Winchester Foundation in the 1950s with the intent that those funds would spill over into his education foundation (then unnamed) when it became operable as a nontaxable private foundation.10 In May 1962, Liberty Fund held only a minuscule endowment of slightly more than $4,000. By June 1963, however, after Liberty Fund’s tax-exempt status had been achieved, Goodrich transferred funds from the Winchester Foundation to Liberty Fund. Those funds, which were in the form of cash, stock, and real estate, amounted to nearly $670,000. Almost all the contributions were made from five Edition: current; Page: [419] holding companies controlled by Goodrich himself: Engineers Incorporated; the P. F. Goodrich Corporation; Central Shares, Inc.; Muncie Theatre Realty; and Patoka Coal Company (a holding company that owned shares in the Ayrshire Collieries Corporation).11

In the 1960s and 1970s, Liberty Fund was primarily a grant-making foundation. Gottfried Dietze, professor of political science at the Johns Hopkins University, served as a paid consultant to the board during that time. At board meetings conducted by Goodrich and attended by Enid Goodrich, Rogge, Reiss, and Welch, the board would consider grant requests from several institutional and individual applicants. The board would then contribute amounts as small as fifty dollars to assist, for instance, with a professor’s traveling expenses to attend a conference. Many of the early awards included grants to the Foundation for Economic Education (FEE), the Foundation for Foreign Affairs, the Great Books Foundation, Wabash College, the China Institute of America, and other institutions in which Goodrich took a long-term interest. Each grant request was measured against whether its purpose was consistent with the criteria contained in the Basic Memorandum.12

At the time of his death, Goodrich was fighting for Liberty Fund to exist as an operating foundation. He was still working with tax advisers and the Internal Revenue Service to see that his personal profit from the sale of the Ayrshire Collieries Corporation was transferred to Liberty Fund with no, or minimal, tax. As Goodrich wrote to his tax attorney, E. Victor Willetts, he saw that how the taxation issue was finally resolved would have major implications, beyond the viability of the foundation Edition: current; Page: [420] itself. “We are hopeful that we can be declared an operating foundation which will have a chance to survive, and survival may be worthwhile not only to us and to the people working with Liberty Fund, but to society itself (usually, however, prophets prophesy too late—wasn’t Jewish society all through after Solomon, really, and the great prophets, Amos, Hosea and Micah came along 200–300 years later).”13

Goodrich left two trust funds with combined assets in excess of $26 million. This formed the foundation’s initial substantial endowment. Most of this money came from Goodrich’s sale of the Ayrshire Collieries Corporation in 1969. Other money that was funneled into the Liberty Fund’s endowment came from the liquidation of holding companies (for example, Engineers Incorporated and the P. F. Goodrich Corporation), the sale of City Securities in 1970, and the 1978 sale of the Indiana Telephone Corporation. Well into the 1990s, approximately one-fourth of Liberty Fund’s endowment was held in stock in Central Newspapers.14 Tax-free transfers of stock were especially important because of the steep capital-gains tax that Goodrich (and later his estate) would otherwise have had to pay.15

Still, other tax obstacles plagued Liberty Fund during its early years. For instance, Goodrich had initially planned for Liberty Fund to manage the companies that the Goodrich family controlled even after his death. Goodrich had hoped this could be achieved, because it would have provided the board of directors with a unique opportunity to apply to practical, day-to-day business operations the classical liberal economic Edition: current; Page: [421] theories that underlie Liberty Fund’s philosophy. Such an arrangement, Goodrich thought, would provide the additional benefit of allowing the income generated from his businesses to be transferred tax-free to the operation of Liberty Fund. That would have provided Liberty Fund with ongoing operating capital to carry on its research and grant-making activities.16 Both federal and state laws, however, essentially precluded such a plan. The Tax Reform Act of 1969 held that a foundation could not retain its tax-exempt status and hold more than a nominal percentage of stock in any one company. Therefore, Goodrich and the subsequent directors of his businesses had to sell off companies such as the Indiana Telephone Corporation. After they were sold, the proceeds could be transferred to Liberty Fund without incurring capital-gains taxes.17

In 1973, after Goodrich’s death, Helen Schultz was elected president of the foundation. Neil McLeod, who had served as economist and director of the Institute of Paper Chemistry in Appleton, Wisconsin, was hired as executive director. Benjamin Rogge served as a paid consultant, spending two to three days each week working on Liberty Fund affairs. William Fletcher was financial vice-president and treasurer.

By the mid 1970s, Schultz, McLeod, Rogge, Fletcher, and the board of directors reached a decision that was extremely critical to the viability and success of Liberty Fund.18 Beginning in May 1975, Liberty Fund entered into, in essence, a probationary period of three years during which it made the transition from a grant-making to an operating foundation, what Goodrich had desired himself. During that time, the general Socratic Edition: current; Page: [422] seminar format, which is now the core of Liberty Fund’s program structure, was fully developed.

From 1975 to 1978, Liberty Fund contracted with both the Institute for Humane Studies (IHS) and individual scholars to hold conferences and seminars. Moreover, a senior-scholars program was established in conjunction with IHS in which prominent scholars such as Friedrich Hayek were invited to conduct seminars.19 Henry Manne, a longtime director of the Center for Law and Economics and formerly associated with George Mason University in Virginia, coordinated approximately a dozen conferences during those three years and many other conferences in later years. Many of the early seminars dealt with practical topics such as planning and the American constitutional legal system, advertising and free speech, deregulation, bankruptcy, and private alternatives to the judicial process.20

According to Manne, “Liberty Fund is generally credited today by the most senior and outstanding scholars in the field of law and economics with having created that whole field. Almost every one of those conferences resulted in either a book or a symposium issue of a law review. Many of them were cited in United States Supreme Court cases. They were absolutely cutting-edge stuff on mundane topics that, nonetheless, philosophically could be always pushed to the issues of a free society.”21

After its three-year probationary period, in March 1979 Liberty Fund received a determination by the Internal Revenue Service granting it operating-foundation status.22 Under its new operating arrangement, Liberty Fund has gone on to sponsor more than sixteen hundred conferences, with more being added each year. Subsequent seminars have included such diverse topics as the “Christian Idea in a Secular Culture: Edition: current; Page: [423] C. S. Lewis and T. S. Eliot,” “Economic Calculation Under Inflation,” “Business and Liberty,” “Freedom and Responsibility in Plato’s Laws,” “The Influence of Foreign Affairs on the American Founding,” and “The Rise of Capitalism in the West.”

Beginning in 1976, Liberty Fund initiated a film series. Four films were produced: Adam Smith and the Wealth of Nations, The Industrial Revolution, Hong Kong: A Story of Human Freedom and Progress, and A Design for Liberty: The American Constitution. From 1976 to 1982, the first three films reached a broad audience, being viewed by more than a hundred thousand high school and college classes, service organizations, and other groups. It is estimated that nearly four million people viewed the films in person and another eleven million viewed them on television.23

Also in 1976, Liberty Fund contracted with IHS, the Reason Foundation, and the Center for Libertarian Studies to organize summer seminars for young scholars (graduate students and new professors). The Liberty Fund Research Seminars were conducted in New York, Chicago, and California until 1980.24 In recent years, Liberty Fund has employed resident scholars to perform research at its Indianapolis offices.

Liberty Fund, as a private, operating foundation, must meet several Internal Revenue Code spending requirements. When the earnings of the endowment exceed this required expenditure, which has generally been true during the last twenty years, then the corpus increases.25

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Goodrich’s vision for Liberty Fund can be at least partially attributed to his years of serving on other educational boards. In the 1940s, 1950s, and 1960s, Goodrich served as a director of the Great Books Foundation, the Foundation for Economic Education, the China Institute, the Institute for Humane Studies, and Wabash College. Moreover, his membership in the Mont Pelerin Society enabled him to benefit from the experiences he had gained during his long association with this education-oriented body.

Liberty Fund seminars are a major activity of the foundation, and they originate from Goodrich’s own vision. From the Great Books Foundation, Goodrich adopted the following ideas: the small Socratic seminar that has one or two moderators who encourage discussion among participants on a particular topic (seminars usually have sixteen participants); the importance of discussion rather than lecture; the idea that great texts should form the core of discussion; and the belief that the great conversations worth pursuing were begun in the ancient past, have continued into the present, and will continue in the future.

From Leonard Read of FEE, now a cooperating institution with goals similar to those of Liberty Fund, Goodrich learned the importance of involving people of myriad backgrounds. Goodrich also took from FEE the ideas that political and intellectual liberty are closely linked with economic freedom and that economic freedom has its responsibilities beyond maximizing the greatest profit.

From his association with the Mont Pelerin Society, Goodrich realized the importance of reaching out to scholars and intellectuals who have common regard for individual liberty. This is true for several reasons. First, Goodrich and his associates knew that even with the help of resources as great as those held by Liberty Fund only a small percentage of the total population can ever directly participate in a sponsored seminar. Therefore, in order to maximize the resources of Liberty Fund, it is important to attract participants who are in a position to affect the thinking of others. It is not by accident that the majority of Liberty Fund participants are academics. Others in positions of intellectual influence, however, are also invited to attend conferences, including individuals in business, the media, government, and the learned professions, Edition: current; Page: [425] including law, medicine, and the ministry. Second, many participants are repeatedly invited to attend seminars; this practice is based upon the belief that thinking about the ideal of a society of free and responsible individuals is a continuous and evolving experience that is best achieved through repeated conversations with other learned individuals.26

The central tenets of Liberty Fund can be summarized briefly. First, education is a lifelong process; Goodrich sought people who recognized that their education was not yet complete. Second, Liberty Fund seminars are generally built around works and ideas of the past. Goodrich valued learning that accumulates throughout the ages, based on the experiences of preceding generations. He recognized that human nature does not change greatly but is not immutable. Man is capable of raising himself to a higher plane of thought and behavior by studying and reflecting upon the great thinkers of the past.27

Third, Liberty Fund seminars are based on a theory of action that focuses on the future. Goodrich believed that the opportunity to engage in discussion about important issues and ideas was worthwhile. Inherent in the seminar format is the belief that man is a truth-seeking being, able to gain insights into complex matters and to test hypotheses, capable of reaching virtually unconditional judgments on the basis of reasoned discourse. These qualities make it possible to improve the lot of both individuals and society. Without this underlying belief, seminar discussions would have little value.28

The ground rules of Liberty Fund seminars are extremely important: Edition: current; Page: [426] No one participant is able to dominate a discussion, and the role of the moderator is to ensure that the true exchange of ideas (a sort of cross-pollination) occurs. Moreover, in an attempt to build a sense of community, participants dine together for all meals and stay for the entire conference, which is usually held at a hotel. Speakers are not sought to address the seminar participants; everyone participates in formal and informal discussions. Liberty Fund seminars have been held in locations as diverse as Australia, South America, and Europe, as well as in hundreds of cities in North America. Participants are given an honorarium.

As a tax-exempt, private operating foundation, Liberty Fund is purely an educational foundation and is unique for what it is not. For instance, it does not (and cannot by law) engage in politics or political action of any kind. It does not, as do such traditional think tanks as the Heritage Foundation, the Brookings Institution, and the American Enterprise Institute, concern itself with influencing topical political debate. It does not attempt to reach the largest number of people. It seldom seeks publicity, and it is hardly known, even in Indianapolis, the location of its headquarters.

Liberty Fund’s charter, known as the Basic Memorandum, was written by Goodrich in the late 1950s and early 1960s with the consultation of a number of broadly educated people he knew from the business and scholastic world.29 The Basic Memorandum is a detailed 129-page blueprint of Goodrich’s “means of relating and combining ideals, experience and business practice.” The manual is primarily composed of Goodrich’s views about how Liberty Fund should operate: everything from how new board members should be selected to what should happen Edition: current; Page: [427] to Liberty Fund in the event that it becomes impossible for it to carry out its stated purpose.30 The Basic Memorandum also contains Goodrich’s views—as they were expressed in letters and other works he authored—on such subjects as man’s ignorance and imperfect nature, the desire of men to govern others, and the problems of power.

The Basic Memorandum also contains selections from John Mill’s On Liberty and the Statement of Aims of the Mont Pelerin Society. At the end of the Basic Memorandum is a book list containing seventy-six great literary works: from the Old and New Testaments to books by more than thirty thinkers, including Aristotle, Luther, Goethe, Lord Acton, F. A. Hayek, and Ludwig von Mises. Goodrich recommended that board members and anyone interested in enduring ideas should read liberally from this list. The list of books is reproduced in appendix B.

In years to come, the Basic Memorandum will no doubt take on even greater significance as a guide to Goodrich’s desires for the foundation. While almost all current board directors knew Goodrich personally, many future directors, who will not have had the benefit of knowing Goodrich, will have to rely even more on the tenets found in the Basic Memorandum if they are to maintain the foundation’s integrity.31 Still, the memorandum is vague; it is not an explicit guidebook, but a reflective document about Goodrich’s personal concerns. As Liberty Fund senior fellow William C. Dennis states, “The Basic Memorandum doesn’t tell us what to do; it tells us how to think about what we should do.”32

The publishing arm of Liberty Fund is another important aspect of the foundation. In 1971 Liberty Fund published in book form the papers Edition: current; Page: [428] presented at the seminar “Education in a Free Society.”33 Since that time, Liberty Fund has published more than one hundred titles, many of them reprints of such classical texts as Adam Smith’s Wealth of Nations, The Selected Writings of Lord Acton, Ludwig von Mises’s Socialism, and F. A. Hayek’s The Counter-Revolution of Science. A cuneiform inscription, the earliest-known appearance of the word “freedom” (amagi), or “liberty,” is imprinted in each book.34

In April 1978, Helen Schultz stepped down as president of Liberty Fund. Neil McLeod succeeded her, serving until May 1986 in that position. After McLeod’s retirement, Dr. W. W. “Dub” Hill, a former Indiana state senator, headed Liberty Fund until 1992. Hill was succeeded by T. Alan Russell as chairman and chief executive officer and by J. Charles King, a former philosophy professor, as president. King, in turn, turned over the presidency in November 1995 to George B. Martin, formerly a professor of literature at Wofford College in South Carolina.

The board of directors is composed of men and women who take Goodrich’s mission seriously. They bring to their positions diverse and valuable experiences from their own occupational backgrounds: Among them are a former president of a large Illinois milling company, a bank president, a founder of the Universidad Francisco Marroquin in Guatemala, a former president of the Indianapolis Power and Light Company, a lawyer and current college professor of political science, a former president of Meadowlark Farms, and a former undersecretary of defense during the Nixon administration. Pierre’s wife Enid served as vice-chairman of the board until her death in November 1996.35

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Was Pierre Goodrich’s decision to establish Liberty Fund a wise one, especially in light of the huge sum of money that he left to the foundation? Would it have been better for Goodrich to have applied his wealth to more practical ends? With so many needs and problems in the world—humanitarian, educational, social—could not the assets have been used to support more beneficent, humane, and practical endeavors? Moreover, if Goodrich truly wanted to influence people’s thinking, would it not have been better for him to establish a more traditional think tank whose results could have been more readily seen and evaluated? These questions are invariably raised whenever the work of Liberty Fund is closely examined.

To see the intrinsic worth of Liberty Fund takes a certain kind of long-term vision. Changing people’s perceptions of themselves and how they are governed and behave in society is an ongoing endeavor. Yet the foundation has the luxury of taking a long-term approach: It does not have shareholders or employees to appease; it is not beholden to anyone or anything except the tenets that Goodrich set out in the Basic Memorandum. There is no reason that the foundation should not continue to exist in perpetuity.

It is interesting to observe how unusual an institution Liberty Fund is. In many ways, it is a modern replica of the ancient Greek academy: While it invites participants to address searching questions, it is not interested in obtaining specific answers or in applying the information that is shared toward a specific purpose; it has a permanent staff and board of directors, but no permanent group of students. It does have disciples, however: participants who have noted the influence that Edition: current; Page: [430] the foundation has had through its extensive seminar and publishing endeavors.

“There’s a totally different set of ideas being discussed in what you call political philosophy,” said James M. Buchanan, a 1986 winner of the Nobel Prize in economics who is general director of the Center for Study of Public Choice at Virginia’s George Mason University. “Surely it [the Fund] has been in part a contributor to that.”36

“It has made a tremendous difference in seeing that the predicate questions of a society are discussed,” said Stephen J. Tonsor, an emeritus professor at the University of Michigan who has attended dozens of Liberty Fund seminars.37 That is indeed the mission of Liberty Fund: to see that the larger questions about man and individual freedom are continually asked and examined. That momentous task and responsibility are commensurate with the desires and the inquiring mind of Liberty Fund’s founder.

Chapter 30: Who Was Pierre F. Goodrich?

One day in late April 1971, Pierre F. Goodrich, president for thirty-five years of the Indiana Telephone Corporation, decided to visit the corporate headquarters in Seymour, Indiana. He did not come to the offices to meet with upper-level management or to discuss the company’s performance in the last business quarter. Rather, he came to see the recently installed telephone equipment, the women who responded to customer complaints (the so-called 114 girls), Marcella Patton, Mary McCallum, Jean Thomson, and the other operators and secretaries.

At seventy-six, an age when many multimillionaires have been retired for a decade, the crusty but soft-spoken CEO began asking questions of the operators: How did the new electronic switching stations work? How did the operators keep them clean? Did they like automation better than the old manual system? The operators grew weary of Mr. Goodrich’s intense curiosity. They simply wanted to get on with their work, but they were too intimidated by the austere and elderly president to seek leave from his seemingly endless questions.1

For Pierre Goodrich, the occasion was bittersweet. It was a day of Edition: current; Page: [434] nostalgia. He was old enough to remember when the mainstay of the company was the magneto-crank telephone, when telephone operators were called upon to contact the local doctor to notify him that a baby was on its way. He further recalled that the local operators in Seymour, Greensburg, and Winchester had been the hub of a great deal of information. The passing of that day was rather sad. He realized that the operators no longer knew the customers; they had become mere button pushers. Moreover, he knew that recently invented fiber optics and microwave transmission would transform modern communications even further. All these changes marked the end of an era.2

But the company president had another agenda that day. He came to discuss ideas he believed had great relevancy for years to come. Dressed in his conservative dark coat and top hat and perceived as eccentric by his employees, he wanted to discuss matters that were meaningful to him throughout his lifetime of accomplishment: a love of freedom, responsibility, personal commitment, tenacity, and other virtues he extolled and embodied.

On that day, the employees gathered into small groups to meet Mr. Goodrich, a man whom they knew more by reputation than through personal contact. He did not come to make a speech; Pierre F. Goodrich Edition: current; Page: [435] seldom made a speech. He came, in essence, to conduct a symposium, to converse about his greatest concerns and deepest beliefs: man’s ignorance and imperfection, the existence of laws not created by man, and the courage of the Founding Fathers.

The employees listened politely. Few of them had ever read, or even heard of, the Federalist or the work of the Austrian economist Ludwig von Mises, both of which Goodrich spoke about in detail and with passion. The informal discussions went on all afternoon and into the evening, when a company dinner was held. Goodrich later wrote a letter thanking the employees for their thought-provoking conversations, though, in fact, they had said little. Combining business with intellectual discussions was Goodrich’s lifelong habit. For Pierre Goodrich, it was difficult to say where business ended and scholarly discourse began.3

Pierre F. Goodrich was a remarkable man: unconventional, enigmatic, demanding, elusive, inquisitive, skeptical, impassioned, private, and perceptive, with nearly inexhaustive energy. “Mr. Goodrich was way before his time,” said Ruth Connolly, one of his secretaries at Liberty Fund.4

Indeed, the Indianapolis-based businessman was a visionary. As chairman of the board of Ayrshire Collieries Corporation, Goodrich began the reclamation of stripped coalfields thirty years before federal and state regulators forced such action upon coal operators. In banking and the telephone industry, he advocated changes that only in the past ten Edition: current; Page: [436] years have been fully adopted by others. His own companies bought the latest technology. He was constantly trying to find out what the competition was doing. He was keenly interested in the latest gadgets.5

Although Pierre Goodrich was visionary in his business practices, he was often anachronistic in his personal life. He did not own a television, because he believed that television would disrupt his passion for books and ideas.6 Although he could afford the best clothes, his abhorrence of waste prompted him to continue to wear suits that were badly worn and dated. In the 1960s, when smoking at work was commonplace, he demanded that his offices be nonsmoking. His demeanor was often that of the stereotypical absent-minded professor; although worth millions, he could be so deep in thought that he would forget to take pocket change for lunch.7

Defining his life presents many problems. His friends and acquaintances disagreed about Goodrich’s personality and beliefs. To some, Goodrich was gracious, hospitable, and refined;8 to others, he was irascible, suspicious, and unkempt.9 One theology professor who attended an early Liberty Fund seminar on religion left the conference convinced Edition: current; Page: [437] that his host was an atheist.10 Yet Pierre Goodrich’s discussions and writings repeatedly refer to an “infinite creator.” Moreover, his vast knowledge of Scripture was well known.11 He was convinced that the pursuit of ideas about liberty was of the utmost importance to a society, yet he did not choose to champion those ideas by the traditional means of holding a political office or an academic position. Moreover, Goodrich avoided socializing, because he believed that membership in most social organizations was a waste of time. Yet he would take any time necessary to examine some small, obscure point if he believed it would enable him to make a better business decision or if it furthered a philosophical insight.

“Hours did not mean anything to Pierre,” said Will Hays, Jr., who served with Goodrich on the Wabash College Board of Trustees. “Pierre would be so intense about something that was interesting to him, that it just consumed him. He could not understand that the person he was talking to would not be as interested in it as he was.”12

Goodrich was a voracious reader. Moreover, he constantly challenged others to read, especially material that reinforced his own strong convictions about liberty, the virtues of the free market, and the evils of governmental power. When employees and acquaintances said that they did not have time to read as broadly as Goodrich had hoped because of work or family commitments, his common response (and he meant it quite seriously) was, “What are you doing between midnight Edition: current; Page: [438] and 2:00 a.m.?” (he often stayed up that late reading himself).13 It was not uncommon for Goodrich to start business meetings with book discussions, and he often had magazine and journal subscriptions sent to friends and acquaintances.14 For instance, after Goodrich met the young Richard Lugar, a former Indianapolis mayor and currently Indiana’s senior United States senator, Goodrich sent Lugar letters containing titles of books by conservative philosophers and legal scholars. “Pierre knew that I had studied politics, philosophy, and economics at Oxford,” said Lugar. “He thought I should be aware of these writers if I hadn’t already been exposed to them.”15

Goodrich also challenged Eli Lilly, another prominent Indianapolis figure and fellow Wabash College trustee, to take up the classics.16 Anyone who visited Goodrich at his Indianapolis office, whether on a business or a personal call, was likely to leave with a book in hand or to be mailed a packet of selected readings. The material would almost always include numbers 10 and 51 of the Federalist. Also included would be a copy of the letter of the British historian Lord Acton containing the well-known admonition that “power tends to corrupt and absolute power corrupts absolutely” and Rudyard Kipling’s poem “The Gods of Edition: current; Page: [439] the Copybook Headings” (see appendix C).17 A list was kept of the people who visited Goodrich in the early 1970s and who were sent the above readings. The list, several pages in length, includes national political insiders, former Indiana governors, congressmen, leading national journalists, academics, and businessmen.18 It was as if Pierre Goodrich’s office was a stopping-off place for prominent figures who were on a pilgrimage to greater understanding. Goodrich was just as apt to have the same literature sent to the plumber who had fixed his sink the day before or the janitor whom he had recently engaged in vigorous debate.19

Former Indiana governor Edgar D. Whitcomb remembers when he first met Goodrich, in 1958. Whitcomb was attempting to get a manuscript that he had written published. “Once I was advised that he might be of help, I went directly to Pierre’s office and the receptionist showed me in,” said Whitcomb. “Mr. Goodrich was sitting in the corner reading a book.” Whitcomb discussed with Goodrich his manuscript, Escape from Corregidor. It was about Whitcomb’s experiences in a Japanese prisoner-of-war camp during World War II. “After I introduced myself and my purpose for visiting,” added Whitcomb, “Pierre pulled a watch out of his pocket and said to me, ‘It is a quarter till twelve. I can give you fifteen minutes.’”

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Two and a half hours later, after lunch and a lengthy philosophical discussion, Whitcomb emerged from Goodrich’s office with at least eight books in hand; Goodrich had also called Henry Regnery on the spot, and Regnery published Whitcomb’s manuscript soon afterward.20

William Campbell, now a professor of economics at Louisiana State University, appreciated Goodrich for giving him a copy of Ludwig von Mises’s Human Action, which introduced him to economics and rational thought. Campbell credits this small gesture as having a major influence on the direction of his intellectual interests. Campbell also remembers the influence that Goodrich had on his father, Albert, a longtime law partner and business associate of Pierre’s: “My father felt personally indebted to Pierre for interesting him in the cause of human liberty. I think it is safe to say that my father would not have dedicated himself to Wabash, Hillsdale, [and] Rockford College without the personal influence of Pierre Goodrich.”21

Victor Milione, former president of the Intercollegiate Studies Institute, had similar praise for Goodrich. “What I admired about Pierre most was here was a man that had tremendous wealth and could have sat on his backside and played golf whenever he wanted to, but instead he got involved in issues and ideas. Pierre spent a great deal of time thinking about the future. He wasn’t simply doing these things for his own material benefit.”22

Pierre Goodrich’s strengths and foibles say much about him. He had a prodigious memory, especially for details. In both business and foundation meetings, Goodrich often prevailed in his arguments because of his ability to quote verbatim from some relatively obscure source.23

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“He would call me on the telephone and we would talk for an hour,” said Dale Braun, who worked for Goodrich briefly to establish Indiana chapters of the Great Books Foundation. “We’d then talk again six months later and Pierre would quote me word for word what I had told him during our earlier conversation. I remember I had to be careful what I told him for fear he’d hold me to the letter of it months later.”24

John Kidder remembers when he was manager of the Ford dealership shortly after World War II in Goodrich’s hometown of Winchester. Because the war had consumed most of the country’s steel, cars for private use were extremely difficult to come by. One Monday morning, on Goodrich’s return to Indianapolis, he drove into the Ford dealership to purchase gasoline. He was driving a 1941 Lincoln Continental. “I told Pierre at the time that if he was ever interested in selling the car, I’d like to purchase it for the dealership,” said Kidder. “He didn’t say anything, just nodded his head. Six years later I got a letter from Pierre asking if I was still interested in buying the Lincoln.”25

Goodrich often addressed his employees by their last names. He believed that casual familiarity (referring to one another by first names) could result in the degeneration of a relationship.26 Nonetheless, he did not put himself on any pedestal. While he could dominate a conversation, he was generally a good listener and took an interest in most of his employees’ suggestions and opinions. Apparently, Goodrich’s intense curiosity was partially natural, but no doubt much of it was also deliberate. The reason for his inquisitiveness could be to gain the knowledge necessary for a more intelligent business decision or to explore the depth of thinking of the examinee, or possibly both.

“One day we were in Indianapolis at a meeting for the purpose of buying telephone equipment and Pierre had hired an expert to give us advice,” said Perce Goodrich, adding parenthetically, “If you were in Edition: current; Page: [442] a meeting with Pierre, something that would normally take an hour, might take half or even a full day. Finally, I said, ‘Pierre, you hire an expert to tell you what to do and then you second guess ’em and don’t take their advice.’ He said, ‘Let me tell you something, Perce, when you hire an expert you gotta check on them to see if they know what they’re talking about.’”27

No one impressed Pierre Goodrich on the basis of a job title or degrees. Goodrich had to be convinced that the person actually had the knowledge that he or she professed to have. Goodrich’s inquisitiveness became infectious. People who were around him would start to ask, “Is there another way?” and, “Would it be better to attempt it in this manner?”28 Goodrich would propose even more difficult and searching questions that had little to do with the business arena directly: Are human beings perfectible? Are they empty vessels? Are there moral absolutes or are morals relative? Who determines what is morally right? How is economic prosperity achieved and maintained? These questions were anxiety-producing to some because they challenged their belief systems and their very comfortable way of living. Moreover, Goodrich’s questions were not simply abstractions. He wanted to know why a person did something and why some other course of action was not preferable. That attitude led him to challenge the modern welfare state at a Edition: current; Page: [443] time (the 1950s, 1960s, and early 1970s) when belief in its virtues was at its zenith.

His probing nature extended into the process by which he hired employees. “Before Pierre Goodrich would hire a new person—and it didn’t make any difference what type of job—he would interview them personally and sometimes the interview would go on for hours,” said Rosanna Amos.29

When Goodrich interviewed an applicant for a top management position, the interview could last up to three successive days. Moreover, it was the exception, not the rule, that the questions had anything to do with the position that the applicant was seeking.

“I was interviewing for the chief financial officer’s position of the Indiana Telephone Corporation in August 1971,” said Alan Russell, now chairman of Liberty Fund. “I expected my first question to be on budgets or closings. But that wasn’t the first question. The first question from Pierre was what is the difference between a paramecium and an amoeba? I was able to tell him that they were both one cell animals and that they reproduced differently, but that was probably the closest I came in two days of answering any one of his questions.” Goodrich was trying to find out if the candidate had an inquiring mind and whether the candidate had a desire to learn or believed he already knew everything there was to know.30

The one encounter Martha Wharton of Indianapolis had with Goodrich in 1966 left an indelible impression upon her. She had come to his Edition: current; Page: [444] offices at 3520 Washington Boulevard to interview for what she had been initially told was a legal secretary’s position. For Wharton, the meeting was unforgettable.

The rapport quickly deteriorated, however, when Wharton corrected Goodrich in his use of a word during a trial run at dictation. Convinced she had “cooked her goose,” she left the interview, not in intimidation or awe of the man, but “with a keen awareness that I had been in the presence of greatness.” (Much to her surprise, Wharton was offered the job by Goodrich, but she turned it down because it was below her salary expectations.)32

There was no doubt about it: Goodrich could be tough on employees. “He might accept a mistake once,” said Gilbert Snider, “but if you failed a second time that indicated a pattern to Mr. Goodrich. He couldn’t tolerate laziness. Human frailties were only accepted by Pierre in very limited amounts. He just overestimated his employees’ capabilities in relation to his own.”33 Rosanna Amos echoed Snider’s opinion: “Mr. Goodrich could lose interest in someone real fast if they did one thing that was stupid.”34

Thus, personal contact with Pierre Goodrich was often not pleasant. He could be demanding, self-centered, and pedantic to the point of boredom. It was not unusual for him to conduct his business activities Edition: current; Page: [445] without apparently thinking about the inconvenience that it might place on others who had to deal with him. For instance, monthly board meetings for the Eastern Indiana Telephone Company and Peoples Loan and Trust Company were held in Winchester on Friday and Saturday nights, respectively, to accommodate Goodrich’s Indianapolis work schedule, not anyone else’s.35 The meetings could go on into all hours of the night and start again early the next morning. He would often have food brought into the meetings so that the flow of the discussion would not be interrupted. One Christmas Eve, Goodrich continued a meeting well into the evening and apparently never gave any thought to the difficult position in which it placed employees with children.36 Goodrich simply did not place the same value on family and social activities as others did: He didn’t have a particularly close relationship with his only child, and he viewed most social gatherings as worthless because they were nonproductive.

In terms of demeanor, Goodrich was often dogmatic in expressing his point of view and unrelenting in prosecuting his case. He also possessed conflicting traits in temperament: a subtle shyness and a strong (at times, dominating) personality. In terms of self-reflection, neither James Goodrich nor Pierre Goodrich seemed to express inner feelings or motives. Seldom in the hundreds of letters of Pierre Goodrich’s I read or the numerous discussions I had with Pierre’s associates did I learn of any sharing of inner thoughts or feelings. Pierre Goodrich may have been a philosopher, but he was not a poet.

Moreover, Goodrich had an abiding, often unrealistic belief that reason either does or should control people’s behavior. He had difficulty Edition: current; Page: [446] appreciating that individuals often make decisions on the basis of emotional, and not purely rational, motives. For instance, he was convinced that customers of his Indiana bank, the Peoples Loan and Trust Company, did business with it because Peoples was one of the soundest and best-run small banks in the state. Yet former bank employee Ronald Medler insists that it was excellent service that attracted customers to the bank. Goodrich too often undervalued the human touch. “One thing I could never get Pierre to understand,” said Medler, “was the importance of customer service. Most customers don’t know who owns a bank or how well capitalized it is. But Pierre believed that people stayed at home and studied these things before they deposited their money. He didn’t appreciate how much service and a familiar face meant to keeping customers satisfied.”37

Goodrich also did not seem to appreciate fully how wealth and higher education offered opportunities that not everyone had access to. He sometimes attributed a person’s lack of success to weakness of will. He did not seem to realize that many individuals are not in a position to change their fortunes dramatically.38 Because of his brilliance and his advantages, Pierre Goodrich could at times overestimate the degree to which people are captains of their fate.39

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Yet despite these shortcomings, according to dozens of people, Pierre Goodrich was the most remarkable person they had ever met. “I would describe Pierre Goodrich as a man who actually had ‘the vision of greatness,’” said Elton Trueblood, a well-known theologian who became a close friend of Goodrich’s through their work with the Great Books Foundation.40 Few that I interviewed would disagree with Trueblood’s assessment.

One evening in the early 1920s, Alice Miller Bly accidentally crossed paths with Pierre Goodrich, the town’s young new attorney, across from the old Winchester High School. Alice’s family was waiting for her to come home for dinner and had nearly given up. There was a thunderstorm, and it had been raining for quite some time when Alice finally trudged through the door, bedraggled. “Alice said that she and Pierre Goodrich had been out talking in the rain about literature and she couldn’t get away from him,” said Mary Johnson, Alice’s sister. “She had an umbrella and Pierre didn’t.”41

This seemingly trivial incident is indicative of the intense feeling that Goodrich had for ideas. He could become consumed with the need to share his insights and bring illumination to a conversation. In his desire Edition: current; Page: [448] to record ideas that he believed were important, Goodrich, in the late 1960s, hired a person to establish an “ideas file.” The duties were to read newspapers, magazines, and journals such as the New York Times, Barrons, the Chicago Tribune, Human Events, the Indianapolis Star, and the Indianapolis Press. The task was to clip any article found on such subjects as inflation, war, the Middle East, Lord Acton, gold and the gold standard, United States Supreme Court decisions, Social Security, espionage, legislating morality and its futility, Japanese internees, Calvin, Locke, Luther, Hegel, Plato, the virtues, and anything to do with Germany. Pierre Goodrich would often sit down with the person responsible for the ideas file along with several others to discuss for hours these ideas and the publications from which they came. The ideas files filled several large upright cabinets in Goodrich’s offices. Goodrich’s preoccupation with ideas knew no time limitations. Several persons I interviewed remarked, often with humor and sometimes with irritation, that he would call them in the middle of the night or would interrupt their dinner, seemingly oblivious of the time or the disruption.42

Goodrich was a classic perfectionist. He had an extremely difficult time reaching closure in almost everything he ever attempted—be it a conversation, a personal letter, a business meeting, writing a business document, or anything else (he made and remade his will eleven times between 1949 and 1969).43 He regarded almost each endeavor as unfinished, incomplete, and capable of being improved upon; many things he wrote were stamped “Draft Only.”

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His painstaking manner exasperated almost everyone who had to work with him.44 “I think there was a driving force within him to seek the unobtainable,” said Arlene Metz, who sat through many lengthy meetings in the early 1960s taking dictation from Goodrich. “I don’t think he left one stone unturned. Regular hours didn’t mean anything to him. You worked until you got something done.”45

Goodrich’s drive for perfection carried over into his need to master his varied interests. When something piqued his curiosity, he would learn all about it. He was not content to dabble in something or simply become acquainted with its rudimentary elements. Rather, Pierre Goodrich would research his interests, consult experts about them, and discuss them in depth. He would not let go of an interest until he had mastered it. It did not matter whether the interest involved understanding the evils of inflation, the inner workings of telephone equipment, cooking, the origins and qualities of gemstones, Eastern mysticism, agriculture, or distinguishing the bouquets of fine German wines.46

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Although he did not embrace organized religion to any great degree as an adult, he was a student of most of the great world religions. Many acquaintances commented on Goodrich’s vast knowledge of Greek Orthodoxy and Eastern mysticism, but he was equally knowledgeable about mainstream Christian faiths. When Goodrich arranged in 1972 to meet with John Waltz, a new Winchester town councilman at the time, one of the first things he wanted to know was Waltz’s church affiliation.

“When I told him I belonged to the Disciples of Christ Church,” said Waltz, “Pierre told me all about the history of the denomination, how the Disciples had evolved from earlier Christian denominations. His knowledge was amazing.”47

One year before Christmas in the 1930s, Goodrich studied the motions of galaxies and calculated what the sky must have looked like in the year of Christ’s birth. He then had Roy Barnes, a local Winchester artist and Goodrich company employee, design a Christmas card with the stars’ configuration on the cover. Goodrich had the card printed and sent to family members and friends.48 This is just one example of Edition: current; Page: [451] how fascinated he could become with an idea or concept once it piqued his curiosity.49

Chapter 31: Defining Influences

If, as sociologists and psychologists tell us, individual character and values are formed at an early age, what does Pierre Goodrich’s upbringing reveal about him? Was there anything unique about his childhood and adolescent years that could explain his deep convictions and strong personality, or were these qualities achieved through experiences in later life?

Pierre F. Goodrich grew up in Winchester, Indiana, at the turn of the twentieth century and lived there until he was eighteen. He returned home at the age of twenty-five to practice law for the next three years of his life (1920–23). For Pierre, growing up in a small Hoosier town was nearly idyllic. His adolescence was filled with Tom Sawyer–like experiences, complete with opportunities for youthful adventure: fishing, sports and games, family outings, travel, and challenging intellectual pleasures.

Winchester was an incredibly homogeneous community and part of an almost equally homogeneous state. The town is located ten miles west of Ohio, near the beginning of what the Delaware Indians called the Wapahani (White River). At the time, Winchester was populated Edition: current; Page: [453] almost entirely by people of German, Irish, and English descent—no Jewish families and few blacks or Catholics.1 It was a world where a young boy had a great sense of security and support, crime was rare, people left their front doors unlocked, and distinctions between right and wrong were made early and often. Moreover, northern European cultural, social, and religious influences, especially Germanic notions of strict discipline, duty, and obedience to authority, were significant.2

The institutions that became an integral part of the Goodrich family’s lives—church, family, government, finance, and business—were all within a short distance of their homes. They were constant physical reminders of turn-of-the-century midwestern values. For instance, Pierre’s elementary and high schools were literally just down the street; in them, he gained an exceptionally fine early education.3 His grandmother, Elizabeth Goodrich; his kindergarten teacher and great aunt, Belle Edger; all four of his uncles and their families; and friends such as the Millers, the McCamishes, the Moormans, and the Jaquas lived within two blocks of his home. The Presbyterian church he attended was located across the street; the county courthouse and jail were two blocks west; the town library was two blocks north.

Moreover, Pierre’s father and his uncle Edward were presidents of Edition: current; Page: [454] two of the town’s most prominent banks. As to the spiritual life of the town, the Society of Friends meetinghouse, the Congregational church, the Disciples of Christ church, the Methodist church, and, of course, the Presbyterian church were all part of the neighborhood where Pierre grew up. Finally, there were the important institutions of politics and the military. Winchester and Randolph County, probably even more than most small rural American communities of the time, were deeply patriotic and political around the turn of the century. It was a community that had produced five Civil War generals.4 Nearly twenty-four hundred men (approximately one of every twelve residents) from the county had fought for the Union cause; despite deep opposition to violence, Quaker parents who were fervent abolitionists sent their sons off to fight against slavery. As a boy, Pierre would have known Civil War veterans such as John Macy, Sr., and Charles Jaqua, who shared Edition: current; Page: [455] wondrous stories about the battles at Chickamauga, Gettysburg, and Antietam.

This spirit and pride in military service spilled over into community celebrations. The two largest community events each year were Decoration Day (now Memorial Day) and the Fourth of July. On these important public holidays, thousands of townspeople gathered along Winchester’s broad streets. The main event was a jubilant parade in which bands played and regiments of the Grand Army of the Republic (Civil War veterans) marched from villages all over the county to the Winchester town square. On July 21, 1892, for instance, at the ceremony marking the dedication of the county’s Civil War Soldiers and Sailors Monument, an estimated fifteen thousand people appeared, including Oliver P. Morton, Indiana’s Civil War governor, who grew up in nearby Centerville, Indiana. On October 11, 1900, an estimated ten thousand people welcomed Teddy Roosevelt to Winchester. Such patriotic gatherings—complete with windy speeches made with great spirit and love of country—continued well into the twentieth century.

Furthermore, politics was a religion in the small community, celebrated with as much enthusiasm and reverence as a country church’s gospel revival. At least four men who had formerly held the office of president (Benjamin Harrison, Theodore Roosevelt, William Howard Taft, and Herbert Hoover) visited Winchester during Pierre’s lifetime. The county had produced two governors (including James Goodrich) and a powerful United States congressman and senator (James Watson). Two men from the county also ran for president of the United States (Watson, in 1928; and Isaac Gray, who lost Democratic nominations to Grover Cleveland, in 1892, and to William Jennings Bryan, in 1896). Most of the time, Pierre’s father held leadership positions in the Republican Party at the county, state, or national level. Moreover, dozens of other men from Winchester held federal or state office positions, men such as Thomas Browne, John Macy, Sr., Enos Watson, Leander Monks, and Union B. Hunt, mentors of James Goodrich’s and names with whom Pierre would be very familiar.

I offer this brief local history to show the reader the rich environment Edition: current; Page: [456] in which the Goodriches grew up. The town’s institutions provided them with structure and support. I believe that these institutions emotionally and psychologically reinforced a value system that remained with Pierre into adulthood, but which he saw during his own lifetime severely strained and weakened. Times and conditions are so different today that it is difficult for most of us to appreciate the spirit, stability, and fraternity of community, family, church, and political involvement that existed during Goodrich’s formative years.

Pierre Goodrich grew up in a town where, if you were from a prominent family like his, almost everyone knew you. They knew your parents and probably your extended family. There were considerable societal pressures to conform to widely accepted customs; moreover, virtues such as honesty, integrity in business, and responsibility to one’s family and friends were also of serious import. How one was perceived and how one behaved were indivisible. The following excerpt about James Goodrich from a local history book published in 1914 tells us much:

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One’s first reaction, of course, is “what tripe!” No one could be that virtuous, and clearly whoever wrote this biography (probably Lee L. Driver, former superintendent of schools in Winchester) should have his head examined. One’s second reaction, upon slight reflection, is that the passage simply reflects the oratory of the time, the tendency toward flowery, exaggerated language. But let me suggest a third interpretation that does not necessarily contradict either of the first two observations. Who one was and how one was perceived were extremely important. If one did not live up to the esteem that one had in the community, he could lose face. The anonymity of contemporary life clearly mitigates this pressure.

Late in life, Pierre Goodrich recalled what it meant to be a small-town lawyer. In such a position, an attorney served as “an officer of the Court,” morally an agent of the judicial system, responsible for furthering truth and not obscuring it.6 Again, I believe the cynicism of modern society, in which to many the idea of lawyering and justice appear to be incompatible, hinders our understanding. Perhaps the atmosphere of the time was best captured in a letter written by a townswoman, Ella Clark. In November 1920, she wrote a young Winchester man, William Bales, who was then a student at the University of Michigan School of Law:

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I believe that Winchester—like most small towns of turn-of-the-century America—was a bastion of moral rectitude. Practicing attorneys with no formal legal education and law school graduates alike did not take classes or bar examinations in ethics. (Now, it seems that every profession from accountancy to real estate requires courses and seminars on morals and civility.)8 At the turn of the century, people were brought up in an atmosphere of religious and societal commitments, and they were expected to observe high standards of personal and professional moral conduct. I do not suggest that scandal and exploitation did not take place, but merely observe that they were rare. The scandalous and the exploitative risked being ostracized by the community, and the community was their world. Standards of responsibility were inculcated into an individual by family (nuclear and extended), church, neighbors, and business mentors. The idea that laws or a watchdog agency was necessary to coerce compliance with professional standards seemed alien to many businessmen of that day. It is clear that many people, including Pierre Goodrich, never accepted that such things were necessary, despite recognizing the abuses that brought such laws and agencies into existence.

Pierre’s view of personal responsibility is perhaps best reflected by the “gentlemen’s rule” that exists even today at Wabash College. Wabash does not have elaborate rules of conduct, as do many—perhaps most—institutions of higher learning. Rather than specifying what is appropriate student behavior, Wabash’s code simply states: “The student is expected to conduct himself, at all times, both on and off the campus, as Edition: current; Page: [459] a gentleman and a responsible citizen.”9 I think that Pierre Goodrich believed that any further elaboration or coercion of conduct (prior to a wrong being done) was unnecessary.

But the institutions that helped shape James and Pierre Goodrich’s beliefs and personalities have been severely eroded. Societal changes that took place during Pierre’s lifetime (and to a much lesser degree during his father’s) have dramatically decreased the influence of family, the church, the community, and the sense of patriotism and moral certitude that helped form people’s professional and personal behaviors. As a result, government has been viewed by those in political power—who are forced to deal with problems when others in society cannot or will not—as the remaining vehicle that can shore up the gaps that have developed as a result of the erosion of other character-forming institutions.

The erosion of family, church, and community can be readily seen. In James’s and Pierre’s young lives, family members and friends lived in proximity to one another. But today, family members and “close friends” (emotionally and psychologically speaking) are apt to live thousands of miles away. Neighbors, who are apt to be strangers, often have little to do with meeting emotional and psychological needs. Moreover, the increased acceptance of mobility and moral relativity has made it much easier for individuals to avoid family and community responsibilities. In a less mobile and more closed society, individuals accepted (or at least tolerated) those responsibilities.

Therefore, I believe the role of the extended family in the lives of James and Pierre Goodrich was extremely important, as the role that John Macy, Sr., had in serving as a mentor to James Goodrich, both as a young lawyer and politician, indicates. And even though James Goodrich was gone from home during a considerable period of Pierre’s adolescence, Pierre had the constant support of his uncles and aunts, Edition: current; Page: [460] his grandmother, his great-aunts, his cousins, and his friends. They all lived a few houses away. Is it any wonder that Pierre felt such a strong bond with and commitment to his family when he was placed in charge of the Goodrich financial empire in the 1940s?

In contrast to the community in which James and Pierre Goodrich grew up is modern society. In the latter, there is a tendency for the individual to draw inward, not to see himself or herself as part of a larger community. The individual, sensing isolation and the relativity of all judgment, is no longer guided by community and religious standards, but makes himself or herself the measure of all things. As a result, personal gratification and narcissistic pleasure become the primary pursuit of the individual.10 Is it any wonder that drug and alcohol addiction, divorce, crime, greed, and a sense of isolation and loneliness have come to be identified with modern times?

The decreasing significance and changing role of the church in people’s lives is another contributing factor. Quite simply, the church today does not function as it did in earlier generations. Society is suffering from the loss of commitment both to the institution and to the Christian ethic it extolled.

All one has to do is look at Pierre Goodrich and his ancestry to see how true this observation is. Pierre’s grandmother, Elizabeth Goodrich, Edition: current; Page: [461] was a founding member of Pierre’s home church. James and Cora Goodrich were Sunday school teachers in that church for more than twenty-five years. The First Presbyterian Church of Winchester was a focal point of spiritual and social engagements for the entire Goodrich family. Yet the church’s significance faded during Pierre’s own lifetime. He himself admitted that he was a “backslid Presbyterian.” Pierre spoke and wrote in euphemistic terms about the “infinite creator,” but nowhere in his writings or during discussions I had with his associates and family did I learn that Pierre had deep spiritual convictions. He was a scholar of the Bible and extremely knowledgeable about world religions, but his pursuit of the spiritual always seemed to be scholastic, detached, and unemotional. Goodrich lamented that the modern clergy spent much of its time preaching the social (political) gospel of the times (civil rights and equality), yet there is no indication that he thought that the preaching of the traditional gospel would have a transforming effect as powerful as that of an understanding based on a study of secular thinkers such as Kant, Locke, and Lord Acton.

The above observations are not meant to criticize the Goodrich family, but to show how growing secularization drastically changed people’s beliefs and deeply altered society during Pierre Goodrich’s lifetime. Society’s problems are so widespread that even small-town America is not exempt from them.12 Moreover, in the past fifty years, government has Edition: current; Page: [462] allocated vast resources in an attempt to deal with the social crises society now faces, often with negligible results.13

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Pierre Goodrich strongly challenged the trend against the growing statism that he saw. An examination of his heritage holds, I believe, at least a partial explanation. The idea of commitment to something outside oneself (family, community, neighbors, objective truth, and so forth) was inculcated in Goodrich and his family. What frustrated Goodrich was that he saw the power of the state over individuals’ lives growing in an attempt to shore up ideals and institutions. The state behaves in this way in order to provide at least some nominal guidance in people’s lives. Goodrich recognized, however, that the state merely compels people to act in a certain way without requiring the individual to understand why. The state does this almost solely by sanctions (for example, laws, taxes, and police) or by incentives (for example, social services and subsidies). It does little to educate people about citizenship. Goodrich believed that the use of coercion is in direct opposition to the exercise of individual understanding and will.14

Chapter 32: Why Did They Work So Hard? Work, Ideas, Citizenship, and Virtue

Life grants nothing to us mortals without hard work,” wrote Horace, the Latin lyric poet, more than two thousand years ago.1 But why was work so important to the Goodrich family? What did it give them besides material comforts?

With all the political expertise possessed by his father, why did Pierre not become directly involved in politics? He had the money, the potential Edition: current; Page: [465] for name recognition, and the intelligence. Perhaps most important, he wanted to be influential.

A political life was never in the cards for Pierre. First, he simply would not have been any good at it. He was much too shy and private to subject himself to the public spotlight. Pierre was not the hand-grabbing, back-slapping type. Second, politics is a means of compelling people to act in accord with some collective decision. While Pierre was intensely interested in changing human behavior, he wanted people to change as a result of their own volition, through a proper understanding of the rights and duties of citizenship. He thought he could best accomplish this end through education. Third, politics involves compromise, and Pierre Goodrich was uncompromising. “Mr. Goodrich would often say,” recalled Rosanna Amos, “be reasonable—do it my way.”2 Before Goodrich reached a decision, he gave most matters such tremendous thought that he would have been frustrated with constituents or politicians who did not. Finally, Goodrich would not have tolerated politics’ most evident pitfall—its lack of candor. While he could be diplomatic, he was just as apt to be blunt. Pierre was not one to shrink from stating what he believed to be the truth, even if the listener was not prepared to hear it.3

If a political career was not right for Pierre, why did he become a businessman? Why did he not pursue a career as an economics professor or a big-city lawyer or a stockbroker? Why did he not just forgo a professional life altogether and sip gin-and-tonics at some Mediterranean villa? He certainly did not have to work. Why, then, did achieving success as a businessman become his consuming passion? Why did he, his father, and the Goodrich family in general “devote their best energies for long hours day after day to this driving activity [work] seemingly Edition: current; Page: [466] so foreign to many of the most powerful impulses of human beings”?4

Pierre Goodrich’s occupational choice had much to do with following in his father’s footsteps. The Goodrich family had controlling interests in several companies long before Pierre came on the scene; someone had to be James Goodrich’s successor if the family financial empire was to endure. Pierre was the best person to step into his father’s shoes. He had served as his father’s business disciple for nearly twenty years and was a direct beneficiary of his father’s (and to a lesser extent his uncles’) hard work and tremendous foresight. After James Goodrich died in 1940, running the family financial empire was Pierre’s life’s work. To succeed his father as head of the Goodrich companies or on the board of Wabash College was an honor and a great responsibility.

But more important, Pierre’s occupation and ambitions gave expression to his enculturation. The manner in which he approached business and life suggests that a distinct belief system, instilled in him at a young age, dominated his thinking and actions. This enculturation may be only partially explained by John Maynard Keynes’s observation in 1925 that “our age is concerned with the Love of Money, with the habitual appeal to the Money Motive [being] nine-tenths of the activities of life, with the universal striving after individual economic security as the prime object of endeavor, with the social approbation of money as the measure of constructive success, and with the social appeal to the hoarding instinct as the foundation of the necessary provision for the family and for the future.”5

Money, as Keynes observes, means security to the individual; it also produces a sense of power and well-being, and is an indicator of success. Perhaps the most stimulating emotion it creates is simply the thrill of making it. I believe, however, that, for the Goodrich family, wealth possessed another significance that equaled or exceeded all the others combined.

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How this yet-to-be fully described belief system was instilled in Pierre might be best seen in the wedding gift his parents gave him in July 1920. Whereas many wealthy parents might give their newlywed son an expensive new car or pay for a lavish honeymoon, James and Cora Goodrich gave Pierre an investment—ten thousand dollars in stock in a coal company.6 Although later in life Pierre stayed at expensive hotels when he traveled, in general, his lifestyle was simple and frugal. His Indianapolis home was one of the finest examples of classical Georgian design anywhere, yet for a man of his considerable wealth it was rather modest.7 To Pierre, the most valuable items in his home were his Stradivarius violin and a first edition of Adam Smith’s Wealth of Nations.8 Goodrich drove expensive cars (Lincolns and Mercedes-Benzes), but he could have had a fleet of cars. Former Wabash president Byron Trippet recalls:

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To have enjoyed an indulgent, ostentatious life would have been completely against Goodrich’s moral and religious upbringing. To that extent, I disagree with Trippet’s appraisal that there was “nothing religious or sanctimonious about [Pierre’s] puritanism.” James, Pierre, and the Goodrich family in general did not work to gain greater wealth for personal consumption; their passion for work (and Pierre’s passion for ideas) had religious roots. In large measure, the Goodriches’ outward demeanor fit closely with the German sociologist Max Weber’s “ideal-type” of the capitalist entrepreneur:

I believe that work and the wealth that it produced was a form of worldly asceticism for James, Pierre, and, in large measure, the entire Goodrich family. Work was a virtuous activity, but the Protestant notion of ascetic propriety “acted powerfully against the spontaneous enjoyment of possessions, it restricted consumption, especially of luxuries.”11 Max Weber’s major thesis is that the Reformation (including Luther’s and Calvin’s radical teachings, which largely brought it about) made the accumulation of wealth not only acceptable, but a sign of godly approval.12 But wealth is not primarily, as the Protestant reformers Edition: current; Page: [469] argued, for personal consumption and pleasure. As Pierre’s longtime assistant Helen Schultz Fletcher stated, “Mr. Goodrich believed that we hold our assets in trust to our Creator, and that idea was a very important part of the philosophy back of his actions.”13 The Reverend Gustav Papperman, delivering the eulogy at James Goodrich’s funeral in 1940, said much the same thing: “The Governor felt that he had been given talents that were a trust, that he was to administer them faithfully. . . . There was a firm religious basis on which his life was built.”14

I think that there was an intimate correlation between James’s and Pierre’s religious and moral upbringings and their choice of professions and ambitions. I believe that this is true even though in later life Pierre did not embrace organized religion to any great degree. The Goodriches were stalwart members of their church dating back to at least Pierre’s grandfather, John Baldwin Goodrich, who was superintendent of the Congregational church in Winchester. Pierre’s paternal grandfather and grandmother attended school at the Winchester Seminary in the 1850s. There, devotions were as much a part of the curriculum as mathematics and spelling. Elizabeth Edger Goodrich also attended Liber College in the late 1850s, where moral teachings were the core of instruction, and was a founding member of the First Presbyterian Church of Winchester in 1882. As Liber College’s president, Ebenezer Tucker, recalled in 1873, “The school has been noted for studiousness, integrity, love of freedom, absence of pride and naughtiness, unity of feeling.”15 Pierre’s uncle Percy was a longtime superintendent of the Sunday school; James Edition: current; Page: [470] Goodrich was an elder of the church and taught a men’s Sunday school class for more than twenty-five years. Cora Goodrich was a Sunday school teacher and oversaw a boys’ Bible study group of which Pierre was a member. Both she and Pierre were extremely knowledgeable about the Bible.16 Pierre taught a young men’s Sunday school class from 1920 to 1922. Pierre’s other uncles and aunts also held leadership positions in the local Presbyterian church.17

As did other small midwestern towns of the late nineteenth and early twentieth centuries, Winchester, Indiana, reflected the religious values of the time. The separations between church, state, business, and family life simply were not as distinct or as great as they are today. The overwhelming majority of Protestant denominations, including the Goodrich family’s Presbyterian church, embraced a strongly Calvinistic Christianity. It was an ethos that had originated in America with New England Puritans more than two centuries earlier and had been transported to the Midwest (via the Carolinas and Virginia) by pioneering families such as the Goodriches. For Pierre, that belief system was reinforced at Wabash College, where campus life for an ambitious student involved hard work, discipline, exposure to serious works, and mandatory daily chapel.18

The Goodriches’ religious ethos was mixed with a Benjamin Franklin Edition: current; Page: [471] worldview that associated prosperity with the Victorian virtues—self-reliance, hard work, patriotism, frugality, cleanliness, and so on. In James Goodrich’s “Russia Manuscript,” he describes a simple but revealing encounter that occurred during his third visit to the Soviet Union. In May 1922, he had just entered the small village of Bezdona, which, he had been informed by everybody, was “the worst place in all famine-stricken Russia.”

James Goodrich’s last words are not biblical; they come straight from Benjamin Franklin’s Poor Richard’s Almanack.20 This view of the world combines spiritual worthiness with worldly prosperity achieved by planning, hard work, thrift, and diligence. James Goodrich’s view of governing was no different. During his four-year term as governor, he made “economy and efficiency” the overriding concerns of his administration.21 Before the Reformation, the accumulation of wealth was Edition: current; Page: [472] viewed as evil, but post-Reformation teachings gradually sanctioned such accumulation so long as it was not done dishonestly or with avarice. What was condemned was the “pursuit of riches for their own sake”: “For wealth in itself was a temptation . . . , [but] the religious valuation of restless, continuous, systematic work in a worldly calling, as the highest means to asceticism, and at the same time the surest and most evident proof of rebirth and genuine faith, must have been the most powerful conceivable lever for the expansion of that attitude toward life which we have here called the spirit of capitalism.”22

One need only reflect upon the Goodriches’ various business operations to reach the conclusion that they had a passion for accumulation almost religious in its intensity. They did not pay high salaries to their employees, pay large dividends to their shareholders, or take large profits for themselves. They continually invested back into their companies a large percentage of the income the companies generated. This constant reinvestment, combined with their skillful management, made the Goodrich companies extremely valuable when they were ultimately sold.23

Moreover, from a practical perspective, the large capital growth of the companies was another reason Pierre was so concerned about inflationary policies. Much of the worth of the Goodrich companies (and of hard-earned wealth in general) would have been eroded if inflation had gotten out of hand, because capital gains were taxed at a very high rate. Pierre realized that inflation allows a taxing authority to drain resources from the private sector while not appearing to be confiscatory. In James Goodrich’s “Russia Manuscript,” he describes repeatedly the devastating effects that inflation had on the economy in post–civil war Russia, Edition: current; Page: [473] where inflation wreaked havoc by making the ruble nearly worthless. Pierre would have known about this directly from his father. He also knew about the ruinous effects of inflation in revolutionary France in the 1780s and in pre–World War II Germany.

The spirit of capitalism is not unique to the Goodrich family. The Protestant aesthetic that favored investment and accumulation over consumption and dissipation is what made America a great economic power in the nineteenth and twentieth centuries. But the Goodrich family is a particularly interesting case.

Education was a large part of the Goodriches’ work ethos. Almost all of the Goodrich money ended up supporting education in one form or another: Wabash College, Hanover College, Butler University, Oakland City University, the University of Notre Dame, the Presbyterian Seminary of Chicago, Liberty Fund, the Great Books Foundation, the Foundation for Economic Education, the Institute for Intercollegiate Studies, the China Institute of America, and on and on. The family viewed education as a process by virtue of which the individual remained informed, made better business decisions, learned the importance of citizenship, and was given an opportunity for individual self-improvement. Therefore, work and education became the centerpieces of the Goodrich family’s ethical and practical life. An examination of Pierre’s customary twelve- to fourteen-hour business day reveals that he made little, if any, distinction between work and avocational interests.24 He was almost always engaged in a process of understanding, whether it was about squeezing greater profits from his coal operations, studying some classic text, or clarifying and refining his thinking by writing lengthy letters. I think that is why making a decision was such an arduous task for Pierre—he seldom thought he understood something well enough to reach a conclusion about it. Moreover, I cannot recall studying Edition: current; Page: [474] another individual whose thoughts and actions were so intimately fused. It was not simply that Pierre Goodrich had a tendency to think or speak in a stream-of-consciousness manner; to a large degree, his life was lived in that manner.

Goodrich’s preoccupation with ideas is very interesting. He applied his ideas while making practical business decisions in a complex, highly developed way, which was not always true of his father. Although James Goodrich was a highly intelligent and savvy businessman and politician, he was not an intellectual, as Pierre was. James was a technician. As Richard Hofstadter writes in his Pulitzer Prize–winning book Anti-intellectualism in American Life, the successful professional man must have a substantial store of knowledge and an acquired stock of mental skills, but he exercises his knowledge and skills primarily for the “pursuit of externally determined ends.” That was James Goodrich: businessman, politician, community leader. He applied information and knowledge to address practical external problems.25

Pierre also had a practical side, as his highly successful years as president, CEO, director, and significant stockholder of dozens of companies indicate. At the same time,